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06/08/2017 Meeting
M eeting L ocation: M unicipal C enter 7100 147th S treet West Apple Valley, M innesota 55124 June 8, 2017 C IT Y C O UN C IL IN F O RMA L MEET IN G T EN TAT IVE D IS C USSIO N IT EMS 5:30 P M 1.C ouncil Discussion Items (5 min.) 2.Present 2016 Comprehensive Annual Financial Report (20 min.) 3.Update on Partners in Higher Education Building (25 min.) 4.Review 2017-2021 Draft C apital Improvements Program (25 min.) 5.Adjourn C IT Y C O UN C IL REG ULA R MEET IN G T EN TAT IVE A G EN D A 7:00 P M 1.C all to Order and Pledge 2.Approve Agenda 3.Audience - 10 Minutes Total Time Limit - For Items N O T on this Agenda 4.Approve C onsent Agenda Items C onsent Agenda Items are considered routine and will be enacted with a single motion, without discussion, unless a councilmember or citizen requests to have any item separately considered. It will then be moved to the regular agenda f or consideration. A.A pprove Minutes of May 25, 2017, Regular Meeting B.A dopt Resolution Accepting Donation from Target C orporation for Use by Police Department C .A pprove State Gambling Exempt Permit for Apple Valley Rotary Scholarship Foundation, at Apple Valley Ford Lincoln, 7200 150th Street W., on October 14, 2017 D.A pprove Issuance of Temporary On-Sale 3.2 Percent Malt Liquor License for Apple Valley American Legion Post 1776, on J une 24, 2017, O utdoors at 14521 Granada Drive E.A uthorize Issuance of 1 to 4 Day Temporary O n-Sale Liquor License for A pple Valley American Legion, Post 1776, in Parking Lot at 14521 G ranada Drive on J uly 4, 2017 F.A uthorize Issuance of 1 to 4 Day Temporary O n-Sale Liquor License for A pple Valley Villa Apartments, in Fireside Dining Room, 14610 Garrett Avenue on August 10, 2017 G.Proclaim "Music in K elley Park" on J une 16 and 23, 2017; J uly 7, 14, 21, and 28, 2017; and August 4, 11, and 18, 2017 H.A uthorize Temporary Parking at Kelley Park for Special C ity-Hosted Events I.A dopt Resolution Establishing Parking Restrictions for the Freedom D ays C elebration J .A dopt Resolution Restricting Parking on C SA H 42 (150th Street W.) for Project 2017-135, C SA H 42 & Embry Path Intersection Improvements K.A dopt Resolution Authorizing Project 2017-140, Galaxie Avenue C orridor Study L.Receive 2016 Comprehensive Annual Financial Report M.A dopt Resolution Adopting 2017 Performance Measures and Approving Participation in Performance Measurement Program N.A pprove Release of Various Financial Guarantees O.A dopt Resolution Approving Plans and Specifications for Project 2017- 135, C S A H 42 & Embry Path Intersection Improvements, and A uthorizing Advertising for Receipt of Bids at 10:00 a.m. on J uly 11, 2017 P.A dopt Resolution Approving Plans and Specifications for Old C ity Hall HVA C Upgrade, and Authorizing Advertising for Receipt of Bids at 10:00 a.m. on J uly 13, 2017 Q.A dopt Resolution Approving Sponsoring Agency A greement with Minnesota Task Force One Urban Search and Rescue Team R.A pprove Water Quality Improvement C ost Share Program Agreement with Elizabeth A. Bennett for Native Garden Installation at 13940 Exley C ourt S.A pprove J oint Powers A greement with Dakota C ounty for C ost Share Related to Project 2017-135, C S A H 42 & Embry Path Intersection Improvements T.A pprove Agreement with C & C Courts, Inc., for Project 2017-169, AVC C Gym Floor Replacement U.A pprove Acceptance and Final Payment on Agreement with Horizon C hemical Company, Inc., d/b/a Horizon Commercial Pool Supply, for Project 2017-122, AVFA C Pool Shell Repair V.A pprove Personnel Report W.A pprove Claims and Bills 5.Regular Agenda Items A.A dopt Resolution Proclaiming "51st Annual Apple Valley Freedom D ays C elebration" B.A uthorize Helicopter Landing and Lift-Off in J ohnny C ake Ridge Park on J uly 3, 2017 C .A dopt Resolution Approving Site Plan for Outdoor Dining Area at Five G uys Restaurant, 14658 C edar Avenue, Suite G 6.Staff and C ouncil C ommunications 7.Approve C alendar of Upcoming Events 8.Adjourn Regular meetings are broadcast, live, on C harter C ommunications C able Channel 180 and on the C ity's website at www.cityof applevalley.org I T E M: 2. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:I nf ormal Agenda I tem Description: P resent 2016 Comprehensive Annual F inancial R eport (20 min.) S taff Contact: Ron Hedberg, F inance Director D epartment / D ivision: F inance Department AC T I O N RE Q UE S T E D: N/A S UM M ARY: A formal action to receive the 2016 C omprehensive Annual Financial Report will be included in the C ity C ouncil agenda later the same evening. J im Eichten, Managing Partner, or J ackie Huegel , Senior Manager, with the C ity’s auditing firm, Malloy Montague Karnowski Radosevich and C o., P.A. (MMKR), will present the 2016 Comprehensive Annual Finance Report and review their Management Report at the informal work session on J une 8, 2017. Included with the council packet information are three separate bound documents; the first, and largest, is a copy of the Comprehensive Annual Financial Statements (C A FR), the second is auditor ’s Management Report, and the third is Special Purpose A udit Reports including opinions on compliance with Government Auditing Standards and Legal Compliance. Since the documents are large, a good place to start reviewing the C A FR documents would be the Transmittal Letter (starting on page iii), the Management Discussion and Analysis letter (starting on page 4) and with the Auditor ’s Management Report on page 1 and their financial analysis section beginning on page 7 of that report. Last year was the fifth year that the C ity of Apple Valley participated in the Certificate of Achievement for Excellence in Financial Reporting program administered by the G FO A, the City of Apple Valley was recently awarded the C ertificate for the 2015 C A FR. Staff believes that the current year ’s submission will also meet the requirements to receive the award. T he presentation will cover some of the highlights of the year. If the Council has some items that they would like to be sure is covered just let me know prior to the meeting and we will be sure to cover it in the presentation. B AC K G RO UND : N/A B UD G E T I M PAC T: N/A AT TAC HM E NT S: Presentation 6/8/2017 1 CITY OF APPLE VALLEY AUDIT REPORT YEAR ENDED DECEMBER 31, 2016 Jackie Huegel, CPA Opinion on Financial Statements Financial statements are fairly presented in accordance with accounting principles generally accepted in the United States of America Testing of Internal Controls and Compliance Internal controls over financial reporting Compliance with laws and regulations related to financial reporting State Laws and Regulations Compliance with Minnesota laws and regulations Single Audit of Federal Awards Not Required for Fiscal 2016 AUDITOR’S ROLE 6/8/2017 2 Financial Report Unmodified or Clean Opinion Internal Controls Over Financial Reporting Inadequate Segregation of Duties over Cash Receipts, Refunds, and Billing Adjustments Minnesota Legal Compliance Audit No Findings AUDIT OPINIONS AND FINDINGS Prior Year Findings Corrected in 2016 Subcontractor Language Responsible Contractor Requirements Other Observations and Recommendations Golf Course Inventory and Event Revenue Tracking 6/8/2017 3 TAX RATES Rates expressed as a percentage of net tax capacity 2015 2016 2015 2016 2015 2016 Average tax rate City 46.9 46.5 43.4 43.0 45.3 44.7 County 44.7 44.1 42.9 42.3 29.6 28.6 School 27.1 27.5 28.3 28.6 23.3 24.4 Special taxing 6.9 6.9 8.8 8.7 5.0 5.0 Total 125.6 125.0 123.4 122.6 103.2 102.7 Apple ValleyMetro Area Seven-CountyAll Cities State-Wide City of REVENUE PER CAPITA Year 2014 2015 2016 Population 2,500–10,000 10,000–20,000 20,000–100,000 50,330 50,161 51,338 Property taxes 443$ 414$ 443$ 460$ 458$ 466$ Tax increments 26 33 37 12 10 4 Franchise fees and other taxes 33 42 39 29 29 29 Special assessments 59 52 59 108 77 81 Licenses and permits 31 31 43 33 43 40 Intergovernmental revenues 285 322 156 69 46 51 Charges for services 110 85 94 50 54 53 Other 69 62 58 83 61 85 Total revenue 1,056$ 1,041$ 929$ 844$ 778$ 809$ December 31, 2015 Governmental Funds Revenue per Capita With State-Wide Averages by Population Class State-Wide City of Apple Valley 6/8/2017 4 EXPENDITURES PER CAPITA Year 2014 2015 2016 Population 2,500–10,000 10,000–20,000 20,000–100,000 50,330 50,161 51,338 Current General government 134$ 109$ 89$ 112$ 100$ 123$ Public safety 255 244 261 221 229 236 Street maintenance 119 117 99 80 72 76 Parks and recreation 88 108 94 102 104 112 All other 64 70 89 – – – 660$ 648$ 632$ 515$ 505$ 547$ Capital outlay and construction 372$ 389$ 286$ 267$ 129$ 164$ Debt service Principal 181$ 178$ 117$ 68$ 71$ 52$ Interest and fiscal 51 40 33 21 22 19 232$ 218$ 150$ 89$ 93$ 71$ State-Wide December 31, 2015 Governmental Funds Expenditures per Capita With State-Wide Averages by Population Class City of Apple Valley GENERAL FUND FINANCIAL POSITION 6/8/2017 5 MUNICIPAL LIQUOR FUND MUNICIPAL GOLF COURSE FUND 6/8/2017 6 SPORTS ARENA FUND WATER AND SEWER FUND 6/8/2017 7 STORM DRAINAGE FUND STREET LIGHT FUND 6/8/2017 8 GASB Statement No 68 – Accounting and Financial Reporting for Pensions ACCOUNTING AND AUDITING UPDATES Clean Opinion on Financial Statements One Finding Reported Overall Improving Financial Condition in City’s General Fund Enterprise Fund Financial Results Continued Ongoing Assessment of Financial Projections and Results Including General, Other Operational and Enterprise Fund Activities SUMMARY I T E M: 3. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:I nf ormal Agenda I tem Description: Update on P artners in Higher Education B uilding (25 min.) S taff Contact: B ruce Nordquist, C ommunity Development Director, A I C P D epartment / Division: C ommunity D evelopment Department AC T I O N RE Q UE S T E D: N/A S UM M ARY: At an informal C ity C ouncil session in February and April, the future of the referenced property has been discussed. Staff was given the direction to: Finalize HVA C repair/replacement documents for bidding Explore updating the building exterior and landscaping with improvements Assemble more comprehensive cost estimates for a renovation and continued use scope of work Since April: 1. Bidding documents have been prepared and the plans and specifications are finished. An authorization to bid is on the J une 8 consent agenda. No structural concerns were identified that would impact the estimated cost. T he engineering consultant's estimate is $218,000 to update HVA C building systems. 2. A concept for updating the building exterior and landscaping has been developed, with cost estimates, by C N H Architects. Elements include: Retain the existing cedar siding and brick exterior, cleaned and repaired, and apply a suitable stain to the surface, colors to be determined. Applying new exterior surfaces throughout was determined to be cost prohibitive. Selectively remove mature trees to re-grade and level the site. T he concept includes stone planters along the foundation at key locations. Landscaping detail still needs to be further developed. Raise the parapet at the east entrance (for St. Mary's) and a proposed southwest entrance (for MacPhail) with a commercial grade metal panel to lead users to the respective tenant locations and best utilize available perimeter parking. T his is an expensive option which will require further attention. T he featured entrances add improved patio/sidewalk surfaces with benches and bike racks that remove timber retaining walls and uneven walking surfaces. T he bronze sculpture grouped in it's present form or as singular statuary are placed on the west side of the building as a highlight to the MacPhail entrance and C edar Avenue. T he estimated cost of demolition, concrete surface improvements, landscaping, metal panel additions, and exterior staining is $461,093. T his includes a contingency and contractor and design fees. 3. Other maintenance items to address: $20,000 to upgrade fixtures, finishes and stalls in the shared bathrooms (2017 improvement) $20,000 for carpet and painting updates at the St. Mary's leased portions in 2018. (MacPhail is planning their own tenant improvements, subject to C ity review and approval) T he roof has been inspected, leaf and branch debris removed and found to be in sound condition. 4. Long term leases, with renewal options, are sought by both St. Mary's and MacPhail. Considerations include: A ten year lease, with renewal after five years. At 5 years, a 15 percent increase in the rent is proposed by staff Base rent plus additional rent per sq. ft. (expenses such as mowing, plowing, heat/cooling, electricity and cleaning services): lease today (St. Mary's): $13.45 lease end of 2017: $15.00 lease, fifth year adjustment: $17.00 Both tenants are desirable, rent sensitive and seek stable costs moving forward An annual reserve, would continue, presently $50,000 to $60,000, and the additional MacPhail rent payment of $60,000 annually would be added to the reserve. T he lease with MacPhail has been requested by the tenant to coincide with their occupancy by end of November. 5. Capital Improvement summarized: $218,000 HVA C repair/replacement $461,093 Exterior renovations, high option $ 40,000 Other maintenance $719,093 Total (a $781,000 fund balance presently exists) Clearly given the expense, the exterior improvements need to be studied more closely (metal panel additions at entrances and planter areas) and alternatives discussed. Project and lease feedback is sought at the J une 8 Informal meeting to guide next steps for staff. B AC K G RO UND : N/A B UD G E T I M PAC T: Resources are available from the Partners in Higher Education reserve account. AT TAC HM E NT S: Elevations Elevations Background Material Memo Presentation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 A B C D E F G H J K L M A B C D E F G H J K L M © COPYRIGHT BY CNH ARCHITECTS, INC.7300 WEST 147TH STREET SUITE 504 APPLE VALLEY, MN 55124-7580 (952) 431-4433CNH NO.: 2 3 4 5 6 7 8 9 10 11 12 13 14 151 REVISIONS: DATE:C:\1-Revit\Revit 2017\17041 - Arts Building Renovation_BJacobson.rvt5/11/2017 1:22:57 PMNOT FOR CONSTRUCTION SC01Perspectives - Option 1Arts Building Renovation14200 Cedar Ave SApple Valley, MN 5512417041 05/11/17 1" = 50'-0"SC01 D1 Schematic Overall Site Plan - Option 1 12" = 1'-0"SC01 J6 Northwest Perspective from Street - Option 1 Rendering 12" = 1'-0"SC01 E6 Southeast Perspective at Entrance - Option 1 Rendering 12" = 1'-0"SC01 A6 Southwest Perspective at Entrance - Option 1 Rendering 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 A B C D E F G H J K L M A B C D E F G H J K L M © COPYRIGHT BY CNH ARCHITECTS, INC.7300 WEST 147TH STREET SUITE 504 APPLE VALLEY, MN 55124-7580 (952) 431-4433CNH NO.: 2 3 4 5 6 7 8 9 10 11 12 13 14 151 REVISIONS: DATE:C:\1-Revit\Revit 2017\17041 - Arts Building Renovation_BJacobson.rvt5/11/2017 1:23:02 PMNOT FOR CONSTRUCTION SC02Perspectives - Option 2Arts Building Renovation14200 Cedar Ave SApple Valley, MN 5512417041 05/11/17 1" = 50'-0"SC02 D1 Schematic Overall Site Plan - Option 2 12" = 1'-0"SC02 J6 Northwest Perspective from Street - Option 2 Rendering 12" = 1'-0"SC02 E6 Southeast Perspective at Entrance - Option 2 Rendering 12" = 1'-0"SC02 A6 Southwest Perspective at Entrance - Option 2 Rendering CNH No: 17401 6/1/2017 Description Total Cost Site Demolition and Clearing $29,500.00 Curb and Walks $18,000.00 Landscaping and Retaining Walls $95,000.00 $0.00 Wall Panels $175,000.00 Staining and Painting $20,000.00 $0.00 $337,500.00 10% $33,750.00 $371,250.00 15%$55,687.50 $426,937.50 8%$34,155.00 $461,092.50 7300 WEST 147TH STREET SUITE 504 APPLE VALLEY, MN 55124 (952) 431-4433 Sub-Total Contingency Date Printed: Apple Valley Arts Renovation Preliminary Cost Estimate Sub-Total Contractor's Profit / Overhead Total Project Budget Design Fee with Reimbursables Total Construction Cost ARCH I T E C T S WENTZ 7225 Ohms Lane, Suite 160 ASSOCIATES Edina, MN 55439 INC. Phone: (952) 831-1180 CONSULTING ENGINEERS Fax: (952) 831-2179 MEMO TO: Bruce Nordquist, City of Apple Valley FROM: Dan Sieben RE: Old City Hall Building SUBJECT: Air Handling Unit and Boiler Replacement DATE: April 5, 2017 Mechanical Executive Summary The Old City Hall building heating, ventilating and air conditioning (HVAC) systems include two (2) condensing units mounted on the roof, two (2) air handling units in the basement mechanical room and a steam boiler including hot water converting equipment in the basement boiler room. The boiler system provides hydronic heat to the air handler heating coils and perimeter radiation. The condensing units, air handlers and boiler are beyond their useful life and are difficult to maintain in working condition. Construction Scope of Work The scope of work under the construction documents includes replacing the existing 20-ton and 10-ton condensing units, and the two (2) air handlers with a roof mounted VAV packaged air handler. New ductwork will be routed in the ceiling space to connect new VAV boxes to existing zones in the building. Several zone ductwork connections will be provided to allow for future tenant buildout flexibility. Existing ductwork in the ceiling will be removed as needed to make room for the new system supply and return ductwork and allow for reconnection of existing zones. The steam boiler is proposed to be replaced using two (2) hot water condensing boilers that would allow removal of all the steam converting equipment. Asbestos containing material appears to be present in some of the heating piping insulation. The intent of the boiler replacement is to leave all asbestos containing insulation in place and undisturbed; modifying only heating piping that is not insulated or only insulated with fiberglass insulation. 6/8/2017 1 14200 Cedar Avenue Partners in Higher Education Discussion about Next Steps June 8, 2017 Informal City Council Meeting Items for Review and Feedback 1)HVAC upgrade on Council Consent this evening 2)Building exterior plans: •Entrances upgraded, with sidewalk replacement a)St. Mary’s University, north and east orientation b)MacPhail, south and west orientation •Exterior surfaces stained/repaired •Site regrading with landscape removal and replanting •Concept includes high cost entrance upgrades and planters that could be scaled back 3)Lease; 5 and 10 years out 6/8/2017 2 HVAC Scope & Cost Air Handler $70,000 Boiler(s) $40,000 Variable Volume Air Boxes $43,000 Heating piping $20,000 Duct work $20,000 Controls $25,000 $218,000 6/8/2017 3 Exterior items needing attention ‐Failing sidewalks at building entrances 6/8/2017 4 Exterior items needing attention ‐siding in sound condition to be stained ‐warped siding to be replaced Exterior items needing attention. ‐large, mature trees to remove ‐overgrown landscaping that blocks views ‐uneven grade, difficult to maintain with dated timber retaining walls 6/8/2017 5 Leasing 6/8/2017 6 Next Steps: •Review plans, lease rates with tenants •Prepare lease with MacPhail; November occupancy •Prepare revised lease with St. Mary’s •Revise exterior work as result of Council and tenant fedback •Return with revised scope of work and cost estimates For Discussion: What will we call 14200 Cedar Avenue? •Partners in Higher Education •Old City Hall •Partners in Education and Arts •Other? I T E M: 4. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:I nf ormal Agenda I tem Description: Review 2017-2021 Draft C apital I mprovements P rogram (25 min.) S taff Contact: Charles Grawe, A ssistant City Administrator D epartment / Division: Administration / I nf ormation Technologies AC T I O N RE Q UE S T E D: N/A S UM M ARY: Staff will present a draft of the 2017-2021 C apital Improvements Program (C IP) at the J une 8, 2017, C ity C ouncil informal meeting. T he C IP is a planning document that is used when developing the operating budgets each year. In the C IP document, the projects included in the years 2017 and 2018 are the projects that staff will be working on in the coming months. B AC K G RO UND : N/A B UD G E T I M PAC T: N/A AT TAC HM E NT S: C I P Presentation CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM 2017-2021 DRAFT 06-05-2017 CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM Table of Contents Introduction ............................................................................................................................. 1 Section 1: Summary Tables ................................................................................................... 3 Section 2: Financial Impact Analysis of Selected Funds ........................................................ 7 Section 3: Five Year CIP Tables .......................................................................................... 39 Appendix A: Street Overlay and Reconstruction Schedule .................................................... 59 Appendix B: Vehicle and Equipment Replacement Schedule ................................................ 64 DRAFT 06-05-2017 Introduction The City of Apple Valley believes that it is necessary to develop and maintain a Capital Improvements Program (CIP). Such a program allows the Council and Staff to better plan for the City’s capital and financial needs in future years. With growth, the need for services will continue to increase in the City. At the same time, the costs of vehicles, equipment, and infrastructure are expected to increase. The CIP formalizes a process in which future projects and outlays can be identified and prioritized. It is intended to provide a realistic projection of future capital expenditures necessary to meet the anticipated needs of the community. The identified improvements reflect City policies for growth, maintenance, and development. The CIP is a planning document intended to assist policy makers and staff to plan for major capital improvement, renewal, and replacement expenditures. As a planning document, the CIP does not bind the City to the anticipated expenditures in the projected years. The CIP is not a budget, nor is it an authorization to expend funds. The authorization of the expenditures occurs through City Council action and in adoption of the annual budget. As a planning document, the CIP facilitates two distinct planning purposes. First, the CIP is a tool with which to implement the City’s Comprehensive Guide Plan. As the City looks at future projects, it is important to make sure that they will appropriately integrate with the Comprehensive Guide Plan. Second, the CIP is a financial planning document. As many capital purchases are made in various dollar amounts in various periods of time, it is important to appropriately plan so that the necessary funding mechanisms are available as expenditures take place. The City’s annual budget document categorizes expenditures into three major groups as a means to summarize and describe expenditures: personnel services, capital outlay, and other. Capital outlay as a sum total is generally the smallest of these three expense categories in the General Fund. Capital outlay is a term used to describe an expenditure of a significant amount, generally over $5,000.00, that benefits more than one year or extends the useful life of an asset. The CIP document totals will not necessarily tie to line items within the annual budget document for several reasons. There are some expenditures included within the CIP that are not currently categorized as capital outlay in the budget, such as the street overlay project and computer software. Also, it is not uncommon for a few medium-to-large capital purchases initially anticipated as General Fund department operating expenditures to be ultimately funded through equipment certificates by the end of the annual budget process. DRAFT 06-05-2017 1 The CIP may include some items that are not line-itemized as a capital outlay in an annual operating budget and it is not intended to anticipate the sporadic purchases of very small tools or equipment. The CIP document generally line itemizes outlays which exceed $50,000, but there are a few major exceptions: Selected divisional expenses such as computer and video related equipment, improvements, renewal, or replacements to City buildings exceeding $5,000, improvements, renewal, or replacement to key infrastructures exceeding $5,000, and subtotaled minor expenditures found in the appendices to the CIP. The rationale for the exception to divisional expenses is that in some cases, and particularly with video and computer equipment, the cost of any individual item might be quite small, but when purchased in large bundles or as a system, can amount to a very large total expenditure. The rationale for the exceptions for City buildings and key infrastructure is that for land use planning, a more comprehensive listing of these improvements is desirable. Some of these recurring infrastructure improvements itemized in the document include pathway overlay and repair, pedestrian ramps, street striping, catch basin retrofits, and Ring Route maintenance. The rationale for the exception for subtotals in the appendices is primarily to provide internal consistency to the document. Using similar rationale to the exceptions listed above, the Replacement Schedule line itemizes some items under $50,000. Departments are asked to only include expenditures exceeding $5,000 in these documents. For use in the CIP, these smaller purchases are subtotaled by department and itemized as a subtotal in the CIP as “minor” equipment or vehicles. As mentioned previously, there are some expenditures found in the CIP that are not classified as capital outlay in the annual budget. Each year, the City spends very significant resources to overlay City streets as part of ongoing street maintenance. As this work is provided by private contractors, the expenditures are classified as a contractual service in the operating budget. Similarly, while computer software is essential to operate the physical hardware assets, the software itself is not considered capital in the budget. As these items are a critical component of the City’s infrastructure and capital assets, the expenditures related to these items are included within the CIP. DRAFT 06-05-2017 2 CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM 2017-2021 Section 1 Summaries DRAFT 06-05-2017 3 City of Apple ValleyCapital Improvements Program 2017-20212017 - 2021 ProjectsAll Funding SourcesFunding Sources 2017 2018 2019 2020 2021 TotalGeneral Fund 3,780,639$ 4,009,500$ 4,562,000$ 4,052,000$ 4,379,000$ 20,783,139$ VERF Charges - (Internal Service Fund) 841,580 991,720 1,056,850 1,127,650 1,387,010 5,404,810 Equip / VERF Expense 1,266,600 1,536,800 948,500 696,600 1,895,650 6,344,150 Municipal Building Fund 457,000 449,000 639,000 671,000 831,500 3,047,500 Future Capital Projects Fund - 680,000 - 1,150,000 2,500,000 4,330,000 GO/Revenue Bonds- 3,000,000 - - - 3,000,000 EDA Funding- - - - - - TIF Funding- - - - - - Park Dedication1,250,000 - - 250,000 - 1,500,000 Ice Arena79,500 1,812,000 200,000 135,000 115,000 2,341,500 Golf211,000 105,000 155,000 185,000 195,000 851,000 Liquor75,000 12,000 20,000 - - 107,000 Old City Hall Fund488,000 205,000 190,000 60,000 - 943,000 Special Assessments100,000 225,000 775,000 100,000 100,000 1,300,000 Water Utility4,621,798 3,659,406 2,752,306 3,003,500 1,905,000 15,942,010 San. Sewer Utility1,901,000 1,466,545 1,567,445 1,632,100 1,202,000 7,769,090 Storm Drainage Utility640,000 1,051,700 2,320,700 1,527,000 987,000 6,526,400 Street Light Utility33,500 10,000 12,000 12,000 12,000 79,500 Road Improvement Fund(509,575) 579,959 (751,820) 31,040 (1,078,000) (1,728,396) Muncipal State Aid1,890,000 3,066,500 1,754,000 1,568,500 616,000 8,895,000 Cemetery Fund185,000 425,000 200,000 - - 810,000 Grant Funding- 100,000 - 3,300,000 - 3,400,000 Other Govt295,975 125,000 49,000 - - 469,975 Other Sources617,500 600,000 640,000 600,000 600,000 3,057,500 Total Funding18,252,017$ 24,110,130$ 17,089,981$ 20,101,390$ 15,647,160$ 95,200,678$ DRAFT 06-05-20174 City of Apple ValleyCapital Improvements Program 2017-20212017 - 2021 ProjectsAll Project CategoriesProject Categories 2017 2018 2019 2020 2021 TotalBuilding and Facility Improvements 1,257,459$ 6,584,000$ 1,794,000$ 1,523,000$ 3,800,500$ 14,958,959$ Capital Technology 322,080 432,000 425,000 325,000 325,000 1,829,080 Fleet Vehicles and Equipment 2,460,680 3,227,820 2,708,550 2,257,850 3,632,660 14,287,560 Parks, Playgrounds, Paths, Open Space 1,977,000 678,000 765,000 1,015,000 675,000 5,110,000 Ponds, Natural Resources, and Environme95,000 125,000 100,000 102,000 102,000 524,000 Street and Utility Improvements 8,097,298 10,224,310 8,677,431 13,485,540 6,444,000 46,928,579 Utility Infrastructure Preservation 4,042,500 2,839,000 2,620,000 1,393,000 668,000 11,562,500 Grand Total 18,252,017$ 24,110,130$ 17,089,981$ 20,101,390$ 15,647,160$ 95,200,678$ DRAFT 06-05-20175 (This Page Intentionally Left Blank) DRAFT 06-05-2017 6 CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM 2017-2021 Section 2 Financial Impact Analysis DRAFT 06-05-2017 7 Future Capital Projects Fund Fund Description The Future Capital Projects Fund accounts for significant capital improvement projects for various service areas within the City as appropriated by the City Council. Some of these projects are projected one-time construction projects. Others, such as the Pavement Management Support Transfer and support of the Municipal Building Fund, may be ongoing based on Council policy. Background The Future Capital Fund was created as a means to fund significant capital projects not included elsewhere in the budget or CIP, especially those that may not have an alternate or dedicated revenue stream other than property tax support. More recently, it has also provided funding support for the City’s Pavement Management Program. Beginning with the 2016-2017 operating budget a transfer has been identified to go to the Municipal Building Fund to support that funds capital outlay, this ongoing transfer is included at an amount equal to the prior year’s interest earnings. Source of Funds The Fund receives its revenues from two primary sources—annual transfer of the ending operating General Fund balance and investment earnings. For this document, staff has conservatively estimated no ending balance transfers from the General Fund between 2017 and 2021. However, if there is a positive balance in those years, the balance would become a revenue source for this fund. Use of Funds The City prepares a detailed five year capital improvement plan that outlines all planned renovations and improvements, the attached scheduled goes out to 2021. Significant anticipated projects include the acquisition of land for Fire Station #4, reconstruction of the shared entrance with the Dakota County Western Services Center off of Galaxie Avenue, replacement of the Park Maintenance Building at Johnny Cake Ridge Park East, and the construction of a Police Department garage at the Municipal Center Site. Transfers The Future Capital Projects Fund transfers funds to support the City’s Park Bond payments. This allowed use of the levy funds to support the Pavement Management Program. The City Council provided direction for support of $960,000 per year to the Park Bond Transfer through 2017. This support is a part of the strategy to avoid specially assessing the benefiting property owners. Fund Outlook Projected expenditures will significantly reduce the fund balance by about 25 percent within the next five years. The Fund’s outlook could improve with transfers from the General Fund ending balance. One significant use includes the Future Capital Projects Fund commitment of $960,000 per year toward the Park Bond Transfer through 2017, when the bonds are retired.DRAFT 06-05-20178 Financial Analysis: Future Capital Projects Fund (4930)20172018201920202021Source of FundsInvestment Earnings187,000$ 176,000$ 161,000$ 161,000$ 144,000$ Valleywood Loan Repayment50,000 50,000 50,000 50,000 50,000 Total Source of Funds237,000$ 226,000$ 211,000$ 211,000$ 194,000$ Use of FundsAdminCedar Avenue Entrance Monument60,000$ Cedar Avenue Overpass at @147th400,000$ FireAcquire land for Station #4500,000$ PolicePD Garage at Muni Center2,500,000$ Municipal CenterVoting Machine Replacement 27,939$ 27,939$ ParksJCRP east new maintenance facility750,000$ Public WorksReconstruct Western Service Center Entrance 120,000$ OtherTransfer to Park Bond 960,000$ Transfer to Road Improvement Fund 126,900$ 285,600$ Transfer to Muni Bldg Fund (Municipal Center Basement)350,000$ Transfer to Municipal Building Fund 183,000$ 202,000$ 202,000$ 202,000$ 202,000$ Total Use of Funds 1,297,839$ 1,195,539$ 202,000$ 1,352,000$ 3,052,000$ Net Change (1,060,839)$ (969,539)$ 9,000$ (1,141,000)$ (2,858,000)$ Beginning Cash Balance 12,778,125$ 11,717,286$ 10,747,747$ 10,756,747$ 9,615,747$ Ending Cash Balance 11,717,286$ 10,747,747$ 10,756,747$ 9,615,747$ 6,757,747$ DRAFT 06-05-20179 Vehicle and Equipment Replacement Fund Fund Description The Vehicle and Equipment Replacement Fund (VERF) accounts for significant capital improvements pertaining to vehicles and equipment, the use of this fund provides for the funding of scheduled equipment replacement. Background In 2013, the City began budgeting for vehicles and equipment replacement using the fleet management approach. Rather than budgeting for individual units on an annual basis, which is subject to large swings in expenditures from year to year, departments are charged an annual fee to the Vehicle and Equipment Replacement Fund. This provides a more stable budgeting approach without the annual volatility. All General Fund departments except for the Streets Department were transitioned in prior years. The Streets Department is proposed to be transitioned in 2017. Source of Funds The Fund receives its revenues from annual charges to each departments operating budget. Use of Funds The Fund covers the annual vehicle and equipment needs for participating departments. Fund Outlook The Vehicle and Equipment Replacement Fund (VERF) was being created to provide a financing mechanism for the systematic replacement of vehicles in the City’s Fleet. The goal of the fund is to have sufficient cash flow to fund annual equipment purchases without the need to borrow and to stabilize budgeting for major equipment purchases. The goal is to accumulate funds but it is not planned to have all the resources to fund 100% of the replacement value of the entire fleet at any one time. The projected low balance over the next five years is approximately $226,000. Over the next five years the VERF is expected to spend $6,343,500 on equipment replacement. DRAFT 06-05-201710 Financial Analysis: Vehicle and Equipment Replacement Fund2017 2018 2019 2020 2021Source of FundsVERF Interfund Charges841,580$ 991,720$ 1,056,850$ 1,127,615$ 1,387,010$ Sales Proceeds149,900 124,000 108,500 67,500 197,780 Investment Earnings7,760 9,567 3,394 6,698 14,276 Transfer from Closed GO Debt Fund600,000 Total Source of Funds1,599,240$ 1,125,287$ 1,168,744$ 1,201,813$ 1,599,066$ Use of FundsFire270,000$ 621,900$ 73,500$ 96,900$ 1,061,950$ General GovernmentCode EnforcementPolice79,000 105,500 258,600 270,000 436,600 Parks496,300 271,100 285,700 159,300 286,100 Building InspectionsEngineeringFleet MaintenancePublic Works Admin24,400 Streets421,300 513,900 330,700 170,400 111,000 Total Use of Funds1,266,600$ 1,536,800$ 948,500$ 696,600$ 1,895,650$ Net Change332,640$ (411,513)$ 220,244$ 505,213$ (296,584)$ Beginning Cash Balance305,152$ 637,792$ 226,279$ 446,523$ 951,736$ Ending Cash Balance637,792$ 226,279$ 446,523$ 951,736$ 655,152$ DRAFT 06-05-201711 (This Page Intentionally Left Blank) DRAFT 06-05-2017 12 General Fund Fund Description The General Fund is the largest fund in the City’s accounting system. This fund is the primary fund affecting many of the City’s daily operations. Background The General Fund contains a wide variety of services offered by many different departments. Most of these services do not generate their own revenue stream or are not operated as an enterprise function. The majority of the City’s annual budget is dedicated to the operations within the General Fund. Typically, capital outlay is a very small percentage of the total General Fund expenditures, with the vast majority of expenses occurring for personnel services or commodities. However, large changes in capital outlay expenditures can have a significant impact on the General Fund. Source of Funds The Fund receives its revenues from many different sources. The primary funding sources is property taxes, comprising approximately 75 percent of the General Fund revenues. The next largest funding source is Transfers In from other funds and Administrative charges to other funds, comprising about ten percent of the revenues. The remaining revenues are each under five percent of the Fund’s total revenues. Generally, residents and the City Council have been very sensitive to significant changes in the property tax level from year to year. As a result, the City has attempted to keep the expenditures in the General Fund as steady as possible. Use of Funds The City prepares a detailed five year capital improvement plan that outlines all planned renovations and improvements. Because the expenditures in this fund tend to be smaller, there are a large number of different expenses which are listed individually in the tables. Examples of expenditures include vehicles and equipment pieces costing less than $50,000, small building maintenance projects, and recurring amenity maintenance, such as recreational trails and pathways. Fund Outlook Operational projects typically begin as proposals in the General Fund budget. Beginning with 2017 the city will have completed the process of transferring vehicle and equipment replacement purchases to a separate Vehicle and Equipment Replacement Fund. One significant item included here is as a proposed project without an identified funding source in the LED field lighting replacement project at Johnny Cake Ridge Road East Park DRAFT 06-05-201713 Financial Analysis: General Fund2017 2018 2019 2020 2021Source of FundsTax Levy453,539$ 721,500$ 645,000$ 532,000$ 754,000$ Other Sources- - 500,000 - - Total Source of Funds453,539$ 721,500$ 1,145,000$ 532,000$ 754,000$ Use of FundsFireFire Station Monument Signs 25,459$ Fire Station Apparatus bay floors ( '18 #3 & #1, '19 #2) 55,000$ 25,000$ Fire Department Subtotal 25,459$ 55,000$ 25,000$ -$ -$ ITVarious IT annual expenditures 287,080$ 300,000$ 315,000$ 325,000$ 325,000$ PolicePolice radios 90,000$ 90,000$ Police Subtotal -$ 90,000$ 90,000$ -$ -$ Public WorksCMF Southfork vehicle storage flood sealingStreets wire feed welder 8,500$ CMF vehicle hoists26,000$ PW - Asset Management Software50,000$ 50,000$ PW - ADA Transition Plan50,000$ CMF building windows$9,500CMF vehicle hoists Bay #5$26,000CMF Police/ Storage bldg unit heater #2$15,500Public Works Subtotal-$ 108,500$ 50,000$ 26,000$ 51,000$ DRAFT 06-05-201714 Financial Analysis: General Fund (continued)2017 2018 2019 2020 2021ParksOverlay park trails 30,000$ 40,000$ 40,000$ 40,000$ 40,000$ Park Reforestation 10,000$ 10,000$ 10,000$ 10,000$ 10,000$ Play Structure Replacement 100,000$ 75,000$ 25,000$ Community Center ceiling tile replacement 5,000$ Senior Cntr banquet chairs 15,000$ Comm Cntr meeting room TVs 5,000$ Park, JCRPW fence between soccer fields 20,000$ Park, AV East ice rink 12,000$ Aquatic Cntr rental cabanas 16,000$ Aquatic Cntr POS system 15,000$ Aquatic Cntr coolers and freezers 13,000$ Comm Cntr hardwood gym curtain 30,000$ Senior Cntr audio/visual equipment20,000$ Teen Cntr minor improvements10,000$ Comm Cntr rental room audio/visual equip10,000$ Park, Valley Middle ice rink15,000$ Park, neighborhood backstops (5)13,000$ Aquatic Cntr funbrellas20,000$ JCRPE - LED Lighting500,000$ Park plastic playground timbers15,000$ Teen Cntr minor improvements10,000$ Comm Cntr rental room tables & chairs6,000$ Park, Tintah soccer field irrigation40,000$ Comm Cntr kitchen & conf room appliances7,000$ Comm Cntr rental room tables & chairs6,000$ Comm Cntr sport court gym main curtain45,000$ Aquatic Cntr boilers230,000$ Aquatic Cntr lifeguard sun protectors15,000$ Parks Subtotal141,000$ 168,000$ 665,000$ 181,000$ 378,000$ Total Use of Funds453,539$ 721,500$ 1,145,000$ 532,000$ 754,000$ Net Change-$ -$ -$ -$ -$ DRAFT 06-05-201715 Former City Hall Fund (Partners in Education Building) Fund Description This Old City Hall Fund accounts for significant capital improvement projects pertaining to the former City Hall property. The City currently leases the property to the St. Mary’s University as an education facility. This lease will expire at the end of 2018 and the City expects the use to continue into the future and is currently pursuing an additional tenant. Background In 2001, the City moved its operations to the Municipal Center location and vacated the former City Hall property. As the City did not have an immediate use for the property, but was also sensitive to the type of new use of the property, the City chose to rent the property. The City continues to have obligations to maintain the facility for the tenant. The building was constructed in a series of additions and renovations over the years, so the infrastructure systems within the building vary from area to area and are not of uniform age or design. Source of Funds The fund receives its revenues from two primary sources—rents received from the tenant and investment earnings. Use of Funds Under the current lease, the City assumes all responsibilities for the maintenance of the property including daily maintenance of the interior and exterior space along with the roof structure, the HVAC system, and plumbing. The boiler infrastructure is at the end of its useful lifespan and requires replacement in the very near future. Such replacement would be extensive because it also involves controls throughout the building. Several roof sections are near the end of their useful lifespan as well. Fund Outlook This fund has built a fund balance over the past ten years as the City has made minimal capital investments. The projected needs in the near future will be significant if the City intends to keep using the building into the future and a long term solution will be needed. DRAFT 06-05-201716 Financial Analysis: Former City Hall Fund (2090)(Partners in Education Building)2017 2018 2019 2020 2021Source of FundsInvestment Earnings11,865$ 5,285$ 3,732$ 2,339$ 2,830$ Rents131,580 192,080 192,080 192,080 192,080 Total Source of Funds143,445$ 197,365$ 195,812$ 194,419$ 194,910$ Use of FundsOperating Exp:Salaries & WagesEmp. BenefitsSupplies50 50 50 50 50 Telephone800 850 880 910 940 Contractual Serv.35,900 35,900 36,970 38,080 39,210 Utilities30,300 31,200 32,090 33,050 34,040 Repairs & Maint.26,900 27,750 28,590 29,450 30,330 Other Exp.130 130 130 130 130 Visa / bank charges- - - - Capital outlay:Boiler and HVAC218,000 Fire sprinkler protection45,000 Bathroom Improvements20,000 Interior lighting190,000 Monument sign60,000 Re‐siding and painting50,000 Retaining wall15,000 Roof (half section)140,000 130,000 Sidewalk & pavement15,000 Windows30,000 30,000 Total Use of Funds582,080$ 300,880$ 288,710$ 161,670$ 104,700$ Net Change(438,635)$ (103,515)$ (92,898)$ 32,749$ 90,210$ Beginning Fund Balance790,981$ 352,346$ 248,831$ 155,933$ 188,682$ Ending Fund Balance352,346$ 248,831$ 155,933$ 188,682$ 278,893$ 27DRAFT 06-05-201717 (This Page Intentionally Left Blank) DRAFT 06-05-2017 18 Municipal Building Fund Fund Description The Municipal Building Fund accounts for significant capital improvements pertaining to vehicles and equipment, the use of this fund provides for the funding of scheduled equipment replacement. Background With the 2016 budget, the City began budgeting for building improvement projects out of a new fund called the Municipal Building Fund. Rather than budgeting for individual projects in individual operating budgets which are subject to large swings in expenditures from year to year. This provides a more stable budgeting approach without the annual volatility in the individual department budgets. Source of Funds The Fund receives its revenues from transfers from the General Fund and the Future Capital Projects Fund, the initial amount of the transfer from the General Fund is approximately equal to what the General Fund had been paying for these projects out of the General Fund operating budget. The transfer amount from the Future Capital Projects Fund is equal to the amount of interest earned in that fund in the previous year. Use of Funds The Fund covers the projected and budgeted building improvements for general government buildings. Fund Outlook The Municipal Building Fund was created to provide a financing mechanism for the systematic building improvements to general government buildings. Based on the existing conservative funding estimates the fund balance would reach a deficit status in 2019. Each year the projects included in the 3rd through 5th years may need to be adjusted as funding becomes available. DRAFT 06-05-201719 Financial Analysis: Muncipal Building Fund2017 2018 2019 2020 2021Source of FundsInvestment Earnings4,500$ 3,800$ 3,000$ -$ -$ Transfer from Future Capital Projects fund183,000 202,000 202,000 202,000 552,000 Transfer from General Fund176,000 181,000 186,000 192,000 198,000 Estimate of FCPF Investment earnings above budgeted31,500 10,000 10,000 10,000 10,000 Total Source of Funds395,000$ 396,800$ 401,000$ 404,000$ 760,000$ Use of FundsCity HallMunicipal Center - bathroom counters 10,000 Municipal Center - PD HVAC Phase 1 60,000 Municipal Center - PD Training room area 56,000 Municipal Center - Recarpet200,000 Municipal Center - PD Boilers250,000 Municipal Center - PD HVAC phase 260,000 Municipal Center - PD open office panels75,000 Municipal Center - PD recarpet150,000 Municipal Center - Basement Office Expansion350,000 Municipal Center - Municipal Center Roof replacement150,000 10,000$ 60,000$ 256,000$ 535,000$ 500,000$ Public WorksCMF roof section 30,000 CMF Streets Foreman offices 7,500 CMF vehicle storage floor 32,500 CMF north & west lot chip seal 15,000 CMF restrooms20,000 CMF Windows, doors and Overhead doors 38,000 CMF CoRayVac Program thermostat control 6,000 CMF front East/West face window panes 18,000 CMF Hallway tile flooring12,000 CMF Old Wash Bay Conversion 27,000 CMF Street/Parks Bldg unit heater 15,000 CMF Police / Storage Bldg Unit Heater #1 15,500 CMF- Bldg Windows9,500 CMF- Replace Vehicle Hoist Bay #326,000 CMF Small HVAC Units30,000 CMF Windows, Doors, Overhead Doors20,000 CMF Parks / Storage Bldg Unit Heater #1 16,000 70,000$ 79,000$ 72,000$ 51,000$ 66,000$ DRAFT 06-05-201720 Financial Analysis: Muncipal Building Fund (continued)2017 2018 2019 2020 2021ParksCommunity Center carpet 35,000 Community Center front counter glass enclosure 12,000 Community Center interior painting 25,000 Community Center lobby and hallway lighting 10,000 Community Center - sport court gym flooring 100,000 Aquatic Center bathhouse floor resurfacing 40,000 Aquatic Center Diamond Bright lap lanes 80,000 Redwood building improvements - year 1 20,000 Valley Middle - park building roof 55,000 Community Center - Flooring various rooms 35,000 Community Center - restroom / locker room flooring 15,000 Community Center - restroom / locker room partitions 15,000 Community Center - painting high traffic areas 15,000 Community Center - Community Center Boilers 60,000 250,000 Community Center - gym divider curtainsAquatic Center - Waterslide 150,000 Redwood building improvements- year 2 20,000 Community Center - Locker room flooring /fixtures 20,000 Community Center sport court gym roof 100,000 Senior Center Building upgrades 35,000 JCRP east- Soccer Stadium Roof 6,000 Aquatic Center - Waterslide150,000 Community Center - Sport Court divider curtains 45,000 JCRP east- Legion Field roof6,000 JCRP east - restroom facility60,000 377,000$ 310,000$ 311,000$ 111,000$ 250,000$ Total Use of Funds 457,000$ 449,000$ 639,000$ 697,000$ 816,000$ Net Change(62,000)$ (52,200)$ (238,000)$ (293,000)$ (56,000)$ Beginning Cash/ Fund Balance314,875$ 252,875$ 200,675$ (37,325)$ (330,325)$ Ending Cash/ Fund Balance252,875$ 200,675$ (37,325)$ (330,325)$ (386,325)$ DRAFT 06-05-201721 Tax Increment Finance Funding Fund Description Tax increment financing is an economic tool established under State law. This fund pertains only to projects that are authorized expenditures for tax increment financing as established under State law. Background The laws have changed over the years and have limited applicability. However, the general concept is that the City, under certain conditions, may establish a tax increment district in an area where property values are currently low, typically because the property is undeveloped or is blighted in some way. The City can issue debt to fund certain types of improvements to the property. After the improvements and additional development or redevelopment activity, the property tax value increases. The City then captures this incremental increase in property tax revenue to pay off the debt for the improvements. In some cases, the increments captured exceed the amount necessary to retire the debt for the improvements. In a limited number of those cases, the City can use the excess increment revenues to fund additional eligible tax increment financing projects. Source of Funds The Fund receives its revenues from two primary sources—receipt of tax increments and investment earnings. Estimating the amount of the increment is dependent on accurate forecasting of the future value of the property after it has been improved. In our case, the districts have been established for decades and there is a long history of property valuations after the improvements were made. Apple Valley’s two included districts (TIF 1 & 7) were decertified by 12-31-15. For this document the resources include previously collected and unspent funds. Use of Funds The State law is very restrictive on the types of expenditures that can be used with tax increment revenues and the geographic locations that these expenditures can be made. Generally, the allowed expenditures are for public improvements such as roadways, traffic signals, or parking facilities. Fund Outlook Projects associated with this fund are typically linked with development activity. The projected expenditures in this document assume that certain development activity will occur in the future that would be supported with tax increment backed improvements. The current capital improvement program currently does not include any identified projects in the report. DRAFT 06-05-2017 22 Financial Analysis: Tax Increment Finance Funding(Decertified Districts #1 & #7)2017 2018 2019 2020 2021Source of FundsInvestment Earnings46,518$ 47,216$ 47,924$ 48,643$ 49,372$ Tax Increments- - - - - Total Source of Funds46,518$ 47,216$ 47,924$ 48,643$ 49,372$ Use of FundsStreets & utility ImprovementsTotal Use of Funds -$ -$ -$ -$ -$ Net Change46,518$ 47,216$ 47,924$ 48,643$ 49,372$ Beginning Cash/ Fund Balance3,101,186$ 3,147,704$ 3,194,919$ 3,242,843$ 3,291,486$ Ending Cash / Fund Balance3,147,704$ 3,194,919$ 3,242,843$ 3,291,486$ 3,340,858$ DRAFT 06-05-201723 (This Page Intentionally Left Blank) DRAFT 06-05-2017 24 Road Improvement Fund Fund Description The Road Improvement Fund accounts for significant capital improvement projects for construction, maintenance, and repair of roadways and pathways. Background The Road Improvement Fund is a mechanism to account for certain portions of roadway improvement projects. It is also important to note that in many cases, the full cost of the roadway project includes many different funding sources. For example, the City’s Utility Funds support portions of the annual street overlay project. For another example, for County roadways, the City pays a portion of the project cost, but large portions of the project may be funded by the County, the State, or other adjoining cities. Source of Funds The Fund receives its revenues from many sources, a large portion of the project costs are shared with the utility funds and other sources, e.g. Municipal State Aid for eligible projects. A portion of the funding identified as property tax levy is included within the General Fund Levy and is transferred each year to the Road Improvement Fund and represents the taxpayer’s support of the annual street program. Use of Funds The City prepares a detailed five year capital improvement plan that outlines all planned renovations and improvements. Significant anticipated projects include a number of street reconstructions, annual street overlay, and traffic signals. Fund Outlook The current Pavement Management Program began with the 2013 construction season. This fund has had a negative balance for many years and is related to a number of years when the annual Pavement Management Program was without an identified funding source. The projected expenditures over the next 3 years will exceed the revenues available. As the program is developed further additional revenue sources may need to be contemplated to maintain the anticipated management program. The Fund’s outlook could improve with additional transfers from the General Fund positive ending balance, or savings on individual construction projects. DRAFT 06-05-2017 25 Financial Analysis: Road Improvement Fund (2025)2017 2018 2019 2020 2021Source of FundsTax Levy - Transfer from General Fund3,332,100 3,317,000 3,417,000 3,520,000 3,625,000 MSA Maintenance550,000 566,500 583,000 599,500 616,000 MSA Construction1,340,000 2,500,000 1,171,000 969,000 - Investment Earnings- - - - - Special Assessments- 125,000 675,000 - - TIF 1 or TIF 7- - - - - Grants or Other Governments share295,975 225,000 49,000 3,300,000 - Water Utility1,412,798 1,084,706 1,263,106 1,725,000 1,322,000 Sewer Utility966,000 1,059,545 1,219,545 1,516,000 1,162,000 Storm Water Utility420,000 556,600 951,600 1,325,000 697,000 Other Funds25,000 - - - - Transfer from other funds- - - 400,000 - Total Source of Funds8,341,873$ 9,434,351$ 9,329,251$ 13,354,500$ 7,422,000$ Use of FundsCity signal upgrade 140th @ Galaxie200,000 City signal right turn lanes 140th @ Galaxie250,000 DC signal design CSAH 42 upgrades70,000 DC signal design CSAH 38 upgrades88,000 DC signal design CSAH 31 /CSAH 46 upgrade70,000 DC signal and lane mods CSAH 23 @ 157th12,000 DC signal design and widening CSAH 38150,000 Street proj, Palomino Hills 3rd & 4th4,927,798 Street proj, Embry Place to CR 42375,000 Street overlay/resurfacing Galaxie Ave450,000 Street proj, Ring Route concrete repairs55,000 Street proj, Johnny Cake corridor study110,000 Street proj, Galaxie Ave. corridor study50,000 Street microsurface/ crack sealing550,000 Street proj, Hayes campus parking lot300,000 Trail CSAH 38 north side Hwy 77 to CR 11112,000 Trail CSAH 42 north side CR 31 to CR 3362,500 City signal install 147th @ JCRR250,000 DC signal design CSAH 42154,000 DC signal upgrade CSAH 31/CSAH 4660,000 DRAFT 06-05-201726 Financial Analysis: Road Improvement Fund (2025)2017 2018 2019 2020 2021(continued)Street proj, Rdwd Dr, Cir, Ct & Keller Lake Dr2,100,568 Street proj, AV 12th1,855,242 Street proj, Rdwd Dr/ Whitney Pnd storm bypass200,000 Street proj, JCRR, Lapaz 2nd3,043,000 Street proj, 133rd St Ct / 134th St Ct1,045,000 Street proj, road widening CSAH 38170,000 Street overlay/resurfacing400,000 Street microsurface/ crack sealing566,500 Trail resurfacing170,000 DC signal CSAH 42 @ JCRR250,000 DC signal CSAH 42 upgrades1,196,000 Street proj, Apple Valley 11th 3,947,031 Street proj, North and South Surrey Trail2,120,400 Trail rehabilitation81,000 Street overlay/resurfacing400,000 Street microsurface/ crack sealing583,000 Street proj, Cimmarron Rd2,950,000 Street proj, AV 3rd (Rdwd, Prk, Juniper)4,178,000 Street proj, Garden View Dr - CR 42 to Whitney1,880,040 Street overlay/resurfacing78,000 Pedestrian overpass Cedar @ 147th3,700,000 Street microsurface/ crack sealing599,500 Street proj, AV 3rd (Pinewood, Walnut)- 2,650,000 Street proj, AV 10th (phase 1)3,000,000 Street overlay/resurfacing78,000 Street microsurface/ crack sealing616,000 Total Use of Funds7,832,298$ 10,014,310$ 8,577,431$ 13,385,540$ 6,344,000$ Net Change509,575$ (579,959)$ 751,820$ (31,040)$ 1,078,000$ Beginning Fund Balance(4,707,075)$ (4,197,500)$ (4,777,459)$ (4,025,639)$ (4,056,679)$ Ending Fund Balance(4,197,500)$ (4,777,459)$ (4,025,639)$ (4,056,679)$ (2,978,679)$ DRAFT 06-05-201727 Park Dedication Fund Fund Description Apple Valley’s subdivision ordinance require subdivision applicants to dedicate a reasonable portion of land within the development to the public to address infrastructure needs created by the development. In lieu of this dedication of land the City may accept a cash fee for some costs of development. Background Cash payments received must be placed in a special fund to be used only for the purposes for which the money was obtained. Cash payments received must be used only for the acquisition and development or improvement of parks, recreational facilities, playgrounds, trails, wetlands, or open space based on the approved park systems plan. Source of Funds The fund receives its revenues from two primary sources; cash payments received from developers and nvestment earnings. Use of Funds Funds are used for the acquisition and development or improvement of parks, recreational facilities, playgrounds, trails, wetlands, or open space. Cash payments may not be used for ongoing operation or maintenance of parks, recreational facilities, playgrounds, trails, wetlands, or open space. Fund Outlook The Park Dedication Fund has recovered and is projected to have a balance in the fund of $929,000 at the end of 2015. The 2016-2020 CIP includes: • The remaining assessments on the property purchases for the Kelley Park expansion which will retire in 2022. The payoff balance at 12-31-15 is $150,913 which could be paid off early and save approximately 34,000 in interest charges.; • Assessments related to the extension of 157th St West of Pilot Knob in 2016 abutting Quarry Point Park • Development of Cortland Park • Development of Kelley Park • Extension of sewer services to Johnny Cake Ridge Park East from 142nd St DRAFT 06-05-2017 28 Financial Analysis: Park Dedication Fund2017 2018 2019 2020 2021Source of FundsDedication Fees received271,674$ 162,000$ 162,000$ 162,000$ 162,000$ Investment Earnings13,500 1,100 2,700 4,500 3,100 Total Source of Funds285,174$ 163,100$ 164,700$ 166,500$ 165,100$ Use of FundsParksSpecial Assessments from the Kelley Park Land Purchase32,155$ 29,653$ 28,240$ 23,786$ 22,556$ Cortland Park development250,000 Kelley Park development1,000,000 JCRP east sewer connection to 142nd St.250,000 Total Use of Funds1,282,155$ 29,653$ 28,240$ 273,786$ 22,556$ Net Change(996,981)$ 133,447$ 136,460$ (107,286)$ 142,544$ Beginning Cash/ Fund Balance1,083,481$ 86,500$ 219,947$ 356,407$ 249,121$ Ending Cash/ Fund Balance86,500$ 219,947$ 356,407$ 249,121$ 391,665$ DRAFT 06-05-201729 Water Utility Fund Fund Description The Water Utility provides high quality, safe and reliable drinking water. Background Water is derived from the operation of 20 municipal groundwater wells and pumped to a central water treatment plant. The existing capacity of the water treatment plant is 24 million gallons of water per day, which is sufficient to meet the future water demands of the city. The water distribution system consists of 240 miles of water main pipe and 5 reservoirs with a storage capacity of 12.7 million gallons. The current average daily demand is 6.8 million gallons. Source of Funds The fund receives nearly all of its revenue from the sale of water to customers within the City. The tiered rates are structured so that the consumption charge increases as the use exceeds certain tiers. This escalating rate structure is intended to encourage conservation. With the meter replacement program it is estimated that metered consumption will increase 3% beginning in 2018. With the significant capital outlay needs of the fund in the next five years this document assumes that the meter replacement program would be financed over a ten year term. Use of Funds The utility is also responsible for the portion of the annual street maintenance project related to the water system; in 2017 and 2018 the CIP includes $1,413,000 and $1,085,000 respectively for this purpose. Over the five year span of this CIP the water utility is shown to be expending $6,807,000, this will exceed the funding available in the Water and Sewer Fund. Fund Outlook The next large expenditure of the utility will be the replacement of customer water meters, which is included in the years 2017 to 2019. The five year projection below assumes a 5% increase in the utility rates for 2018 and beyond. One of the larger upcoming expenditures is the meter replacement program, included here at $4.5 million over the next three years. Once the estimated costs and timing of the meter replacement program is determined rates may need to be adjusted in future years. The capital needs combined with the meter replacement program will result in additional rate increases. DRAFT 06-05-201730 Financial Analysis: Water Utility 2017 Budget 2018 estimate 2019 estimate 2020 estimate 2021 estimate Revenues:Utility Charges4,426,000$ 4,805,000$ 5,045,000$ 5,297,000$ 5,562,000$ Investment Earnings105,000 100,000$ 66,000$ 56,000$ 28,000$ Other Revenues75,000 75,000 75,000 75,000 75,000 Total4,606,000 4,980,000 5,186,000 5,428,000 5,665,000 Expenses:Personnel Services‐ Wages828,505 850,365 867,000 884,000 902,000 Personnel Services‐ Benefits268,440 276,700 285,000 294,000 303,000 Total Personnel Services1,096,945 1,127,065 1,152,000 1,178,000 1,205,000 Supplies228,962 229,530 234,100 238,800 243,600 Services309,713 228,700 233,300 238,000 242,800 Utilities406,720 420,230 437,000 454,500 472,700 Repairs & Maint221,665 249,945 254,900 260,000 265,200 Other operating Costs391,920 486,180 495,900 505,800 515,900 Items for resale35,000 36,000 36,700 37,400 38,100 Depreciation1,230,000 1,306,000 1,203,646 1,385,646 1,490,146 Non Capitalized Capital outlay52,000 183,500 146,000 166,000 174,000 Transfers/Admin Fee to General Fund542,320 556,250 572,900 590,100 607,800 Debt Service interest207,825 192,825 185,125 177,225 169,225 Total Expense4,723,070 5,016,225 4,951,571 5,231,471 5,424,471 Net Income (loss)(117,070) (36,225) 234,429 196,529 240,529 Addback Depreciation1,230,000 1,306,000 1,203,646 1,385,646 1,490,146 Add Debt Issued1,500,000 2,000,000 1,000,000 Less: Debt Service Principal ‐ Trmt Plant(380,000) (385,000) (395,000) (400,000) (410,000) Less: Debt Service Principal ‐ Meter Replacement(165,000) (390,000) (495,000) (495,000) Less Capital Outlay ‐Meter Replacement(1,500,000) (2,000,000) (1,000,000) - - Less: Capital Outlay(2,946,800) (1,659,400) (1,752,300) (3,003,500) (1,883,000) Net use of cash(2,213,870) (774,625) (709,225) (1,821,325) (562,325) Beginning Cash Balance7,400,000 5,186,130 4,411,505 3,702,280 1,880,955 Ending Cash Balance5,186,130$ 4,411,505$ 3,702,280$ 1,880,955$ 1,318,630$ DRAFT 06-05-201731 Sanitary Sewer Fund Fund Description The Sanitary Sewer Utility provides wastewater service to 50,000 Apple Valley residents. The Sanitary Sewer Utility Fund operates and maintains the sanitary sewer conveyance system and delivers wastewater to the regional treatment plants operated by the Metropolitan Council Environmental Services (MCES). Background The sanitary sewer system consists of 193 miles of sanitary sewer mains and 9 sanitary lift stations. The system conveys the sewage to the regional wastewater treatment facilities operated by Metropolitan Council Environmental Services (MCES). The system conveys approximately 1.2 billion gallons of wastewater each year. Source of Funds The fund receives nearly all of its revenue from the sale of water to customers. The sanitary sewer charges are based on actual water usage for each individual property. The rates are structured so that the consumption charge increases as the use exceeds certain thresholds. This escalating rate structure is intended to encourage conservation. Use of Funds In addition to the personnel and maintenance costs of operating the utility the largest expense of the utility is the annual charge levied by the MCES for the treatment of wastewater based on the sanitary sewer flows from the City. The 2017 and 2018 budget includes $2,700,000 and $2,839,000 respectively for the treatment of wastewater by MCES. The utility is also responsible for the portion of the annual street maintenance project related to the sanitary system; in 2017 and 2018 the CIP includes $966,000 and $1,060,000 respectively for this purpose. Over the five year span of this CIP the water utility is shown to be expending $5,923,000, this will exceed the funding available in the Water and Sewer Fund. Fund Outlook The working capital levels of the fund continue to be maintained at sufficient levels for the operation of the utility. The five year projection below assumes a 5% increase in the utility rates for 2018 and thereafter. DRAFT 06-05-201732 Financial Analysis: Sewer Utility 2017 Budget 2018 estimate 2019 estimate 2020 estimate 2021 estimate Revenues:Utility Charges5,064,000$ 5,498,000$ 5,773,000$ 6,062,000$ 6,365,000$ Investment Earnings105,000 100,000 26,000 17,000 9,000 Other Revenues60,000 60,000 60,000 60,000 60,000 Total5,229,000 5,658,000 5,859,000 6,139,000 6,434,000 Expenses:Personnel Services‐ Wages 515,050 527,830 538,000 549,000 560,000 Personnel Services‐ Benefits 195,465 202,230 208,000 214,000 220,000 Total Personnel Services 710,515 730,060 746,000 763,000 780,000 Supplies 70,185 81,065 83,000 85,000 87,000 Services 85,905 49,425 50,000 51,000 52,000 Utilities 33,100 34,200 36,000 37,000 38,000 Repairs & Maint 103,895 108,930 111,000 113,000 115,000 Other operating Costs 273,235 280,415 286,000 292,000 298,000 MCES Treatment 2,700,000 2,839,000 2,981,000 3,130,000 3,287,000 Depreciation 710,000 743,000 816,000 892,000 972,000 Non Capitalized Capital outlay 15,000 4,600 40,000 40,000 40,000 Transfers/Admin Fee to General Fund 529,000 552,800 569,000 586,000 604,000 Total Expenses 5,230,835 5,423,495 5,718,000 5,989,000 6,273,000 Net Income (loss)(1,835) 234,505 141,000 150,000 161,000 Addback Depreciation710,000 743,000 816,000 892,000 972,000 Subtract Capital Outlay(1,901,000) (1,466,545) (1,527,400) (1,592,100) (1,278,000) Net use of cash(1,192,835) (489,040) (570,400) (550,100) (145,000) Beginning Cash Balance3,400,000 2,207,165 1,718,125 1,147,725 597,625 Ending Cash Balance2,207,165$ 1,718,125$ 1,147,725$ 597,625$ 452,625$ DRAFT 06-05-201733 Storm Water Utility Fund Fund Description The Storm Water Utility Fund provides for the operation and maintenance of the City’s storm water drainage system and the management of surface water bodies. A majority of expenses related to this activity relate to improvement projects to fulfill State and Federal mandates for pollutant load reduction to lakes, maintenance of the drainage system, and the drainage system costs related to the annual street maintenance program. Background The storm water sewer system consists of 193 miles of sewer pipe and 12 storm water lift stations. Source of Funds The fund receives nearly all of its revenue from storm water charges to customers on their utility bills. The rates are based on estimated runoff from impervious surfaces on each parcel. In 2011, the City issued $2,600,000 of GO Storm water Utility Revenue bonds to fund a number of projects. Use of Funds The majority of the expenditures of the fund are used to address Federal or State mandates. The utility is also responsible for the portion of the annual street maintenance project related to the sanitary system; in 2017 and 2018 the CIP includes $420,000 and $567,000 respectively for this purpose. Over the five year span of this CIP the water utility is shown to be expending $3,950,000, this will exceed the funding available in the Storm Water fund. Fund Outlook The five year projection below assumes an annual increase of 3% in the storm water rates. As additional mandates are created, negative pressure will be placed on the fund resources and additional rate increases may be needed. DRAFT 06-05-201734 Financial Analysis: Storm Water Utility 2017 Budget 2018 estimate 2019 estimate 2020 estimate 2021 estimate Revenues:Utility Charges1,710,000$ 1,796,000$ 1,976,000$ 2,174,000$ 2,391,000$ Investment Earnings32,000 33,000 34,000 10,000 3,000 Other Revenues5,000 5,000 60,000 60,000 60,000 Total1,747,000 1,834,000 2,070,000 2,244,000 2,454,000 Expenses:Personnel Services‐ Wages 180,070 184,000 188,000 192,000 196,000 Personnel Services‐ Benefits 46,950 48,000 49,000 50,000 52,000 Total Personnel Services 227,020 232,000 237,000 242,000 248,000 Supplies 41,025 42,000 43,000 44,000 45,000 Services 359,475 367,000 374,000 381,000 389,000 Utilities 57,800 59,000 60,000 61,000 62,000 Repairs & Maint 52,750 54,000 55,000 56,000 57,000 Other operating Costs 12,865 13,000 13,000 13,000 13,000 Depreciation 550,000 577,000 623,000 734,000 795,000 Non Capitalized Capital outlay 108,000 125,000 100,000 102,000 102,000 Transfers/Admin Fee to General Fund 339,660 348,000 358,000 369,000 380,000 Debt Service ‐ interest 49,480 46,282 42,652 38,692 34,272 Total Expenses 1,798,075 1,863,282 1,905,652 2,040,692 2,125,272 Net Income (loss)(51,075) (29,282) 164,348 203,308 328,728 Addback Depreciation550,000 577,000 623,000 734,000 795,000 Less: Debt Service Principal(160,000) (165,000) (165,000) (170,000) (175,000) Less: Capital Outlay(545,000) (926,700) (2,220,700) (1,225,000) (797,000) Net use of cash(206,075) (543,982) (1,598,352) (457,692) 151,728 Beginning Cash Balance3,032,000 2,825,925 2,281,943 683,591 225,899 Ending Cash Balance2,825,925$ 2,281,943$ 683,591$ 225,899$ 377,627$ DRAFT 06-05-201735 (This Page Intentionally Left Blank) DRAFT 06-05-2017 36 CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM 2017-2021 Section 3 5 Year CIP Tables DRAFT 06-05-2017 37 (This Page Intentionally Left Blank) DRAFT 06-05-2017 38 CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM 2017-2021 2017 Projects DRAFT 06-05-2017 39 City of Apple ValleyCapital Improvements Program 2017-20212017 ProjectsDeptProject NameGeneral FundMunicipal Building Fund Ice Arena GolfLiquorOld City Hall Fund Cemetery Fund Other Sources Total FundingBuilding and Facility ImprovementsCity Hall City Hall boiler and HVAC218,000$ 218,000$ City Hall City Hall restroom rennovation20,000$ 20,000$ City Hall City Hall residing and painting50,000$ 50,000$ City Hall City Hall retaining wall15,000$ 15,000$ City Hall City Hall roof (half sections)140,000$ 140,000$ City Hall City Hall sidewalk & pavement15,000$ 15,000$ City Hall City Hall windows30,000$ 30,000$ Fire Fire Station monument signs25,459$ 25,459$ Liquor Liquor Store 3 ground sign75,000$ 75,000$ Muni Cntr Municipal Center bathroom counters10,000$ 10,000$ Parks Hayes Arena compressor15,000$ 15,000$ Parks Hayes Arena Conference Room Roof12,000$ 12,000$ Parks Hayes Arena LED lighting35,000$ 35,000$ Parks Sports Arena LED lighting17,500$ 17,500$ 35,000$ Parks Comm Cntr carpet35,000$ 35,000$ Parks Comm Cntr front counter glass enclosure12,000$ 12,000$ Parks Comm Cntr interior painting25,000$ 25,000$ Parks Comm Cntr lobby and hallway lighting10,000$ 10,000$ Parks Comm Cntr sport court gym flooring100,000$ 100,000$ Parks Senior Cntr banquet chairs15,000$ 15,000$ Parks Valleywood banquet/bar/patio furniture7,000$ 7,000$ Parks Valleywood ceremony chairs5,000$ 5,000$ Parks Valleywood clubhouse & exterior lighting10,000$ 10,000$ Parks Valleywood dance floor4,000$ 4,000$ Parks Aquatic Cntr bathhouse floor resurfacing40,000$ 40,000$ ParksAquatic Cntr coolers and freezers13,000$ 13,000$ Parks Aquatic Cntr Diamond Bright lap lanes 80,000$ 80,000$ Parks Aquatic Cntr rental cabanas 16,000$ 16,000$ Parks Redwood building improvements 20,000$ 20,000$ Pub Wrks CMF roof section 30,000$ 30,000$ Pub Wrks CMF Streets Foreman offices 7,500$ 7,500$ Pub Wrks CMF Vehicle Storage floor 32,500$ 32,500$ Pub Wrks Cemetery acquired property site grading100,000$ 100,000$ Subtotal 69,459$ 402,000$ 79,500$ 26,000$ 75,000$ 488,000$ 100,000$ 17,500$ 1,257,459$ Capital TechnologyInfo Tech IT public safety laptops 60,000$ 60,000$ Info Tech IT servers, networking, pc's, etc. 89,200$ 89,200$ Info Tech IT software & network licenses 137,880$ 137,880$ Parks Comm Cntr meeting room TVs 5,000$ 5,000$ Parks Valleywood A/V equipment15,000$ 15,000$ Parks Aquatic Cntr POS system 15,000$ 15,000$ Subtotal 307,080$ 15,000$ 322,080$ DRAFT 06-05-201740 City of Apple ValleyCapital Improvements Program 2017-20212017 ProjectsDeptProject NameGeneral FundVERF Charges - (Internal Service Fund)Equip / VERF ExpenseMunicipal Building Fund Park Dedication Golf Water UtilitySan. Sewer UtilityStorm Drainage Utility Other Sources Total FundingFleet Vehicles and Equipment (appendix B)Com Dev Code Enforcement VERF Charge2,540$ 2,540$ Fire Fire vehicles & equipment270,000$ 270,000$ Fire Fire VERF charge292,100$ 292,100$ Muni Cntr Municipal Center VERF charge2,620$ 2,620$ Parks Valleywood cart lease annual payment45,000$ 45,000$ Parks Valleywood vehicles & equipment125,000$ 125,000$ Parks Parks Maint vehicles & equipment496,300$ 496,300$ Parks Parks Maint VERF charge212,950$ 212,950$ Police Police vehicles & equipment79,000$ 79,000$ Police Police VERF charge196,870$ 196,870$ Pub Wrks Engineering vehicles & equipment27,500$ 27,500$ Pub Wrks Engineering VERF charge10,000$ 10,000$ Pub Wrks Fleet Maint VERF charge5,550$ 5,550$ Pub Wrks Building Inspections VERF charge9,500$ 9,500$ Pub Wrks Natural Resources VERF charge4,450$ 4,450$ Pub Wrks Streets vehicles & equipment421,300$ 421,300$ Pub Wrks Streets VERF charge105,000$ 105,000$ Pub Wrks Sewer Replace JD 977 Mower # 70420,000$ 20,000$ Pub Wrks Water & Sewer line camera135,000$ 135,000$ Subtotal-$ 841,580$ 1,294,100$ -$ -$ 170,000$ -$ 155,000$ -$ -$ 2,460,680$ Parks, Playgrounds, Paths, Open SpaceParksPark, Cortland development250,000$ 250,000$ Parks Park, Kelley development1,000,000$ 1,000,000$ Parks Park reforestation10,000$ 10,000$ ParksPark, JCRPW fence between soccer fields20,000$ 20,000$ Parks Park, Valley Middle bldg roof55,000$ 55,000$ Parks Park, AV East ice rink12,000$ 12,000$ Parks Greenway underpasses600,000$ 600,000$ Parks Park trail overlays30,000$ 30,000$ Subtotal72,000$ 55,000$ 1,250,000$ 600,000$ 1,977,000$ Ponds, Natural Resources, and EnvironmentPub Wrks Pond easement acquisition50,000$ 50,000$ Pub Wrks Storm pond sediment removal45,000$ 45,000$ Subtotal95,000$ 95,000$ DRAFT 06-05-201741 City of Apple ValleyCapital Improvements Program 2017-20212017 ProjectsDeptProject NameGeneral FundSpecial Assessments Water UtilitySan. Sewer UtilityStorm Drainage UtilityStreet Light UtilityRoad Improvement FundMuncipal State Aid Cemetery Fund Other Govt Total FundingStreet and Utility ImprovementsPub Wrks Cemetery Assessment for Embry Way85,000$ 85,000$ Pub Wrks City signal upgrade 140th @ Galaxie200,000$ 200,000$ Pub Wrks City signal right turn lanes 140th @ Galaxie250,000$ 250,000$ Pub Wrks DC signal design CSAH 42 upgrades70,000$ 70,000$ Pub Wrks DC signal design CSAH 38 upgrades88,000$ 88,000$ Pub Wrks DC signal design CSAH 31 /CSAH 46 upgrade70,000$ 70,000$ Pub Wrks DC signal and lane mods CSAH 23 @ 157th12,000$ 12,000$ Pub Wrks DC signal design and widening CSAH 38150,000$ 150,000$ Pub Wrks Street project G/F levy allocation3,332,100$ (3,332,100)$ -$ Pub Wrks Street proj, Palomino Hills 3rd & 4th1,412,798$ 966,000$ 420,000$ 25,000$ 2,104,000$ 4,927,798$ Pub Wrks Street proj, Embry Place to CR 42175,000$ 200,000$ 375,000$ Pub Wrks Street overlay/resurfacing Galaxie Ave450,000$ 450,000$ Pub Wrks Street proj, Ring Route concrete repairs55,000$ 55,000$ Pub Wrks Street proj, utility breaks patching55,000$ 55,000$ Pub Wrks Street proj, 140th Street driveway entrance25,000$ 25,000$ Pub Wrks Street proj, Johnny Cake corridor study110,000$ 110,000$ Pub Wrks Street proj, Galaxie Ave. corridor study50,000$ 50,000$ Pub Wrks Street microsurface/ crack sealing550,000$ 550,000$ Pub Wrks Street proj, Hayes campus parking lot300,000$ 300,000$ Pub WrksTrail CSAH 38 north side Hwy 77 to CR 1150,400$ 61,600$ 112,000$ Pub Wrks Trail CSAH 42 north side CR 31 to CR 3328,125$ 34,375$ 62,500$ FinanceSubdivision improvements100,000$ 100,000$ Subtotal3,332,100$ 100,000$ 1,467,798$ 966,000$ 445,000$ 25,000$ (509,575)$ 1,890,000$ 85,000$ 295,975$ 8,097,298$ Utility Infrastructure PreservationPub Wrks Ring Route street light painting8,500$ 8,500$ Pub Wrks Lift Station, Sanitary No. 5 Rehab720,000$ 720,000$ Pub Wrks Lift 1 pump replacement (1 of 3)60,000$ 60,000$ Pub Wrks General stormwater improvements100,000$ 100,000$ Pub Wrks Well Maint Wells 8 and 12130,000$ 130,000$ Pub Wrks WTP Pump Maint - LZP314,000$ 14,000$ Pub Wrks Water meter system replacement 2 of 31,500,000$ 1,500,000$ Pub Wrks Well Maint Well 16 Recommissioning200,000$ 200,000$ Pub Wrks Water Line Watermain Diamond Path275,000$ 275,000$ Pub Wrks Water Reservoir Maint835,000$ 835,000$ Pub Wrks Gate valve replacements25,000$ 25,000$ Subtotal2,979,000$ 780,000$ 100,000$ 8,500$ 3,867,500$ DRAFT 06-05-201742 CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM 2017-2021 2018 Projects DRAFT 06-05-2017 43 City of Apple ValleyCapital Improvements Program 2017-20212018 ProjectsDeptProject NameGeneral FundMunicipal Building FundFuture Capital Projects Fund GO/Revenue BondsIce ArenaLiquorOld City Hall Fund Cemetery Fund Total FundingBuilding and Facility ImprovementsCity Hall City Hall fire sprinkler protection45,000$ 45,000$ City Hall City Hall roof (half sections)130,000$ 130,000$ City Hall City Hall windows30,000$ 30,000$ Fire Fire Station 1 apparatus bay floor 30,000$ 30,000$ Fire Fire Station 3 apparatus bay floor 25,000$ 25,000$ Fire Fire Station 4 construction3,000,000$ 3,000,000$ Fire Fire Station 4 land acquisition 500,000$ 500,000$ Muni Cntr Municipal Center PD HVAC phase 1 60,000$ 60,000$ Muni Cntr DC Govt. Cntr parking lot overlay 120,000$ 120,000$ Parks Sports Arena R-22 system1,800,000$ 1,800,000$ Parks Comm Cntr flooring various rooms 35,000$ 35,000$ Parks Comm Cntr hardwood gym curtains 60,000$ 60,000$ Parks Comm Cntr restroom/locker room flooring 15,000$ 15,000$ Parks Comm Cntr restroom/locker room partitions 15,000$ 15,000$ Parks Senior Cntr interior painting high traffic 15,000$ 15,000$ Parks Teen Cntr minor improvements 10,000$ 10,000$ Parks Aquatic Cntr funbrellas 20,000$ 20,000$ Parks Aquatic Cntr waterslide 150,000$ 150,000$ Parks Redwood building improvements 20,000$ 20,000$ Pub Wrks CMF North & West Lot chip seal 15,000$ 15,000$ Pub Wrks CMF restrooms 20,000$ 20,000$ Pub Wrks CMF windows, doors, OH doors 38,000$ 38,000$ Pub Wrks Cemetery boundary fence200,000$ 200,000$ Pub Wrks Cemetery internal roads175,000$ 175,000$ Pub Wrks Columbarium50,000$ 50,000$ Pub Wrks CMF CoRayVac program thermostat cntrl6,000$ 6,000$ Subtotal85,000$ 449,000$ 620,000$ 3,000,000$ 1,800,000$ 205,000$ 425,000$ 6,584,000$ Capital TechnologyInfo Tech IT servers, networking, pc's, etc.90,000$ 90,000$ Info Tech IT software & network licenses140,000$ 140,000$ Info Tech IT special projects70,000$ 70,000$ Liquor Liquor Store security cameras12,000$ 12,000$ Parks Comm Cntr rental room audio/visual equip10,000$ 10,000$ Parks Senior Cntr audio/visual equipment20,000$ 20,000$ Police Police radios90,000$ 90,000$ Subtotal420,000$ 12,000$ 432,000$ DRAFT 06-05-201744 City of Apple ValleyCapital Improvements Program 2017-20212018 ProjectsDeptProject NameGeneral FundVERF Charges - (Internal Service Fund)Equip / VERF Expense Ice ArenaGolfWater UtilitySan. Sewer UtilityStorm Drainage UtilityOther Sources Total FundingFleet Vehicles and Equipment (appendix B)Com Dev Code Enforcement VERF Charge 2,540$ 2,540$ Com Dev Code Enforcment vehicles & equipment-$ Fire Fire vehicles & equipment 621,900$ 621,900$ Fire Fire VERF charge 321,000$ 321,000$ Muni Cntr Municipal Center vehicles & equipment-$ Muni Cntr Municipal Center VERF charge 2,620$ 2,620$ Parks Hayes Arena lift12,000$ 12,000$ Parks Valleywood cart lease annual payment45,000$ 45,000$ Parks Valleywood vehicles & equipment60,000$ 60,000$ Parks Parks Maint vehicles & equipment 271,100$ 271,100$ Parks Parks VERF charge 231,000$ 231,000$ Police Police vehicles & equipment 105,500$ 105,500$ Police Police VERF charge 216,560$ 216,560$ Pub Wrks Engineering vehicles & equipment-$ Pub Wrks Engineering VERF charge 10,250$ 10,250$ Pub Wrks Streets wire feed welder 9,500$ -9,500$ Pub Wrks Fleet Maint vehicles & equipment-$ Pub Wrks Fleet Maint VERF charge 5,700$ 5,700$ Pub Wrks Building Inspections vehicles & equipment-$ Pub Wrks Building Inspections VERF charge 12,600$ 12,600$ Pub Wrks Natural Resources vehicles & equipment 24,400$ 24,400$ Pub Wrks Natural Resources VERF charge 4,450$ 4,450$ Pub Wrks Storm Utility vehicles & equipment-$ Pub Wrks Streets vehicles & equipment 513,900$ 513,900$ Pub Wrks Streets VERF charge 185,000$ 185,000$ Pub Wrks Replace 3/4 Ton Pickup #406 35,700$ 35,700$ Pub Wrks Sewer jetter287,000$ 287,000$ Pub Wrks 3/4 ton pick-up-$ Pub Wrks Forklift-$ Pub WrksPlow truck-$ Pub Wrks Tandem plow truck-$ Pub Wrks Sweeper # 324250,100$ 250,100$ Subtotal9,500$ 991,720$ 1,536,800$ 12,000$ 105,000$ 35,700$ 287,000$ 250,100$ -$ 3,227,820$ Parks, Playgrounds, Paths, Open SpaceParks Park, neighborhood backstops (5)13,000$ 13,000$ Parks Park reforestation10,000$ 10,000$ Parks Park, Valley Middle ice rink15,000$ 15,000$ Parks Greenway underpasses600,000$ 600,000$ Parks Park trail overlays40,000$ 40,000$ Subtotal78,000$ 600,000$ 678,000$ Ponds, Natural Resources, and EnvironmentPub Wrks Pond easement acquisition75,000$ 75,000$ Pub Wrks Storm pond sediment removal50,000$ 50,000$ Subtotal125,000$ 125,000$ DRAFT 06-05-201745 City of Apple ValleyCapital Improvements Program 2017-20212018 ProjectsDeptProject NameGeneral FundFuture Capital Projects FundSpecial AssessmentsWater UtilitySan. Sewer UtilityStorm Drainage UtilityStreet Light UtilityRoad Improvement Muncipal State Aid Grant Funding Other Govt Total FundingStreet and Utility ImprovementsFinance Subdivision improvements100,000$ 100,000$ Pub Wrks City signal install 147th @ JCRR 125,000$ 125,000$ 250,000$ Pub Wrks DC signal design CSAH 42154,000$ 154,000$ Pub Wrks DC signal upgrade CSAH 31/CSAH 4660,000$ 60,000$ Pub Wrks Street project G/F levy allocation 3,317,000$ (3,317,000)$ -$ Pub Wrks Street proj, Rdwd Dr, Cir, Ct & Keller Lake Dr 404,000$ 365,000$ 396,000$ 935,568$ 2,100,568$ Pub Wrks Street proj, AV 12th562,706$ 499,545$ 31,600$ 761,391$ 1,855,242$ Pub Wrks Street proj, Rdwd Dr/ Whitney Pnd storm bypass100,000$ 100,000$ 200,000$ Pub Wrks Street proj, JCRR, Lapaz 2nd118,000$ 115,000$ 14,000$ 680,000$ 2,116,000$ 3,043,000$ Pub Wrks Street proj, 133rd St Ct / 134th St Ct80,000$ 15,000$ 950,000$ 1,045,000$ Pub Wrks Street proj, road widening CSAH 38170,000$ 170,000$ Pub Wrks Street overlay/resurfacing400,000$ 400,000$ Pub Wrks Cedar Ave. Entrance Monument 60,000$ 60,000$ Pub Wrks ADA Transition Plan 50,000$ 50,000$ Pub Wrks Street microsurface/ crack sealing566,500$ 566,500$ Pub Wrks Trail resurfacing45,000$ 125,000$ 170,000$ Subtotal 3,367,000$ 60,000$ 225,000$ 1,084,706$ 1,059,545$ 556,600$ 579,959$ 3,066,500$ 100,000$ 125,000$ 10,224,310$ Utility Infrastructure PreservationPub Wrks Ring Route street light painting10,000$ 10,000$ Pub Wrks Lift 1 pump replacement (2 of 3)60,000$ 60,000$ Pub Wrks General stormwater improvements100,000$ 100,000$ Pub Wrks Well Maint Wells 1, 2 and 18130,000$ 130,000$ Pub Wrks WTP Pump Maint - LZP114,000$ 14,000$ Pub Wrks Water meter system replacement 3 of 32,000,000$ 2,000,000$ Pub Wrks Water Reservoir Maint Nordic10,000$ 10,000$ Pub Wrks Water Longridge/Harwell corrosion mitigation300,000$ 300,000$ Pub Wrks Gate valve replacements25,000$ 25,000$ Pub Wrks Asset Management software50,000$ 20,000$ 20,000$ 20,000$ 110,000$ Pub Wrks Fiber network extension40,000$ 40,000$ 80,000$ Subtotal50,000$ 2,539,000$ 120,000$ 120,000$ 10,000$ 2,839,000$ DRAFT 06-05-201746 CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM 2017-2021 2019 Projects DRAFT 06-05-2017 47 City of Apple ValleyCapital Improvements Program 2017-20212019 ProjectsDeptProject NameGeneral FundMunicipal Building Fund Ice Arena LiquorOld City Hall Fund Cemetery Fund Other Sources Total FundingCity Hall City Hall interior lighting190,000$ 190,000$ Muni Cntr Municipal Center data room back-up cooling40,000$ 40,000$ Fire Fire Station 2 apparatus bay floor25,000$ 25,000$ Muni Cntr Municipal Center PD training room area56,000$ 56,000$ Muni Cntr Municipal Center recarpet200,000$ 200,000$ Parks Hayes Arena roof200,000$ 200,000$ Parks Comm Cntr locker room flooring/fixtures20,000$ 20,000$ Parks Comm Cntr sport court gym roof100,000$ 100,000$ Parks Senior Cntr building upgrades35,000$ 35,000$ Parks JCRPE new LED lighting500,000$ 500,000$ Parks JCRPE Soccer Stadium roof6,000$ 6,000$ Parks Aquatic Cntr waterslide150,000$ 150,000$ Pub Wrks CMF front East/West face window panes18,000$ 18,000$ Pub Wrks CMF hallway tile flooring12,000$ 12,000$ Pub Wrks CMF old washbay conversion27,000$ 27,000$ Pub Wrks Cemetery driveway from Embry200,000$ 200,000$ Pub Wrks CMF Streets/Parks bldg unit heater15,000$ 15,000$ Subtotal525,000$ 639,000$ 200,000$ 190,000$ 200,000$ 40,000$ 1,794,000$ Info Tech IT servers, networking, pc's, etc.100,000$ 100,000$ Info Tech IT software & network licenses145,000$ 145,000$ Info Tech IT special projects70,000$ 70,000$ Liquor Liquor Store security cameras and DVR's20,000$ 20,000$ Police Police radios90,000$ 90,000$ Subtotal405,000$ 20,000$ 425,000$ DRAFT 06-05-201748 City of Apple ValleyCapital Improvements Program 2017-20212019 ProjectsDeptProject NameVERF Charges - (Internal Service Fund)Equip / VERF Expense Golf Water UtilitySan. Sewer UtilityStorm Drainage Utility Other Sources Total FundingFleet Vehicles and Equipment (appendix B)Com Dev Code Enforcement VERF Charge 2,600$ 2,600$ Com Dev Code Enforcment vehicles & equipment-$ Fire Fire vehicles & equipment 73,500$ 73,500$ Fire Fire VERF charge 353,100$ 353,100$ Muni Cntr Municipal Center vehicles & equipment-$ Muni Cntr Municipal Center VERF charge 2,690$ 2,690$ Parks Valleywood cart lease annual payment 45,000$ 45,000$ Parks Valleywood vehicles & equipment 110,000$ 110,000$ Parks Parks Maint vehicles & equipment 285,700$ 285,700$ Parks Parks VERF charge 236,780$ 236,780$ Police Police vehicles & equipment 258,600$ 258,600$ Police Police VERF charge 238,220$ 238,220$ Pub Wrks Engineering vehicles & equipment-$ Pub Wrks Engineering VERF charge 10,510$ 10,510$ Pub Wrks Fleet Maint vehicles & equipment-$ Pub Wrks Fleet Maint VERF charge 5,840$ 5,840$ Pub Wrks Building Inspections vehicles & equipment-$ Pub Wrks Building Inspections VERF charge 12,920$ 12,920$ Pub Wrks Natural Resources vehicles & equipment-$ Pub Wrks Natural Resources VERF charge 4,560$ 4,560$ Pub Wrks Storm Utility replace sedan #60423,200$ 23,200$ Pub Wrks Streets vehicles & equipment 330,700$ 330,700$ Pub Wrks Streets VERF charge 189,630$ 189,630$ Pub Wrks Water & Sewer vehicles # 419, 42173,200$ 73,200$ Pub WrksAir compressor-$ Pub Wrks Loadall-$ Pub Wrks Replace 604, 419, 421-$ Pub Wrks Sewer Jet/ vac # 401225,900$ 225,900$ 451,800$ Pub Wrks Tandem plow truck-$ Subtotal1,056,850$ 948,500$ 155,000$ 73,200$ 225,900$ 249,100$ 2,708,550$ Parks, Playgrounds, Paths, Open SpaceParks Park reforestation10,000$ Parks Park plastic playground timbers15,000$ Parks Park play structure100,000$ Parks Greenway underpasses600,000$ 600,000$ Parks Park trail overlays40,000$ Subtotal600,000$ 765,000$ Ponds, Natural Resources, and EnvironmentPub Wrks Pond easement acquisition50,000$ 50,000$ Pub Wrks Storm pond sediment removal50,000$ 50,000$ Subtotal100,000$ 100,000$ DRAFT 06-05-201749 City of Apple ValleyCapital Improvements Program 2017-20212019 ProjectsDeptProject NameGeneral FundSpecial Assessments Water UtilitySan. Sewer UtilityStorm Drainage UtilityStreet Light UtilityRoad Improvement Muncipal State Aid Other GovtTotal FundingStreet and Utility ImprovementsFinance Subdivision improvements 100,000$ 100,000$ Pub Wrks DC signal CSAH 42 @ JCRR 250,000$ 250,000$ Pub Wrks DC signal CSAH 42 upgrades 425,000$ 771,000$ 1,196,000$ Pub Wrks Street project G/F levy allocation 3,417,000$ (3,417,000)$ -$ Pub Wrks Street proj, Apple Valley 11th 762,706$ 799,545$ 531,600$ 1,853,180$ 3,947,031$ Pub Wrks Street proj, North and South Surrey Trail 500,400$ 420,000$ 420,000$ 780,000$ 2,120,400$ Pub Wrks Trail rehabilitation32,000$ 49,000$ 81,000$ Pub Wrks Street overlay/resurfacing400,000$ 400,000$ Pub Wrks Street microsurface/ crack sealing583,000$ 583,000$ Subtotal 3,417,000$ 775,000$ 1,263,106$ 1,219,545$ 951,600$ (751,820)$ 1,754,000$ 49,000$ 8,677,431$ Utility Infrastructure PreservationPub Wrks Ring Route street light painting12,000$ 12,000$ Pub Wrks Lift 1 pump replacement (3 of 3)62,000$ 62,000$ Pub Wrks Lift Station, Storm No. 3 (Farquar) Rehab900,000$ 900,000$ Pub Wrks General stormwater improvements100,000$ 100,000$ Pub Wrks Well Maint Wells 6, 11, 20 140,000$ 140,000$ Pub Wrks WTP Pump Maint - LZP416,000$ 16,000$ Pub Wrks Nordic Booster Station pump rehab 30,000$ 30,000$ Pub Wrks Water meter system replacement finalize 1,000,000$ 1,000,000$ Pub Wrks Water Reservoir Maint Quarry Pt 140,000$ 140,000$ Pub Wrks Asset Management software 50,000$ 20,000$ 20,000$ 20,000$ 110,000$ Pub Wrks Fiber network extension40,000$ 40,000$ 80,000$ Pub Wrks Gate valve replacements30,000$ 30,000$ Subtotal50,000$ 1,416,000$ 122,000$ 1,020,000$ 12,000$ 2,620,000$ DRAFT 06-05-201750 CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM 2017-2021 2020 Projects DRAFT 06-05-2017 51 City of Apple ValleyCapital Improvements Program 2017-20212020 ProjectsDeptProject NameGeneral FundMunicipal Building FundFuture Capital Projects FundOld City Hall Fund Total FundingBuilding and Facility ImprovementsCity Hall City Hall monument sign60,000$ 60,000$ Muni Cntr Municipal Center PD boilers250,000$ 250,000$ Muni Cntr Municipal Center PD HVAC phase 260,000$ 60,000$ Muni Cntr Municipal Center PD open office panels75,000$ 75,000$ Muni Cntr Municipal Center PD recarpet150,000$ 150,000$ Parks Comm Cntr rental room tables & chairs6,000$ 6,000$ Parks Comm Cntr sport court gym divider curtains45,000$ 45,000$ Parks Teen Cntr minor improvements10,000$ 10,000$ Parks JCPRE new maintenance facility750,000$ 750,000$ Parks JCRPE Legion Field roof6,000$ 6,000$ Parks JCRPE restroom facility60,000$ 60,000$ Pub Wrks CMF building windows9,500$ 9,500$ Pub Wrks CMF vehicle hoists Bay #326,000$ 26,000$ Pub Wrks CMF Police/ Storage bldg unit heater #115,500$ 15,500$ Subtotal42,000$ 671,000$ 750,000$ 60,000$ 1,523,000$ Capital TechnologyInfo Tech IT servers, networking, pc's, etc.105,000$ 105,000$ Info Tech IT software & network licenses150,000$ 150,000$ Info Tech IT special projects70,000$ 70,000$ Subtotal325,000$ 325,000$ DRAFT 06-05-201752 City of Apple ValleyCapital Improvements Program 2017-20212020 ProjectsDeptProject NameGeneral FundVERF Charges - (Internal Service Fund)Equip / VERF Expense Park Dedication Ice Arena Golf Water UtilitySan. Sewer UtilityStorm Drainage Utility Other Sources Total FundingFleet Vehicles and Equipment (appendix B)Com Dev Code Enforcement VERF Charge2,700$ 2,700$ Com Dev Code Enforcment vehicles & equipment-$ Fire Fire vehicles & equipment96,900$ 96,900$ Fire Fire VERF charge388,410$ 388,410$ Muni Cntr Municipal Center vehicles & equipment-$ Muni Cntr Municipal Center VERF charge2,760$ 2,760$ Parks Hayes Arena ice resurfacer135,000$ 135,000$ Parks Valleywood cart lease annual payment45,000$ 45,000$ Parks Valleywood vehicles & equipment140,000$ 140,000$ Parks Parks Maint vehicles & equipment159,300$ 159,300$ Parks Parks Maint VERF charge242,700$ 242,700$ Police Police vehicles & equipment270,000$ 270,000$ Police Police VERF charge262,040$ 262,040$ Pub Wrks Engineering vehicles & equipment-$ Pub Wrks Engineering VERF charge10,770$ 10,770$ Pub Wrks Fleet Maint vehicles & equipment-$ Pub Wrks Fleet Maint VERF charge5,990$ 5,990$ Pub Wrks Building Inspections vehicles & equipment-$ Pub Wrks Building Inspections VERF charge13,240$ 13,240$ Pub Wrks Natural Resources vehicles & equipment-$ Pub Wrks Natural Resources VERF charge4,670$ 4,670$ Pub Wrks Storm Utility vehicles & equipment-$ Pub Wrks Streets vehicles & equipment170,400$ 170,400$ Pub Wrks Streets VERF charge194,370$ 194,370$ Pub Wrks Sewer 3/4 Ton Pickup # 41837,500$ 37,500$ Pub Wrks Panel truck # 42238,600$ 38,600$ Pub WrksVacuum sweepster-$ Pub Wrks 3/4 ton pick-up # 40637,500$ 37,500$ Subtotal1,127,650$ 696,600$ 135,000$ 185,000$ 37,500$ 76,100$ -$ 2,257,850$ Parks, Playgrounds, Paths, Open SpaceParks Park, Tintah soccer field irrigation40,000$ 40,000$ Parks Park reforestation10,000$ 10,000$ Parks Park, JCRPE sewer connection to 142nd250,000$ 250,000$ Parks Park play structure75,000$ 75,000$ Parks Greenway underpasses600,000$ 600,000$ Parks Park trail overlays 40,000$ 40,000$ Subtotal 165,000$ 250,000$ 600,000$ 1,015,000$ Ponds, Natural Resources, and EnvironmentPub Wrks Pond easement acquisition50,000$ 50,000$ Pub Wrks Storm pond sediment removal52,000$ 52,000$ Subtotal102,000$ 102,000$ DRAFT 06-05-201753 City of Apple ValleyCapital Improvements Program 2017-20212020 ProjectsDeptProject NameGeneral FundFuture Capital Projects FundSpecial Assessments Water UtilitySan. Sewer UtilityStorm Drainage UtilityStreet Light UtilityRoad Improvement Muncipal State Aid Grant Funding Total FundingStreet and Utility ImprovementsFinance Subdivision improvements100,000$ 100,000$ Pub Wrks Street project G/F levy allocation3,520,000$ (3,520,000)$ -$ Pub Wrks Street proj, AV 3rd (Rdwd, Prk, Juniper)825,000$ 800,000$ 475,000$ 2,078,000$ 4,178,000$ Pub Wrks Street proj, Cimmarron Rd600,000$ 450,000$ 600,000$ 1,300,000$ 2,950,000$ Pub Wrks Street proj, Garden View Dr - CR 42 to Whitney300,000$ 266,000$ 250,000$ 95,040$ 969,000$ 1,880,040$ Pub Wrks Street overlay/resurfacing78,000$ 78,000$ Pub Wrks Pedestrian overpass Cedar @ 147th400,000$ 3,300,000$ 3,700,000$ Pub Wrks Street microsurface/ crack sealing599,500$ 599,500$ Subtotal3,520,000$ 400,000$ 100,000$ 1,725,000$ 1,516,000$ 1,325,000$ 31,040$ 1,568,500$ 3,300,000$ 13,485,540$ Utility Infrastructure PreservationPub Wrks Ring Route street light painting12,000$ 12,000$ Pub Wrks General stormwater improvements100,000$ 100,000$ Pub Wrks Well Maint Wells 4, 13 and 16155,000$ 155,000$ Pub Wrks WTP Pump Maint - HZP416,000$ 16,000$ Pub Wrks Pressure station rehab GVD & 137th St100,000$ 100,000$ Pub Wrks Water Reservoir Maint Longridge900,000$ 900,000$ Pub Wrks Fiber network extension40,000$ 40,000$ 80,000$ Pub Wrks Gate valve replacements30,000$ 30,000$ Subtotal1,241,000$ 40,000$ 100,000$ 12,000$ 1,393,000$ DRAFT 06-05-201754 CITY OF APPLE VALLEY CAPITAL IMPROVEMENTS PROGRAM 2017-2021 2021 Projects DRAFT 06-05-201755 City of Apple ValleyCapital Improvements Program 2017-20212021 ProjectsDeptProject NameGeneral FundMunicipal Building FundFuture Capital Projects Fund Ice ArenaTotal FundingBuilding and Facility ImprovementsMuni Cntr Municipal Center Basement Office Expansion350,000$ 350,000$ Muni Cntr Municipal Center campus add PD garage2,500,000$ 2,500,000$ Muni Cntr Municipal Center roof replacement150,000$ 150,000$ Parks Hayes Arena artificial turf115,000$ 115,000$ Parks Comm Cntr boilers250,000$ 250,000$ Parks Comm Cntr kitchen & conf room appliances7,000$ 7,000$ Parks Comm Cntr rental room tables & chairs6,000$ 6,000$ Parks Comm Cntr sport court gym main curtain45,000$ 45,000$ Parks Aquatic Cntr boilers230,000$ 230,000$ Parks Aquatic Cntr lifeguard sun protectors15,000$ 15,000$ Pub Wrks CMF building windows9,500$ 9,500$ Pub Wrks CMF small HVAC units30,000$ 30,000$ Pub Wrks CMF vehicle hoists Bay #526,000$ 26,000$ Pub Wrks CMF windows, doors, OH doors20,000$ 20,000$ Pub Wrks CMF Parks/ Storage bldg unit heater #116,000$ 16,000$ Pub Wrks CMF Police/ Storage bldg unit heater #215,500$ 15,500$ 31,000$ Subtotal354,000$ 831,500$ 2,500,000$ 115,000$ 3,800,500$ Capital TechnologyInfo Tech IT servers, networking, pc's, etc.105,000$ 105,000$ Info Tech IT software & network licenses150,000$ 150,000$ Info Tech IT special projects70,000$ 70,000$ Subtotal325,000$ 325,000$ DRAFT 06-05-201756 City of Apple ValleyCapital Improvements Program 2017-20212021 ProjectsDeptProject NameGeneral FundVERF Charges - (Internal Service Fund)Equip / VERF ExpenseGolf Water UtilitySan. Sewer UtilityStorm Drainage Utility Other Sources Total FundingFleet Vehicles and Equipment (appendix B)Com Dev Code Enforcement VERF Charge2,700$ 2,700$ Com Dev Code Enforcment vehicles & equipment-$ Fire Fire vehicles & equipment1,061,950$ 1,061,950$ Fire Fire VERF charge407,830$ 407,830$ Muni Cntr Municipal Center vehicles & equipment-$ Muni Cntr Municipal Center VERF charge2,830$ 2,830$ Parks Valleywood cart lease annual payment45,000$ 45,000$ Parks Valleywood vehicles & equipment150,000$ 150,000$ Parks Parks Maint vehicles & equipment286,100$ 286,100$ Parks Parks Maint VERF charge248,770$ 248,770$ Police Police vehicles & equipment436,600$ 436,600$ Police Police VERF charge288,240$ 288,240$ Pub Wrks Engineering vehicles & equipment-$ Pub Wrks Engineering VERF charge11,040$ 11,040$ Pub Wrks Fleet Maint vehicles & equipment-$ Pub Wrks Fleet Maint VERF charge6,140$ 6,140$ Pub Wrks Building Inspections vehicles & equipment-$ Pub Wrks Building Inspections VERF charge13,570$ 13,570$ Pub Wrks Natural Resources vehicles & equipment-$ Pub Wrks Natural Resources VERF charge4,790$ 4,790$ Pub Wrks Storm Utility vehicles & equipment-$ Pub Wrks Streets vehicles & equipment111,000$ 111,000$ Pub Wrks Streets VERF charge401,100$ 401,100$ Pub Wrks Water & Sewer vehicles & equipment-$ Pub Wrks Panel truck-$ Pub Wrks Vacuum sweepster-$ Pub Wrks 3/4 ton pick-up-$ Pub Wrks Message Board #42719,200$ 19,200$ Pub WrksVersa Vac # 40358,800$ 58,800$ Pub Wrks Vacuum sweepster-$ Pub Wrks 3/4 ton pick-ups # 412, 41477,000$ 77,000$ Subtotal1,387,010$ 1,895,650$ 195,000$ 77,000$ 78,000$ -$ 3,632,660$ Parks, Playgrounds, Paths, Open SpaceParks Park reforestation10,000$ 10,000$ Parks Park play structure (2)25,000$ 25,000$ Parks Greenway underpasses600,000$ 600,000$ Parks Park trail overlays40,000$ 40,000$ Subtotal75,000$ 600,000$ 675,000$ Ponds, Natural Resources, and EnvironmentPub Wrks Pond easement acquisition50,000$ 50,000$ Pub Wrks Storm pond sediment removal52,000$ 52,000$ Subtotal102,000$ 102,000$ DRAFT 06-05-201757 City of Apple ValleyCapital Improvements Program 2017-20212021 ProjectsDeptProject NameGeneral FundSpecial Assessments Water UtilitySan. Sewer UtilityStorm Drainage UtilityStreet Light UtilityRoad Improvement Muncipal State Aid Total FundingStreet and Utility ImprovementsFinance Subdivision improvements100,000$ 100,000$ Pub Wrks Street project G/F levy allocation3,625,000$ (3,625,000)$ -$ Pub Wrks Street proj, AV 3rd (Pinewood, Walnut)672,000$ 562,000$ 397,000$ 1,019,000$ 2,650,000$ Pub Wrks Street proj, AV 10th (phase 1)650,000$ 600,000$ 300,000$ 1,450,000$ 3,000,000$ Pub Wrks Street overlay/resurfacing78,000$ 78,000$ Pub Wrks Street microsurface/ crack sealing616,000$ 616,000$ Subtotal3,625,000$ 100,000$ 1,322,000$ 1,162,000$ 697,000$ -$ (1,078,000)$ 616,000$ 6,444,000$ Utility Infrastructure PreservationPub Wrks Ring Route street light painting12,000$ 12,000$ Pub Wrks General stormwater improvements110,000$ 110,000$ Pub Wrks Well Maint Wells 7, 9, and 19155,000$ 155,000$ Pub Wrks WTP Pump Maint - HZP216,000$ 16,000$ Pub Wrks Water Reservoir Maint Palomino200,000$ 200,000$ Pub Wrks Well 1 & 3 electrical upgrade65,000$ 65,000$ Pub Wrks Fiber network extension40,000$ 40,000$ 80,000$ Pub Wrks Gate valve replacements30,000$ 30,000$ Subtotal506,000$ 40,000$ 110,000$ 12,000$ 668,000$ DRAFT 06-05-201758 APPENDIX A STREET OVERLAY AND RECONSTRUCTION SCHEDULE 2017-2021 DRAFT 06-05-2017 59 (This Page Intentionally Left Blank) DRAFT 06-05-2017 60 Pavement Management Program The City of Apple Valley is responsible for maintaining 174 centerline miles, or approximately 400 lane miles, of city streets within its boundaries. A variety of methods are used to preserve street pavement and maximize the service life of existing streets. The city uses preservation practices such as overlays, micro surfacing, seal coating, and crack sealing for asphalt pavements. While preservation practices help to significantly extend the service life of pavement, eventually there is a diminishing return on investment. All streets will eventually need to be reconstructed as part of an ongoing maintenance program. The street system in Apple Valley grew rapidly with development beginning in the 1960s. During the 15 year period between 1967 and 1982, approximately 80 miles of city streets were constructed throughout the community. The service life for an asphalt street constructed in the 1960s or 1970s is commonly assumed to be about 45 years. The City currently has approximately five miles of streets reaching the end of the anticipated 45-year service life each year. The City monitors pavement conditions of the street system through field inspections and the use of pavement condition ratings. The ASTM D6433 rating system is used to assign pavement condition ratings to 25 percent of the total pavement mileage each year. This pace allows the City to update pavement conditions for all street segments on a four year cycle. Pavement condition rating information is entered into the City’s pavement management software. The pavement management software serves two important functions for managing the condition of city streets. First, the software is used to calculate an “Overall Condition Index” providing a single broad-scale measurement of the whole street system. Second, the software is used to forecast the Overall Condition Index of the street system in future years based on the amount of investment provided in the Capital Improvement Program. This forecast process provides a valuable tool for use by the City Council and staff to evaluate the appropriate level of investment in maintaining the street system. The City has established a goal of maintaining an Overall Condition Index score of 73 out of a possible 100 points. The current Overall Condition Index for the street system is 74 for the year 2016. Based on the amount of investment identified in the 2017 – 2021 Capital Improvement Program, the Overall Condition Index for the street system is forecasted to remain within two points (+/-) of the 73 target over the next five years. DRAFT 06-05-2017 61 (This Page Intentionally Left Blank) DRAFT 06-05-2017 62 $1 LNELMHURSTLNCREEKELMCT GARRETT CT W 128th ST PATHEMBRYGRANADA36. EGRET PLACE 36C T L DRBAY155th ST WPLGALLIVANTN Y B BLE CO T S h t 4 4 1 CT WR LNE P I S Y A W D O O N E W W CT W L 129th APPLE VALLEY 13CEDAR AVE. SA1;x LacLavon ParkSS CTE R P M WA YH ELETV E ICL L CTTR CEI L L PLM U I O D N A ONE T R T LAGS EES D RDN O CTI E COMMUNITYCENTER STATIONPOLICE MUNICIPALCENTERAVET W ODO K C A E ANTORIAE E ONT S C R O E WAYNTM WAYParkKelley 158th ST W 157th ST W WAY CemeteryLebanon 29. GREENLAND AVE CT GRAFTON GOTHAM CT 144th ST W CENTERAQUATIC CENTERTEEN FACILITYMAINTENCENTRALCITY Park Ponds LNX Y R U B N L W O D A E M LNEKYCRELNN O T T U D N L DRAWSTONE TR. Y W K P E K A L E N O T S E L B B O C Y A W D N E B S T . W . 147TH UPPEREVEREST AVE . UPPER 147TH ST.EASTDUMONTDRAVEF F A T S T S h t 5 3 1 O G R U D D O O W R T E S R TERCHTRT S E V E W h t ST T C D L I ST O N N R E T CT E V A T E L M A H CT W H A E W Y A Y E H S R E H E G A T I R E H O N I M O L A P 35. LOWER 127th ST W 9. DYNASTY WAY 6. DUNHILL LN 3. DUCKTAIL LN 2. DUCK CROSSING 1. 140th ST BLVD 8. DWELLERS WAY 7. DUNRAVEN DR 5. DUNBERRY WAY 4. DUNBERRY CIR 14. EAGLEVIEW WAY 22. GALLUP CT 24. GENESEE CT 34. HICKORY WAY 32. HIBISCUS CT 33. HICKORY CT 31. GULF BREEZE CT 30. GREENTREE CT 28. GRANGER CT 27. GERDINE CT 26. GERANIUM CT 25. GEORGE CT 23. GAVOTTE CT 21. FLAGSTAFF AVE 20. FIRETHORNE LN 19. EMPIRE CT 18. EDINBOROUGH CIR 17. ECHO RIDGE RD 16. EASTBROOK LN 15. EAGLEWOOD LN 13. EAGLES NEST WAY 11. EAGLE SHORE DR 12. EAGLE STONE RD 10. EAGLE RIDGE RD STREET INDEX Y A W R D O N I M O L A P AVEY E S SUR T SURREY CT ON W O D A E E D D I H S O H S T C A ST SH T N U A CTM O E E S d W ST EVAN W T S W T S t s 1 2 1 N L Y R T N A G T C OaksBriar Park R A G T S h t 6 2 1 E V A E E S S E N E G GALAXIE AVEFROST PATHLegacyFRESC0153rd ST W GALANTE LNFONTANA AVEFORTINO ST GABELLA ST SCHOOL ELEMENTARYSCHOOL OFFICESADMINISD 196 DAKOTARIDGESCHOOL SCHOOLHIGHEASTVIEW SCHOOL WESTVIEWELEM CEDAR PARK DIAMOND PATHELEMENTARY HIGHLANDELEMENTARY SCOTTHIGHLANDS SOUTHVIEWELEMENTARY VALLEYMIDDLE APPLE VALLEYHIGH SCHOOL GREENLEAFELEMENTARY SCHOOL SCHOOL SCHOOL MIDDLE SCHOOL SCHOOL MIDDLE SCHOOLFALCON RIDGE STUDIESENVIRONMENTALSCHOOL OF Cobblestone Lake Park126th156th Knolls ParkCedar ChaparralPark Park EastCake RidgeJohnny RedwoodPark Middle ParkValley Apple GrovePark DuchessPark ParkNewell ParkPennock Park Apple Longridge WildwoodPark KellerParkField & Space Public Arena Hayes Ridge Park WestJohnny Cake CedarIsle GreeningPark AppleValleyEast Park ParkRegatta Galaxie Farquar Park Delaney Sunset PublicOpen Carrollwood Fred J. Largen Scott Wallace Faith Moeller ParkLakeP a r k Park Park Park Park Park Park Park Palomino Heritage Belmont ParkPark Park Alimagnet Park Park Park Space Park Park ParkGreenleaf Nordic Findlay H a g em e i s t e r ParkLongPark Park Diamond Pa th Park Park Tintah Park Open Summerfield Park Huntington Park Valleywood Municipal Golf Course & ParkRegional Park Lebanon Hills Dakota County Minnesota Zoological Gardens WAY FROST POINT TERFO U N D E R S L N E AG L EAVE145th ST W FLORISSANT PATHFLYCATCHER LN GIBR 145th ST WPENNOCK WHITNEY CT 3 FOLIAGE AVE4 5 9 DUNBAR AVE133rd S T C T DOWNEY TRDODDDUCK TR. LN6 2 15 8 7 121110 16 17 14FLYBOATLNFOGHORNLNGARRET143rd ST C T HALL MARK DRGRANITEGREYLOCK FOUNDERS LN FOSTORIA DRFREEDOM LNFRISIAN LNDUNCAN PATH WAYDUCK PONDCIREARLY B IRD HANNOVERPATHHARMONY WAYAVE127th ST W U 147th ST W 33 REGENT DR FOLK 158th 20 SACAJAWEA CAMP GLENDALE CTDRCTELLSWORTH35 DRY159TH ST W WAYDIAMOND 158th ST W ELAND CTE McANDREW S R D W 46GARDENIA AVE1 HE R A L D 142nd ST W ST W ST W W HEMLOCK CTST WST W 142nd ST W136th ST W GAMMA ST W ST W130th 130th ST W 132nd ST W 132nd ST W 129th ST W CT131st ST WFLORIDA ST W 132nd S T W 134th ST W 134th S T W 137th ST WL 134th ST W 130th ST W 134th ST W 132nd ST W 131st ST W ESSEX WAY ST W 128th ST W 129th ST W 152nd ST W U 147th ST W 148th ST W 14 7 t h S T W U 147t h S T W 144th ST W 148th S T W ST W ST W 153rd ST W ST W ST AVEFLIGHT LNGRAND OAKGEORGIACTGENEVA WAYDRCTHUNTLEYW 140th ST W ST140th EVERMOOR PARKWAY HARMONY 153rd ST W 151st ST W 152nd ST W 151st ST W FLIGHT WAY ST W 158th ST W 160th ST W160th ST W160th ST W PILOTGALENA WAY LNCT FLAGSTAFF AVEWERFLOCTGLENHAVEN TR.DOVE154th ST W CIR FLORIST WAYTERRACEWAYFLAGSTAFF33 33 31 DIAMOND PATH42 DUNBARCTCTSERVICE RD.22 C T F L O R A DIAMOND DUBLINCTEDENWOODCTHYLAND DR WHITNEY DR125th ST W 156th 157th 158thMINJON D R ZOO BLVD23 23 23 77 77 LN STRESE WAYENERGYFLAGSTAFF AVEGARRETT DR 159th S T C T W Mc I N T O S H D R GARDEN VIEWGARDEN VIEWGARDEN VIEW GARDEN VIEWPONY LN ECTBELMONTINTERSTATE 35EINTERSTATE 35EFIN C H LNFJORDWAYGE11 77 33 31 31 33 31 4242CT 38 FOXTAILGALAXIE CT 38 38 38 McANDREWS RD McANDREWS RD 38 CIMARR O N 46 23 139th CT W W LOWER ENDICOTTPATHWAYWAY29AVEPENNOCKW W W ST W W W W W PATHFLANDERSFORUMFLAGSTAFF AVEPATHFOLIAGEST GADWALL FLORENCE TR 147th ST WTRCTCTWA Y TRAVEWAYCTLN CT W 150th ST W AVEGARDENGATEPATH C T ED CT 141st WAY AVEWAY A V E D U N D E E CTPATH TREVER AVE LNGREENLEAFAVECTCT DR 135th PA T H CTCTWA Y CT C O R T L A N D D RREDWELL LNCT WPATH WAYFLORACTCTGLADIOLALNCTPATHAVEAVE FIRE W A Y AVECTCTWAYWA Y EXLE Y LNAVE LN CT ANWAY CTCTCT PATH BROOK VIEWPATHAVELN W D R AVECT W125thLN 150th ST W 150th ST W GALAXIE AVE147th ST W 147th ST W FJORDFI N E W O O D AVEFESCU E C T FENNEL CTDRLN LN FALCONAVEHEMLOCKLN GL A D I O L A HA R M O N Y CT GURNEY GASLIGHT DRST C T W 13 2 n d FINDLAY AVEFLAIR CT FINDLA Y FINDLAYFOSSIL L N FINDLAY FINDLAYCEDAR AVE.SGLEN WAY GLEN PENNOCK AVEFLAX WAY FLAGSTONE TRFOOTB R I D G E W A Y DUNDEE AVETR DUNWOOD CT CTDUNDEEPATHCTDUTCHESSDUNLIN DUPONT CTDUTCHMAN WAYGENEFELDSPAR DIAMOND PATH 19 PATH LN GARVIN BROOK ECHO L N PATHEDGEWATERDIAMOND PATH HUMMINGBIRD CT137th ST W FAIROAKFAWN RIDGECTFALLBROOK LNHERITAGE FALCON D RFALCON CT23 EMBER CTFLAGWAYEMERALD32HEMLOCKU 138th CT139th CT 13 8 t h 137th CT 34 DORYW 125DUBLIN RD DULUTH DRFLORIDA LN FLINTWOOD FLINTWOODFOREST LN HYA C I N T H HYLAND POINTE CTCHAPARRALCT N MDRFAIRLAWN AVEWAYFREEPORTCTFRIDLEY WAY 146th ST W 146th ST G A R R E T T D R GALVESTONGALLANT CTCIRPENNOCK LNFIRESIDE DR DUCHESS LNBEACON LNHAY E S HEYWOOD WAY CT CT HALLMARK PATH15 9 t hTRDRLNHOPEWELLRAMSDELL DR ROME KELLER LA K E DR LOWELLDR JUN REDWOOD DRELM DR LNSTRESECIRCIRSTRESEWALNUTOAKWOOD RDGRANADA AVEST W 149th 147th ST WL 147th ST W U 146th ST W DRU 145th CT W U 145th ST W GLENCOVE CT CT U GUTHRIE GUTHRIEWALNUT LN 144th ST N S 144th ST WHEYWOODAVE142nd STHERITAGE CT 141st STC T 141st CT RIMROCK DR CT HE Y W O O D 138th ST WST CT 138th HOL Y O K E HERALDCTCT H E Y W O O D 31 GLAZIERST W UPPER 139th CTGLADIOLA GEORGIA DRGEORGIA DRCTGOSSAMERPATHGUNFLINTHAVELOC K CT HAVELOCK134th CTST CT W ST W ST W CT CIRHUNTINGTON DR HUNTINGTON TERRACE HIALEAHCTSTPONYS W E E T W A T E RCHAPARRAL YANCEY GABLE CT GARDENIA GER M A N E GAVOTTEST WCTGENEVA GARLAND AVEGERMANE GANTRY LNSAFARI PASSL HAMLETU HAMLET CTU 129th CT W ST W 143rd ST F FOUNTAINFOUNTAIN FIRELIGHTCT WAY FOREST CT 129th CT W 21 DORCH. CT DOVER CT KNOB18 EMMERCURVE E A S T EASTVIEWCTL 131st WAY 131st ST FERNA N D O EVERTONAVEE FARMINGTON137th C T LN FERNWOOD FALLBROOKDREXEL DUNBAR CT 148th PATH WEB O N Y L N DR A K E P A D R U M L I N DULCIMER U 141st ST W ESSEX LNESSEX AVEESSEX CTDUNBAR DREXELU 135th ST W DULUTH CT DRIFTWOODDROMMONDDUBLIN W 138th S T W ELKHART CTEVERGREEN CT CIR 138th D O Y L E ' S GARNET GATE W A Y W GLE N C O V E T R CT142nd STGRANADA WAYFORDHAMGARRETT LN TR WAY GLENBROOK 282724 25 26 30 GENECT123rGENEVA ENDICOTTEUREKA CT EX C E L S I O R L N GREE NEUROPA WAYLI G H T GRANADA AVECT GEMSTONE DUNBAR BLVDAVEEASTER149th ST EASTER AVEEMBRY P AT H ECHO WAYEMBRY149th ST CT 145th ST W 142nd ST W ELGIN CTAVEELMIRAELMIRA CT142nd CT EMPIRE AVEEMBRY PATH EMBASSY W A Y 144th ST W144th ST WEUROPAEVELETH AVEEXC E L S I O R EXLEY LNEM C T EXLEY EVELETH CTWAY CT 13 9 t h S T EUCLID CT138th ST W 138th S T C T W EVEREST AVE139th ST ST CT W U 136 t h 136th S T DURHAM DUTCHEDGEMONT CV 127th ST WEVERTON AVEER EVELETH 126th ST W EUCLID AVEEV E R E S T A V E E ELL I C E T REVELETH AVEEXLEY AVEST CT W FALCON RIDGEFINCH WA Y FERRISFERNANDOFOLIAGE CTGENEVANERST GARRETT AVEGA R N E R CT W AVEFINDLAY WAYAVECTFLORIDAW 135th ST W CT137thFORDHAMFRANCHISEG A U N T L E T FORDHAMFOLIAGE AV E FLAMINGOFLORAL132nd WAY W CT W CT W134th STE 133rd ST FERNGREENLEAF TR CT 144thGALLERIAPL GARNET AVECTGEORGIACTFAIRLAWNGARDENIAGARRETT AVEPATHGEYSERGLASGOWUPPER WAY GALWAY C T GLAZIER AVEGLAZIER AVEGERMANE AVEAVEGARRETTGARLAN146t h W A Y W UPPER GLAZIER AVE146th GARRETT AVEGRANADA AVEGOOSEBERRY WAY GARRETT PATHGRIFFON PATHHARMONY WAY CT HARWELL HEATHHENNACTHALLMARK WAY NEWELL DR HOOVER LNJONATHAN DR HARALSON DR COOPER LNGOLDING LNPORTER LNBALDWIN DR CORTLAND DR S CORTLAND DR G R E E N I N G D RLNO R I O L E D RKENTLINDENHARRINGTONPINEWOOD DREDGEWOOD LNCT W 142nd141st CTHANOVER PATH HU R O N C T 137th HENNAAVE135th ST W GU 133rd ST WCTHARMONY WAYLOWER 139th CT WPENNOCKGROTHEGUILD G U R N E Y P A T H PATH HARWELLCT CIRHANNIBALHAVELOCK TRGOSSAMER WAYGRANADA AVECTGREENWICHG L E N H A V E N 131 s t HAMBURG CT 133rd 132nd HANNOVER HERALD CIR CT129thST WHONI TRW 128th ST SABRA CTBE CIMARRBUTTEAVE A GRANDVIEWFRESNO AVE120th ST W DORY AVEDENMARK AVEDRIFTWOOD PLDODRIFTDOVERDOVER DRETHELTON WAYEDENEDINEDINBOROUGH WAYEMMER PL128thCT ECHO LN ELDERBERRY CTELMWOOD CTEMMER PL 137thCIR WDUNBARWAY DULUTH CIR 137th ST W DOMINICA WAY W ELKWOOD CIR DR ELKWOO D ELKW O O D CT CT ELK W O O D D R ELKHART RDESSEX CTEMBER WAY ESSEX TR RDDUL U T H DR TR LNAVEDOMINICADRESDENST 142nd ST DIAMOND PATH CT 141st ST W AVEEUCLIDENSLEY CTEMBASSY AVEEMBRY 143rd ST C TW 144th ST W ELYSCTCORRIGAN149th CT W 148th CT W DENMARKDOMINICACTCTCTCT W149thWA YU 148thDURHAMECHO DRESDENDREXELDRESDEN TR152nd CT WDRESDEN CT 143rd ST W AVECT WCTC T EUROPAC T W 13 0 t h S T EVEREST CT WEVEREST CT EFAIRGREEN AVETR CT129th ST W 135th ST CTFLINT LNCT 134thCT CT133rd F O R D H A M A V E AVEFERRISCTFINDLAY CT FERNANDO AVEFAWN RIDGE F LEETWOOD CTFLAGSTAFF AVEFRIDAY LNLN FOXTAILFLAGSTONE FREEPORT TRFRIDLEY WAYFREESIA WAY AVEGAL LERYCTC T W HALLMARKGLEASON PATHGLAZIER AVE 145th CT W 131st CIR W FOLIAGEAVEPL GALAXIEGALA XIE LN 128th AVEGERMANEGARNERCT123rd AVECTCTRD RD CT C I R CIR CIM A R R O N RD CT W HEMLOCK140thCT WAVEGLE N D A CT140thST CT WCTCTHERSHEYAVECTHAYES TRHYLAND AVEHAVELOCKHIGHVIEWDRPAT H BALDWIN WHITNEY DR ROMECTPINEW O O D HOLIDAYAVE HOLLAND HOLLANDST CT W 143rd HOLYO K E CT R E F L CT W136thH O L Y O K E 140 t h ST W HUGHES HOLLINSCTCTHOLIDAYWAYCTPATHHIALHIGHWOOD UPPER ELKWOOD PATHRDBLVDCTDURNINGAVEDIAMONDCAKERDRIDGEJOHNNYAVEAVEFLORALST W CIRGLAZIER CTDRGEORGIAFLAGSTAFF133rdCT WCTHERSHEYCTU NTERSW A Y HUNTERS AVEST W AVEGULLCT137th134thCT HARVESTCTCT 134th 1 3 3 rd 131st CIRDRHUNTERSWAY H BELMONT RD HALLMAR K CTHAVER AVE 138th ST W CTPILOTKNOBRDEVERESTEUROPAAVEJOHNNYCAKERIDGERDESTATESAVEGLE N D A AVEAVEGANNONWAYUPPER CT W UPPER DRST ST W ST157th158thG L A D S T O N E P A T H 155th ST W CT 143rd 143rd 146th AVEGARRETT AVECTUPPER157 thST W STW GARRETT CT CT CT H A Y E S CT CTST C I R CI R CIR WALNUT LN LINDEN DRSPRUCEDRCIRP ARK LNHAYESCTWAY PENNOCKCTHANOVER H AV EN DRPL DRELMCIR 145th 142nd UPPER GUTHRIEAVEWAYLN CIR DRR E D W O O D HIGHVIEW DR HIGHVIEW LN CIR DR 157th 159thST CT W RDW 139th CT W CT GRANADAFOX CIRRD. STF FRFRISIAN LNWAY DRFOSW 145th ST W FLUTEFLO T I L L A FLE E T T R F LO A T FLORET FLOATLNFLATFISHFLAN CTLNWAYTR FLUTE WAYWAY C T L AVEFLACKWOODU FJORDFINCH LNFIRTREELNWAYFINESSEWAYFJORDWAYTRTRFLACKWOODW A YW FLFJORD AVEFIRTREE DRD R ST W GLADIOLA CTGUTHRIE AVEL GUTHRIE WHITNEY DR DUTCHMANCTRI D G E V I EW 157th ST W NO. 1 FIRESTA FIRESTANO. 3 FIRESTANO. 2 CAPITAL IMPROVEMENT PROGRAM 2017 - 2021CITY STREET IMPROVEMENT Project Area Forecast by Year Path: S:\public-works\private\Administration PW\Budget & CIP\CIP\2017 CIP (2017-2021)\2017-2021 CIP Areas w MICRO.mxd / 0 1,400 2,800 4,200 5,600700Feet 06.05.17 Project areas are preliminary and subjectto change based on available funding. 2017 Street Improvement Area 2018 Street Improvement Area 2019 Street Improvement Area 2020 Street Improvement Area 2021 Street Improvement Area Est. Improvement Type !H !H !H !H STREET & UTILITY RECONSTRUCTION STREET RECONSTRUCTION MILL / OVERLAY MICROSURFACE TRAFFIC SIGNAL RECONSTRUCT TRAFFIC SIGNAL CONSTRUCTION SANITARY LIFT STATION !H !H !H $1 !H APPENDIX B VEHICLE AND EQUIPMENT REPLACEMENT SCHEDULE 2017-2021 DRAFT 06-05-2017 64 Introduction A major portion of the City’s capital outlays is derived from vehicle and equipment replacements. This report is a replacement schedule, listing each individual vehicle or major piece of equipment owned by the City of Apple Valley. The Replacement Schedule serves three main functions: 1) The Replacement Schedule accounts for the City’s vehicle and equipment purchases. The CIP lists only department summary totals of expenditures for vehicles and pieces of equipment. 2) The Replacement Schedule provides additional information concerning the condition of vehicles and equipment. For each vehicle or piece of equipment, the Replacement Schedule provides the production date, the cost to the City at the time of purchase, the expected useful life-span, the scheduled date of replacement, and the expected cost of replacement. Replacement dates are based on detailed examination of each individual vehicle or piece of equipment and determination of its likely remaining useful life. 3) The Replacement Schedule provides a comprehensive plan for vehicle and equipment replacement within each department. Purchases in one year may greatly affect purchases in the next. The Schedule is a budgeting tool that helps departments budget for long-term capital outlays. The Replacement Schedule includes the budgeted purchases for the current year, as well as future purchases projected over the next five years. It does not include funding sources for these purchases. However, the funding sources can be found in the vehicle and equipment tables within the CIP. DRAFT 06-05-2017 65 Replacement Criteria The City’s practice is to replace vehicles and equipment when the Fleet Maintenance Division determines that it is cost prohibitive to keep the vehicle and pay for repairs. Since the CIP is a five-year projection, it is challenging for Fleet Maintenance to determine exactly when a particular vehicle or piece of equipment is in need of replacement. Many variables such as design and production properties of individual vehicle models, extent of use of the vehicle, and severity of use while in the City’s fleet determine the useful life-span of a vehicle. Thus, for example, a sedan used by the Police Department for patrol may only be useful for four years, while the same model may be useful to Building Inspections for eight years. The Fleet Maintenance Division has established guidelines or replacement standards for the expected useful life of various vehicles and equipment. Vehicles are scheduled for replacement in the CIP and Replacement Schedule in the year that departments project the vehicles will meet the standards established in the guidelines. However, prior to the annual budgeting process, the Fleet Maintenance Division evaluates each vehicle and piece of equipment scheduled for replacement that year. If the Fleet Maintenance Division evaluates the vehicle and determines that it can continue to be used cost effectively, the vehicle will remain in service even if it exceeds the replacement criteria. Similarly, if a vehicle does not meet the replacement criteria, but the Fleet Maintenance Division evaluates the vehicle and determines that it is cost prohibitive to continue using the vehicle, a replacement will be requested in the operating budget. Thus, the CIP serves as a general planning document and may vary from actual proposed annual budgets. Appendix B: Vehicle and Equipment Sheets Appendix B lists all of the vehicles in the City’s fleet, sorted by Department and with projected expenditures for vehicle replacements. Appendix B also lists all of the significant equipment items used by the City, sorted by Department and with projected expenditures for vehicle replacements. Below is a brief description of the different City Departments/ Division and the types of fleet and equipment uses they have. DRAFT 06-05-2017 66 Fire Department The Fire Department uses three types of vehicles--fire-fighting vehicles which are used for emergency response and should be replaced with similar models; vehicles used by the fire officers that are used for daily use as well as for emergency response; and vehicles used to transport fire fighters to training drills. The fire department also has water emergency equipment. The VERF for the Fire Department includes four expensive groups of equipment that will need to be replaced in the coming years; these include the Self Contained Breathing Apparatus, Thermal Imagers, hydraulic rescue tools and 800 Mhz radios. The strategy of including this equipment in the VERF is to level out the budgetary impacts in the coming years. Liquor Operations The Liquor Operations division is an enterprise operation and has its own funding sources. Parks Maintenance The Park and Recreation Department requires many vehicles and much equipment to maintain the City’s parks and facilitate the City’s recreation programs. Parks and Recreation / Golf Operations The Park and Recreation Department also maintains the City’s 18 hole golf course. The needs of the golf course are quite different from the needs of regular park maintenance. The golf course is an enterprise operation and has its own funding sources. Arena Operations The City runs two ice arenas under the Park and Recreation Department. During the spring and summer, special surfaces placed on the floors of the arenas to create indoor tennis courts. The Arena Operations division is an enterprise operation and has its own funding sources. Pool and Aquatic Park Operations The City runs one pool and aquatic park under the Park and Recreation Department. During the summer, both operations are in full use. The Pool and Aquatic Park Operations are not an enterprise operation and are part of the General Fund programs. DRAFT 06-05-2017 67 Police Department The Police Department vehicles, aside from the squad cars, are used for the sergeants, investigators, and captains. Public Works Inspections, Natural Resources, & City Hall The Public Works Department vehicles in this section are used for three different functions--building inspections, natural resources, and general purpose. The building inspectors use their vehicles to make on-site inspections. The forester uses a vehicle for on-site work. The general-purpose vehicle is shared by many other City departments. Fleet Maintenance The Fleet Maintenance division of the Public Works Department is responsible for the maintenance of the City’s buildings, vehicles, and equipment. Streets The Streets division of the Public Works Department is responsible for the maintenance of the City’s street-scape and storm sewer system. The responsibilities of this department include patching the roads in the summer and plowing in the winter. Utilities The Utilities division of the Public Works Department is responsible for the maintenance of the City’s water and sanitary sewer operations. The Utilities division is an enterprise operation and has its own funding sources. Stormwater The Streets division of the Public Works Department is responsible for the maintenance of the City’s stormwater sewer operations. The Stormwater operation is an enterprise operation and has its own funding sources. DRAFT 06-05-2017 68 TARGET REPLACEMENT CYCLES VEHICLE CATEGORIES AGE MILES OR HOURS Administrative/Inspection Sedan 10 100,000 Pickup 10 100,000 Vans (mini & multi-passenger) 10 100,000 Specialty Light Duty Pickup 2-wheel drive 10 100,000 Bronco/Blazer 10 100,000 Utility Van 10 100,000 Park Mowers 10 Boulevard Mowers 5 Medium Duty Utility Truck 10 100,000 4x4 Pickup 10 100,000 1-ton Dump Truck 10 100,000 Skidsteer (Bobcat) 10 4,000 Hrs. Fire Rescue or Grass Rig 15 Does Not Apply Heavy Duty Single Axle Dump Truck 12 80,000 Tandem Axle Dump Truck 12 80,000 Front End Loader 20 10,000 Hrs. Tractor Backhoe 15 6,000 Hrs. Sweeper 15 6,000 Hrs. Jetter 12 Does Not Apply Tanker/Flusher 20 8,000 Hrs. Sewer Vac 8 Does Not Apply Pumpers 20 Does Not Apply Police Investigation 10 100,000 Police Patrol 10 100,000 DRAFT 06-05-2017 69 COMMUNITY DEVELOPMENT - CODE ENFORCEMENTTargetEstimatedReplacement Cost Per yearCITYReplace2017Estimated 2017 2018 2019 2020 2021VEHICLECycle In-service Replace Original Purchase TradeNUMBERMAKE/MODELYears Date Year Cost Price Value696 2014 GMC ½ Ton Ext. Cab 4X4 Truck 122014 2026 26,027 27,900 5,000 - - - - - TOTALS26,027 27,900 5,000 - - - - - Vehicle & Equipment Replacement FundDRAFT 06-05-201770 General GovernmentTargetEstimatedReplacement Cost Per yearCITYReplace2017Estimated 2017 2018 2019 2020 2021VEHICLECycle In-service Replace Original Purchase TradeNUMBERMAKE/MODELYears Date Year Cost Price Value1201 2012 Chev Traverse102012 2022 25,000 26,000 5,000 - - - - - TOTALS25,000 26,000 5,000 - - - - - Vehicle & Equipment Replacement FundDRAFT 06-05-201771 Building InspectionsTargetEstimatedfuture replacement costCITYReplace2017Estimated 2017 2018 2019 2020 2021VEHICLECycle In-service Replace Original Purchase TradeNUMBERMAKE/MODELYears Date Year Cost Price Value101 2013 Chev ½ Ton Pickup (4-WD) 102013 2023 19,000.00 23,800 5,000 - - - - - 104 2015 GMC ½ Ton Pickup (4 WD) 102015 2025 22,670.00 23,800 5,000 - - - - - 107 2014 GMC ½ Ton Pickup (4 WD) 102014 2024 22,670.00 23,800 5,000 - - - - - - - - - - 105FLEET ADD'M COLORADO 4x4 Ext Cab 2002Chev ½ Ton Pickup (4 WD) Replaces VIN 2Z304748102017 202723,500 3,000 - - - - - 109FLEET ADD'N 1/2 Ton 4x4 ext cab2003 Chev 1/2 Ton Pickup (4 WD) Replaces VIN 3Z276966102018 202827,500 5,000 - - - - - TOTALS64,340 71,400 15,000 - - - - - Vehicle & Equipment Replacement FundDRAFT 06-05-201772 Vehicle & Equipment Replacement FundPOLICE DEPARTMENTTargetEstimatedfuture replacement costCITYReplace20172017 2018 2019 2020 2021VEHICLECycle In-service In-service Replace Original PurchaseNUMBERMAKE/MODELMILEAGEYears YearDate YearCost Price901 2014 Ford Explorer32241 6 2014 4/16/2014 2020 32,550 37,000 - - - 39,800 - 902 2013 Ford Explorer59055 7 2012 11/30/2012 2019 32,550 37,000 - - 38,900 - - 903 2015 Ford Explorer14193 6 2014 9/16/2014 2020 33,000 33,000 - - - 35,500 - 904 2013 Ford Police Interceptor47234 8 2012 11/13/2012 2020 29,400 33,000 - - - 35,500 - 905 2014 Ford Police Interceptor28677 7 2014 9/15/2014 2021 33,000 33,000 - - - - 36,400 906 2010 Chev Impala 68839 8 2010 12/1/2010 2018 20,590 33,000 - 33,800 - - - 907 2015 Ford Explorer26887 6 2014 10/24/2014 2020 37,000 37,000 - - - 39,800 - 908 2010 Ford Crown Victoria 79686 8 2011 2/3/2011 2019 22,646 33,000 - - 34,700 - - 909 2015 Ford Explorer250 6 2016 6/28/2016 2022 37,000 37,000 - - - - - 910 2015 Ford Explorer31584 5 2014 12/2/2014 2019 37,000 37,000 - - 38,900 - - 911 2011 Ford Crown Victoria 79921 5 2012 1/3/2012 2017 24,238 33,000 33,000 - - - - 912 2010 Ford Crown Victoria 79296 7 2011 7/1/2011 2018 22,646 33,000 - 33,800 - - - 913 2014 Ford Police Interceptor 37794 8 2013 10/16/2013 2021 32,550 33,000 - - - - 36,400 914 2015 Ford Police Interceptor15199 4 2015 8/21/2015 2019 17,358 33,000 - - 34,700 - - 915 2014 Ford Explorer40824 7 2013 11/6/2013 2020 32,550 37,000 - - - 39,800 - 9162014 Ford Explorer42858 7 2013 10/24/2013 2020 29,400 37,000 - - - 39,800 - 917 2013 Ford Explorer48502 5 2013 7/23/2013 2018 32,550 37,000 - 37,900 - - - 918 2014 Ford Explorer31498 8 2014 4/22/2014 2022 32,550 37,000 - - - - - 919 2013 Ford Explorer43426 7 2013 8/15/2013 2020 32,550 37,000 - - - 39,800 - 920 2014 Ford Explorer (K-9)44838 5 2014 3/6/2014 2019 24,216 40,000 - - 42,000 - - 921 2013 Ford Police Interceptor30642 7 2012 2/28/2012 2019 24,238 33,000 - - 34,700 - - 922 2011 Ford Crown Victoria (SRO)71683 7 2012 2/22/2012 2019 24,238 33,000 - - 34,700 - - 931 2015 Chev Traverse (invest.)12791 10 2015 6/15/2015 2025 27,454 33,000 - - - - - 932 2016 Ford Police Interceptor (admin.) 245 10 2012 7/25/2012 2022 31,100 33,000 - - - - - 933 2012 Dodge Caravan (invest.)30277 10 2012 6/20/2012 2022 25,750 26,250 - - - - - 944 2013 Ford Police Interceptor (admin.) 25395 10 2013 10/3/2013 2023 31,100 33,000 - - - - - 945 2013 Ford Police Interceptor (invest.) 22850 10 2012 7/25/2012 2022 31,100 33,000 - - - - - 946 2013 Ford Police Interceptor (admin.) 31691 10 2012 10/3/2012 2022 31,100 33,000 - - - - - 947 2013 Ford Police Interceptor (admin.) 20408 10 2013 3/8/2013 2023 31,100 33,000 - - - - - 948 2015 Ford Police Interceptor (invest.) 5465 12 2015 1/5/2015 202715,60033,000 - - - - - 960 2011 GMC 1/2 Ton 4-WD Pickup (CSO) 67129 6 2011 10/19/2011 2017 24,500 28,000 28,000 - - - - 963 2016 GMC 1/2 Ton 4-WD Pickup (CSO) 3974 6 2016 2/17/2016 2022 27,246 28,000 - - - - - 800 Mhz Radios (93)10 2008 2008 2021623,100 - - - - 343,900 972 1997 Radar Trailer #120 1997 1997 2017 14,468 18,000 18,000 - - - - 973 2001 Radar Trailer #2 (Mod. 5700)20 2001 2001 2021 11,920 18,000 - - - - 19,900 TOTALS946,258 1,745,350 79,000 105,500 258,600 270,000 436,600 DRAFT 06-05-201773 EngineeringTargetEstimatedfuture replacement costCITYReplace2017Estimated 2017 2018 2019 2020 2021VEHICLECycle In-service Replace Original Purchase TradeNUMBERMAKE/MODELYears Date Year Cost Price Value114 2012 Chev Traverse102012 2022 23,900 25,100 5,000 - - - - - 115 2013 GMC ½ Ton Pickup (4-WD) 102013 2023 21,400 24,050 5,000 - - - - - 116 2009 Chev Impala - REPLACE WITH 1/102007 2017 21,400 27,500 27,500 - - - - FLEET ADDN- 2016 Colarado 4x4 Ext C102016 202623,500 3,000 - - - - - TOTALS66,700 100,150 13,000 27,500 - - - - Vehicle & Equipment Replacement FundDRAFT 06-05-201774 FIRE DEPARTMENTfuture replacement cost Target FA System EstimatedCITYReplace Actual2017Estimated 2017 2018 2019 2020 2021VEHICLECycle Acq In-service Replace Original Purchase TradeNUMBERMAKE/MODELYears Date Date Year Cost Price Value4971 2014 Ford Explorer10Jun-14 2014 2024 38,664 41,100 3,000 - - - - - 4972 2012 Ford Explorer10Apr-12 2012 2022 38,591 41,100 3,000 - - - - - 4974 2012 Ford Explorer10Apr-12 2012 2022 38,591 41,100 3,000 - - - - - 4976 2014 Ford Explorer10Jun-14 2014 2024 38,491 41,100 3,000 - - - - - 4980 2000 HME Fire Aerial Ladder Truck 21Jan-00 2000 2021 438,398 697,000 60,000 - - - - 769,400 4981 2003 Spartan Fire Pumper 1250 GPM/21Jan-03 2003 2024 339,525 510,000 40,000 - - - - - 4982 2007 Spartan Fire Aerial Ladder Truck21Jan-07 2007 2028 584,393 697,000 60,000 - - - - - 4983 2010 Spartan Fire Pumper 1500 GPM/21Jan-10 2010 2031 454,079 510,000 40,000 - - - - - 4987 # 1991 Spartan Fire Pumper 1250 GPM/25Jan-91 1991 2018 495,370 510,000 20,000 - - - - - 4984 2014 Spartan Fire Pumper 1250 GPM/21 Sep-14 2014 2035 495,944 510,000 20,000 - - - - - 4985 2016 Spartan Fire Pumper 1250 GPM/21 May-16 2016 2037 495,370 510,000 40,000 - - - - - 4990 1992 Chev Step Van25 Jan-92 1992 2017 23,932 240,000 3,000 240,000 - - - - 4991 2012 Chev Colorado Pickup10Apr-13 2013 2023 36,046 30,750 3,000 - - - - - 4992 2017 GMC Sierra K2500 Crew Cab Pic15Jan-17 2017 2032 30,400 35,000 5,000 - - - - - 4993 2002 Chev K2500 Crew Cab Pickup 15Apr-02 2002 2017 26,375 30,000 3,000 30,000 - - - - 4995 # 2006 Ford F-350 4-WD (grass rig- Sta 12Apr-06 2006 2018 24,606 - - - - - 4997 2006 Chev K2500 Crew Cab Pickup 15Apr-06 2006 2021 25,669 28,000 5,000 - - - - 30,900 4975 2015 Zodiac /Evenrude Boat & Trailer 15 Sep-15 2015 2030 14,975 15,500 1,000 - - - - - 49__ -# Rescue / Initial Attack truck (replaces 4102018 2028292,700 - 300,000 - - - eq 800 Mhz Radio (63)102008 2021422,100 - - - - 232,950 eq Hydraulic Rescue tools152005 202090,000 - - - 96,900 - eq SCBA (51 packs/120 bottles)102008 2018314,000 - 321,900 - - - eq Thermal Imagers72012 201970,000 - - 73,500 - - New Fire Engine Station #40- - - - - 4973 2005 Pace Am Sprinkler Trailer15Jan-06 2006 2021 5,013 26,000 2,000 - - - - 28,700 TOTALS3,644,432 5,702,450 314,000 270,000 621,900 73,500 96,900 1,061,950 # - Will not be replacedVehicle & Equipment Replacement FundDRAFT 06-05-201775 PW - NATURAL RESOURCESTargetEstimatedfuture replacement costCITYReplace2017Estimated Estimated 2017 2018 2019 2020 2021VEHICLECycle In-service Replace Original Purchase Trade ReplaceNUMBERMAKE/MODELYears Date Year Cost Price Value Cost601 2013 Chev ½ Ton Pickup (4-WD) 102013 2023 20,750.00 23,800 5,000 27,601 - - - - - 603 2008 Chev ½ Ton Pickup (4 WD) 102008 2018 20,487.00 23,800 5,000 24,395 - 24,400 - - - TOTALS41,237 47,600- 24,400 - - - Vehicle & Equipment Replacement FundDRAFT 06-05-201776 PARKS DEPARTMENTTargetEstimatedAnnual future replacement costCITYReplace2017Estimated VERF 2017 2018 2019 2020 2021VEHICLECycle In-service Replace Original Purchase Trade ChargeNUMBERMAKE/MODELYears DateYearCost PriceValueLight Duty Pickups2242016 Dodge 1/2 Ton Pickup10 2016 2026 19,677.00 20,170 1,500 $2,370 - - - - - 2252014 Ford ¾ Ton Quad Cab Pickup10 2014 2024 23,031.00 24,800 3,000 $2,650 - - - - - 2272016 Ford 3/4 Ton Pickup (4-WD)10 2016 2026 28,000.00 28,700 3,000 $3,280 - - - - - 2282015 Ford F250 ¾ Ton Pickup (4-WD) w/ 8’6" Pro-Plow10 2015 2025 30,550.00 32,000 4,000 $3,500 - - - - - 2312013 Ford F250 ¾ Ton Pickup10 2013 2023 19,000.00 21,000 1,500 $2,290 - - - - - 2332003 Ford E-350 Van (Puppet Van)122003 2018 18,366.00 22,000 1,500 $1,407 - 22,600 - - - 2352016 Ford F250 Pickup102016 2026 25,000.00 25,625 1,500 $3,050 - - - - - 2432010 Dodge 3/4 Ton Pickup (4-WD) W/7.5’ Boss Plow102010 2020 19,646.00 22,000 7,000 $1,670 - - - 23,700 - 2472007 Ford F250 ¾ Ton Pickup102007 2017 21,222.00 25,500 1,500 $2,400 25,500 - - - - 2482008 Ford F250 ¾ Ton Pickup (4-WD)102008 2018 21,630.00 25,500 1,500 $2,460 - 26,100 - - - 2602011 Frod F350 1 Ton Dump Truck102011 2021 38,798.00 40,100 7,000 $3,730 - - - - 44,300 2262009 Ford F250 3/4 Ton Pickup102009 2019 17,391.00 25,850 1,500 $2,570 - - 27,200 - - 236 #1989 Chev. K3500 4-WD Pickup (grass rig)198913,737.00 3,500 $0- - - - - 2412011 Dodge 1/2 Ton Pickup102011 2021 18,662.00 20,170 1,500 $2,080 - - - - 22,300 Heavy Duty Trucks229Box10 2012 2022 37,800.00 40,100 7,000 $3,840 - - - - - 230Truck (4-WD) 9’ Unimount Pro-Plus Plow102014 2024 33,177.00 40,100 7,000 $4,070 - - - - - 2372008 Ford F350 1 Ton Dump Truck (4-WD) -replace with F450102008 2018 34,500.00 45,300 5,000 $4,140 - 46,400 - - - 2382016 Ford F450 1-1/2 Ton Dump Truck (4-WD)102016 2026 44,223.00 45,300 7,000 $4,960 - - - - - 2402008 Isuzu Trash Truck102008 2018 70,233.00 87,700 8,000 $8,190 - 89,900 - - - 2462007 Ford F350 1 Ton Dump Truck (4-WD)102007 2017 34,252.00 40,100 7,000 $3,310 40,100 - - - - 249ppTruck (4-WD) 9’ Unimount Pro-Plus Plow10 2014 2024 33,177.00 40,100 7,000 $4,070 - - - - - 250Truck (4-WD) 9’ Unimount Pro-Plus Plow10 2014 2024 33,177.00 40,100 7,000 $4,070 - - - - - Water Trucks232Gal.)15 2016 2031 145,000.00 148,600 10,000 $13,333 - - - - - 234Gal.)14 2013 2027 138,000.00 148,600 10,000 $12,871 - - - - - Mowers2112012 Toro 5900 Grounds Master6 2012 2018 76,600.00 84,000 5,000 $13,517 - 86,100 - - - 2152013 Toro 580D Grounds Master72013 2020 72,000.00 73,800 5,000 $10,643 - - - 79,500 - 2162002 Bobcat 763 Skid Loader W/Cab152002 2017 20,951.00 30,000 6,000 $1,600 30,000 - - - - 2182014 Toro GM4700-D Mower72014 2021 66,000.00 66,000 10,000 $8,986 - - - - 72,900 Vehicle & Equipment Replacement FundDRAFT 06-05-201777 PARKS DEPARTMENTTargetEstimatedAnnual future replacement costCITYReplace2017Estimated VERF 2017 2018 2019 2020 2021VEHICLECycle In-service Replace Original Purchase Trade ChargeNUMBERMAKE/MODELYears DateYearCost PriceValueVehicle & Equipment Replacement Fund2202014 Toro GM4700-D Mower72014 2021 66,000.00 66,000 10,000 $8,986 - - - - 72,900 2442016 Toro GM 4700-D72016 2023 71,396.00 73,180 10,000 $10,700 - - - - - Sidewalk Plow Units2092005 Holder C-242 Tractor W/ 60” Snow Blower & 50” V-Plow122005 2017 59,481.00 110,000 5,000 $8,750 110,000 - - - - 2102016 Holder C270 Tractor w/Broom, Snowblower & Plow102016 2026 120,000.00 123,000 5,000 $14,860 - - - - - 2222015 Holder C270 Tractor w/Broom, Snowblower & Plow102015 2025 124,940.00 125,000 15,000 $13,730 - - - - - Tractors2012007 JD 5425 (4-WD) Tractor W/Cab & Loader122007 2019 42,553.00 45,000 5,000 $3,525 - - 47,300 - - 2022013 JD 5420 (4-WD) Tractor W/Cab & Loader122013 2025 40,000.00 42,000 5,000 $3,850 - - - - - 2032009 JD 6230 (2-WD) Tractor W/Cab122009 2021 38,614.00 40,000 4,500 $3,308 - - - - 44,200 2042011 JD 6230 Tractor122011 2023 40,153.00 40,000 4,500 $3,492 - - - - - 2062014 JD 5085E Tractor122015 2027 49,947.00 50,000 4,500 $4,958 - - - - - 2122002 JD 110 (4-WD) Tractor W/Loader & Backhoe152002 2017 48,143.00 54,000 8,000 $3,067 54,000 - - - - 217Tractor122005 2017 78,691.00 190,000 35,000 $12,917 190,000 - - - - 2512005 New Holland TV145 Tractor w/ Snowblower122005 2019 69,757.00 190,000 35,000 $11,757 - - 199,600 - - 203R2006 Sweepster CH Dual Drive Broom112006 2017 8,209.00 10,200 1,000 $836 10,200 - - - - Misc Equipment2522009 Kawasaki 4x4 Mule 401072009 2016 11,324.00 27,000 1,500 $3,643 - - - - - 2532011 Kaw 4x4 Mule 3010 & 80 Gal. Field Liner62011 2017 10,000.00 13,500 1,500 $2,000 13,500 - - - - 2542015 Toro Workman HDX-D Utility Cart w/Groomer-Leveler 62015 2021 26,770.00 26,770 6,000 $3,917 - - - - 29,500 2552014 Kawasaki 4x4 Mule 401062014 2020 12,000.00 12,350 2,500 $1,800 - - - 13,300 - 2562016 Toro Rake-O-Vac Turf Sweeper122016 2028 33,000.00 33,825 1,000 $3,617 - - - - - 2572014 Toro Workman 3200 Utility Cart w/Groomer-Leveler 62014 2020 27,000.00 27,800 3,000 $4,483 - - - 29,900 - 2582013 Kawasaki Mule 62013 2019 10,000.00 11,000 1,500 $1,683 - - 11,600 - - 2592010 Toro Workman72010 2017 21,018.00 23,000 1,500 $3,071 23,000 - - - - 2622001 AERA-vator 80" Aerator152001 2016 8,048.00 10,500 500 $667 - - - - - 2722016 Toro Rake-O-Vac Turf Sweeper122016 2028 33,000.00 32,000 1,000 $3,417 - - - - - 2742008 Olympia 82.5" Ice Resurfacer122008 2020 10,118.00 12,000 1,000 $992 - - - 12,900 - 2862003 Bannerman BTD-20 Turf Topdresser202003 2023 14,537.00 17,000 500 $960 - - - - - # 2006 Grass/Trash Sweeper10200626,103.00 26,000 1,000 - - - - - TOTALS$2,254,602 $2,694,340 $310,500 $266,042 496,300 271,100 285,700 159,300 286,100 DRAFT 06-05-201778 PW - STREET MAINTENANCETargetEstimatedfuture replacement costCITYReplace2017Estimated 2017 2018 2019 2020 2021VEHICLEMAKE/MODELCycle In-service Replace Original Purchase TradeNUMBERYears Date Year Cost Price Value300 2010 Mack Dump Truck GU812122010 2022 179,444 212,000 30,000 - - - - - 301 2010 Mack Dump Truck GU812122011 2023 179,802 212,000 30,000 - - - - - 305 2010 Mack Dump Truck GU812122011 2023 179,802 212,000 30,000 - - - - - 307 2016 Kenworth Dump Truck T470132015 2028 203,000 212,000 30,000 - - - - - 310 2015 Kenworth Dump Truck T470122014 2026 202,647 212,000 27,500 - - - - - 312 2015 Kenworth Dump Truck T470122014 2026 202,647 212,000 27,500 - - - - - 313 2007 Chev ¾ Ton Pickup (4-WD)102007 2017 22,460 34,000 7,000 34,000 - - - - 314 2006 Sterling Dump Truck L7500122006 2018 150,000 212,000 27,500 - 217,300 - - - 316 2008 Chev ¾ Ton Pickup (4-WD)102008 2018 20,755 34,000 7,000 - 34,900 - - - 319 2007 Sterling Dump Truck LT7500 (Tande122007 2019 163,550 225,000 30,000 - - 236,400 - - 322 2010 Mack Dump Truck GU812122010 2022 179,444 212,000 30,000 - - - - - 323 2005 Ford F550 Dump Truck122005 2017 59,140 70,000 10,000 70,000 - - - - 325 2007 Ford F550 Dump Truck102007 2017 61,529 70,000 10,000 70,000 - - - - 326 2002 Ford F550 Bucket Truck152002 2017 72,027 100,000 12,000 100,000 - - - - 327 2016 Kenworth Dump Truck T470132015 2028 208,500 212,000 30,000 - - - - - 330 2011 Ford F750 Bucket Truck152011 2026 115,658 130,000 14,000 - - - - - 331 2013 Chev ¾ Ton Ext. Cab Pickup (4-WD)102013 2023 27,248 34,850 9,000 - - - - - 336 2015 SPH-0 Blacktop Trailer202015 2035 52,000 54,600 7,000 - - - - - 337 2015 Chev ¾ Ton Pickup (4-WD)102014 2024 34,082 36,000 7,000 - - - - - 338 2016 Ford F550 Bucket/Sign Truck152016 2031 92,654 100,000 12,000 - - - - - 340 2016 Ford F550 Dump Truck102015 2025 60,000 61,500 10,000 - - - - - 341 2013 Chev ¾ Ton Ext. Cab Pickup (4-WD)102013 2023 27,248 34,850 9,000 - - - - - 344 2005 Sterling Dump Truck LT7500 (Tande122006 2018 135,000 225,000 30,000 - 230,600 - - - 360 2010 GMC 3/4 Ton Pickup (4-WD)102010 2020 24,876 34,000 7,000 - - - 36,600 - 361 2010 Ford F550 Dump Truck102010 2020 50,822 70,000 10,000 - - - 75,400 - 362 2011 Chev 1 Ton Dump Truck102011 2021 45,000 53,500 10,000 - - - - 59,100 381 2017 Kenworth Dump Truck T470122017 2029 213,500 212,000 30,000 - - - - - 302 1994 Model XA5905D Compressor251994 2019 11,000 18,000 2,000 - - 18,900 - - 303 2011 CAT Tractor Backhoe Model 430E 152011 2026 102,659 119,000 15,000 - - - - - 309 2010 Vermeer BC 1800 XL Chipper 102010 2020 45,674 54,200 5,000 - - - 58,400 - 321 # 1983 CASE 450 Dozer198332,750 8,000 - - - - - 328 1998 Daewoo Forklift201998 2018 18,500 30,300 3,000 - 31,100 - - - 329 # 1993 853 Skid Loader199326,400 5,000 - - - - - 332 2006 Skid Loader A-300112006 2017 35,800 47,000 8,000 47,000 - - - - 333 2004 JCB 520 Loadall Teles. Load Handle152004 2019 44,368 71,800 8,000 - - 75,400 - - Vehicle & Equipment Replacement FundDRAFT 06-05-201779 PW - STREET MAINTENANCETargetEstimatedfuture replacement costCITYReplace2017Estimated 2017 2018 2019 2020 2021VEHICLEMAKE/MODELCycle In-service Replace Original Purchase TradeNUMBERYears Date Year Cost Price ValueVehicle & Equipment Replacement Fund334 2007 AEBI TT75 Tractor152007 2022 85,000 105,000 8,000 - - - - - 335 2012 JD 997 Mower52012 2017 15,675 22,000 3,000 22,000 - - - - 342 2003 Chipper182003 2021 25,280 47,000 5,000 - - - - 51,900 343 # 1990 Rotary Snow Blower199060,264 12,000 - - - - - 345 2015 Model SC802 Stump Grinder222015 2037 39,245 41,200 7,500 - - - - - 346 2014 Toolcat 5600102014 2024 52,333 56,300 15,400 - - - - - 347 2006 Toolcat 5600112006 2017 35,000 56,300 15,400 56,300 - - - - 349 2012 JD 997 Mower52012 2017 15,676 22,000 3,000 22,000 - - - - 350 2012 New Holland Bi-directional Tractor 152012 2027 134,000 157,800 15,000 - - - - - 351 2016 CAT 938M Loader 282016 2044 230,940 236,700 40,000 - - - - - 352 # 1987 CAT 950B Loader198798,879 15,000 - - - - - 353 # 2006 Power Boss Sweeper200631,445 3,000 - - - - - 354 2008 Dura Patch 125DJT152008 202352,000 61,800 5,000 - - - - - 355 2013 New Holland Bi-directional Tractor 152013 2028 143,000 157,800 15,000 - - - - - 363 2012 JCB 520 Loadall Teles. Load Handle152012 2027 63,500 71,800 8,000 - - - - - 371 2013 Doosan Ingersoll Rand Air Compress252013 2038 17,600 19,400 1,000 - - - - - 2003 Crash Attenuator252003 2028 12,000 15,000 3,000 - - - - - 3M54 # 1990 Manhole Cutter199013,280 2,000 - - - - - 4,405,103 4,897,700 421,300 513,900 330,700 170,400 111,000 # Will not be replacedDRAFT 06-05-201780 PW - FLEET & BUILDINGSTarget FA SystemEstimatedFuture replacement costCITYReplace Actual2017Estimated 2017 2018 2019 2020 2021VEHICLECycle Acq In-service Replace Original Purchase TradeNUMBERMAKE/MODELYears Date Date Year Cost Price Value701 2010 GMC 1 Ton Service Truck15 Jun-10 2010 2025 40,833 46,125 10,000 - - - - - 702 2012 Chev Colorado 4X410 Jan-12 2012 2022 19,375 21,500 4,000 - - - - - TOTALS60,208 67,625 14,000 - - - - - Vehicle & Equipment Replacement FundDRAFT 06-05-201781 PW - STREET MAINTENANCE-STORM WATERTargetEstimatedfuture replacement costCITYReplace20172017 2018 2019 2020 2021VEHICLEMAKE/MODELCycle In-service Replace Original PurchaseNUMBERYears Date Year Cost Price604 2009 Chev Malibu 10 2009 2019 17,742 22,000 - - 23,200 - - 4012010 Mack Gap Vax Sewer Cleaner (cost split w/ Sanit92010 2019 320,000 215,000 - - 225,900 - - 304 2011 Elgin Pelican Street Sweeper152011 2026 185,600 195,250 - - - - - 306 2015 Elgin Pelican Street Sweeper172015 2032 198,931 195,250 - - - - - 317 # 1998 Elgin Pelican Street Sweeper198563,000 - - - - - 324 2005 Elgin Crosswind J Sweeper132005 2018 136,946 244,000 - 250,100 - - - 922,219 871,500 - 250,100 - - - # Will not be replacedEquipment Replacement ScheduleDRAFT 06-05-201782 PW - UTILITIESTargetEstimatedfuture replacement costCITYReplace2017Estimated 2017 2018 2019 2020 2021VEHICLECycle In-service Replace Original Purchase TradeNUMBERMAKE/MODELYears Date Year Cost Price Value404 2015 Chev 1 Ton Utility Pickup (4-WD) 10 2015 2025 60,000 61,500 7,000 - - - - - 406 2008 Chev 3/4 Ton Ext. Cab Pickup (4-WD) 102008 2018 22,469 34,850 7,000 - 35,700 - - - 408 2010 GMC 3/4 Ton Pickup (4-WD)102010 2020 23,256 34,850 7,000 - - - 37,500 - 411 2015 Chev 3/4 Ton Ext. Cab Pickup (4-WD) 102014 2024 29,850 34,850 7,000 - - - - - 416 2012 Chev 3/4 Ton Ext. Cab Pickup (4-WD) 102012 2022 24,600 34,850 7,000 - - - - - 419 2009 Chev 3/4 Ton Pickup (4-WD)102009 2019 21,386 34,850 7,000 - - 36,600 - - 421 2009 Chev 3/4 Ton Pickup (4-WD)102009 2019 33,920 34,850 7,000 - - 36,600 - - 466G2011 Cat 125KW Portable Generator252011 2036 57,000 62,525 8,000 - - - - - Subtotal Water272,481 333,125 57,000 - 35,700 73,200 37,500 - 401 2010 Mack Gap Vax Sewer Cleaner (cost sp92010 2019 320,000 215,000 50,000 - - 225,900 - - 402 2006 Freightliner M2 Jetter122006 2018 166,075 280,000 30,000 - 287,000 - - - 405 # 2005 Chev 1 Ton Utility Pickup (4-WD)200543,2007,000 - - - - - 409 2012 Chev 3/4 Ton Ext. Cab Pickup (4-WD) 102012 2022 24,600 34,850 7,000 - - - - - 412 2011 GMC 3/4 Ton Pickup (4-WD)102011 2021 24,505 34,850 7,000 - - - - 38,500 414 2011 GMC 3/4 Ton Pickup w/ Tommy Lift (4-102011 2021 24,505 34,850 7,000 - - - - 38,500 415 # 2005 Chev 1 Ton Utility Pickup (4-WD)200452,0007,000 - - - - - 417 2015 Chev 1-Ton Utility Truck102015 2025 83,000 87,125 7,000 - - - - - 418 2010 GMC 3/4 Ton Ext. Cab Pickup (4-WD) 102010 2020 25,511 34,850 7,000 - - - 37,500 - 422 2008 Chev Sewer Camera Express Van 122008 2020 33,657 35,875 7,000 - - - 38,600 - 4252013 Easement Machine202013 2033 32,000 33,620 4,000 - - - - - 427 2009 Port. Changeable Message Board 122009 2021 16,700 17,425 1,000 - - - - 19,200 4282012 Cornell Pump202013 2033 40,132 42,230 1,000 - - - - - 451G #1985 Kohler Portable Generator198524,0008,000 - - - - - 452G1999 Olympia Portable Generator251999 2024 31,982 51,250 8,000 - - - - - 4032001 VersaVac202001 2021 45,000 53,300 8,000 - - - - 58,800 704 2012 John Deere 997 Mower52012 2017 15,500 20,000 4,000 20,000 - - - - Subtotal Sewer1,002,367 975,225 170,000 20,000 287,000 225,900 76,100 155,000 TOTALS1,274,848 1,308,350 227,000 20,000 322,700 299,100 113,600 155,000 # Will not be replacedEquipment Replacement ScheduleDRAFT 06-05-201783 Golf Equipment ScheduleVALLEYWOOD GOLFFuture Replacement CostUNIT# YEAR MAKE DESCRIPTIONTarget Replace Cycle YearsIn-service DateCOST NEWEstimated 2017 Purchase Price2017 2018 2019 2020 2021504 2009 Toro Mower, Greensmaster 3150 2009 $20,000 40,000 505 2010 Smithco Greens Roller 2010 $11,000 20,000 506 2009 Toro Mower, Greensmaster 3150 2009 $20,000 30,000 30,000520 2005 Toro Mower, Greens 3000 2005 $22,500 30,000 30,000523 2005 Toro Mower, Greens 3100 2005 $22,500 40,000 40,000507 2006 Toro Mower, Rough 4700D 2006 $47,000 60,000 60,000522 1999 Toro Mower, Reelmaster 5200D 1999 $35,000 60,000 60,000527 2012 Toro Mower, Reelmaster 5200D 2012 $47,000 50,000 530 2008 Toro Mower, Fairway 4700D 2008 $47,000 50,000 50,000558 2002 Toro Fairway Wheel Drive 5200D 2002 $35,000 40,000 514 1978 JD Tractor Loader 401C 1978 $12,000 90,000 586 1989 Bobcat Skidloader Backhoe 1989 $14,950 25,000 535 1998 Ryan Aerator 1998 $30,000 20,000 20,000519 1988 Cushman Core Harvester 1988 $5,000 15,000 15,000528 2012 Toro Zero-Turn 2012 $20,000 30,000 30,000547 1999 Toro 5500 Sprayer (Large) 1999 $37,000 60,000 60,000Sprayer (small) 15,000 15,000518 2001 Dakota Spreader 2001 $9,850 15,000 15,000Spreader- 581 2010 Pro Force Leaf Blower 2010 $6,200 - Sod Cutter - Spin Grinder 60,000 508 2009 Toro Utility, Worman 2009 $12,000 30,000 509 2009 Toro Utility, Workman 2009 $14,000 25,000 25,000512 2009 Toro Utility, Worman 2009 $6,830 25,000 25,000510 2012 Cushman Utility, Truckster 2012 $13,000 20,000 20,000538 1996 Cushman Utility, Trap Rake 1996 $15,000 25,000 25,000529 2001 Toro Utility, Workman 2001 $10,000 55,000 20,000526 2001 Toro Utility, Workman 2001 $10,000 25,000 25,000517 2001 Toro Utility, Workman 2001 $12,842 20,000 20,000NEW 2013 EZGO Golf Carts (55 total) 2013 $4500/cart 45,000 45,000 45,000 45,000 45,000Golf Total $170,000 $105,000 $155,000 $185,000 $195,000DRAFT 06-05-201784 6/8/2017 1 City of Apple Valley Capital Improvements Program Why Have a Capital Improvements Program (CIP)? Anticipate future service demands and costs Identify and prioritize projects and outlays Encourage financial planning so that funding is available for future expenditures Identifies trends Ensure that future projects will integrate with the Comprehensive Guide Plan Demonstrate City policies for growth, maintenance, and development 6/8/2017 2 CIP as a Planning Document, Not a Budget The CIP is a strategy for anticipated future expenditures and investments. The CIP is not a budget, nor is it an authorization to expend funds. The CIP is not a wish list. The CIP does not bind the City to the anticipated expenditures in the projected years. The authorization of the expenditures occurs through City Council action and in adoption of the annual budget. What is in the CIP? The CIP includes significant capital outlays Not intended for sporadic purchases of supplies like very small tools or equipment. Generally itemizes outlays which exceed $50,000, but there are a few major exceptions: selected small divisional expenses such as computer and video related equipment where capital purchases tend to be aggregated, improvements, renewal, or replacements to City buildings exceeding $5,000, and subtotaled minor expenditures found in the appendices to the CIP. 6/8/2017 3 CIP Integrates into Budget Process The departmental CIP review begins in the first quarter. The draft CIP then is a basis from which departments formulate their budget requests around mid-year. The annual budget is reviewed and modified through the remainder of the year. Projects may be added or subtracted for the upcoming year. Once the budget is approved, the CIP is reconciled and adjusted based on the approved budget. 2017‐21 CIP Totals $95.2 million Building & Facility Impr. $14,959 16% Capital Technology $1,829 2% Vehicles & Equip. $14,289 15% Parks, Playgrounds, Paths $5,110 5% Ponds, Nat. Res., & Environment $524 1% Street and Infrastructure $58,491 61% 2017 - 21 CIP Totals $95.2 million (in 1000's) 6/8/2017 4 CIP Format: Three Sections 1.Yearly Projects for All Funding Sources A.Building & Facility Improvements, Capital Technology, Vehicles & Equipment, Parks & Playgrounds, Ponds & Natural Resources, Street and Utility Improvements and Utility Infrastructure Preservation 2.Financial Impact – selected funds (Eleven) 3.Five year CIP tables 4.Appendices 1.Street Overlay and Reconstruction Schedule 2.Vehicle and Equipment Replacement Schedule Examples of Revenue Sources General Fund Net Revenue Bonds VERF Charges Storm Water Fund General Obligation Bonds Liquor Fund Equipment Certificates Golf Fund Future Capital Projects Fund Arena Fund Federal Gov’t Aid Cemetery Fund Municipal State Aid (MSA) City Hall Fund Dakota County Special Assessments ISD 196 Tax Increment Utilities Fund Donations 6/8/2017 5 Anticipated Public Safety and General Govt. Projects Exceeding $500,000 •Fire Station # 4 - Land Purchase $ 500,000 •Fire Station #4 - Construction $3,000,000 •PD Garage @ Muni Center $2,500,000 •LED Lighting – JCRPE $ 500,000 •Ice Arena Refrigerant $1,800,000 •Former City Hall Bldg Impr. $ 943,000 Anticipated Parks Projects Exceeding $500,000 2017 Kelley Park – Development $1,000,000 Greenway Underpass 600,000 2018 Greenway Underpasses $ 600,000 2019 Greenway Underpasses $ 600,000 2020 •Greenway Underpasses $ 600,000 JCRP East Maintenance Bldg $ 750,000 2021 Greenway Underpasses $ 600,000 6/8/2017 6 Anticipated Public Works Projects Exceeding $500,000 Streets & Road Construction 2017 Palomino Hills 3rd and 4th Galaxie Ave Resurfacing Embry Place Signal/Turn-lane 140th & Galaxie Hayes Campus Parking Lot 2018 Redwood Dr,Cir,Ct & Keller Lake Dr. JCRR 133rd St Ct / 134th St Ct Widen CR 38 Signal Upgrade CR 31/CR 46 $- $5,000 $10,000 $15,000 $20,000 $25,000 $18,252 $24,110 $17,090 $20,101 $15,647 17-21 CIP Expense by year (in $1000's) Anticipated Public Works Projects Exceeding $500,000 (Continued) Streets & Road Construction 2019 AV 11th North & South Surrey Tr CR 42 Signals 2020 AV 3 rd(Redwood Pk,Juniper) Cimmarron Rd Garden View Dr (42 to Whitney) PedestrianOverpass@147th 2021 AV 3 rd (Pinewood, Walnut) AV 10 th (phase 1) $- $5,000 $10,000 $15,000 $20,000 $25,000 $18,252 $24,110 $17,090 $20,101 $15,647 17-21 CIP Expense by year (in $1000's) 6/8/2017 7 Anticipated Utility Projects Exceeding $500,000 Utility & Facility Improvements 2017 Lift Station # 5 rehab $ 720,000 Water Reservoir Maint (Valleywood) $ 835,000 Water meter replacement (1 of 3) $1,500,000 2018 Water meter replacement (2 of 3) $2,000,000 2019 Water meter replacement (3 of 3) $1,000,000 2020 Water Reservoir Maint (Longridge) $ 900,000 2021 Street & Infrastructure Program makes up $ 58.5 million, 61% of CIP (p.65) 6/8/2017 8 Reconstruction/Overlay(2017‐21) Microsurfacing Projects (2017‐21) 6/8/2017 9 Financial Analysis – Selected Funds Future Capital Projects Fund(in 1000’s) 2017 2018 2019 2020 2021 Sources: Investment Earnings 187$ 176$ 161$ 161$ 144$ Valleywood Loan R. 50 50 50 50 50 237 226 211 211 194 Use of funds: Cedar Ave. Monument - 60 - - - Cedar Ave. Overpass - - - 400 - Fire Station #4 - 500 - - - PD Garage - - - - 2,500 Voting Machine lease 28 28 - - - JCRP East Maint Bld - - - 750 - Recon.Western Serv. - 120 - - - Transfer - Park Bond 960 - - - - Transfer -Road Imp. 127 286 - - - Transfer - Muni Bldg 183 202 202 202 552 1,298 1,196 202 1,352 3,052 Net change (1,061) (970) 9 (1,141) (2,858) Beg Balance 12,778 11,717 10,747 10,756 9,615 End Balance 11,717 10,747 10,756 9,615 6,757 6/8/2017 10 VERF Fund successful at leveling out budget impacts (p.15) $‐ $500,000 $1,000,000 $1,500,000 $2,000,000 2017 2018 2019 2020 2021 2022 VERF Charges Expenditures net of Trade Value VERF includes $15.4M of assets in program & now includes streets Municipal Building Fund CIP Identifies Shortfall in 2019 (p.19) 2017 2018 2019 2020 2021 Investment Earnings 4,500$ 3,800$ 3,000$ -$ -$ Transfers in 390,500 393,000 398,000 404,000 760,000 395,000 396,800 401,000 404,000 760,000 Use of funds: Municipal Center 10,000 60,000 256,000 535,000 5,000 CMF 70,000 79,000 72,000 51,000 66,000 Park Facilities 377,000 310,000 311,000 111,000 250,000 457,000 449,000 639,000 697,000 321,000 Net change (62,000) (52,200) (238,000) (293,000) 439,000 Beg Balance 314,875 252,875 200,675 (37,325) (330,325) End Balance 252,875 200,675 (37,325) (330,325) 108,675 6/8/2017 11 Park Dedication Fund (p. 28) 2017 2018 2019 2020 2021 2022 Source of Funds Dedication Fees received 271,674$ 162,000$ 162,000$ 162,000$ 162,000$ 162,000$ Investment Earnings 13,500 1,100 2,700 4,500 3,100 4,900 Total Source of Funds 285,174$ 163,100$ 164,700$ 166,500$ 165,100$ 166,900$ Use of Funds Parks Special Assessments from the Kelley Park 32,155$ 29,653$ 28,240$ 23,786$ 22,556$ 14,480$ Cortland Park development 250,000 Kelley Park development 1,000,000 JCRP east sewer connection to 142nd St. 250,000 Total Use of Funds 1,282,155$ 29,653$ 28,240$ 273,786$ 22,556$ 264,480$ Net Change (996,981)$ 133,447$ 136,460$ (107,286)$ 142,544$ (97,580)$ Beginning Cash/ Fund Balance 1,083,481$ 86,500$ 219,947$ 356,407$ 249,121$ 391,665$ Ending Cash/ Fund Balance 86,500$ 219,947$ 356,407$ 249,121$ 391,665$ 294,085$ Water Account – Utility Fund (p.30) 6/8/2017 12 Water Fund Cash Balance will need rate increase to fund meter replacement and capital outlay May even require financing of meters Sewer Account–Utility Fund (p.32 6/8/2017 13 Sewer Cash Balances Water and Sewer Fund ‐ Cash balance down $3.2 million since 2009 ‐ after spending a net 18 Million on capital outlay (net of borrowing) 6/8/2017 14 Water & Sewer Fund ‐ 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 2017 2018 2019 2020 2021 Expenditures Capital Outlay Cash flows from Operations Looking Forward 2017 & 2018 projects in process 2019 planning will begin Projects with need to finalize funding Overpass 147th & Cedar ‘20 (state funding ?)$3,700,000 Former City Hall Improvements ‘19 $ 943,000 Fire Station # 4 Construction ’18 $3,000,000 PD Garage @ Muni Center ‘21 $2,500,000 Sports Arena Refrigerant Repl ‘18 $1,800,000 JCRP East LED Lighting $ 500,000 JCRP East Maintenance Facility ‘20 $ 750,000 Greenway Underpasses (‘16 to ‘20) $3,170,000 Water Meter Replacement (potentially financed) 6/8/2017 15 Discussion I T E M: 4.A . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove Minutes of May 25, 2017, Regular Meeting S taff Contact: P amela J . G ackstetter, C ity C lerk D epartment / D ivision: C ity C lerk’s Office AC T I O N RE Q UE S T E D: Approve the minutes of the regular meeting of May 25, 2017. S UM M ARY: T he minutes from the last regular C ity Council meeting are attached for your review and approval. B AC K G RO UND : State statute requires the creation and preservation of meeting minutes which document the official actions and proceedings of public governing bodies. B UD G E T I M PAC T: N/A AT TAC HM E NT S: Minutes CITY OF APPLE VALLEY Dakota County, Minnesota May 25, 2017 Minutes of the regular meeting of the City Council of Apple Valley, Dakota County, Minnesota, held May 25, 2017, at 7:00 o’clock p.m., at Apple Valley Municipal Center. PRESENT: Mayor Hamann-Roland; Councilmembers Bergman, Goodwin, and Hooppaw. ABSENT: Councilmember Grendahl. City staff members present were: City Administrator Lawell, Deputy City Clerk Marschall, City Attorney Dougherty, City Engineer Anderson, Police Captain Bermel, Parks and Recreation Director Bernstein, Police Captain Francis, Human Resources Manager Haas, Finance Director Hedberg, Community Development Director Nordquist, Police Chief Rechtzigel, Public Works Director Saam, Planner/Econ. Dev. Specialist Sharpe, and Fire Chief Thompson. Mayor Hamann-Roland called the meeting to order at 7:00 p.m. Everyone took part in the Pledge of Allegiance to the flag. APPROVAL OF AGENDA MOTION: of Hooppaw, seconded by Bergman, approving the agenda for tonight’s meeting, as presented. Ayes - 4 - Nays - 0. AUDIENCE Mayor Hamann-Roland asked if anyone was present to address the Council, at this time, on any item not on this meeting’s agenda. No one requested to speak. CONSENT AGENDA Mayor Hamann-Roland asked if the Council or anyone in the audience wished to pull any item from the consent agenda. There were no requests. MOTION: of Bergman, seconded by Goodwin, approving all items on the consent agenda with no exceptions. Ayes - 4 - Nays - 0. CONSENT AGENDA ITEMS MOTION: of Bergman, seconded by Goodwin, approving the minutes of the regular meeting of May 11, 2017, as written. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, adopting Resolution No. 2017-81 accepting, with thanks, the donation of $205.00 from Karla and Matthew VanderBie, Diane Cunningham, and the VanderBie Family for use by Lebanon Cemetery. Ayes - 4 - Nays - 0. CITY OF APPLE VALLEY Dakota County, Minnesota May 25, 2017 Page 2 MOTION: of Bergman, seconded by Goodwin, adopting Resolution No. 2017-82 accepting, with thanks, the donation of blankets from Hosanna Emergency Action Response Team (HEART) for use by the Police and Fire Departments. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, authorizing the addition of the Telecommunication Advisory Committee to the Commission/Committee Recognition Program, as described in the Parks and Recreation Director’s memo. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving the 2018 Budget Calendar and setting a special informal City Council meeting, at 5:30 p.m., on August 24, 2017, as described in the Finance Director’s memo. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, adopting Resolution No. 2017-83 restricting parking along Galaxie Avenue, for Project 2017-165, Galaxie Avenue Mill and Overlay Improvements, and ordering installation of the necessary signage. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving the License Agreement for drain tile encroachment at 13620 Georgia Drive (Lot 1, Block 4, Eagle Ridge Estates 2nd Addition) with Brian P. Kohler and Courtney K. Kohler, as attached to the City Engineer’s memo, and authorizing the Mayor and City Clerk to sign the same. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, adopting Resolution No. 2017-84 rejecting bids for Project 2017-137, 2017 Central Maintenance Facility (CMF) and Police Department Air Handling Unit Upgrades, because minimum requirements were not met. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, adopting Resolution No. 2017-85 authorizing advertising for receipt of bids for Project 2017-137, 2017 Central Maintenance Facility (CMF) and Police Department Air Handling Unit Upgrades, at 10:00 a.m., on June 8, 2017, via a posting on the City’s website and Quest Construction Data Network. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, adopting Resolution No. 2017-86 approving plans and specifications for Project 2017-165, Galaxie Avenue Mill and Overlay Improvements; and authorizing advertising for receipt of bids, at 10:00 a.m., on June 20, 2017, via a posting on the City’s website and Quest Construction Data Network. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, adopting Resolution No. 2017-87 approving plans and specifications for Project 2017-167, Cobblestone Lake Park Pavilion and Restroom Building; and authorizing advertising for receipt of bids, at 2:00 p.m., on June 27, 2017, via a posting on the City’s website and Quest Construction Data Network. Ayes - 4 - Nays - 0. CITY OF APPLE VALLEY Dakota County, Minnesota May 25, 2017 Page 3 MOTION: of Bergman, seconded by Goodwin, adopting Resolution No. 2017-88 awarding the agreement for Project 2017-101, Valleywood Reservoir Rehabilitation, to V & T Painting, LLC, the lowest responsible bidder, in the amount of $733,750.00. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving the Cost Share Agreement with Dakota County Soil and Water Conservation District for Project 2017-162, Hayes Arena Stormwater Retrofits, as attached to the Natural Resources Coordinator’s memo, and authorizing the Mayor and Deputy City Clerk to sign the same. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving the Joint Powers Agreement with Dakota County for Intersection Improvements at Cedar Avenue (CSAH 23) and 157th Street W., as attached to the Public Works Director’s memo, and authorizing the Mayor and City Clerk to sign the same. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving the Lease Supplement with Advanced Imaging Solutions (AIS), for copier/printer lease and maintenance, as attached to the IT Manager’s memo, and authorizing the Mayor and Deputy City Clerk to sign the same. Ayes - 4 - Nays - 0. MOTION: of Goodwin seconded by Bergman, accepting Project 2015-103, 157th Street & Johnny Cake Ridge Road Improvements, as complete and authorizing final payment on the agreement with Friedges Contracting Co., LLC, in the amount of $66,744.92. Ayes - 4 - Nays - 0. MOTION: of Goodwin seconded by Bergman, approving hiring the seasonal, part-time, and full-time employees, as listed in the Personnel Report dated May 25, 2017. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, to pay the claims and bills, check registers dated May 4, 2017, in the amount of $908,614.36; and May 10, 2017, in the amount of $469,374.33. Ayes - 4 - Nays - 0. END OF CONSENT AGENDA STORK PIN PRESENTATION Fire Chief Thompson said Apple Valley firefighters and paramedics were involved in providing direct support and service for a pre-hospital birth and provided a brief summary. Mr. Kurt Weidner, Allina Health EMS Manager, presented Stork Pins to Fire Lieutenant Colleen Elvin, Firefighters Joseph Landru, and Jennifer Wilkes; and Paramedics Tim Dresher, Matt Noll, and Val Ubl for their professional involvement with the birth. The City Council congratulated all involved. CITY OF APPLE VALLEY Dakota County, Minnesota May 25, 2017 Page 4 UPONOR MINNESOTA INVESTMENT FUND (MIF) APPLICATION Mr. Sharpe introduced this item and provided a brief history on Uponor, Inc. Uponor is proposing to expand its operations with the construction of a 57,818 sq. ft. manufacturing and office facility to be located at 14751 Energy Way and connected to the 14800 Everest Avenue annex facility. The cost of improvements and equipment is estimated at $15,800,000 and is expected to create at least 66 additional jobs. Because of the high construction costs, Uponor requested assistance from the State of Minnesota. A grant is available from the Minnesota Investment Fund (MIF) to assist Uponor with this project. The grant is awarded through the Department of Employment and Economic Development (DEED) to local units of government who provide forgivable loans to assist expanding businesses. He added that a public hearing is required relative to the submittal of an application for MIF loan funds. Discussion followed. Mayor Hamann-Roland called the public hearing to order at 7:13 p.m. to consider the Minnesota Investment Fund (MIF) application to the Department of Employment and Economic Development (DEED) for Uponor, Inc. The Mayor asked for questions or comments from the Council and the audience. There were none and the hearing was declared closed at 7:14 p.m. MOTION: of Bergman, seconded by Goodwin, adopting Resolution No. 2017-89 authorizing submittal of a Minnesota Investment Fund (MIF) application to the Department of Employment and Economic Development (DEED) for Uponor, Inc. Ayes - 4 - Nays - 0. Discussion followed. Mr. Brad Beckman, Finance Vice President of Uponor, addressed the City Council. COMMUNICATIONS Mr. Bernstein invited the public to the annual “Music in Kelley Park” concert series from 6:00 p.m. to 9:00 p.m. on June 16 and 23; July 7, 14, 21, and 28; and August 4, 11 and 18, 2017. Mr. Lawell invited the public to take part in the Parks and Recreation survey located on the City website. Information gathered through this survey and other means, will be used to update the City's existing Comprehensive Parks Plan from 2009. Mr. Lawell expressed appreciation to the Mayor on the positive message she delivered at the State of the City address. To learn more about recent and upcoming developments, events, and celebrations in the City of Apple Valley, a video of the address is located on the City website. Mayor Hamann-Roland congratulated Rick Anderson and Randy Baily on the success of their 9th annual bike sale held in Apple Valley, which benefits Dakota County non-profit organizations Kids ‘n Kinship and DARTS. CITY OF APPLE VALLEY Dakota County, Minnesota May 25, 2017 Page 5 CALENDAR OF UPCOMING EVENTS MOTION: of Hooppaw, seconded by Bergman, approving the calendar of upcoming events as included in the Deputy City Clerk’s memo dated May 25, 2017, and noting that each event listed is hereby deemed a Special Meeting of the City Council. Ayes - 4 - Nays - 0. MOTION: of Goodwin, seconded by Hooppaw, to adjourn. Ayes - 4 - Nays - 0. The meeting was adjourned at 7:23 o’clock p.m. Respectfully Submitted, /s/ Stephanie Marschall Stephanie Marschall, Deputy City Clerk Approved by the Apple Valley City Council on Mary Hamann-Roland, Mayor I T E M: 4.B . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A dopt Resolution Accepting Donation f rom Target C orporation for Use by P olice D epartment S taff Contact: Nick Francis, P olice C aptain D epartment / D ivision: P olice Department AC T I O N RE Q UE S T E D: Adopt the attached resolution accepting a donation of $500.00 from Target Corporation for use by the Police Department. S UM M ARY: T he Police Department has been offered a $500 donation from the Apple Valley Target stores. T he donation is in the form of gift cards and will be used in connection with this year's Night to Unite celebration. B AC K G RO UND : N/A B UD G E T I M PAC T: N/A AT TAC HM E NT S: R esolution CITY OF APPLE VALLEY RESOLUTION NO. 2017- A RESOLUTION ACCEPTING DONATION WHEREAS, the City Council of Apple Valley encourages public donations to help defray costs and improve the quality of life in Apple Valley; and WHEREAS, the Apple Valley Target Stores have offered to donate $500.00 to the Police Department’s Night to Unite celebration; and WHEREAS, Minnesota Statutes 465.03 requires that all gifts and donations of real or personal property be accepted only with the adoption of a resolution approved by two-thirds of the members of the City Council. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, that this donation is hereby accepted for use by the City. BE IT FURTHER RESOLVED that the City sincerely thanks our local Target Stores for the gracious and generous donation and their support of the Police Department’s Night to Unite celebration. ADOPTED this the 8th day of June, 2017. ____________________________________ Mary Hamann-Roland, Mayor ATTEST: ____________________________________ Pamela J. Gackstetter, City Clerk I T E M: 4.C. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove S tate Gambling E xempt Permit for A pple Valley R otary S cholarship F oundation, at A pple Valley F ord L incoln, 7200 150th S treet W., on October 14, 2017 S taff Contact: P amela J . G ackstetter, C ity C lerk D epartment / D ivision: C ity C lerk’s Office AC T I O N RE Q UE S T E D: Approve issuance of a lawful gambling exempt permit, by the State Gambling C ontrol Board, to Apple Valley Rotary Scholarship Foundation, for use on October 14, 2017, at Apple Valley Ford Lincoln, 7200 150th Street W., and waiving any waiting period for State approval. S UM M ARY: Apple Valley Rotary Scholarship Foundation, submitted an application for a gambling event to be held at Apple Valley Ford Lincoln, 7200 150th Street W., on October 14, 2017. T he application is on file should you wish to review it. B AC K G RO UND : Exempt permits to conduct lawful gambling activities, on five or fewer days in a calendar year, for qualified nonprofit organizations, are issued by the State G ambling C ontrol Board. Issuance is subject to approval or denial by the city in which the gambling activity is to be conducted. B UD G E T I M PAC T: N/A I T E M: 4.D. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove I ssuance of Temporary On-S ale 3.2 Percent Malt L iquor L icense f or Apple Valley A merican L egion Post 1776, on J une 24, 2017, Outdoors at 14521 G ranada Drive S taff Contact: P amela J . G ackstetter D epartment / D ivision: C ity C lerk’s Office AC T I O N RE Q UE S T E D: Approve the issuance of a Temporary On-Sale 3.2 Percent Malt Liquor License to A pple Valley American Legion, Post 1776, for use on J une 24, 2017, outdoors at 14521 Granada Drive. S UM M ARY: Apple Valley A merican Legion, Post 1776, has filed an application for a Temporary On-Sale 3.2 Percent Malt Liquor License, in connection with its On-Sale C lub License and Special License for Sunday Liquor Sales, for use outdoors at 14521 Granada Drive on J une 24, 2017. T he application is in order and can be approved by the C ity C ouncil. B AC K G RO UND : N/A B UD G E T I M PAC T: N/A I T E M: 4.E . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A uthorize I ssuance of 1 to 4 Day Temporary O n-S ale L iquor L icense for A pple Valley A merican L egion, Post 1776, in P arking L ot at 14521 Granada D rive on J uly 4, 2017 S taff Contact: P amela J . G ackstetter, C ity C lerk D epartment / D ivision: C ity C lerk’s Office AC T I O N RE Q UE S T E D: Authorize issuance of 1 to 4 Day Temporary On-Sale Liquor License for Apple Valley American Legion, Post 1776, by Minnesota Alcohol and Gambling Enforcement Division, outdoors at 14521 Granada D rive for use on J uly 4, 2017. S UM M ARY: T he Apple Valley A merican Legion, Post 1776, submitted an application for a 1 to 4 Day Temporary On-Sale Liquor License in its south parking lot at 14521 Granada D rive. A sketch showing the location is attached. T he application is for use on J uly 4, 2017. T he American Legion has also applied to have temporary banners advertising its chicken barbecue and activities in connection with the J uly 4, 2017, event. T he application is in order and may be approved by the City C ouncil. B AC K G RO UND : Temporary On-Sale Liquor Licenses are issued by the Minnesota Alcohol and Gambling Enforcement D ivision subject to approval by the City C ouncil. B UD G E T I M PAC T: N/A AT TAC HM E NT S: Map I T E M: 4.F. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A uthorize I ssuance of 1 to 4 Day Temporary O n-S ale L iquor L icense for A pple Valley Villa A partments, in F ireside D ining Room, 14610 G arrett Avenue on A ugust 10, 2017 S taff Contact: P amela J . G ackstetter, C ity C lerk D epartment / D ivision: C ity C lerk’s Office AC T I O N RE Q UE S T E D: Authorize issuance of a 1 to 4 Day Temporary On-Sale Liquor License for Apple Valley Villa Apartments, by Minnesota A lcohol and Gambling Enforcement Division, for use on August 10, 2017, in Fireside Dining Room (5th Floor), located at 14610 Garrett Avenue. S UM M ARY: Apple Valley Villa Apartments submitted an application for a 1 to 4 Day Temporary On- Sale Liquor License. T he application requests intoxicating liquor sales in the Fireside Dining Room (5th Floor), located at 14610 Garrett Avenue, on A ugust 10, 2017. A pple Valley Villa Apartments has provided a C ertificate of Liability Insurance covering this event. B AC K G RO UND : Temporary On-Sale Liquor Licenses are issued by the Minnesota Alcohol and Gambling Enforcement D ivision subject to approval by the City C ouncil. B UD G E T I M PAC T: N/A I T E M: 4.G. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: P roclaim "Music in Kelley Park" on J une 16 and 23, 2017; J uly 7, 14, 21, and 28, 2017; and A ugust 4, 11, and 18, 2017 S taff Contact: Director Barry B ernstein Department / Division: Parks and Recreation Department AC T I O N RE Q UE S T E D: Proclaim "Music in K elley Park" on J une 16, 23, 2017; and J uly 7, 14, 21, 28, 2017; and August 4, 11, 18, 2017. S UM M ARY: T he Apple Valley Arts Foundation has offered to provide a music series on Friday evenings J une 16, 23, and J uly 7, 14, 21, 28, and A ugust 4, 11, 18, 2017, from 6:00 p.m. to 9:00 p.m. at Kelley Park. T he proclamation declares the music series a community event and encourages the citizens of Apple Valley to support and attend these music events. As in the past, there will be various vendors selling food and beverages. B AC K G RO UND : T he Apple Valley Arts Foundation has offered a music series at Kelley Park for several years. T his year's line-up includes: J une 16 5-Speed (Relay for Life Night) J une 23 -Riverside Swing Band (Uponor Night) J uly 7 -Hornucopia J uly 14 -David Gonzalez & Retro Funk (Wings Financial N ight) J uly 21 -J D Steele and the McPhail C ommunity Youth C hoir J uly 28 -Patty Peterson and the A ll Star Band August 4 -Reina del C id August 11 -Riverside Hitmen August 18 -8th Street Band (T hink Mutual Bank Night) B UD G E T I M PAC T: Staffing costs - approx. $900.00 AT TAC HM E NT S: Proclamation Presentation CITY OF APPLE VALLEY PROCLAMATION WHEREAS, the City of Apple Valley is proud to provide cultural experiences for its residents; and WHEREAS, the Apple Valley Arts Foundation has offered to provide a music series on summer evenings June 16 and 23; July 7, 14, 21, and 28; and August 4, 11 and 18, 2017, from 6:00 p.m. to 9:00 p.m. at Kelley Park; and WHEREAS, the Apple Valley Arts Foundation, residents, civic organizations, business community, and Parks and Recreation Department have joined together to develop this free music celebration. NOW, THEREFORE BE IT RESOLVED, by the City Council of Apple Valley, Dakota County, Minnesota, that said dates in June, July, and August 2017, are hereby proclaimed to be: “MUSIC IN KELLEY PARK” The Council further declares this music series a community event and encourages the citizens of Apple Valley to support and attend these music events. PROCLAIMED this 8th day of June, 2017. Mary Hamann-Roland, Mayor ATTEST: Pamela J. Gackstetter, City Clerk Think Mutual Bank and Uponor Present 2017 Music in Kelley Park Concert Series Show times 6-9 pm FREE! Food and beverages available for purchase FREE prize drawings (must be present to win) Musical performances brought to you by The Apple Valley Arts Foundation in cooperation with the City of Apple Valley 2017 summer concert series Kelley Park 6855 Fortino St., Apple Valley, MN 55124 June 16 5 Speed (Relay for Life Night) June 23 Riverside Swing Band (Uponor Night) July 7 Hornucopia July 14 David Gonzalez & Retro Funk (Wings Financial Night) July 21 JD Steele and the MacPhail Community Youth Choir July 28 Patty Peterson and the All Star Band Aug 4 Reina del Cid Aug 11 Riverside Hitmen Aug 18 8th Street Band (Think Mutual Bank Night) I T E M: 4.H. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A uthorize Temporary P arking at Kelley P ark f or S pecial C ity-Hosted E vents S taff Contact: J ohn Bermel, Captain D epartment / D ivision: P olice Department AC T I O N RE Q UE S T E D: Authorize temporary parking at Kelley Park for special City-hosted events. S UM M ARY: T he C ity will host a number of special events at Kelley Park over the course of J une, J uly, August, and September 2017. We anticipate the attendance and logistical workings at these events will demand parking on non-paved surfaces for performers, vendors, service organizations, and possibly attendees. B AC K G RO UND : City Ordinance §155.373.B.3 states in part: All motorized vehicles, regardless of type, method of propulsion, or placement on a trailer, and all C lass II vehicles and trailers shall be parked or stored on a paved surface. City Ordinance §95.03.(A) and (B) states: (A) Operation of motor vehicles. No person shall drive or operate a motor vehicle in any park except on roads or designated parking areas or other areas as the city shall designate, and no person shall operate a motor vehicle within a park at a speed in excess of ten miles per hour. (B) Parking of motor vehicles. No person shall park or stop any motor vehicle at any place in a park, except in designated parking areas or upon a public street and no person shall park or leave any unauthorized motor vehicle within a park when persons are not permitted in the parkas set forth in § 95.04. A violation of this section is a petty misdemeanor. City Ordinance §71.02.C.(1) and (2) states: (1) When determined to be in the best interest for the health, safety and welfare of the residents, property owners, business or commuting public, the Chief of Police is empowered with the authority of the C ity Council to restrict or allow parking, and the enforcement thereof, on public thoroughfares and private property by means of installing or ordering the installation of signage, barricades or other physical means as necessary to convey the intent for proper enforcement in accordance with the state statutes, city code or other local ordinances. (2) When parking is restricted pursuant to subsection (1) above or it is determined to allow parking, the C ity Council shall be so informed of the specific area affected and the type of control at the next regularly scheduled meeting from the date of the installation or sooner. T he C ity Council retains the rights to rescind, modify or reaffirm the controls as it deems necessary. Increased attendance at City hosted events at Kelley Park, new multi-housing construction around Kelley Park, and the increased scale of events increases the number of people and vehicles in the area. T he police department is concerned that if this additional parking permission is not granted, the number and type of vehicles having to move in and out of the park area for setup will create a hazard for people attending events. T his provision will allow for vehicles to remain stationary for the duration of the events. T his provision will also allow parking off of primary streets when attendance demands. B UD G E T I M PAC T: N/A I T E M: 4.I . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A dopt Resolution E stablishing P arking Restrictions f or the F reedom Days C elebration S taff Contact: Michael Glewwe, Public Works Superintendent - Streets D epartment / D ivision: P ublic Works D epartment AC T I O N RE Q UE S T E D: Adopt the resolution establishing parking restrictions for the Freedom Days celebration. S UM M ARY: T he Public Works Department is requesting the establishment of temporary parking restrictions for the J uly 4, 2017, Freedom Days celebration. T he requested parking restrictions provide for an unrestricted parade route, staging area, and Fun Run Route. Should Council adopt the attached resolution, the Public Works Department will schedule the installation of appropriate "No Parking" signs by 11:00 a.m. on J uly 3 and remove the signs by 4:00 p.m. on J uly 4. B AC K G RO UND : Parking restrictions have been established for the Freedom D ays celebration for the past several years. B UD G E T I M PAC T: N/A AT TAC HM E NT S: R esolution CITY OF APPLE VALLEY RESOLUTION NO. 2017- A RESOLUTION RESTRICTING PARKING WHEREAS, the Apple Valley City Code, Section 71.19, authorizes the City Council to restrict parking by ordering the erection of appropriate signs; and WHEREAS, it is necessary to restrict parking on certain City streets to provide for the July 4 Freedom Days Parade route, staging area, and Fun Run Route. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, that a No Parking zone is hereby established on the following streets from 11:00 a.m. on July 3, 2017, to 4:00 p.m. on July 4, 2017: • North side of Jonathan Drive from McIntosh Drive to Pennock Avenue • Whitney Drive from Cedar Avenue to Harmony Way • Pennock Avenue from Whitney Drive to 153rd Street West • Pennock Avenue from 147th Street West to 145th Street West • 145th Street West from Pennock Avenue to Hayes Road • Hayes Road from 145th Street West to 140th Street West • North side of 143rd Street West from Hayes Road to Garden View Drive BE IT FURTHER RESOLVED that appropriate No Parking signs on said street segments are hereby ordered installed. ADOPTED this 8th day of June, 2017. Mary Hamann-Roland, Mayor ATTEST: Pamela J. Gackstetter, City Clerk I T E M: 4.J . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A dopt Resolution Restricting P arking on C S A H 42 (150th S treet W.) for Project 2017-135, C S A H 42 & E mbry Path I ntersection I mprovements S taff Contact: B randon A nderson, City E ngineer D epartment / D ivision: P ublic Works D epartment AC T I O N RE Q UE S T E D: Adopt the resolution restricting parking on C S A H 42 (150th Street W.) from Pilot Knob Road (C SA H 31) east to Easter Ave., for Project 2017-135, C S A H 42 & Embry Path Intersection Improvements. S UM M ARY: Attached for C ity C ouncil consideration is a resolution restricting parking along C SA H 42 for Project 2017-135, C S A H 42 & Embry Path Intersection Improvements. T he requested parking restrictions are a requirement of State Aid Funding because Municipal and C ounty State Aid Funds are being used, State A id Project No. 019-642-061 and 186-020-035. B AC K G RO UND : N/A B UD G E T I M PAC T: N/A AT TAC HM E NT S: R esolution Map CITY OF APPLE VALLEY RESOLUTION NO. 2017- A RESOLUTION RESTRICTING PARKING ON COUNTY STATE AID HIGHWAY 42 (15OTH STREET W) SAP 019-642-061 AND 186-020-035 WHEREAS, the City of Apple Valley in cooperation with Dakota County has planned the improvement of CSAH 42 (150th Street W) from 670’ west of Embry Path to 550’ east of Embry Path, State Aid Project No. 019-642-061 and 186-020-035; and WHEREAS, Municipal and County State Aid Funds will be expended on the improvements on CSAH 42 (150th Street); and WHEREAS, the improvement does not provide adequate width for parking on both sides of the street; and approval of the proposed construction as a County State Aid Highway project must therefore be conditioned upon a resolution restricting parking. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, hereby prohibits the parking of vehicles on both sides of CSAH 42 (150th Street) from Pilot Knob Road to Easter Avenue. ADOPTED this 8th day of June 2017. Mary Hamann-Roland, Mayor ATTEST: Pamela J. Gackstetter, City Clerk CSAH 42 (150th Street)Embry PathCSAH 31 (Pilot Knob Road)Easter AvenueEcho Way NO PARKING 152nd Street Upper 147th Street PROJECT NO. DATE:5/16/17 PARKING RESTRICTIONS CITY OF APPLE VALLEY CSAH 42 & EMBRY PATH INTERSECTION IMPROVEMENTS 2017-135 1FIGURE: FEETSCALE 0 500250 I T E M: 4.K . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A dopt Resolution Authorizing P roject 2017-140, Galaxie Avenue Corridor Study S taff Contact: Matt Saam, P ublic Works Director D epartment / D ivision: P ublic Works D epartment AC T I O N RE Q UE S T E D: Adopt the resolution authorizing the work related to Project 2017-140, G alaxie Avenue Corridor Study. S UM M ARY: T he draft 2017-2021 Capital Improvements Program for the C ity includes funding in 2017 for a corridor study of Galaxie Avenue from 140th Street W. north to C S A H 38 (McAndrews Road). T he corridor study would examine the existing/proposed traffic along Galaxie Avenue within the study limits and confirm that the current lane configuration for the corridor is correct. A map of the proposed study area is attached. B AC K G RO UND : T he corridor study is the result of concerns raised at the March 2016 Traffic Safety Advisory C ommittee meeting. At that meeting, the principal of Greenleaf Elementary School expressed concerns with the roadway configuration following an accident involving students crossing Galaxie Avenue. T he principal noted the increased traffic from parents picking up students after school has resulted in stacking issues in the southbound lane of Galaxie Avenue. Staff utilized the C ity’s existing engineering consultant pool to obtain a proposal from SEH Engineering for the corridor study. T he main work tasks of their proposal include: Completion of a traffic study of the entire corridor including data collection, analysis of the forecasted traffic volume from the Regional Metro Model, operational analysis, review of pedestrian crossing facilities and crash data. Recommendations for the future roadway geometry for the corridor. Completion of a technical memorandum summarizing the study. B UD G E T I M PAC T: T he not-to-exceed cost for the above work is $19,900. It is anticipated that Municipal State Aid (MSA) Funds will be used for this work. AT TAC HM E NT S: R esolution Map CITY OF APPLE VALLEY RESOLUTION NO. 2017- A RESOLUTION AUTHORIZING THE WORK RELATED TO PROJECT 2017-140, GALAXIE AVENUE CORRIDOR STUDY WHEREAS, the City’s draft Capital Improvements Program identifies Galaxie Avenue for a corridor study in 2017 from 140th Street W. north to CSAH 38 (McAndrews Road); and WHEREAS, traffic safety concerns along Galaxie Avenue near Greenleaf Elementary School have been raised at the Traffic Safety Advisory Committee. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, that: 1. Staff is directed to conduct preliminary field work and prepare a Corridor Study. 2. Estimated project costs and proposed funding for the Corridor Study are authorized as follows: Estimated Project Costs: Corridor Study $ 19,900 Estimated Project Funding: Municipal State Aid (MSA) Fund $ 19,900 ADOPTED this 8th day of June 2017. __________________________________ Mary Hamann-Roland, Mayor ATTEST: _________________________________ Pamela J. Gackstetter, City Clerk GALAXIE AVENUE CORRIDOR STUDY CITY OF APPLE VALLEY McANDREWS RD DATE: 05-31-17 0 300 600150Feet I GREENLEAF PARK PARK GREENLEAF SCOT TPARK NORDICPARK GAL AX IEPARK GREEN LEAF ELEME NTARY SCHO OL FIRESTATION Legend Corridor Study 140TH ST W GALAXIE AVEPROJECT NO. 2017-140 132ND ST W 135TH ST W U PPE R 139T H ST W UPPER 136TH ST W 133R D ST W I T E M: 4.L . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: Receive 2016 Comprehensive Annual F inancial R eport S taff Contact: Ron Hedberg, F inance Director D epartment / D ivision: F inance Department AC T I O N RE Q UE S T E D: Receive the 2016 C omprehensive Annual Financial Report. S UM M ARY: J im Eichten, Managing Partner, or J ackie Huegel, Senior Manager, with the C ity’s auditing firm, Malloy Montague Karnowski Radosevich and Co. P.A. (MMKR) will present the 2016 Comprehensive Annual Finance Report and review their Management Report at the informal work session on J une 8, 2017. Included with the council packet information are three separate bound documents; the first, and largest, is a copy of the Comprehensive Annual Financial Statements (C A FR), the second is auditor ’s Management Report, and the third is Special Purpose A udit Reports including opinions on compliance with Government Auditing Standards and Legal Compliance. Since the documents are large, a good place to start reviewing the C A FR documents would be the Transmittal Letter (starting on page iii), the Management Discussion and Analysis letter (starting on page 4) and with the Auditor ’s Management Report on page 1 and their financial analysis section beginning on page 7 of that report. Last year was the fifth year that the C ity of Apple Valley participated in the Certificate of Achievement for Excellence in Financial Reporting program administered by the G FO A, the City of Apple Valley was recently awarded the C ertificate for the 2015 C A FR. Staff believes that the current year ’s submission will also meet the requirements to receive the award. T he presentation will cover some of the highlights of the year. If the Council has some items that they would like to be sure is covered just let me know prior to the meeting and we will be sure to cover it in the presentation. B AC K G RO UND : N/A B UD G E T I M PAC T: No budget impact. AT TAC HM E NT S: R eport R eport R eport Comprehensive Annual Financial Report City of Apple Valley Minnesota Year Ended December 31, 2016 CITY OF APPLE VALLEY DAKOTA COUNTY, MINNESOTA Comprehensive Annual Financial Report for the Year Ended December 31, 2016 Prepared by Finance Department CITY OF APPLE VALLEY 7100 147th Street West Apple Valley, Minnesota 55124 THIS PAGE INTENTIONALLY LEFT BLANK Page INTRODUCTORY SECTION ELECTED OFFICIALS AND ADMINISTRATION i ORGANIZATIONAL STRUCTURE ii LETTER OF TRANSMITTAL iii–ix CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING x FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT 1–3 MANAGEMENT’S DISCUSSION AND ANALYSIS 4–18 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 19 Statement of Activities 20–21 Fund Financial Statements Governmental Funds Balance Sheet 22–23 Reconciliation of the Balance Sheet to the Statement of Net Position 24 Statement of Revenue, Expenditures, and Changes in Fund Balances 25–26 Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund Balances to the Statement of Activities 27 Statement of Revenue, Expenditures, and Changes in Fund Balances – General Fund – Budget and Actual 28 Proprietary Funds Statement of Net Position 29–32 Statement of Revenue, Expenses, and Changes in Net Position 33–34 Statement of Cash Flows 35–36 Notes to Basic Financial Statements 37–74 REQUIRED SUPPLEMENTARY INFORMATION PERA – General Employees Retirement Fund Schedule of City’s and Non-Employer Proportionate Share of Net Pension Liability 75 Schedule of City Contributions 75 PERA – Public Employees Police and Fire Fund Schedule of City’s Proportionate Share of Net Pension Liability 76 Schedule of City Contributions 76 Apple Valley Firefighters’ Relief Association Schedule of Changes in the Relief Association’s Net Pension Liability and Related Ratios 77 Schedule of City Contributions 78 Other Post-Employment Benefits Plan Schedule of Funding Progress 79 CITY OF APPLE VALLEY DAKOTA COUNTY, MINNESOTA Table of Contents Page SUPPLEMENTARY INFORMATION Combining and Individual Fund Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 80 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 81 Nonmajor Special Revenue Funds 82 Combining Balance Sheet 83–84 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 85–86 Nonmajor Debt Service Funds 87 Combining Balance Sheet 88–91 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 92–95 Nonmajor Capital Projects Funds 96–97 Combining Balance Sheet 98–103 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 104–109 General Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual 110–115 Road Improvements Capital Projects Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual 116 Future Capital Projects Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual 117 Cable TV Special Revenue Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual 118 EDA Operations Special Revenue Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual 119 Equipment Certificate Capital Projects Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual 120 Cable Capital Equipment Capital Projects Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual 121 Internal Service Funds 122 Combining Statement of Net Position 123 Combining Statement of Revenue, Expenses, and Changes in Net Position 124 Combining Statement of Cash Flows 125 CITY OF APPLE VALLEY DAKOTA COUNTY, MINNESOTA Table of Contents (continued) Page STATISTICAL SECTION Net Position by Component 126–127 Changes in Net Position 128–131 Fund Balances of Governmental Funds 132–133 Changes in Fund Balances of Governmental Funds 134–135 Assessed and Estimated Actual Value of Taxable Property 136–137 Property Tax Capacity Rates 138–139 Principal Property Taxpayers 140 Property Tax Levies and Collections 141–142 Ratios of Outstanding Debt by Type 143–144 Ratios of General Bonded Debt Outstanding 145–146 Direct and Overlapping Governmental Activities Debt 147 Legal Debt Margin Information 148–149 Pledged Revenue Coverage 150–151 Demographic and Economic Statistics 152 Principal Employers 153 Full-Time Equivalent City Government Employees by Function 154–155 Operating Indicators by Function 156–157 Capital Asset Statistics by Function/Program 158–159 CITY OF APPLE VALLEY DAKOTA COUNTY, MINNESOTA Table of Contents (continued) THIS PAGE INTENTIONALLY LEFT BLANK INTRODUCTORY SECTION -i- Term Expires Mary Hamann-Roland Mayor December 31, 2018 John Bergman Councilmember December 31, 2018 Thomas Goodwin Councilmember December 31, 2020 Ruth Grendahl Councilmember December 31, 2020 Clint Hooppaw Councilmember December 31, 2018 M. Thomas Lawell City Administrator Pamela Gackstetter City Clerk Ronald Hedberg Finance Director/Treasurer Matt Saam Public Works Director Jon Rechtzigel Police Chief Nealon Thompson Fire Chief Bruce Nordquist Community Development Director Barry Bernstein Parks and Recreation Director Cathy Broughten Assistant Finance Director Charles Grawe Assistant City Administrator Melissa Haas Human Resource Manager Brandon Anderson City Engineer Carol Blommel Johnson Public Works Superintendent ELECTED OFFICIALS ADMINISTRATION CITY OF APPLE VALLEY DAKOTA COUNTY, MINNESOTA Elected Officials and Administration December 31, 2016 ii Organizational Structure City of Apple Valley Mayor and City Council Citizens City Attorney (contractual) Economic Development Authority Planning Commission City Administrator Administration Fire Police Finance Community Development Public Works Planning Economic Development Code Enforcement Finance Utility Billing Administration Information Technologies Human Resources Cable TV Fire Patrol Investigations Records Parks & Recreation Recreation Programs Park Maintenance Planning Accounting Administration Patrol Fire Recreation Programs Street Maintenance Economic Development Financial Reporting City Clerk/ Elections Investigations Fire Inspection Park Maintenance Natural Resources Code Enforcement Cash & Investments Information Technology Records Ice Arena Engineering Utility Billing Human Resources Hayes Community & Senior Center Building Inspections Cable TV AV Aquatic Center Utilities Apple Valley Community Center Fleet Maintenance Municipal Liquor Stores Valleywood Golf Cemetery Redwood Pool -ii- -iii- City of Telephone (952) 953-2540 Fax (952)953-2515 www.ci.apple-valley.mn.us June 2, 2017 To the Honorable Mayor, City Council, and Citizens of the City of Apple Valley: The Comprehensive Annual Financial Report (CAFR) of the City of Apple Valley, Minnesota (the City), for the year ended December 31, 2016, is hereby submitted. The report was prepared in accordance with accounting principles generally accepted in the United States of America as established by the Governmental Accounting Standards Board and meets the requirements of the State Auditor’s Office. The report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all information presented within this report. To provide a reasonable basis for making these representations, management of the City has established internal controls designed to protect the City’s assets from loss, theft, or misuse and to provide sufficient information for the preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh the benefits, the City’s internal controls have been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatements. As management, we assert that to the best of our knowledge and belief this CAFR is complete and reliable, in all material respects. The City’s financial statements have been audited by Malloy, Montague, Karnowski, Radosevich & Co., P.A., Certified Public Accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the year ended December 31, 2016, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates used by management; and evaluating the overall financial statement presentation. Based upon the audit, the independent auditor concluded that there was a reasonable basis for rendering an unmodified opinion that the City’s financial statements, for the year ended December 31, 2016, are fairly presented in conformity with accounting principles generally accepted in the United States of America. The independent auditor’s report is presented in the financial section of this report. The management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The City’s MD&A complements this letter of transmittal and should be read in conjunction with it. 7100 147th St. W Apple Valley, MN 55124 -iv- Profile of the City of Apple Valley The City was incorporated as a village on January 1, 1969, and incorporated as a city on January 1, 1974. The City is a suburban community located 17 miles south of downtown Minneapolis within Dakota County, and has a convenient location with a comprehensive system of highways – Interstate 35E serves the northwest boundary of the City, while State Highway 77 runs north and south through the City. The City is served by a Bus Rapid Transit service that connects to the light rail system serving Minneapolis and St. Paul. The City is seven miles from the Minneapolis-St. Paul International Airport within the seven-county Twin Cities metropolitan region, has a land area of 17.5 square miles, and serves a community with a current population of 51,338. -v- The City operates as a Statutory Plan A City, the mayor-council form, under Minnesota law. The governing body, consisting of the mayor and four councilmembers, is elected at large and on a nonpartisan basis. Terms of office are four years, with elections held in each even-numbered year; not more than three councilmembers’ terms expire in any one year. The City Council is responsible for, among other things, passing ordinances, adopting the budget, appointing members to various advisory committees and commissions, and hiring the city administrator and other city employees. The city administrator is responsible for carrying out the policies, ordinances, and directions of the City Council, and for overseeing the day-to-day operations of the City. The City provides its residents and businesses with a full range of municipal services consisting of public safety (police, fire, building inspections), public works, parks and recreation, and general government administration. The City also operates a number of enterprise activities including: water and sanitary sewer, Valleywood Golf Course, three off-sale liquor stores, storm water, street lights, sports arenas, and a cemetery. Sanitary sewage treatment and disposal is operated on a regional basis by the Metropolitan Council Environmental Services. Refuse collection and disposal are handled on a private basis through contractual arrangements by city residents with private haulers. Further information regarding city services can be obtained from the City’s website at www.ci.apple-valley.mn.us. The Apple Valley Economic Development Authority (EDA) is a separate legal entity organized pursuant to Minnesota Statutes, Chapter 469, and is included as a blended component unit. The EDA is considered a component unit because the governing body is comprised of City Council members and two other members being appointed by the City Council. Also, the EDA is in a relationship of financial benefit or burden with the City. The annual budget serves as the foundation for the City’s financial planning and control. The budgetary process is outlined in the notes to basic financial statements. The City applies budgetary controls to ensure compliance with legal provisions of the laws of Minnesota. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual budgets are adopted for the General Fund in addition to certain special revenue and capital projects funds. Budget to actual comparisons are presented for each governmental fund for which an annual budget has been adopted. Factors Affecting Financial Condition The City is committed to maintaining a strong financial condition, while continuing to provide public services to its residents and businesses. The City’s financial position, as reflected in the financial statements presented in the reports, is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. Local Economy The economic conditions have improved for the City, its residents, and its businesses. The City’s unemployment rate as of December 2016, for example, is 3.0 percent, compared to the state of Minnesota’s rate of 4.1 percent, and the national unemployment rate of 4.5 percent. Unemployment Rate: Dec. 2016 Dec. 2015 Dec. 2014 Dec. 2013 Dec. 2012 City of Apple Valley 3.0% 2.6% 2.8% 3.6% 4.2% Dakota County 3.4% 3.1% 3.8% 4.0% 4.7% State of Minnesota 4.1% 3.7% 3.8% 4.5% 5.3% National 4.5% 5.0% 5.6% 6.7% 7.8% (Source: MN Dept. of Economic Development) -vi- Housing Values Home values in the City are continuing a positive trend, reflecting the recovery of the housing market. The assessor’s estimated market for residential market values increased on the median valued home approximately 5.0 percent for 2016. Assessor values for 2017 and 2018 continue this positive trend. Increase (Decline) in Median Value Home: 2013 (5.8%) 2014 3.5% 2015 8.1% 2016 5.0% 2017 2.5% 2018 (Preliminary) 6.7% The population of the City has increased from 585 in 1960 to 49,084 according to the 2010 U.S. Census and is estimated at 51,338 for 2016. Most of the population of the City concentrates in two age groups: 45–54 years and 5–14 years at 17.0 percent and 14.2 percent, respectively. According to the 2010 U.S. Census, the average age is 32 years and the median family income was $90,901. The most recent estimate of the median family income from the U.S. Census Bureau is $96,281 for 2015. The City is the home to Uponor and Wings Financial Credit Union. Other major employers in the area include Target, Wal-Mart, Minnesota Zoo, Augustana Health Care Center, Apple Valley Medical Clinic, and Apple Valley Redi-Mix. Market Value Growth The City consistently adds new tax base each year. In 2016, a total of $29.7 million of market value was added to the City’s tax base and which current data indicates is continuing. Total market value increased to $4.5 billion for 2016 resulting from improved market conditions. Conditions continue to improve for the future with preliminary County Assessor data for payable 2018 showing a 9.1 percent increase to a total city-wide taxable market value of $5.1 billion, of which $81 and $96 million results from new construction for pay 2017 and 2018, respectively. -vii- Major Initiatives In 2016, investment continued in the City as new businesses opened and new developments were approved. What follows is a sample of some of the development projects that were reviewed, approved, began construction, or were completed in 2016, as well as some of the long-range planning and economic development initiatives that will help maintain the City’s high quality of life. Residential Development Over the past 10 years, single-family construction has averaged 60 units per year, and 2016 saw 140 single-family units constructed, valued at over $39 million. Recent multi-family construction shows strong activity for 2016 with 280 apartment units completed for occupancy at the Springs of Apple Valley complex. While the construction of new single-family homes has increased for 2016, the valuation added by remodeling and renovations is being maintained at a high level, valued at over $22.8 million. This reflects homeowners’ continued interest in investing in their properties. Three different residential subdivisions were approved in 2016, providing for 197 single-family and townhome lots. Construction began in 2016 on two senior apartment/cooperative complexes totaling 358 units in addition to the second phase of the Remington Cove 95-unit apartment complex. The second phase of the Parkside Village began construction in 2017, with an additional 134 units with occupancy scheduled for 2017. -viii- Commercial Development Commercial and industrial development continued to improve in 2016, with total improvement values, including commercial alterations, totaling $25.6 million in 2016. New commercial construction projects included the 74,000 square foot manufacturing facility for Karmella, Inc. Other new construction includes the 18,000 square foot Foliage Medical Office Building, the 3,250 square foot Bank of America bank branch, and the 7,000 square foot Cobblestone Retail II Building. Upcoming Initiatives Include: Mixed-Use Business Campus: In 2017, approximately 350 acres of mixed business campus will begin to be master planned with some mixed uses proposed to begin development in the area currently being actively mined for aggregate. The property owner has identified a development partner to collaborate and invest in the active mining area. Significant public infrastructure improvements including roads, trails, ponding, and park improvements, will be part of the plan and coincide with private development. Menard’s Hanson Development Site: The 50-acre site known as Menard’s/Hanson will have proposed mixed business land uses (retail, office, industrial) considered. Water Meter Replacement Program: The City has engaged a consulting group to develop a Water Meter Replacement Program plan. Many water meters in the City have been in service for more than 25 years. The accuracy of water meters tends to diminish as they get older. The City’s Capital Improvement Program includes a four (4) year schedule for water meter replacement and will be funded within the Water Utility Fund. Infrastructure Improvements The City is committed to maintaining its significant investment in the community’s infrastructure with the implementation of an aggressive street maintenance program in 2012. In 2016, over $5 million was invested to maintain the infrastructure and included the following significant projects: Reconstruction of streets in the Palomino 4th subdivision Reconstruction of streets in the Longridge 1st Reconstruction of Hidden Meadow Road and Hamburg Court Additional resurfacing of streets throughout the community Long-Term Financial Planning Each year the City adopts a five-year Capital Improvement Program (CIP). The CIP is a five-year plan that identifies the City’s infrastructure, development objectives, and the allocation of resources for these projects. This CIP provides policy makers and the community with a strategic approach to implementation and administration of improvement projects. The 2017–2021 CIP identifies $106 million of capital projects along with the associated funding. The five-year CIP also includes five-year revenue and expenditure projections for the majority of funds identified in the document. One of the larger improvements included in the 2017–2021 CIP includes the continued Street and Utility Reconstruction and Reconditioning Program, which totals $53 million over the next five years. -ix- Relevant Financial Policies The City utilizes various financial and budget policies to guide the City Council and staff when making financial decisions. These include adoption of a balanced budget, minimizing the reliance on state revenues which have proven to be unpredictable, setting of a 50 percent of subsequent year’s budgeted expenditures minimum fund balance level to provide for cash flow purposes, and adoption of a five-year CIP to provide for capital asset acquisition and replacement. Cash temporarily idle during the year was invested in U.S. government agency obligations, municipal securities, certificates of deposit, and money market instruments. The City’s investment policy calls for the investment of public funds in a manner that will provide the highest investment return with minimum risk while meeting the daily cash flow demands of the City. For investments held at December 31, 2016, the effective duration of the investment portfolio was two years. The City’s average return on investments in 2016 was 1.53 percent. Awards and Acknowledgements The Government Finance Officers Association (GFOA) of the United States and Canada awarded the City a Certificate of Achievement for Excellence in Financial Reporting for its CAFR for the fiscal year-end December 31, 2015. This is the fifth year that the City achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government has to publish an easily readable and efficiently organized CAFR that satisfies both accounting principles generally accepted in the United States of America and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. However, we believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another award. The preparation of this report could not occur without the efficient and dedicated service of the entire finance department staff throughout the reporting year. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. We would like to thank the City Council for its commitment in planning and implementing the financial operations of the City in a fiscally prudent and progressive manner. Respectfully Submitted, CITY OF APPLE VALLEY, MINNESOTA Ronald Hedberg Finance Director -x- FINANCIAL SECTION -1- INDEPENDENT AUDITOR’S REPORT To the City Council and Management City of Apple Valley, 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 Apple Valley, Minnesota (the City) as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. AUDITOR’S RESPONSIBILITY Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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. (continued) -2- OPINIONS In our opinion, the financial statements referred to on the previous page 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 at December 31, 2016, 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 and the required supplementary information (RSI), as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI 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’s basic financial statements. The introductory section, supplementary information, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not required parts of the basic financial statements. The 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. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. (continued) -3- OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated June 2, 2017 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Minneapolis, Minnesota June 2, 2017 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF APPLE VALLEY Management’s Discussion and Analysis Year Ended December 31, 2016 -4- As management of the City of Apple Valley, Minnesota (the City), we have provided readers of the City’s financial statements with this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2016. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, located earlier in this report. FINANCIAL HIGHLIGHTS The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $271,181,386 (net position). Of this amount, $41,498,768 (unrestricted net position) may be used to meet the City’s ongoing obligations to citizens and creditors; $16,320,512 is restricted for specific purposes (restricted net position); and $213,362,106 represents the net investment in capital assets. The City’s total net position increased by $8,471,700 during the year ended December 31, 2016. As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $63,362,224, an increase of $2,374,474. Restricted fund balances decreased from $27,424,225 to $27,079,147, a decrease of $345,078, which is the result of a decrease in the EDA Operations Special Revenue Fund, due to an increase in developer assistant expenditures. This decrease was offset by an increase in the capital projects funds from the collections of restricted funds such as: park dedication fees, franchise fees, special assessments, and tax increments. The unassigned fund balances increased from $5,782,048 to $6,819,130, while assigned fund balances increased from $27,028,733 to $28,510,255. At the end of the current fiscal year, unassigned fund balance for the General Fund was $15,740,362, or 50.0 percent, of total General Fund expenditures based on 2017 budgeted expenditure levels, including transfers. The City’s long-term liabilities increased by $16,105,163, or 24.6 percent, during the current fiscal year. The increase is primarily attributable to the increase in net pension liability of $19,342,224, as a result of the change in actuarial assumptions in the computation of the City’s obligation under Governmental Accounting Standards Board (GASB) Statement No. 68. This increase was partly offset by the City making continuing payments on its outstanding debt obligations per the agreed upon schedules. Please see further details of long-term debt in Note 5 of the notes to basic financial statements. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements include three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-Wide Financial Statements – The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private sector business. -5- The Statement of Net Position presents information on all of the City’s assets, liabilities, and deferred inflows/outflows 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 fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned, but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by property taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, and parks and recreation. The business-type activities of the City include municipal liquor, municipal golf course, sports arena, water and sewer, storm drainage, cemetery, and street light utility. The government-wide financial statements not only include the City itself (known as the primary government), but also the Apple Valley Economic Development Authority (EDA). The EDA is legally separate and is reported as if it were part of the primary government because it provides services exclusively for the City. The EDA is reported as the Economic Development Debt Service Fund and the EDA Operations Special Revenue Fund. 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 the near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental funds Balance Sheet and Statement of Revenue, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains several individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and Statement of Revenue, Expenditures, and Changes in Fund Balances for the General Fund, Closed Bond Issues Debt Service Fund, 2001/2008B Refunding Improvement Bonds Debt Service Fund, Road Improvements Capital Projects Fund, and Future Capital Projects Capital Projects Fund, all of which are considered to be major funds. 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. -6- The City adopts an annual appropriated budget for its General Fund, Road Improvements Capital Projects Fund, Future Capital Projects Capital Projects Fund, Cable TV Special Revenue Fund, EDA Operations Special Revenue Fund, Equipment Certificate Capital Projects Fund, and Cable Capital Equipment Capital Projects Fund. A budgetary comparison statement or schedule has been provided for these funds to demonstrate compliance with this budget. Proprietary Funds – The City maintains two different types of proprietary funds. 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 municipal liquor, municipal golf course, sports arena, water and sewer, storm drainage, cemetery, and street light utility operations. Internal service funds are accounting devices used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its dental insurance, benefits/other insurance, and vehicle and equipment replacement. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. 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 municipal liquor, municipal golf course, sports arena, water and sewer, storm drainage, cemetery, and street light utility operations, all of which are considered to be major funds of the City. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary funds financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. Notes to Basic Financial Statements – The notes to basic financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other Information – In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information and the combining and individual fund statements and schedules (presented as supplementary information) referred to earlier in connection with nonmajor governmental funds and internal service funds, which are presented immediately following the basic financial statements. Further, a statistical section has been included as part of the Comprehensive Annual Financial Report (CAFR) to facilitate additional analysis, and is the third and final section of the report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of the City’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $271,181,386 at the close of the most recent fiscal year. By far, the largest portion of the City’s net position reflects its net investment in capital assets (e.g., land, buildings, machinery, equipment, distribution system, and infrastructure) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investments in its capital assets are reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. -7- City of Apple Valley’s Net Position 2016 2015 2016 2015 2016 2015 Assets Current and other assets 75,551,704$ 74,434,555$ 22,659,941$ 19,907,006$ 98,211,645$ 94,341,561$ Capital assets, net 111,334,935 106,353,296 130,498,267 130,174,041 241,833,202 236,527,337 Total assets 186,886,639$ 180,787,851$ 153,158,208$ 150,081,047$ 340,044,847$ 330,868,898$ Deferred outflows of resources Pension plan deferments 20,189,949$ 2,910,986$ 1,341,210$ 298,927$ 21,531,159$ 3,209,913$ Total assets and deferred outflows of resources 207,076,588$ 183,698,837$ 154,499,418$ 150,379,974$ 361,576,006$ 334,078,811$ Liabilities Other liabilities 3,436,537$ 2,496,508$ 745,041$ 1,060,144$ 4,181,578$ 3,556,652$ Noncurrent liabilities 64,951,342 49,104,529 16,613,418 16,355,068 81,564,760 65,459,597 Total liabilities 68,387,879$ 51,601,037$ 17,358,459$ 17,415,212$ 85,746,338$ 69,016,249$ Deferred inflows of resources Pension plan deferments 4,208,020$ 2,085,974$ 440,262$ 266,902$ 4,648,282$ 2,352,876$ Net position Net investment in capital assets 93,945,022$ 86,664,918$ 119,417,084$ 118,288,727$ 213,362,106$ 204,953,645$ Restricted 16,141,535 16,541,831 178,977 178,529 16,320,512 16,720,360 Unrestricted 24,394,132 26,805,077 17,104,636 14,230,604 41,498,768 41,035,681 Total net position 134,480,689$ 130,011,826$ 136,700,697$ 132,697,860$ 271,181,386$ 262,709,686$ Total liabilities, deferred inflows of resources, and net position 207,076,588$ 183,698,837$ 154,499,418$ 150,379,974$ 361,576,006$ 334,078,811$ Business-Type Activities Totals Table 1 Summary of Net Position as of December 31, 2016 and 2015 Governmental Activities An additional portion of the City’s net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position of $41,498,768 may be used to meet the City’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City as a whole, as well as for its separate governmental and business-type activities. There was an increase in net position in the governmental activities of $4,468,863 and an increase in business-type activities of $4,002,837, for a net total increase of $8,471,700 in net position. The City experienced an increase in pension plan deferments and noncurrent liabilities from the computations of the City’s obligations for pensions under GASB Statement No. 68. -8- City of Apple Valley’s Changes in Net Position 2016 2015 2016 2015 2016 2015 Revenues Program revenues Charges for services 7,542,244$ 6,802,719$ 23,013,748$ 21,833,893$ 30,555,992$ 28,636,612$ Operating grants and contributions 1,531,412 771,220 – – 1,531,412 771,220 Capital grants and contributions 5,489,541 5,918,652 3,631,836 2,110,667 9,121,377 8,029,319 General revenues Property taxes 24,039,391 23,474,262 121,000 121,000 24,160,391 23,595,262 Other taxes 185,568 186,512 – – 185,568 186,512 Franchise taxes 1,309,757 1,259,271 – – 1,309,757 1,259,271 Grants and contributions not restricted to specific programs 37,719 40,061 – – 37,719 40,061 Other 6,888 7,387 – – 6,888 7,387 Investment earnings 801,038 863,798 204,464 235,424 1,005,502 1,099,222 Total revenues 40,943,558 39,323,882 26,971,048 24,300,984 67,914,606 63,624,866 Expenses General government 7,030,599 5,468,843 – – 7,030,599 5,468,843 Public safety 15,097,659 12,464,603 – – 15,097,659 12,464,603 Public works 7,690,149 7,038,033 – – 7,690,149 7,038,033 Parks and recreation 7,025,281 6,543,162 – – 7,025,281 6,543,162 Interest and fiscal charges 912,007 1,037,567 – – 912,007 1,037,567 Municipal liquor – – 7,872,023 7,772,369 7,872,023 7,772,369 Municipal golf course – – 1,728,605 1,653,759 1,728,605 1,653,759 Sports arena – – 770,666 770,215 770,666 770,215 Water and sewer – – 9,336,567 8,154,989 9,336,567 8,154,989 Storm drainage – – 1,481,121 1,444,800 1,481,121 1,444,800 Cemetery – – 60,790 49,086 60,790 49,086 Street light utility – – 437,439 446,644 437,439 446,644 Total expenses 37,755,695 32,552,208 21,687,211 20,291,862 59,442,906 52,844,070 Increase in net position before transfers 3,187,863 6,771,674 5,283,837 4,009,122 8,471,700 10,780,796 Transfers 1,281,000 4,681,392 (1,281,000) (4,681,392) – – Change in net position 4,468,863 11,453,066 4,002,837 (672,270) 8,471,700 10,780,796 Net position – beginning 130,011,826 118,558,760 132,697,860 133,370,130 262,709,686 251,928,890 Net position – ending 134,480,689$ 130,011,826$ 136,700,697$ 132,697,860$ 271,181,386$ 262,709,686$ Table 2 Change in Net Position for the Years Ended December 31, 2016 and 2015 Business-Type Activities TotalGovernmental Activities Governmental Activities – The City’s net position for governmental activities increased by $4,468,863, or 3.4 percent. Key elements of this increase are seen in the table above. -9- Revenues increased overall by $1,619,676, or 4.1 percent. This change included: Increases in charges for services, due to increased building permits and engineering fees as a result of development activity within the City. Increase in operating grants and contributions as a result of additional park dedication revenue being received in the current year. Increase in property taxes due to increases in the general tax levy. Expenses increased overall by $5,203,487, or 16.0 percent. This increase included: The general government function increased $1,561,756, which largely resulted from additional assistance given to developers of the City’s development projects and changes regarding the City’s obligation under the General Employees Retirement Fund pension plan. The public safety function increased $2,633,056, mainly due to changes in the actuarial assumptions regarding the City’s obligations under the Public Employees Police and Fire Fund pension plan. As seen in the following graph, taxes make up about 63 percent of the total governmental activities revenues for 2016. Charges for services make up about 18 percent of the total, and are followed by grants at 17 percent and other at 2 percent of the total. 2016 Revenues by Source – Governmental Activities 2015 Revenues by Source – Governmental Activities -10- 2016 Expenses – Governmental Activities 2015 Expenses – Governmental Activities The expenses in the graph above for governmental activities show the amounts spent on different activities for 2016 and 2015. In 2016, public safety makes up 40 percent, public works 20 percent, parks and recreation 19 percent, and general government 19 percent. Other includes debt service interest and fiscal charges in governmental activities and makes up 2 percent. -11- Business-Type Activities – Business-type activities increased the City’s total net position by $4,002,837. Key elements of the business-type activities are as follows: Charges for services for business-type activities include sales for municipal liquor, municipal golf course, and sports arena; and charges for water and sewer, storm drainage, cemetery, and street light utility operations. The following graph shows the relationship between the revenues and expenses for the various activities. About 79 percent of all business-type activity expenses are from the municipal liquor and water and sewer operations. Overall, business-type activities generated an increase in net position before capital contributions and transfers of $1,652,001. After considering capital grants and contributions of $3,631,836 and net transfers out to governmental activities totaling $1,281,000, net position increased by $4,002,837. Revenues and Expenses – Business-Type Activities $– $1,250,000 $2,500,000 $3,750,000 $5,000,000 $6,250,000 $7,500,000 $8,750,000 $10,000,000 $11,250,000 $12,500,000 Municipal Liquor Municipal Golf Course Sports Arena Water and Sewer Storm Drainage Cemetery Street Light Utility Revenues Expenses -12- 2016 Revenues by Source – Business-Type Activities 2015 Revenues by Source – Business-Type Activities -13- FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds – The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of currently available 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 fiscal year. As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $63,362,224, an increase of $2,374,474 in comparison with the prior year. The City has five major governmental funds: the General Fund, the Closed Bond Issues Debt Service Fund, the 2001/2008B Refunding Improvement Bonds Debt Service Fund, the Road Improvements Capital Projects Fund, and the Future Capital Projects Capital Projects Fund. General Fund The General Fund is the chief operating fund of the City. At the end of the current fiscal year, total fund balance of the General Fund was $16,609,454. As a measure of the General Fund’s liquidity, it may be useful to compare the unassigned fund balance to total fund expenditures. Unassigned fund balance represents 50.0 percent of subsequent year budget expenditures, including transfers. Total fund balance for the City’s General Fund increased by $517,350 during 2016. Key factors in this increase are as follows: The City adopted a balanced budget prior to the start of the current year. Development-related revenues were approximately $1,070,000 over budget and are an increase of $1,001,000 over the prior year. Capital outlay expenditures were approximately $368,000 under the 2016 budgeted amounts. The total fund balance increase of $517,350 is after transferring $1,650,000 out of the General Fund to the Future Capital Projects Capital Projects Fund in accordance with the City’s fund balance policy. Closed Bond Issues Fund – Debt Service Fund The Closed Bond Issues Fund accumulates resources remaining from retired debt service funds. The fund balance at the end of 2016 is $8,843,565, which increased $1,600,795 from the prior year. The increase results from the Closed Bond Issues Fund collecting $1,970,017 in special assessments on previously levied assessments. The fund transferred out of $406,498 to close other funds that previously had a deficit fund balance. 2001/2008B Refunding Improvement Bonds Fund – Debt Service Fund The 2001/2008B Refunding Improvement Bonds Fund accounts for the debt service activity and special assessment collections for bond retirement. The fund balance at the end of 2016 is negative $2,928,431. The fund balance increased $88,489 from the prior year, resulting from the special assessment collections in the current year. -14- Road Improvements Fund – Capital Projects Fund The Road Improvements Fund receives transfers from other funds. These resources are used to finance street overlays and reconstruction projects per the City’s pavement management plan. The fund balance at the end of 2016 is negative $5,198,862, which is a decrease of $929,808 from the prior year, resulting from a shortfall in revenues. Future Capital Projects Fund – Capital Projects Fund The Future Capital Projects Fund accumulates resources according to the City Council’s adopted fund balance policy. This policy calls for amounts in the General Fund that exceed a maximum level to be transferred to the Future Capital Projects Fund. The fund balance at the end of 2016 is $14,675,768, which is an increase of $449,044 from the prior year. A transfer from the General Fund was received in 2016 in the amount of $1,650,000 in accordance with the fund balance policy. A transfer out in the amount of $960,000 was made in 2016 to fund replacing the 2016 property tax levy for the 2012 Park Refunding Bonds. The reduction of the park bond levy provides levy capacity to add to the annual road improvement levy. This annual transfer is expected to continue until the 2012 Park Refunding Bonds are retired in 2017. 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 City has seven enterprise funds and three internal service funds. The seven enterprise funds include: Municipal Liquor Fund, Municipal Golf Course Fund, Sports Arena Fund, Water and Sewer Fund, Storm Drainage Fund, Cemetery Fund, and the Street Light Utility Fund. The total net position of all enterprise funds totals $136,804,340, $119,417,084 of which is capital assets, net of related debt and in total is an increase of $1,128,357 from the prior year, mostly from contributed capital. The total unrestricted net position for all proprietary funds for the year was $17,208,279, an increase of $2,887,114. This increase results from the change in utility rates and improved liquor store sales. Municipal Liquor Fund The net position in the Municipal Liquor Fund increased $263,563 from current year operations. This increase reflects continued positive operations of the City’s liquor stores after transferring $630,000 to the General Fund in support of public safety and parks and recreation activities. The increase in the Municipal Liquor Fund current year operations comes from maintaining gross profit margins. Municipal Golf Course Fund The Municipal Golf Course Fund operations posted a decrease in net position from current year operations of $370,290. Sports Arena Fund The Sports Arena Fund posted an increase in net position from current year operations of $135,513, which is after inclusion of an annual $121,000 property tax levy. This increase is due to improvement in the operating income with reductions in personal services and utilities. Water and Sewer Fund The Water and Sewer Fund is the City’s largest proprietary fund. Unrestricted net position at the end of the year amounted to $13,608,253, an increase of $2,129,821. Current year operations posted a $2,328,864 increase in net position, resulting from continued positive operations of $319,400, and $2,437,311 from capital contributions. Operating revenues were up $461,951 for the year, which resulted from a 3 percent increase in utility rates combined with an increase in the volume of water sold. Total net investment in capital assets totals $73,292,345, an increase of $199,043. -15- Storm Drainage Fund The Storm Drainage Fund increased its net position by $1,484,180 from current year operations. This is mainly due to the capital contributions through the public improvement process, the special assessments of improvements, or the contribution of infrastructure improvements by developers constructing subdivisions. Cemetery Fund The Cemetery Fund increased its net position by $109,575, which results from additional lot sales during the year. Street Light Utility Fund The Street Light Utility Fund increased its net position by $64,514, which had a 3 percent rate increase for the year. GENERAL FUND BUDGETARY HIGHLIGHTS The most significant amendment to the 2016 General Fund budget was made to provide for projects that were carried over from 2015 to 2016. During the year, the total revenues exceeded the final amended budgetary estimates by $1,071,344, which can be attributed to licensing and permits exceeding the budget by $955,613 due to increased development activity in the current year. Total actual expenditures were $1,473,287 less than the budgetary estimates. General Fund budget performance can be attributed to curtailing spending where possible, position vacancies during the year, and conservative budgeting practices. Personal services in the General Fund ended the year about $345,000 under budget. In addition, actual capital outlay expenditures were approximately $368,000 less than anticipated for 2016. -16- CAPITAL ASSETS AND LONG-TERM DEBT Capital Assets – The City’s investment in capital assets for its governmental and business-type activities as of December 31, 2016 amounts to $241,833,202 (net of accumulated depreciation). This investment in capital assets includes land and land improvements, construction in progress, buildings, other improvements, furniture and equipment, and infrastructure. The total increase in the City’s investment in capital assets for the current fiscal year was $5,305,865, or approximately 2.2 percent. Total depreciation charged in 2016 was $9,564,277. City of Apple Valley’s Capital Assets 2016 2015 2016 2015 2016 2015 Capital assets Land and land improvements 3,885,715$ 3,885,715$ 6,744,731$ 6,576,322$ 10,630,446$ 10,462,037$ Construction in progress 1,668,316 774,643 1,789,097 31,711 3,457,413 806,354 Buildings 32,313,580 32,246,271 21,988,389 21,974,589 54,301,969 54,220,860 Other improvements 25,239,683 24,981,605 149,255,827 147,189,969 174,495,510 172,171,574 Furniture and equipment 17,780,862 16,626,747 5,359,718 5,256,697 23,140,580 21,883,444 Infrastructure 103,455,658 95,875,960 – – 103,455,658 95,875,960 Less accumulated depreciation (73,008,879) (68,037,645) (54,639,495) (50,855,247) (127,648,374) (118,892,892) Total capital assets, net of depreciation 111,334,935$ 106,353,296$ 130,498,267$ 130,174,041$ 241,833,202$ 236,527,337$ Total Table 3 Capital Assets Governmental Activities Business-Type Activities Major capital asset additions during the current year included the following: Street improvement projects totaling approximately $7.6 million, including the following significant projects: Palomino 4th Street and Utility Improvements ($1,933,000), Longridge 1st Addition Street Improvements ($802,000), 157th Street Extension Street Improvements ($1,486,000), new subdivisions in the Cobblestone and Quarry Ponds areas ($2,234,000), along with other 2016 street and trail improvements totaling $1,145,000. The public Central Village parking lot at a cost of $382,000 was placed in service. Water, Sanitary and Storm Sewer Utility improvements in new subdivisions totaling $1,660,000. Equipment additions totaling $1,244,000. Additional information on the City’s capital assets can be found in Note 4 of the notes to basic financial statements. -17- Long-Term Debt – At the end of the current fiscal year, the City had total debt outstanding of $81,464,760. Of this amount, $38,665,000 is backed by the full faith and credit of the City and $2,270,000 is special assessment debt for which the City is liable in the event of default by the property owners subject to the assessment. The revenue bonds and capital lease are backed by the revenues of the enterprise funds. City of Apple Valley’s Debt 2016 2015 2016 2015 2016 2015 General obligation bonds 27,550,000$ 29,865,000$ –$ –$ 27,550,000$ 29,865,000$ General obligation improvement bonds 2,270,000 2,605,000 – – 2,270,000 2,605,000 General obligation revenue bonds – – 11,115,000 11,640,000 11,115,000 11,640,000 Revenue bonds – – 1,355,000 1,585,000 1,355,000 1,585,000 Capital lease – – 56,285 97,919 56,285 97,919 Unamortized premium 378,707 427,125 183,255 195,425 561,962 622,550 Net OPEB obligation 1,398,959 1,228,025 244,694 213,911 1,643,653 1,441,936 Net pension liability 30,539,605 12,259,474 3,185,079 2,122,986 33,724,684 14,382,460 Compensated absences 2,714,071 2,719,905 474,105 499,827 3,188,176 3,219,732 Total 64,851,342$ 49,104,529$ 16,613,418$ 16,355,068$ 81,464,760$ 65,459,597$ Total Table 4 Outstanding Debt Governmental Activities Business-Type Activities The City’s total bonded debt decreased by $3,405,000 during 2016, which resulted from the scheduled debt payments during the year. Included in the total outstanding bonded debt are two outstanding advance refunding bonds totaling $14,265,000, prior to the crossover date. As of December 31, 2016, there is $13,670,049 held in escrow to be used for the call of the refunded bonds. The City maintains an “Aaa” rating from Moody’s and AAA from Standard and Poor’s on all of its general obligation debt. State statutes limit the amount of general obligation debt a governmental entity may issue to 3 percent of its total market valuation. A complete calculation of the City’s legal debt margin can be found in the statistical section of this report. Additional information on the City’s long-term debt can be found in Note 5 of the notes to basic financial statements. -18- ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES The City’s budget along with the 5-year Capital Improvement Plan is an important part of the City’s public process. The combination of these documents provides the framework that allows the City to address needed maintenance and provide for the growth and demands for service. Through innovation and efficiencies, the City continues to provide quality services that meet or exceed the expectations of our community members. Strong financial stewardship and quality customer service is a hallmark of the City’s government and is evidenced by the City’s AAA bond rating. In addition, planning and construction continues in the Overlake area to anticipate the neighborhood’s needs when light rail becomes a part of the area. The City has fostered relationships, both private and with other government organizations, to ensure Overlake continues to be a thriving neighborhood. Lastly, the City is investing in connecting neighborhoods and keeping up with infrastructure maintenance through 2016. General Fund revenue ended the year slightly over expectations due to a one-time audit reimbursement in sales tax. Departments successfully managed their expenditures and as a result General Fund expenditures were approximately 5 percent below the authorized budget. The City experienced growth in licenses and permits, due to a surge in single and multi-family development activity which began in 2014 and is anticipated to last beyond 2017. The City will continue to make significant ongoing investments in the Infrastructure Preservation and Reconstruction Program. These factors were considered in preparing the City’s budget for the 2017 fiscal year: Property taxes provide the largest source, approximately 75.0 percent, of the resources needed to support the General Fund activities. Minnesota cities are not subject to levy limits for 2017. Property values in the City are increasing as they are in other locations. The increase in the median valued residential property for the 2017 budget year will be approximately 2.5 percent, compared to an increase of 5.0 percent for the 2016 budget year. The preliminary county data for 2018 shows a 6.7 percent increase in the median valued home. The total property tax levy increased 3.3 percent for 2017. The taxes paid by the median valued home increased for 2017 to $971 from $942 in 2016, approximately 3.0 percent. Contract settlements with all of the City’s three unions have been reached through 2017. A 3.0 percent increase in water utility rates was enacted each year from 2012 to 2017 to fund the expansion of the City’s water treatment plant and the Water Meter Replacement Program. Utility rates for the sewer, storm water, and street light utilities each also increased by 3.0 percent for 2016 and 2017. REQUESTS FOR INFORMATION This CAFR is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Finance Director, City of Apple Valley, 7100 – 147th Street West, Apple Valley, Minnesota 55124. THIS PAGE INTENTIONALLY LEFT BLANK GOVERNMENT-WIDE FINANCIAL STATEMENTS Governmental Business-Type Activities Activities Total Assets Cash and investments 49,928,333$ 17,256,558$ 67,184,891$ Receivables Accounts and interest 745,042 2,989,978 3,735,020 Taxes 1,682,242 – 1,682,242 Special assessments 4,390,113 319,238 4,709,351 Due from other governmental units 1,356,147 486,498 1,842,645 Internal balances 2,017,302 (2,017,302) – Prepaids 278,244 257,928 536,172 Inventory 8,920 1,618,473 1,627,393 Land held for resale 3,026,198 – 3,026,198 Restricted assets Cash and investments for debt service 12,100,456 1,748,570 13,849,026 Interest receivable 18,707 – 18,707 Capital assets Not depreciated 5,554,031 8,533,828 14,087,859 Depreciated, net of accumulated depreciation 105,780,904 121,964,439 227,745,343 Total assets 186,886,639 153,158,208 340,044,847 Deferred outflows of resources Pension plan deferments 20,189,949 1,341,210 21,531,159 Total assets and deferred outflows of resources 207,076,588$ 154,499,418$ 361,576,006$ Liabilities Accrued salaries payable 552,750$ 78,505$ 631,255$ Accounts payable 2,070,690 484,791 2,555,481 Contracts payable 701,826 38,584 740,410 Interest payable 29,296 14,510 43,806 Due to other governmental units 74,415 128,651 203,066 Claims incurred, but not reported 7,560 – 7,560 Long-term liabilities Due within one year 15,510,400 2,669,985 18,180,385 Due in more than one year 49,440,942 13,943,433 63,384,375 Total long-term liabilities 64,951,342 16,613,418 81,564,760 Total liabilities 68,387,879 17,358,459 85,746,338 Deferred inflows of resources Pension plan deferments 4,208,020 440,262 4,648,282 Net position Net investment in capital assets 93,945,022 119,417,084 213,362,106 Restricted for Debt service 4,975,150 178,977 5,154,127 Tax increment financing 4,285,489 – 4,285,489 Economic development 167,940 – 167,940 Police forfeiture 13,048 – 13,048 Capital acquisition 6,106,791 – 6,106,791 Fire relief pension 424,386 – 424,386 Other purposes 168,731 – 168,731 Unrestricted 24,394,132 17,104,636 41,498,768 Total net position 134,480,689 136,700,697 271,181,386 Total liabilities, deferred inflows of resources, and net position 207,076,588$ 154,499,418$ 361,576,006$ See notes to basic financial statements CITY OF APPLE VALLEY Statement of Net Position as of December 31, 2016 -19- Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities General government 6,974,444$ 1,768,008$ –$ 6,939$ Public safety 15,097,659 543,950 1,531,412 – Public works 7,746,304 2,489,539 – 5,482,602 Parks and recreation 7,025,281 2,740,747 – – Interest and fiscal charges 912,007 – – – Total governmental activities 37,755,695 7,542,244 1,531,412 5,489,541 Business-type activities Municipal liquor 7,872,023 8,738,804 – – Municipal golf course 1,728,605 1,356,436 – – Sports arena 770,666 783,962 – – Water and sewer 9,336,567 9,754,601 – 2,437,311 Storm drainage 1,481,121 1,718,352 – 1,194,525 Cemetery 60,790 160,716 – – Street light utility 437,439 500,877 – – Total business-type activities 21,687,211 23,013,748 – 3,631,836 Total governmental and business-type activities 59,442,906$ 30,555,992$ 1,531,412$ 9,121,377$ General revenues Property taxes Other taxes Franchise taxes Grants and contributions not restricted to specific programs Other general revenues Investment earnings Transfers Total general revenues and transfers Change in net position Net position – beginning Net position – ending See notes to basic financial statements Program Revenues CITY OF APPLE VALLEY Statement of Activities Year Ended December 31, 2016 -20- Governmental Business-Type Activities Activities Total (5,199,497)$ –$ (5,199,497)$ (13,022,297) – (13,022,297) 225,837 – 225,837 (4,284,534) – (4,284,534) (912,007) – (912,007) (23,192,498) – (23,192,498) – 866,781 866,781 – (372,169) (372,169) – 13,296 13,296 – 2,855,345 2,855,345 – 1,431,756 1,431,756 – 99,926 99,926 – 63,438 63,438 – 4,958,373 4,958,373 (23,192,498) 4,958,373 (18,234,125) 24,039,391 121,000 24,160,391 185,568 – 185,568 1,309,757 – 1,309,757 37,719 – 37,719 6,888 – 6,888 801,038 204,464 1,005,502 1,281,000 (1,281,000) – 27,661,361 (955,536) 26,705,825 4,468,863 4,002,837 8,471,700 130,011,826 132,697,860 262,709,686 134,480,689$ 136,700,697$ 271,181,386$ Revenue and Changes in Net Position Net (Expenses) -21- THIS PAGE INTENTIONALLY LEFT BLANK FUND FINANCIAL STATEMENTS THIS PAGE INTENTIONALLY LEFT BLANK Capital Projects 2001/2008B Refunding General Closed Bond Improvement Road Fund Issues Bonds Improvements (1000)(3205)(3285)(2025) Assets Cash and investments 14,202,606$ 2,113,622$ –$ –$ Restricted cash with fiscal agent – – – – Receivables Accounts 240,181 – – – Taxes 1,682,242 – – – Special assessments Current 2,400 237,329 48,819 55,115 Delinquent 11,622 15,337 – – Deferred – 1,265,725 425,258 481,311 Interest 342,168 – – – Due from other governmental units 1,187,075 – – 159,000 Due from other funds – 3,145,225 – – Advances to other funds – 576,000 – – Prepaids 111,027 – – – Inventory 8,920 – – – Land held for resale – 3,026,198 – – Total assets 17,788,241$ 10,379,436$ 474,077$ 695,426$ Liabilities Accrued salaries payable 548,990$ –$ –$ –$ Accounts payable 380,171 17,480 – 77,196 Contracts payable – – – 469,709 Due to other governmental units 71,081 – – 3,186 Due to other funds – – 2,928,431 4,807,771 Advances from other funds – – – – Total liabilities 1,000,242 17,480 2,928,431 5,357,862 Deferred inflows of resources Unavailable revenue – property taxes 164,523 – – – Unavailable revenue – special assessments 14,022 1,518,391 474,077 536,426 Total deferred inflows of resources 178,545 1,518,391 474,077 536,426 Fund balances (deficit) Nonspendable 119,947 – – – Restricted – – – – Committed 693,145 – – – Assigned 56,000 8,843,565 – – Unassigned 15,740,362 – (2,928,431) (5,198,862) Total fund balances (deficit)16,609,454 8,843,565 (2,928,431) (5,198,862) Total liabilities, deferred inflows of resources, and fund balances 17,788,241$ 10,379,436$ 474,077$ 695,426$ See notes to basic financial statements Debt Service CITY OF APPLE VALLEY Balance Sheet Governmental Funds as of December 31, 2016 -22- Capital Projects Future Capital Nonmajor Total Projects Governmental Governmental (4930)Funds Funds 7,969,047$ 21,596,273$ 45,881,548$ – 12,100,456 12,100,456 – 156,432 396,613 – – 1,682,242 – 310,651 654,314 – 3,307 30,266 – 1,533,239 3,705,533 – 16,647 358,815 – 10,072 1,356,147 4,809,078 – 7,954,303 1,897,643 16,016 2,489,659 – 600 111,627 – – 8,920 – – 3,026,198 14,675,768$ 35,743,693$ 79,756,641$ –$ 3,760$ 552,750$ – 1,505,638 1,980,485 – 232,117 701,826 – 148 74,415 – 218,101 7,954,303 – 576,000 576,000 – 2,535,764 11,839,779 – – 164,523 – 1,847,199 4,390,115 – 1,847,199 4,554,638 – 600 120,547 – 27,079,147 27,079,147 – 140,000 833,145 14,675,768 4,934,922 28,510,255 – (793,939) 6,819,130 14,675,768 31,360,730 63,362,224 14,675,768$ 35,743,693$ 79,756,641$ -23- THIS PAGE INTENTIONALLY LEFT BLANK Total fund balances – governmental funds 63,362,224$ 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 177,006,163 Less accumulated depreciation (68,973,565) Long-term liabilities are not payable with current financial resources and,therefore,are not reported in governmental funds. Bonds payable (29,820,000) Net OPEB obligation (1,398,959) Net pension liability (30,539,605) Due to availability,certain revenues are not recognized under the governmental fund statements until received;however,under full accrual in the government-wide Statement of Activities, revenues are recorded when earned regardless of when received.4,554,638 Accrued interest payable is included in net position,but is excluded from fund balances until due and payable.(29,296) Internal service funds are used by management to charge certain costs to individual funds.The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Position. Internal service fund balances included in governmental activities 4,612,224 Add internal services balances allocated to business-type activities 103,643 Governmental funds report debt premiums as other financing sources at the time of issuance. Premiums are reported as liabilities in the Statement of Net Position.(378,707) Governmental funds do not report certain long-term amounts related to pensions that are included in net position. Deferred outflows – pension plan deferments 20,189,949 Deferred inflows – pension plan deferments (4,208,020) Total net position – governmental activities 134,480,689$ See notes to basic financial statements Amounts reported for governmental activities in the Statement of Net Position are different because: as of 12/31/2016 CITY OF APPLE VALLEY Reconciliation of the Balance Sheet to the Statement of Net Position Governmental Funds -24- Capital Projects 2001/2008B Refunding General Closed Bond Improvement Road Fund Issues Bonds Improvements (1000)(3205)(3285)(2025) Revenue Taxes 22,541,746$ –$ –$ –$ Other taxes 94,976 – – – Franchise taxes 490,000 – – – Special assessments 6,939 1,970,017 88,489 144,144 Licenses and permits 2,052,043 – – – Intergovernmental 806,909 – – 590,660 Charges for services 2,739,163 – – – Fines and forfeits 273,372 – – – Investment earnings 157,028 45,551 – – Other 891,388 – – 1,900 Total revenue 30,053,564 2,015,568 88,489 736,704 Expenditures Current General government 4,849,471 – – – Public safety 11,808,792 – – – Public works 3,708,753 – – – Parks and recreation 5,349,067 – – – Capital outlay 270,275 – – 4,694,712 Debt service Principal – – – – Interest and fiscal charges – 8,275 – – Total expenditures 25,986,358 8,275 – 4,694,712 Excess (deficiency) of revenue over expenditures 4,067,206 2,007,293 88,489 (3,958,008) Other financing sources (uses) Sale of capital assets 18,844 – – – Transfers in 1,281,000 – – 3,028,200 Transfers (out)(4,849,700) (406,498) – – Total other financing sources (uses)(3,549,856) (406,498) – 3,028,200 Net change in fund balances 517,350 1,600,795 88,489 (929,808) Fund balances (deficit) Beginning of year 16,092,104 7,242,770 (3,016,920) (4,269,054) End of year 16,609,454$ 8,843,565$ (2,928,431)$ (5,198,862)$ See notes to basic financial statements Debt Service CITY OF APPLE VALLEY Statement of Revenue, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended December 31, 2016 -25- Future Capital Nonmajor Total Projects Governmental Governmental (4930)Funds Funds –$ 1,568,459$ 24,110,205$ – 90,592 185,568 – 819,757 1,309,757 – 1,940,938 4,150,527 – – 2,052,043 – 1,208,200 2,605,769 – – 2,739,163 – – 273,372 160,797 392,965 756,341 – 2,440,306 3,333,594 160,797 8,461,217 41,516,339 – 1,414,897 6,264,368 – 296,796 12,105,588 31,753 215,543 3,956,049 – 378,982 5,728,049 – 3,460,320 8,425,307 – 2,650,000 2,650,000 – 956,722 964,997 31,753 9,373,260 40,094,358 129,044 (912,043) 1,421,981 – 113,649 132,493 1,650,000 2,087,074 8,046,274 (1,330,000) (640,076) (7,226,274) 320,000 1,560,647 952,493 449,044 648,604 2,374,474 14,226,724 30,712,126 60,987,750 14,675,768$ 31,360,730$ 63,362,224$ -26- THIS PAGE INTENTIONALLY LEFT BLANK Total net change in fund balances – governmental funds 2,374,474$ 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 outlay 8,289,376 Capital contributions 1,874,289 Net book value of capital assets transferred from governmental funds to internal service funds (1,105,470) Depreciation expense (5,169,298) A gain or loss on the disposal of capital assets,including the difference between the carrying value and any related sale proceeds,is included in the change in net position;however,only the sale proceeds are included in the change in fund balances.(343,573) Repayment of long-term liabilities is an expenditure in the governmental funds,but the repayment reduces long-term liabilities in the Statement of Net Position.2,650,000 Net OPEB obligations are recognized as paid in the governmental funds,but recognized as the expense is incurred in the Statement of Activities.(170,934) Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due,and thus requires the use of current financial resources.In the Statement of Activities,however,interest expense is recognized as the interest accrues, regardless of when it is due.4,572 Governmental funds report debt issuance premiums as other financing sources at the time of issuance. Premiums are reported as liabilities in the Statement of Net Position.48,418 Certain revenues are recognized as soon as they are earned in the Statement of Activities;however,under the modified accrual basis of accounting,certain revenues cannot be recognized until they are available to liquidate liabilities of the current period.(2,570,093) Internal service funds are used by management to charge certain costs to individual funds.The net revenue of certain activities of internal service funds is reported with governmental activities in the government-wide financial statements. Internal service fund activity included in governmental activities, net of capital contributions 591,764 Add back internal service fund activity allocated to business-type activities 13,082 Capital contributions from governmental funds 1,105,470 Governmental funds do not report long-term amounts related to pensions that are included in the change in net position. Net pension liability (18,280,131) Deferred outflows – pension plan deferments 17,278,963 Deferred inflows – pension plan deferments (2,122,046) Change in net position – governmental activities 4,468,863$ See notes to basic financial statements Amounts reported for governmental activities in the Statement of Activities are different because: CITY OF APPLE VALLEY Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund Balances to the Statement of Activities Governmental Funds Year Ended December 31, 2016 -27- THIS PAGE INTENTIONALLY LEFT BLANK Over (Under) Original Final Actual Budget Revenue Taxes 22,631,000$ 22,631,000$ 22,541,746$ (89,254)$ Other taxes 99,180 99,180 94,976 (4,204) Franchise taxes 490,000 490,000 490,000 – Special assessments 14,000 14,000 6,939 (7,061) Licenses and permits 1,096,430 1,096,430 2,052,043 955,613 Intergovernmental 672,925 672,925 806,909 133,984 Charges for services 2,880,785 2,880,785 2,739,163 (141,622) Fines and forfeits 274,000 274,000 273,372 (628) Investment earnings 173,000 173,000 157,028 (15,972) Other 650,900 650,900 891,388 240,488 Total revenue 28,982,220 28,982,220 30,053,564 1,071,344 Expenditures Current General government 5,247,776 5,202,401 4,849,471 (352,930) Public safety 12,008,253 11,952,053 11,808,792 (143,261) Public works 4,224,482 4,224,482 3,708,753 (515,729) Parks and recreation 5,442,609 5,442,609 5,349,067 (93,542) Capital outlay General government 126,900 368,100 134,941 (233,159) Public safety – 53,500 8,558 (44,942) Public works – – 16,853 16,853 Parks and recreation 33,500 216,500 109,923 (106,577) Total expenditures 27,083,520 27,459,645 25,986,358 (1,473,287) Excess of revenue over expenditures 1,898,700 1,522,575 4,067,206 2,544,631 Other financing sources (uses) Sale of capital assets 20,000 20,000 18,844 (1,156) Transfers in 1,281,000 1,281,000 1,281,000 – Transfers (out)(3,199,700) (3,199,700) (4,849,700) (1,650,000) Total other financing sources (uses)(1,898,700) (1,898,700) (3,549,856) (1,651,156) Net change in fund balances –$ (376,125)$ 517,350 893,475$ Fund balances Beginning of year 16,092,104 End of year 16,609,454$ See notes to basic financial statements Budgeted Amounts CITY OF APPLE VALLEY Statement of Revenue, Expenditures, and Changes in Fund Balances General Fund – Budget and Actual Year Ended December 31, 2016 -28- Municipal Municipal Sports Water and Liquor Golf Course Arena Sewer (5000, 5030)(5100)(5200)(5300, 5400) Current assets Cash and investments 2,235,800$ –$ –$ 10,857,935$ Restricted cash with fiscal agent – – – – Receivables Special assessments Current – – – 236,153 Delinquent – – – 17,776 Accounts – 16,456 88,102 2,299,708 Interest – – – – Due from other governmental units – – 207,685 278,168 Prepaids 15,515 335 – 242,078 Inventory 1,476,330 57,246 – 84,897 Total current assets 3,727,645 74,037 295,787 14,016,715 Noncurrent assets Restricted cash with fiscal agent 178,977 – – – Deferred special assessment receivable – – – 35,086 Advance to other funds – – – 1,175,131 Capital assets Land and land improvements 1,177,683 991,179 2,000 1,964,953 Construction in progress 68,887 – – 1,344,617 Buildings 3,527,623 3,190,504 3,505,184 11,765,078 Other improvements 25,000 689,963 40,594 99,109,132 Furniture and equipment 362,676 926,939 287,615 3,465,382 Less accumulated depreciation (1,502,493) (1,612,767) (2,646,521) (36,437,249) Total capital assets (net of accumulated depreciation)3,659,376 4,185,818 1,188,872 81,211,913 Total noncurrent assets 3,838,353 4,185,818 1,188,872 82,422,130 Total assets 7,565,998 4,259,855 1,484,659 96,438,845 Deferred outflows of resources Pension plan deferments – PERA 292,016 189,547 93,691 655,571 Total assets and deferred outflows of resources 7,858,014$ 4,449,402$ 1,578,350$ 97,094,416$ as of December 31, 2016 Business-Type Activities – Enterprise Funds CITY OF APPLE VALLEY Statement of Net Position Proprietary Funds See notes to basic financial statements -29- Governmental Storm Street Light Activities Drainage Cemetery Utility Internal (5500, 5550)(5600, 5700)(5800)Totals Service Fund 3,032,775$ 1,005,783$ 124,265$ 17,256,558$ 4,046,785$ 1,569,593 – – 1,569,593 – 1,224 – – 237,377 – – – – 17,776 – 450,114 – 133,538 2,987,918 8,321 2,060 – – 2,060 – – – 645 486,498 – – – – 257,928 166,617 – – – 1,618,473 – 5,055,766 1,005,783 258,448 24,434,181 4,221,723 – – – 178,977 – 28,999 – – 64,085 – – – – 1,175,131 – 2,095,356 513,560 – 6,744,731 – 353,032 22,561 – 1,789,097 – – – – 21,988,389 – 48,735,464 655,674 – 149,255,827 – 317,106 – – 5,359,718 7,337,651 (12,227,793) (212,672) – (54,639,495) (4,035,314) 39,273,165 979,123 – 130,498,267 3,302,337 39,302,164 979,123 – 131,916,460 3,302,337 44,357,930 1,984,906 258,448 156,350,641 7,524,060 110,385 – – 1,341,210 – 44,468,315$ 1,984,906$ 258,448$ 157,691,851$ 7,524,060$ (continued) -30- Municipal Municipal Sports Water and Liquor Golf Course Arena Sewer (5000, 5030)(5100)(5200)(5300, 5400) Current liabilities Accrued salaries payable 24,014$ 10,334$ 8,034$ 31,658$ Accounts payable 398,026 16,667 4,831 34,761 Contracts payable – – – 20,536 Interest payable 2,274 474 – 8,351 Due to other governmental units 94,951 308 220 26,469 Claims payable – – – – Accrued compensated absences 77,800 28,700 12,500 134,400 Capital lease payable – 56,285 – – Bonds payable 235,000 – – 380,000 Total current liabilities 832,065 112,768 25,585 636,175 Noncurrent liabilities Accrued compensated absences 11,783 64,665 19,217 113,228 Net OPEB obligation 61,201 31,079 19,850 126,642 Net pension liability 692,866 434,681 220,952 1,562,350 Advance from other fund – 2,858,363 230,427 – Bonds payable 1,120,000 – – 7,539,568 Total noncurrent liabilities 1,885,850 3,388,788 490,446 9,341,788 Total liabilities 2,717,915 3,501,556 516,031 9,977,963 Deferred inflows of resources Pension plan deferments – PERA 95,784 60,375 30,570 215,855 Net position (deficit) Net investment in capital assets 2,304,376 4,129,533 1,188,872 73,292,345 Restricted for debt service 178,977 – – – Unrestricted 2,560,962 (3,242,062) (157,123) 13,608,253 Total net position 5,044,315 887,471 1,031,749 86,900,598 Total liabilities, deferred inflows of resources, and net position 7,858,014$ 4,449,402$ 1,578,350$ 97,094,416$ Business-Type Activities – Enterprise Funds See notes to basic financial statements CITY OF APPLE VALLEY Statement of Net Position Proprietary Funds (continued) as of December 31, 2016 -31- Governmental Storm Street Light Activities Drainage Cemetery Utility Internal (5500, 5550)(5600, 5700)(5800)Totals Service Fund 4,465$ –$ –$ 78,505$ –$ 24,513 2,379 3,614 484,791 90,205 – 18,048 – 38,584 – 3,411 – – 14,510 – 6,581 – 122 128,651 – – – – – 7,560 10,300 – – 263,700 1,510,400 – – – 56,285 – 1,735,000 – – 2,350,000 – 1,784,270 20,427 3,736 3,415,026 1,608,165 1,512 – – 210,405 1,303,671 5,922 – – 244,694 – 274,230 – – 3,185,079 – – – – 3,088,790 – 1,643,687 – – 10,303,255 – 1,925,351 – – 17,032,223 1,303,671 3,709,621 20,427 3,736 20,447,249 2,911,836 37,678 – – 440,262 – 37,522,835 979,123 – 119,417,084 3,302,337 – – – 178,977 – 3,198,181 985,356 254,712 17,208,279 1,309,887 40,721,016 1,964,479 254,712 136,804,340 4,612,224 44,468,315$ 1,984,906$ 258,448$ 157,691,851$ 7,524,060$ Total net position – enterprise funds 136,804,340$ Adjustment to reflect the consolidation of internal service fund activity related to enterprise funds (103,643) Net position – business-type activities 136,700,697$ -32- Municipal Municipal Sports Water and Liquor Golf Course Arena Sewer (5000, 5030)(5100)(5200)(5300, 5400) Operating revenue Sales and rentals 8,738,804$ 1,354,645$ 783,089$ –$ Charges for services – – – 9,450,362 Total operating revenue 8,738,804 1,354,645 783,089 9,450,362 Cost of goods sold 6,171,691 237,409 13,521 – Gross profit 2,567,113 1,117,236 769,568 9,450,362 Operating expenses Personal services 1,029,039 869,905 355,245 1,650,777 Contractual services 27,429 73,649 25,667 232,883 Other charges 320,272 37,566 8,890 631,817 Supplies and repairs 50,530 231,660 55,170 492,374 Insurance 71,688 35,700 25,500 197,508 Utilities 47,070 52,972 134,754 361,567 Depreciation 136,546 174,171 151,851 2,729,115 Sewer charges – – – 2,834,921 Total operating expenses 1,682,574 1,475,623 757,077 9,130,962 Operating income (loss)884,539 (358,387) 12,491 319,400 Nonoperating revenue (expense) Taxes – – 121,000 – Investment earnings 23,934 – 299 118,129 Other income 10,140 1,791 873 304,239 Gain (loss) on sale of capital assets 3,924 – 850 – Interest expense (28,974) (13,694) – (199,215) Total nonoperating revenue (expense)9,024 (11,903) 123,022 223,153 Income (loss) before capital contributions and transfers 893,563 (370,290) 135,513 542,553 Capital contributions – – – 1,072,151 Capital contributions – connection fees – – – 1,365,160 Transfers in – – – – Transfers (out)(630,000) – – (651,000) Change in net position 263,563 (370,290) 135,513 2,328,864 Net position Beginning of year 4,780,752 1,257,761 896,236 84,571,734 End of year 5,044,315$ 887,471$ 1,031,749$ 86,900,598$ See notes to basic financial statements Business-Type Activities – Enterprise Funds CITY OF APPLE VALLEY Statement of Revenue, Expenses, and Changes in Net Position Proprietary Funds Year Ended December 31, 2016 -33- Governmental Storm Street Light Activities Drainage Cemetery Utility Internal (5500, 5550)(5600, 5700)(5800)Totals Service Fund –$ –$ –$ 10,876,538$ –$ 1,717,350 160,716 500,877 11,829,305 2,371,687 1,717,350 160,716 500,877 22,705,843 2,371,687 – – – 6,422,621 – 1,717,350 160,716 500,877 16,283,222 2,371,687 267,628 2,768 2,022 4,177,384 851,827 138,196 22,747 23,840 544,411 22,277 303,890 6,465 1,603 1,310,503 873,628 28,071 8,462 12,785 879,052 – 6,600 – 7,704 344,700 – 79,452 1,284 389,485 1,066,584 – 575,256 19,064 – 3,786,003 608,976 – – – 2,834,921 – 1,399,093 60,790 437,439 14,943,558 2,356,708 318,257 99,926 63,438 1,339,664 14,979 – – – 121,000 – 51,377 9,649 1,076 204,464 44,697 1,002 – – 318,045 – – – – 4,774 71,088 (80,981) – – (322,864) – (28,602) 9,649 1,076 325,419 115,785 289,655 109,575 64,514 1,665,083 130,764 747,635 – – 1,819,786 1,105,470 446,890 – – 1,812,050 – – – – – 461,000 – – – (1,281,000) – 1,484,180 109,575 64,514 4,015,919 1,697,234 39,236,836 1,854,904 190,198 132,788,421 2,914,990 40,721,016$ 1,964,479$ 254,712$ 136,804,340$ 4,612,224$ Change in net position – enterprise funds 4,015,919$ Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds (13,082) Change in net position – business-type activities 4,002,837$ -34- Municipal Municipal Sports Water and Liquor Golf Course Arena Sewer (5000, 5030)(1500)(5200)(5300, 5400) Cash flows from operating activities Cash received from customers 8,748,944$ 1,347,539$ 754,052$ 9,326,591$ Cash receipts on interfund services provided – – – – Cash payments to suppliers (6,804,047) (637,332) (296,735) (5,015,968) Cash payments to employees for services (994,404) (827,945) (337,476) (1,547,646) Net cash flows from operating activities 950,493 (117,738) 119,841 2,762,977 Cash flows from capital and related financing activities Acquisition and construction of capital assets (68,887) (118,966) (28,144) (1,477,706) Connection fees received – – – 1,365,160 Proceeds from sale of capital assets 3,924 – 850 – Payment on debt (230,000) (41,634) – (370,000) Interest paid (29,127) (13,694) – (207,825) Transfer from other funds – – – – Net cash flows from capital and related financing activities (324,090) (174,294) (27,294) (690,371) Cash flows from investing activities Interest received on investments 23,934 – 299 118,129 Cash flows from noncapital financing activities Taxes – – 121,000 – Cash received from (paid to) other funds – 292,032 (323,316) 82,924 Transfers (out)(630,000) – – (651,000) Net cash flows from noncapital financing activities (630,000) 292,032 (202,316) (568,076) Net increase (decrease) in cash and cash equivalents 20,337 – (109,470) 1,622,659 Cash and cash equivalents Beginning of year 2,394,440 – 109,470 9,235,276 End of year 2,414,777$ –$ –$ 10,857,935$ Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss)884,539$ (358,387)$ 12,491$ 319,400$ Adjustments to reconcile operating income (loss) to net cash flows from operating activities Depreciation 136,546 174,171 151,851 2,729,115 Other revenue (expense)10,140 1,791 873 304,239 Change in assets, deferred outflows/inflows of resources, and liabilities Receivables Special assessments – – – 24,139 Accounts – (8,897) (25,818) (173,981) Due from other governmental units – – (4,092) (278,168) Inventory (71,254) 23,620 – 7,339 Prepaids (3,591) (335) – (11,743) Deferred outflows of resources (227,032) (149,841) (73,063) (508,552) Accounts payable (45,060) 8,889 (16,628) (61,372) Contracts payable – – – (147,261) Accrued salaries payable 7,878 2,448 1,287 9,002 Claims payable – – – – Net OPEB obligation 6,704 4,423 2,153 15,029 Net pension liability 231,347 152,689 74,452 518,217 Accrued compensated absences (22,024) 7,318 788 (15,151) Due to other governmental units 4,538 (550) (16,605) (51,861) Deferred inflows of resources 37,762 24,923 12,152 84,586 Net cash flows from operating activities 950,493$ (117,738)$ 119,841$ 2,762,977$ Noncash capital activities Capital contributions –$ –$ –$ 1,072,151$ Net book value of capital assets disposals –$ –$ –$ –$ See notes to basic financial statements Business-Type Activities – Enterprise Funds CITY OF APPLE VALLEY Statement of Cash Flows Proprietary Funds Year Ended December 31, 2016 -35- Governmental Storm Street Light Activities Drainage Cemetery Utility Internal (5500, 5550)(5600, 5700)(5800)Totals Service Fund 1,683,029$ 160,716$ 494,130$ 22,515,001$ –$ – – – – 2,393,635 (550,281) (21,407) (468,970) (13,794,740) (1,719,452) (245,040) (2,768) (2,022) (3,957,301) (90,571) 887,708 136,541 23,138 4,762,960 583,612 (574,179) (22,561) – (2,290,443) (1,015,915) 446,890 – – 1,812,050 – – – – 4,774 147,182 (155,000) – – (796,634) – (84,979) – – (335,625) – – – – – 461,000 (367,268) (22,561) – (1,605,878) (407,733) 51,377 9,649 1,076 204,464 44,697 – – – 121,000 – – – – 51,640 – – – – (1,281,000) – – – – (1,108,360) – 571,817 123,629 24,214 2,253,186 220,576 4,030,551 882,154 100,051 16,751,942 3,826,209 4,602,368$ 1,005,783$ 124,265$ 19,005,128$ 4,046,785$ 318,257$ 99,926$ 63,438$ 1,339,664$ 14,979$ 575,256 19,064 – 3,786,003 608,976 1,002 – – 318,045 – (21,655) – – 2,484 – (29,435) – (7,323) (245,454) (6,933) 15,767 – 576 (265,917) – – – – (40,295) – 380 – – (15,289) (99,401) (83,795) – – (1,042,283) – 5,628 17,541 (32,681) (123,683) (28,968) (282) 10 – (147,533) – 1,237 – – 21,852 – – – – – 793 2,474 – – 30,783 – 85,388 1,062,093 3,347 – – (25,722) 94,166 202 – (872) (65,148) – 13,937 – – 173,360 – 887,708$ 136,541$ 23,138$ 4,762,960$ 583,612$ 747,635$ –$ –$ 1,819,786$ 1,105,470$ –$ –$ –$ –$ (76,080)$ -36- THIS PAGE INTENTIONALLY LEFT BLANK CITY OF APPLE VALLEY Notes to Basic Financial Statements as of December 31, 2016 -37- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES A. Organization The City of Apple Valley, Minnesota (the City) is a statutory city governed by an elected mayor and four councilmembers. The accompanying financial statements present the government entities for which the City is considered to be financially accountable. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. B. Reporting Entity As required by accounting principles generally accepted in the United States of America, these financial statements include the City (the primary government) and its component units. Component units are legally separate entities for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component unit includes whether or not the primary government appoints the voting majority of the potential component unit’s board, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. The Apple Valley Economic Development Authority (EDA) was established to provide economic development services to the City. Although a legally separate entity, the Apple Valley EDA is reported as if it were part of the primary government because it provides services exclusively for the City. The Apple Valley EDA governing body is substantially the same as the governing body of the primary government because five of the Apple Valley EDA boardmembers are City Council members and the two other members are appointed by the City Council. Management of the primary government also has operational responsibility for the Apple Valley EDA. The Apple Valley EDA is a blended component unit of the City, with the following funds reported as funds of the City: Economic Development Debt Service Fund and the EDA Operations Special Revenue Fund. The Apple Valley EDA does not issue separate financial statements. C. Government-Wide Financial Statement Presentation The government-wide financial statements (Statement of Net Position and Statement of Activities) display information about the reporting government as a whole. These statements include all of the financial activities of the City. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which significantly rely upon sales, fees, and charges for support. -38- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other internally directed revenues are reported as general revenues. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes and special assessments are recognized as revenues in the fiscal year for which they are certified for levy. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. However, charges between the City’s enterprise funds and other functions are not eliminated, as that would distort the direct costs and program revenues reported in those functions. Depreciation expense is included in the direct expenses of each function. Interest on long-term debt is considered an indirect expense and is reported separately on the Statement of Activities. D. Fund Financial Statement Presentation Separate fund financial statements are provided for governmental and proprietary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Aggregated information for the remaining nonmajor governmental funds is reported in a single column in the fund financial statements. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this basis of accounting transactions are recorded in the following manner: 1. Revenue Recognition – Revenue is recognized when it becomes measurable and available. “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days after year-end. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources. Major revenue that is susceptible to accrual includes property taxes, special assessments, intergovernmental revenue, charges for services, and interest earned on investments. Major revenue that is not susceptible to accrual includes licenses and permits, fees, and miscellaneous revenue. Such revenue is recorded only when received because it is not measurable until collected. 2. Recording of Expenditures – Expenditures are generally recorded when a liability is incurred, except for principal and interest on long-term debt and other long-term liabilities which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as capital outlay expenditures in the governmental funds. -39- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Proprietary fund financial statements are reported using the economic resources measurement focus and accrual basis of accounting, similar to the government-wide financial statements. 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. The 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 that do not meet this definition are reported as nonoperating revenues and expenses. Aggregated information for the internal service funds is reported in a single column in the proprietary fund financial statements. Because the principal user of the internal services is the City’s governmental activities, the financial statements of the internal service funds are 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. Description of Funds The City reports the following major governmental funds: General Fund (1000) – This fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Closed Bond Issues Debt Service Fund (3205) – This fund accounts for all the closed bond issues that still have activity. 2001/2008B Refunding Improvement Bonds Debt Service Fund (3285) – This fund accounts for the payment of the bond issuance for various improvements. Road Improvements Capital Projects Fund (2025) – This fund accounts for various road improvements. Future Capital Projects Capital Projects Fund (4930) – This fund accounts for funds set aside for future capital improvements. The City reports the following major enterprise funds: Municipal Liquor Fund (5000 and 5030) – This fund accounts for the operations of the City’s liquor stores. Municipal Golf Course Fund (5100) – This fund accounts for the operations of the City’s golf course. Sports Arena Fund (5200) – This fund accounts for the operations of the City’s sports arena. Water and Sewer Fund (5300 and 5400) – This fund accounts for the activities of the City’s water and sewer operations. -40- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Storm Drainage Fund (5500 and 5550) – This fund accounts for the activities of the City’s storm drainage operations. Cemetery Fund (5600 and 5700) – This fund accounts for the activities of the City’s cemetery operations. Street Light Utility Fund (5800) – This fund accounts for the activities of the City’s street light operations. Additionally, the City reports the following fund types: Internal Service Funds – Internal service funds account for the financing of goods and services provided to other departments or agencies of the City on a cost reimbursement basis. The City utilizes a Dental Insurance Internal Service Fund, Benefits/Other Insurance Internal Service Fund, and a Vehicle Equipment Replacement Internal Service Fund in managing city operations. E. Cash and Investments Cash and investments include balances from all funds that are combined and invested to the extent available in various securities as authorized by state law. Earnings from the pooled investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. The City generally reports investments at fair value. Investment pools/mutual funds and certificates of deposit with a maturity of less than one year are reported at amortized cost. Restricted cash with fiscal agent in the G.O. Refunding Bonds of 2013 Debt Service Fund, G.O. Park Bonds of 2015 Debt Service Fund, and Storm Drainage Fund includes balances held in escrow accounts for future bond refunding. Earnings on these accounts are allocated directly to these funds. Restricted cash with fiscal agent in the Municipal Liquor Fund includes balances held in an account in accordance with debt agreements to subsidize potential deficiencies from the liquor store operations that could adversely affect debt service payments. The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. 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; and Level 3 inputs are significant unobservable inputs. Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. See Note 2 for the City’s recurring fair value measurements as of the current year-end. F. Receivables Utility and miscellaneous accounts receivable are reported at gross. Since the City is generally able to certify delinquent amounts to the county for collection as special assessments, no allowance for uncollectible accounts has been provided on current receivables. The City does record an allowance for the amount of utility receivables that remain delinquent after having been certified to the county. The only receivables not expected to be collected within one year are property taxes and special assessments receivable. -41- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Interfund Receivables and Payables In the fund financial statements, activity between funds that is representative of lending or borrowing arrangements is reported as either “due to/from other funds” (current portion) or “advances to/from other funds.” All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” H. Land Held for Resale Land held for resale represents various property purchases made by the City with the intent to sell in order to increase tax base or to attract new businesses. These assets are stated at the lower of cost or fair value. Assets held for resale has a Level 2 fair value measurement category using the same accounting principles generally accepted in the United States of America hierarchy as discussed earlier in these notes. During the year ended December 31, 2016, management has reviewed the cost value reported for these assets and has indicated the properties are fairly presented for financial reporting purposes. I. Property Taxes Property tax levies are set by the City Council in December of each year, and are certified to Dakota County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The county spreads the levies over all taxable property. Such taxes become a lien on January 1 and are recorded as receivables by the City on that date. Real property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. Personal property taxes are due in full on May 15. The county provides tax settlements to cities and other taxing districts three times a year; in July, December, and January. Property taxes are recognized as revenue in the year levied in the government-wide financial statements and proprietary fund financial statements. In the governmental fund financial statements, taxes are recognized as revenue when received in cash or within 60 days after year-end. Taxes which remain unpaid on December 31 are classified as delinquent taxes receivable, and are offset by a deferred inflow of resources in the governmental fund financial statements. J. Special Assessments Special assessments represent the financing for public improvements paid for by benefiting property owners. Special assessments are recorded as receivables upon certification to the county. Special assessments are recognized as revenue in the year levied in the government-wide financial statements and proprietary fund financial statements. In the governmental fund financial statements, special assessments are recognized as revenue when received in cash or within 60 days after year-end. Governmental fund special assessments receivable which remain unpaid on December 31 are offset by a deferred inflow of resources in the governmental fund financial statements. K. Prepaids Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. Prepaid items are reported using the consumption method and recorded as expenditures/expenses at the time of consumption. -42- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Inventories The inventories for the Municipal Golf and Municipal Liquor Funds use the average cost valuation method. Inventories of the remaining governmental and proprietary funds are valued at cost using the first-in, first-out valuation method. Inventories are recorded as expenditures or expenses when consumed. M. Capital Assets Capital assets, which include land, land improvements, buildings, other improvements, furniture and equipment, and infrastructure assets (roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Such assets are capitalized at historical cost, or estimated historical cost for assets where actual historical cost is not available. Donated assets are recorded as capital assets at their estimated acquisition value on the date of donation. The City defines capital assets as those with an initial, individual cost of $5,000 or more with an estimated useful life in excess of two years. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets are recorded in the government-wide and proprietary fund financial statements, but are not reported in the governmental fund financial statements. Interest incurred during the construction phase of capital assets for business-type activities is included as part of the capitalized value of the assets constructed. Capital assets are depreciated using the straight-line method over their estimated useful lives. Land and construction in progress are not depreciated. The estimated useful lives are as follows: Assets Years Buildings 7–40 Improvements other than buildings 5–40 Furniture and equipment 3–50 Infrastructure 25–50 N. Compensated Absences Full-time employees employed by the City after January 1, 1995 are eligible for 3 to 6 weeks of annual leave depending on their length of service with the City. Annual leave may not accrue in excess of 800 hours. Upon termination of employment with the City, employees in “good standing” are reimbursed for all accrued and unused annual leave. Employees employed by the City prior to January 1, 1995 were eligible to elect to continue earning sick leave and vacation in lieu of the annual leave option. Those employees who elected not to take the annual leave provisions continue to be eligible to earn 12 days of sick leave and 2 to 4 weeks of vacation per year, depending on their length of service with the City. Sick leave may carry forward indefinitely. Upon termination of employment in “good standing,” employees with more than 10 years of continuous service shall be paid up to one-third of their accrued and unused sick leave. The maximum amount of vacation that may be accumulated is twice the amount earned in any one year. Upon termination of employment, “good standing” employees shall be paid for their accrued and unused vacation leave. Compensated absences are accrued in governmental fund financial statements only when used or matured prior to year-end due to employee termination or similar circumstances. Vacation and sick benefits are recorded as expenses and liabilities in proprietary funds when earned. Compensated absences payable in the government-wide Statement of Net Position and the Statement of Net Position – Proprietary Funds include all leave balances accrued but not yet used by employees, whether or not the employees have terminated employment with the City. -43- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Long-Term Liabilities In the government-wide and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities. Bond premiums and discounts, if material, are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are expensed in the period incurred. 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 expenditures. P. Deferred Outflows/Inflows of Resources In addition to assets, statements of financial position or balance sheets will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City only has one item that qualifies for reporting in this category. It is the deferred outflows of resources related to pensions reported in the government-wide and enterprise funds Statement of Net Position. This deferred outflow results from differences between expected and actual experience, changes of assumptions, differences between projected and actual earnings on pension plan investments, and from contributions to the plan subsequent to the measurement date and before the end of the reporting period. These amounts are deferred and amortized as required under pension standards. In addition to liabilities, statements of financial position or balance sheets 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 future periods and so will not be recognized as an inflow of resources (revenue) until that time. The City has two types of items which qualify for reporting in this category. The first item, unavailable revenue, arises only under a modified accrual basis of accounting and, therefore, is only reported in the governmental funds Balance Sheet. The governmental funds report unavailable revenue 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 second item, deferred inflows of resources related to pensions, is reported in the government-wide and enterprise funds Statement of Net Position. This deferred inflow results from differences between expected and actual experience, changes of assumptions, and differences between projected and actual earnings on pension plan investments. These amounts are deferred and amortized as required under pension standards. Q. Pension Plans For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from the PERA’s fiduciary net position have been determined on the same basis as they are reported by the PERA except that the 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. -44- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The PERA has a special funding situation created by a direct aid contribution made by the state of Minnesota. The direct aid is a result of the merger of the Minneapolis Employees Retirement Fund into the PERA on January 1, 2015. R. Budgets and Budgetary Accounting The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. In August of each year, city staff submits to the City Council, a proposed operating budget for the year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them for the upcoming year. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution by the City Council. 4. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. 5. Expenditures may not legally exceed budgeted appropriations at the fund level. No fund’s budget can be increased without City Council approval. The City Council may authorize transfers of budgeted amounts between departments within any fund. Management may amend budgets within a department level, so long as the total department budget is not changed. 6. Annual appropriated budgets are adopted during the year for the General Fund, Cable TV Special Revenue Fund, and EDA Operations Special Revenue Fund. Annual appropriated budgets are not adopted for debt service funds because effective budgetary control is alternatively achieved through bond indenture provisions. Budgetary control for capital projects funds is accomplished through the use of project controls and formal appropriated budgets are not adopted for most capital projects funds. In 2016, the City also adopted formal annual appropriated budgets for the Road Improvements Capital Projects, Future Capital Projects, Equipment Certificates Capital Projects, and Cable Capital Equipment Capital Projects Funds. 7. The finance director/treasurer presents monthly reports to the City Council. 8. Budgeted amounts are as originally adopted or as amended by the City Council. Budgeted expenditures lapse at year-end. S. Statement of Cash Flows For purposes of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an original maturity from the time of purchase by the City of three months or less to be cash equivalents. The proprietary fund’s portion in the government-wide cash and investment management pool is considered to be cash equivalent. -45- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) T. Net Position and Flow Assumptions In the government-wide and proprietary fund financial statements, net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources. Net position is displayed in three components: Net Investment in Capital Assets – Consists of capital assets, net of accumulated depreciation, reduced by any outstanding debt attributable to acquire capital assets. Restricted Net Position – Consists of net position restricted when there are limitations imposed on its use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Unrestricted Net Position – All other elements of net position that do not meet the definition of “restricted” or “net investment in capital assets.” The City applies restricted resources first when an expense is incurred for which both restricted and unrestricted resources are available. U. Fund Balance Classifications and Flow Assumptions In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable – Consists of amounts that are not in spendable form, such as prepaid items, inventory, and other long-term assets. Restricted – Consists of amounts related to externally imposed constraints established by creditors, grantors, or contributors; or constraints imposed by state statutory provisions. Committed – Consists of internally imposed constraints that are established by resolution of the City Council. Those committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. Assigned – Consists of internally imposed constraints. These constraints consist of amounts intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds, assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority. Pursuant to City Council resolution, the city administrator and/or the finance director/treasurer are authorized to establish assignments of fund balance. Unassigned – The residual classification for the General Fund which also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted resources, then use unrestricted resources as they are needed. When committed, assigned, or unassigned resources are available for use, it is the City’s policy to use resources in the following order: 1) committed, 2) assigned, and 3) unassigned. -46- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) V. Risk Management The City is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The City participates in the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool for its general property and casualty, workers’ compensation, and other miscellaneous insurance coverage. The LMCIT operates as a common risk management and insurance program for a large number of cities in Minnesota. The City pays an annual premium to the LMCIT for insurance coverage. The LMCIT agreement provides that the trust will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of certain limits. The City also carries commercial insurance for certain other risks of loss. Settled claims resulting from these risks did not exceed insurance coverage in any of the past three fiscal years. There were no significant reductions in insurance coverage in 2016. The City uses its Dental Insurance Internal Service Fund to account for and finance its self-insured risk of loss for an employee dental plan. The dental plan is funded by the City, employee contributions, and investment earnings. The claims liability of $7,560 is included in the liabilities of the Dental Insurance Internal Service Fund at December 31, 2016, and is based on the requirement that a liability for claims be reported if information prior to issuance of the financial statements indicates that it is probable that a liability has been incurred on the date of the financial statements and the loss can be reasonably estimated. Changes in the fund’s claim liability for the past two years were: Claims Beginning and Changes Claim Ending Balance in Estimates Payments Balance 2015 7,376$ 209,773$ 210,382$ 6,767$ 2016 6,767$ 203,790$ 202,997$ 7,560$ W. Restricted Assets Restricted assets are cash, investments, and interest accrued thereon; the use of which is limited by external requirements such as a bond indenture. X. 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 amounts reported in the financial statements during the reporting period. Actual results could differ from those estimates. -47- NOTE 2 – CASH AND INVESTMENTS A. Components of Cash and Investments Cash and investments at year-end consist of the following: Deposits 1,753,123$ Investments 79,266,494 Petty cash 14,300 Total 81,033,917$ Cash and investments are presented in the financial statements as follows: Statement of Net Position Cash and investments 67,184,891$ Restricted assets Cash and investments for debt service 13,849,026 Total 81,033,917$ B. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council, including checking accounts and certificates of deposit. The following is considered the most significant risk associated with deposits: Custodial Credit Risk – In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may be lost. Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated “A” or better; revenue obligations rated “AA” or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The City has no additional deposit policies addressing custodial credit risk. At year-end, the carrying amount of the City’s deposits was $1,753,123, while the balance on the bank records was $2,475,201. At December 31, 2016, all deposits were fully covered by federal depository insurance, surety bonds, or by collateral held by the City’s agent in the City’s name. -48- NOTE 2 – CASH AND INVESTMENTS (CONTINUED) C. Investments The City has the following investments at year-end: Fair Value Measurements Less Investment Type Rating Agency Using Than 1 1 to 5 6 to 10 Total U.S. agency securities AA S&P Level 2 998,461$ 23,594,927$ –$ 24,593,388$ State and local bonds AAA S&P Level 2 1,001,410 3,807,809 – 4,809,219 State and local bonds AAA Moody’s Level 2 500,010 – – 500,010 State and local bonds AA S&P Level 2 2,907,589 15,750,879 1,516,506 20,174,974 State and local bonds AA Moody’s Level 2 3,330,186 8,085,305 1,146,914 12,562,405 State and local bonds A S&P Level 2 520,775 1,001,824 – 1,522,599 State and local bonds A Moody’s Level 2 – 1,043,350 – 1,043,350 Commercial paper P2 Moody’s Level 2 244,955 – – 244,955 Negotiable certificates of deposit N/R N/A Level 1 5,638,781 – – 5,638,781 Negotiable certificates of deposit N/R N/A Level 1 – 7,160,117 – 7,160,117 15,142,167$ 60,444,211$ 2,663,420$ 78,249,798 Investment pools/mutual funds Wells Fargo Advantage Heritage AAA S&P N/A 1,016,696 Total investments 79,266,494$ N/A – Not Applicable N/R – Not Rated Credit Risk Maturity Duration in Years Interest Risk – Investments are subject to various risks, the following of which are considered the most significant: Custodial Credit Risk – For investments, this is the risk that in the event of a failure of the counterparty to an investment transaction (typically a broker-dealer) the City would 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 the City may not invest in securities that are both uninsured and not registered in the name of the City and are held by either the counterparty or the counterparty’s trust department or agent, but not in the name of the City. Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota Statutes limit the City’s investments to direct obligations or obligations guaranteed by the United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated “AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less; Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or certain Minnesota securities broker-dealers. The City’s investment policy addresses credit risk by limiting investments to the safest type of securities and using prequalifying brokers/financial institutions. -49- NOTE 2 – CASH AND INVESTMENTS (CONTINUED) Concentration Risk – This is the risk associated with investing a significant portion of the City’s investment (considered 5 percent or more) in the securities of a single issuer, excluding U.S. guaranteed investments (such as treasuries), investment pools, and mutual funds. The City’s investment policy states no more than 5.0 percent of the overall portfolio may be invested in the securities of a single issuer, except for the securities of the U.S. government or an external investment pool. As of December 31, 2016, the City’s investment portfolio includes the Federal National Mortgage Association at 15.3 percent and Federal Home Loan Bank at 11.1 percent. Interest Rate Risk – This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in interest rates (the longer the period for which an interest rate is fixed, the greater the risk). The City’s investment policy does include specific limits on investment maturities as a means of managing its exposure to fair value arising from increasing interest rates. It also states investments should not be purchased that are considered to be highly sensitive to interest rate changes. NOTE 3 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS A. Due To and Due From Other Funds Interfund receivables and payables at year-end were as follows: Closed Bond Future Capital Due To Other Funds Issues Projects Total Governmental 2001/2008B Refunding Improvement Bonds 2,928,431$ –$ 2,928,431$ Road Improvements – 4,807,771 4,807,771 Nonmajor 216,794 1,307 218,101 Total 3,145,225$ 4,809,078$ 7,954,303$ Governmental Due From Other Funds Interfund borrowing is utilized for cash flow borrowing to eliminate temporary cash balance deficits due to the timing of projects and the related revenue sources. B. Advance From and Advance To Other Funds Borrowing at year-end was as follows: Enterprise Closed Bond Future Capital Water and Advance From Other Funds Issues Projects Nonmajor Sewer Total Governmental Nonmajor 576,000$ –$ –$ –$ 576,000$ Enterprise Municipal Golf Course – 1,897,643 16,016 944,704 2,858,363 Sports Arena – – – 230,427 230,427 Total 576,000$ 1,897,643$ 16,016$ 1,175,131$ 3,664,790$ Governmental Advance To Other Funds Advances are utilized to cover operations of the related city funds, including capital improvements. -50- NOTE 3 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (CONTINUED) C. Interfund Transfers Internal Service Vehicle Road Future Capital Equipment Transfers Out General Fund Improvements Projects Nonmajor Replacement Total Governmental General Fund –$ 3,028,200$ 1,650,000$ 171,500$ –$ 4,849,700$ Closed Bond Issues – – – 406,498 – 406,498 Future Capital Projects – – – 1,330,000 – 1,330,000 Nonmajor – – – 179,076 461,000 640,076 Enterprise Municipal Liquor 630,000 – – – – 630,000 Water and Sewer 651,000 – – – – 651,000 Total 1,281,000$ 3,028,200$ 1,650,000$ 2,087,074$ 461,000$ 8,507,274$ Governmental Transfers In Transfers are made in accordance with budget appropriations or as approved by the City Council for special funding of city activities. These transfers were made to fund operations, debt payments, capital outlay, or to close funds. NOTE 4 – CAPITAL ASSETS Capital asset activity for the year ended December 31, 2016 was as follows: A. Changes in Capital Assets Used in Governmental Activities Transfers and Beginning Completed of Year Additions Deletions Construction End of Year Capital assets, not depreciated Land 3,885,715$ –$ –$ –$ 3,885,715$ Construction in progress 774,643 8,266,075 (198,986) (7,173,416) 1,668,316 Total capital assets, not depreciated 4,660,358 8,266,075 (198,986) (7,173,416) 5,554,031 Capital assets, depreciated Buildings 32,246,271 – – 67,309 32,313,580 Other improvements 24,981,605 17,251 (192,786) 433,613 25,239,683 Furniture and equipment 16,626,747 1,021,965 (834,935) 967,085 17,780,862 Infrastructure 95,875,960 1,874,289 – 5,705,409 103,455,658 Total capital assets, depreciated 169,730,583 2,913,505 (1,027,721) 7,173,416 178,789,783 Less accumulated depreciation on Buildings 11,745,049 832,709 – – 12,577,758 Other improvements 8,989,939 871,388 (48,199) – 9,813,128 Furniture and equipment 10,759,794 1,232,812 (758,841) – 11,233,765 Infrastructure 36,542,863 2,841,365 – – 39,384,228 Total accumulated depreciation 68,037,645 5,778,274 (807,040) – 73,008,879 Net capital assets, depreciated 101,692,938 (2,864,769) (220,681) 7,173,416 105,780,904 Total capital assets, net 106,353,296$ 5,401,306$ (419,667)$ –$ 111,334,935$ -51- NOTE 4 – CAPITAL ASSETS (CONTINUED) B. Changes in Capital Assets Used in Business-Type Activities Transfers and Beginning Completed of Year Additions Deletions Construction End of Year Capital assets, not depreciated Land 6,576,322$ 158,700$ –$ 9,709$ 6,744,731$ Construction in progress 31,711 2,052,902 – (295,516) 1,789,097 Total capital assets, not depreciated 6,608,033 2,211,602 – (285,807) 8,533,828 Capital assets, depreciated Buildings 21,974,589 13,800 – – 21,988,389 Other improvements 147,189,969 1,780,051 – 285,807 149,255,827 Furniture and equipment 5,256,697 104,776 (1,755) – 5,359,718 Total capital assets, depreciated 174,421,255 1,898,627 (1,755) 285,807 176,603,934 Less accumulated depreciation on Buildings 8,812,180 613,091 – – 9,425,271 Other improvements 38,142,134 2,891,228 – – 41,033,362 Furniture and equipment 3,900,933 281,684 (1,755) – 4,180,862 Total accumulated depreciation 50,855,247 3,786,003 (1,755) – 54,639,495 Net capital assets, depreciated 123,566,008 (1,887,376) – 285,807 121,964,439 Total capital assets, net 130,174,041$ 324,226$ –$ –$ 130,498,267$ C. Depreciation Expense by Function Depreciation expense for the year ended December 31, 2016 was charged to the following functions: Governmental activities General government 378,823$ Public safety 354,135 Public works 3,304,220 Parks and recreation 1,132,120 Capital assets held by the City’s internal service funds are charged to the various functions based on their usage of the assets 608,976 Total depreciation expense – governmental activities 5,778,274$ Business-type activities Municipal liquor 136,546$ Municipal golf course 174,171 Sports arena 151,851 Water and sewer 2,729,115 Storm drainage 575,256 Cemetery 19,064 Total depreciation expense – business-type activities 3,786,003$ -52- NOTE 5 – LONG-TERM DEBT A. Components of Long-Term Debt Final Balance – Original Issue Interest Rate Maturity End of Year Governmental activities General obligation bonds G.O. Park Bonds 2007A 6,400,000$ 3.40–4.40% 12/15/2032 5,480,000$ G.O. Park Bonds 2008D 6,685,000$ 2.40–4.20% 12/15/2032 5,730,000 G.O. Park Bonds 2011A 1,345,000$ 2.00–4.10% 12/15/2032 1,125,000 G.O. Equipment Certificate Bonds 2012A 1,305,000$ 2.00% 12/15/2021 645,000 G.O. Park Refunding Bonds 2012A 4,550,000$ 2.00% 12/15/2017 935,000 G.O. Crossover Refunding Bonds 2013A 9,000,000$ 1.75–2.35% 12/15/2031 9,000,000 G.O. Equipment Bonds 2014A 680,000$ 2.00% 12/15/2020 495,000 G.O. Bonds 2015B 4,255,000$ 2.00–2.75% 12/15/2029 4,140,000 Total general obligation bonds 27,550,000 General obligation improvement bonds G.O. Improvement Bonds 2007B 3,600,000$ 3.35–4.10% 12/15/2023 1,575,000 G.O. Improvement Bonds 2012A 920,000$ 2.00% 12/15/2022 695,000 Total general obligation improvement bonds 2,270,000 Total governmental activities bonds 29,820,000 Unamortized premium 378,707 Net OPEB obligation 1,398,959 Net pension liability 30,539,605 Compensated absences 2,814,071 Total governmental activities 64,951,342$ Business-type activities General obligation revenue bonds G.O. Storm Water Bonds 2011A 2,600,000$ 2.00–3.60% 12/15/2026 1,735,000$ G.O. Water Revenue Bonds 2014A 8,830,000$ 2.00–3.00% 12/15/2033 7,775,000 G.O. Bonds 2015B 1,605,000$ 2.00–2.75% 12/15/2026 1,605,000 Total general obligation revenue bonds 11,115,000 Revenue bonds Liquor Store Revenue Refunding Bonds 2015A 1,785,000$ 0.50–2.15% 12/01/2021 1,355,000 Total business-type activities bonds 12,470,000 Capital lease 56,285 Unamortized premium 183,255 Net OPEB obligation 244,694 Net pension liability 3,185,079 Compensated absences 474,105 Total business-type activities 16,613,418$ -53- NOTE 5 – LONG-TERM DEBT (CONTINUED) B. Changes in Long-Term Debt Balance – Beginning Balance –Due Within of Year Additions Deletions End of Year One Year Governmental activities General obligation bonds 29,865,000$ –$ 2,315,000$ 27,550,000$ 13,665,000$ General obligation improvement bonds 2,605,000 – 335,000 2,270,000 335,000 Unamortized premium 427,125 – 48,418 378,707 – Net OPEB obligation 1,228,025 192,700 21,766 1,398,959 – Net pension liability 12,259,474 22,854,590 4,574,459 30,539,605 – Compensated absences 2,719,905 1,604,603 1,510,437 2,814,071 1,510,400 Total governmental activities 49,104,529 24,651,893 8,805,080 64,951,342 15,510,400 Business-type activities General obligation revenue bonds 11,640,000 – 525,000 11,115,000 2,115,000 Revenue bonds 1,585,000 – 230,000 1,355,000 235,000 Capital lease 97,919 – 41,634 56,285 56,285 Unamortized premium 195,425 – 12,170 183,255 – Net OPEB obligation 213,911 34,704 3,921 244,694 – Net pension liability 2,122,986 1,596,381 534,288 3,185,079 – Compensated absences 499,827 254,997 280,719 474,105 263,700 Total business-type activities 16,355,068 1,886,082 1,627,732 16,613,418 2,669,985 Total government-wide 65,459,597$ 26,537,975$ 10,432,812$ 81,564,760$ 18,180,385$ C. Minimum Debt Payments Minimum annual payments required to retire bonds are as follows: Governmental Activities Year Ending December 31, Principal Interest Principal Interest Principal Interest 2017 13,665,000$ 626,420$ 335,000$ 76,675$ 14,000,000$ 703,095$ 2018 990,000 283,513 335,000 65,813 1,325,000 349,326 2019 1,065,000 264,075 340,000 54,838 1,405,000 318,913 2020 1,125,000 243,150 120,000 43,650 1,245,000 286,800 2021 905,000 221,025 570,000 32,250 1,475,000 253,275 2022–2026 4,545,000 852,550 570,000 30,075 5,115,000 882,625 2027–2031 5,255,000 357,043 – – 5,255,000 357,043 Total 27,550,000$ 2,847,776$ 2,270,000$ 303,301$ 29,820,000$ 3,151,077$ General Obligation Bonds TotalImprovement Bonds General Obligation -54- NOTE 5 – LONG-TERM DEBT (CONTINUED) Business-Type Activities Year Ending December 31, Principal Interest Principal Interest Principal Interest Principal Interest 2017 2,115,000$ 282,295$ 235,000$ 27,288$ 56,285$ 1,351$ 2,406,285$ 310,934$ 2018 565,000 225,213 240,000 22,588 – – 805,000 247,801 2019 570,000 213,913 250,000 17,788 – – 820,000 231,701 2020 580,000 202,513 255,000 13,163 – – 835,000 215,676 2021 590,000 190,913 375,000 8,063 – – 965,000 198,976 2022–2025 3,085,000 757,425 – – – – 3,085,000 757,425 2027–2030 2,505,000 394,211 – – – – 2,505,000 394,211 2032–2033 1,105,000 49,950 – – – – 1,105,000 49,950 11,115,000$ 2,316,433$ 1,355,000$ 88,890$ 56,285$ 1,351$ 12,526,285$ 2,406,674$ Revenue Bonds Revenue Bonds Total General Obligation Capital Lease D. Description of Long-Term Debt General Obligation Bonds and General Obligation Improvement Bonds – The City issues general obligation (G.O.) bonds to provide financing for street, utility, park, and cemetery project improvements. The City issues G.O. equipment certificates to provide financing for capital equipment. Debt service is covered respectively by special assessments, state aids, general property taxes, and tax increments. G.O. bonds and equipment certificates are direct obligations and pledge the full faith and credit of the City. Equipment certificates are issued as five-year notes with fluctuating debt service payments each year. In April 2013, the City issued $9,000,000 of G.O. Crossover Refunding Bonds, Series 2013A. The proceeds of this issue and interest earned thereon will be used to refund the 2023 through 2032 maturities of the City’s G.O. Park Bonds, Series 2007A, totaling $4,150,000, on their December 15, 2017 call date and the 2023 through 2032 maturities of the City’s G.O. Park Bonds, Series 2008D, totaling $4,225,000, on their December 15, 2017 call date. Until the call date, the City will make all debt service payments on the 2007A and 2008D issues, and all debt service on the 2013A issue will be paid from the refunding escrow account. This “crossover refunding” will reduce the City’s total future debt service payments by $1,031,660 and result in a present value savings of $1,047,760. In May 2015, the City issued $5,860,000 of G.O. Bonds, Series 2015B. The proceeds of this issue and interest earned thereon will be used to refund the 2018 through 2022 maturities of the City’s G.O. Park Bonds, Series 2007A, totaling $1,155,000, on their December 15, 2017 call date, the 2018 through 2023 maturities of the City’s G.O. Park Bonds, Series 2008D, totaling $1,320,000, on their December 15, 2017 call date, and the 2018 through 2032 maturities of the City’s G.O. Park Bonds, Series 2011A and G.O. Storm Water Bonds, Series 2011A, totaling $2,650,000, on their December 15, 2017 call date. Until the call date, the City will make all debt service payments on the 2007A, 2008D, and 2011A issues, and all debt service on the 2015B issue will be paid from the refunding escrow account. This “crossover refunding” will reduce the City’s total future debt service payments by $216,551 and result in a present value savings of $231,938. General Obligation Revenue Bonds and Revenue Bonds – The City issues revenue bonds to provide financing for its enterprise funds. The City issued revenue bonds for the liquor store and G.O. revenue bonds for the arena, water and sewer, and storm drainage activity. Debt service is covered through the revenue producing activities of these funds. -55- NOTE 5 – LONG-TERM DEBT (CONTINUED) Capital Lease – The City entered into a lease agreement for financing the acquisition of equipment for the municipal golf course. This lease agreement matures in April 2017 and carries an interest rate of 0.24 percent. As of December 31, 2016, these assets had a capitalized value of $218,015 with accumulated depreciation of $160,077. Revenues from the Municipal Golf Course Fund financed this lease. Net OPEB Obligation – This liability represents the City’s Other Post-Employment Benefits (OPEB) Plan obligation as further described later in these notes. The General Fund, Municipal Liquor, Municipal Golf Course, Sports Arena, Water and Sewer, and Storm Drainage Funds will be used to liquidate this liability. Net Pension Liability – This liability represents the City’s pension benefit obligations as further described later in these notes. The General, Municipal Liquor, Municipal Golf Course, Sports Arena, Water and Sewer, and Storm Drainage Funds will be used to liquidate this liability. Compensated Absences – This liability represents vested benefits earned by employees through the end of the year, which will be paid or used in future periods. The Benefits/Other Insurance Internal Service Fund, Municipal Liquor, Municipal Golf Course, Sports Arena, Water and Sewer, and Storm Drainage Funds will be used to liquidate this liability. E. Revenue Pledged Percent of Remaining Principal Pledged Use of Total Debt Term of Principal and Interest Revenue Bond Issue Proceeds Type Service Pledge and Interest Paid Received G.O. Storm Water Bonds 2011A Utility improvements Utility charges 100% 2011–2017 1,784,483$ 207,583$ 1,717,350$ G.O. Water Revenue Bonds 2014A Utility improvements Utility charges 100% 2014–2033 9,849,375$ 577,825$ 9,450,362$ Liquor Store Revenue Refunding Bonds 2015A Site improvements Liquor sales 100% 2015–2021 1,443,890$ 259,128$ 8,738,804$ G.O. Bonds 2015B Utility improvements Utility charges 100% 2015–2026 1,797,575$ 32,388$ 1,717,350$ Revenue Pledged Current Year F. Arbitrage Rebate The Tax Reform Act of 1986 requires governmental entities to pay to the federal government income earned on the proceeds from the issuance of debt in excess of interest costs, pending the expenditure of the borrowed funds. This rebate of interest income (known as arbitrage) applies to governmental debt issued after August 31, 1986. In the opinion of management, any obligation would be immaterial. -56- NOTE 5 – LONG-TERM DEBT (CONTINUED) G. Conduit Debt Obligations At times, the City has issued various types of revenue bonds to provide financial assistance to private sector, nonprofit, or governmental entities to finance the acquisition or construction of facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issuance. Neither the City, nor any political subdivision thereof, is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the City’s financial statements. As of December 31, 2016, the following conduit debt issues were outstanding: Augustana Care Health Care Revenue Bonds (Augustana Health Care Center Project), Series 2016A 17,435,000$ Minnesota Senior Living LLC Senior Living Revenue Bonds (Minnesota Senior Living LLC Project), Series 2016A 68,890,000 Senior Living Revenue Bonds (Minnesota Senior Living LLC Project), Series 2016B 50,540,000 Senior Living Revenue Bonds (Minnesota Senior Living LLC Project), Series 2016C 6,890,000 Senior Living Revenue Bonds (Minnesota Senior Living LLC Project), Series 2016D 21,650,000 Ecumen Housing and Health Care Revenue Bonds (The Seasons at Apple Valley Project), Series 2010 5,090,000 Health Care Revenue Bonds (Evercare Senior Living, LLC Projects), Series 2012 A&B 18,055,000 Lifeworks Services Inc. Educational Facilities Revenue Note, Series 2011 1,915,658 Total conduit debt obligations 190,465,658$ NOTE 6 – JOINT POWERS COMMITMENT On August 25, 2005, the City entered into a joint powers agreement (the Agreement) with the cities of Burnsville, Eagan, Farmington, Hastings, Inver Grove Heights, Lakeville, Mendota Heights, Rosemount, South St. Paul, West St. Paul, and Dakota County, Minnesota, to establish the Dakota Communications Center (DCC), a Minnesota nonprofit corporation. The purpose of the DCC is to engage in the operation and maintenance of a county-wide public safety answering point and communications center for law enforcement, fire, emergency medical services, and other public safety services for the mutual benefit of residents residing in the above mentioned cities and county (members). Pursuant to the Agreement, members are required to provide the DCC their pro rata share of the cost of operations, maintenance, and capital projects. Information regarding the DCC can be obtained by contacting the City of Lakeville, 20195 Holyoke Avenue, Lakeville, MN 55044-9177 or from the website www.mn-dcc.org/about-the-dcc/statistics/. -57- NOTE 7 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE A. Plan Description The City participates in the following cost-sharing, multiple-employer defined benefit pension plans administered by the PERA of Minnesota. The PERA’s defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. The PERA’s defined benefit pension plans are tax-qualified plans under Section 401(a) of the Internal Revenue Code (IRC). 1. General Employees Retirement Fund (GERF) All full-time and certain part-time employees of the City are covered by the General Employees Retirement Fund (GERF). GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All new members must participate in the Coordinated Plan. 2. Public Employees Police and Fire Fund (PEPFF) The Public Employees Police and Fire Fund (PEPFF), 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 PEPFF also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to the PERA. B. Benefits Provided The PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the State Legislature. Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Members in plans that are at least 90.0 percent funded for two consecutive years are given 2.5 percent increases. Members in plans that have not exceeded 90.0 percent funded, or have fallen below 80.0 percent, are given 1.0 percent increases. The benefit provisions stated in the following paragraphs of this section are current provisions and apply to active plan participants. 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. 1. GERF Benefits 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 the PERA’s Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. For 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 age 66. -58- NOTE 7 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) 2. PEPFF Benefits Benefits for PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50 percent after five years up to 100 percent after 10 years of credited service. Benefits for PEPFF members first hired after June 30, 2014, vest on a prorated basis from 50 percent after 10 years up to 100 percent after 20 years of credited service. The annuity accrual rate is 3 percent of average salary for each year of service. For PEPFF members who were first hired prior to July 1, 1989, a full annuity is available when age plus years of service equal at least 90. C. Contributions Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the State Legislature. 1. GERF Contributions Basic Plan members and Coordinated Plan members were required to contribute 9.10 percent and 6.50 percent, respectively, of their annual covered salary in calendar year 2016. The City was required to contribute 11.78 percent of pay for Basic Plan members and 7.50 percent for Coordinated Plan members in calendar year 2016. The City’s contributions to the GERF for the year ended December 31, 2016 were $741,397. The City’s contributions were equal to the required contributions as set by state statute. 2. PEPFF Contributions Plan members were required to contribute 10.8 percent of their annual covered salary in calendar year 2016. The City was required to contribute 16.2 percent of pay for PEPFF members in calendar year 2016. The City’s regular contributions to the PEPFF for the year ended December 31, 2016 were $808,641. The City’s contributions were equal to the required contributions as set by state statute. D. Pension Costs 1. GERF Pension Costs At December 31, 2016, the City reported a liability of $12,674,544 for its proportionate share of the GERF’s net pension liability. The City’s net pension liability reflected a reduction due to the state of Minnesota’s contribution of $6 million to the fund in 2016. The state of Minnesota is considered a non-employer contributing entity and the state of Minnesota’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 $165,598. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by the PERA during the measurement period for employer payroll paid dates from July 1, 2015 through June 30, 2016, relative to the total employer contributions received from all of the PERA’s participating employers. At June 30, 2016, the City’s proportionate share was 0.1561 percent, which was a decrease of 0.0073 percent from its proportion measured as of June 30, 2015. -59- NOTE 7 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) For the year ended December 31, 2016, the City recognized pension expense of $1,507,692 for its proportionate share of the GERF’s pension expense. In addition, the City recognized an additional $49,377 as pension expense (and grant revenue) for its proportionate share of the state of Minnesota’s contribution of $6 million to the GERF. At December 31, 2016, the City reported its proportionate share of the GERF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience –$ 1,042,335$ Changes in actuarial assumptions 2,481,687 – Differences between projected and actual investment earnings 2,432,543 – Changes in proportion – 708,865 Contributions paid to the PERA subsequent to the measurement date 405,997 – Total 5,320,227$ 1,751,200$ Deferred outflows of resources reported $405,997 related to pensions resulting from city contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ending December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ending Expense December 31, Amount 2017 783,442$ 2018 783,442$ 2019 1,138,319$ 2020 457,827$ 2. PEPFF Pension Costs At December 31, 2016, the City reported a liability of $20,828,373 for its proportionate share of the PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by the PERA during the measurement period for employer payroll paid dates from July 1, 2015 through June 30, 2016, relative to the total employer contributions received from all of the PERA’s participating employers. At June 30, 2016, the City’s proportion was 0.519 percent, which was an increase of 0.004 percent from its proportion measured as of June 30, 2015. For the year ended December 31, 2016, the City recognized pension expense of $3,601,719 for its proportionate share of the PEPFF’s pension expense. The City also recognized $46,710 for the year ended December 31, 2016, as pension expense (and an offsetting reduction of net pension liability) for its proportionate share of the state of Minnesota’s on-behalf contributions to the PEPFF. In 2013, legislation passed and required the state of Minnesota to begin contributing $9 million to the PEPFF each year, starting in fiscal year 2014. -60- NOTE 7 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) At December 31, 2016, the City reported its proportionate share of the PEPFF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience –$ 2,383,512$ Changes in actuarial assumptions 11,462,764 – Differences between projected and actual investment earnings 3,172,618 – Changes in proportion 37,874 50,402 Contributions paid to the PERA subsequent to the measurement date 428,355 – Total 15,101,611$ 2,433,914$ Deferred outflows of resources reported $428,355 related to pensions resulting from city contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ending December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ending Expense December 31, Amount 2017 2,629,743$ 2018 2,629,743$ 2019 2,629,743$ 2020 2,374,857$ 2021 1,975,256$ E. Actuarial Assumptions The total pension liability in the June 30, 2016 actuarial valuation was determined using 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 were based on RP-2014 tables for the GERF and RP-2000 tables for the PEPFF for males or females, as appropriate, with slight adjustments. Cost of living benefit increases for retirees are assumed to be: 1 percent per year for all future years for the GERF and the PEPFF. Actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the GERF was completed in 2015. The experience study for the PEPFF was for the period July 1, 2004 through June 30, 2009. -61- NOTE 7 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) The following changes in actuarial assumptions occurred in 2016: 1. GERF The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2035 and 2.50 percent per year thereafter to 1.00 percent per year for all future years. The assumed investment return was changed from 7.90 percent to 7.50 percent. The single discount rate was changed from 7.90 percent to 7.50 percent. Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. 2. PEPFF The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2037 and 2.50 percent thereafter to 1.00 percent per year for all future years. The assumed investment return was changed from 7.90 percent to 7.50 percent. The single discount rate changed from 7.90 percent to 5.60 percent. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. The State Board of Investment, which manages the investments of the PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis 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: Asset Class Domestic stocks 45 % 5.50 % International stocks 15 % 6.00 % Bonds 18 % 1.45 % Alternative assets 20 % 6.40 % Cash 2 % 0.50 % Long-Term Expected Target Real Rate Allocation of Return F. Discount Rate The discount rate used to measure the total pension liability in 2016 was 7.5 percent, a reduction from the 7.9 percent used in 2015. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on these assumptions, fiduciary net position of the GERF was 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. -62- NOTE 7 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) In the PEPFF, the fiduciary net position was projected to be available to make all projected future benefit payments of current plan members through June 30, 2056. Beginning in fiscal year ended June 30, 2057, when projected benefit payments exceed the funds’ projected fiduciary net position, benefit payments will be discounted at the municipal bond rate of 2.85 percent based on an index of 20-year general obligation bonds with an average AA credit rating at the measurement date. An equivalent single discount rate of 5.60 percent was determined that produced approximately the same present value of projected benefits when applied to all years of projected benefits as the present value of projected benefits using 7.50 percent applied to all years of projected benefits through the point of asset depletion and 2.85 percent thereafter. 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 Discount Rate Discount Rate Discount Rate (6.5%) (7.5%) (8.5%) The City’s proportionate share of the GERF net pension liability 18,001,611$ 12,674,544$ 8,286,494$ 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (4.6%) (5.6%) (6.6%) The City’s proportionate share of the PEPFF net pension liability 29,156,958$ 20,828,373$ 14,023,287$ 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 PERA website at www.mnpera.org. -63- NOTE 8 – DEFINED CONTRIBUTION PENSION PLAN – STATE-WIDE Councilmembers of the City are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple-employer deferred compensation plan administered by the PERA. The PEDCP is a tax qualified plan under Section 401(a) of the IRC and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official’s employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employee contributions must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, the PERA receives 2 percent of employer contributions and twenty-five hundredths of 1 percent (0.0025) of the assets in each member’s account annually. Total contributions made by the City for the fiscal year 2016 were: Required Rate for Employees Employee Employer Employee Employer and Employers 1,854$ 1,854$ 5% 5% 5% Contribution Amount Percentage of Covered Payroll NOTE 9 – DEFINED BENEFIT PENSION PLAN – FIRE RELIEF ASSOCIATION A. Plan Description All members of the Apple Valley Fire Department (the Department) are covered by a defined benefit plan administered by the Apple Valley Firefighters’ Relief Association (the Association). As of the measurement date, the plan covered 67 active firefighters and 18 vested terminated firefighters whose pension benefits are deferred. The plan is a single employer retirement plan and is established and administered in accordance with Minnesota Statutes, Chapter 69. The Association maintains a separate Special Pension Trust Fund to accumulate assets to fund the retirement benefits earned by the Department’s membership. Funding for the Association is derived from an insurance premium tax in accordance with the Volunteer Firefighter’s Relief Association Financing Guidelines Act of 1971 (Chapter 261 as amended by Chapter 509 of Minnesota Statutes 1980). Funds are also derived from investment income. -64- NOTE 9 – DEFINED BENEFIT PENSION PLAN – FIRE RELIEF ASSOCIATION (CONTINUED) B. Benefits Provided Each member who is at least 50 years of age, has separated from service from the fire department, has served at least 5 years of active service for members commencing active duty prior to January 1, 2010, and 10 years of active service for members commencing active duty after January 1, 2010 with such department before separation and has been a member of the Association in good standing at least 5 years prior to such separation shall be entitled to a lump sum service pension in the amount of $6,700 for each year of service (including each year over 20) or a monthly service pension of $45 for each year of service (including each year over 20) but not exceeding the maximum amount per year of service allowed by law for the minimum average amount of available financing per firefighter as prescribed by law. According to the bylaws of the Association and pursuant to Minnesota Statutes, members who separate from service with less than 20 years of service and have reached the age of at least 50 and have completed at least 5 years of active membership for members commencing active duty prior to January 1, 2010 and 10 years of active membership for members commencing active duty after January 1, 2010 are entitled to a reduced service pension not to exceed the amount calculated by multiplying the member’s service pension for the completed years of service times the applicable nonforfeitable percentage of pension for the completed years of service times the applicable nonforfeitable percentage of pension. C. Contributions Minnesota Statutes, Chapters 424 and 424A, authorize pension benefits for volunteer fire relief associations. The plan is funded by fire state aid, investment earnings, and, if necessary, employer contributions as specified in Minnesota Statutes and voluntary city contributions (if applicable). Required employer contributions are calculated annually based on statutory provisions. The City made a contribution to the plan for the year ended December 31, 2016 totaling $259,830 in accordance with Minnesota Statutes. Furthermore, firefighters have no obligation to contribute to the plan. D. Pension Costs At December 31, 2016, the City reported a net pension liability of $221,767 for the plan. The net pension liability was measured as of December 31, 2015. The total pension liability used to calculate the net pension liability in accordance with GASB Statement No. 68 was determined by Van Iwaarden Associates applying an actuarial formula to specific census data certified by the Department as of December 31, 2015. For the year ended December 31, 2016, the City recognized pension expense of $345,982. The City also recognized $276,307 as revenue from the state of Minnesota on-behalf contributions to the Department. -65- NOTE 9 – DEFINED BENEFIT PENSION PLAN – FIRE RELIEF ASSOCIATION (CONTINUED) The following table presents the changes in net pension liability during the year: Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Beginning balance 6,489,705$ 6,427,084$ 62,621$ Changes for the year Service cost 181,221 – 181,221 Interest 398,162 – 398,162 Difference between expected and actual experience 12,130 – 12,130 Change of assumptions (209,787) – (209,787) Contributions – state and local – 477,537 (477,537) Net investment income – (219,523) 219,523 Benefit payments (600,659) (600,659) – Administrative costs – (35,434) 35,434 Total net changes (218,933) (378,079) 159,146 Ending balance 6,270,772$ 6,049,005$ 221,767$ At December 31, 2016, the City reported deferred inflows of resources and deferred outflows of resources, its contributions subsequent to the measurement date, related to pension from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Net difference between projected and actual earnings on plan investments 557,413$ –$ Difference between expected and actual liability 10,500 – Change of assumptions – 181,590 City contributions subsequent to the measurement date 259,830 – State aid to the City subsequent to the measurement date 281,578 281,578 Total 1,109,321$ 463,168$ -66- NOTE 9 – DEFINED BENEFIT PENSION PLAN – FIRE RELIEF ASSOCIATION (CONTINUED) Deferred outflows of resources totaling $541,408 related to pensions resulting from the city contributions to the plan subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending December 31, 2017. Deferred inflows of resources totaling $281,578 related to state aid received subsequent to the measurement date will be recognized for its impact on the net pension liability in the year ending December 31, 2017. Other amounts reported as deferred outflows and inflows of resources related to the plan will be recognized in pension expense as follows: Pension Year Ending Expense December 31, Amount 2017 118,762$ 2018 118,762$ 2019 118,764$ 2020 94,857$ 2021 (26,567)$ Thereafter (38,255)$ E. Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of the measurement date using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.50% Salary increases N/A Investment rate of return Index rate for 20-year, tax-exempt municipal bonds (Bond Buyer G.O. 20-Year Municipal Bond Index); used in discount rate determination 3.57% N/A – Not Applicable 6.50% net of pension plan investment expense, including inflation The investment rate of return above represents a 0.25 percent increase from the Association’s previous valuation. Mortality rates were based on the July 1, 2015 Minnesota Public Employees Retirement Association Police and Fire Plan actuarial valuation as described below: Healthy Pre-Retirement – RP 2000 non-annuitant generational mortality projected with Scale AA, white collar adjustment, male rates set back two years, female rates set back two years. Healthy Post-Retirement – RP 2000 non-annuitant generational mortality, projected with Scale AA, white collar adjustment, without age adjustment. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimates of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These asset class estimates are combined to produce the portfolio long-term expected rate of return by weighting the expected future real rates of return by the current asset allocation percentage (or target allocation, if favorable) and by adding expected inflation. All results are then rounded to the nearest quarter percent. -67- NOTE 9 – DEFINED BENEFIT PENSION PLAN – FIRE RELIEF ASSOCIATION (CONTINUED) Asset Class Domestic equity 5.25 % 50.00 % International equity 5.25 % 25.00 % Fixed income 1.75 % 24.00 % Real estate and alternatives 3.75 %– % Cash and equivalents 0.25 % 1.00 % Total (weighted average, rounded to 1/4 percent) 6.50 % 100.00 % Allocation at Measurement Date Long-Term Expected Real Rate of Return F. Discount Rate The discount rate used to measure the total pension liability was 6.50 percent. The liability discount rate was developed using the alternative method described in paragraph 43 of GASB Statement No. 67, which states that “if the evaluations required by paragraph 41 can be made with sufficient reliability without a separate projection of cash flows into and out of the pension plan, alternative methods may be applied in making the evaluations.” We believe that the plan’s current overfunded status, combined with Minnesota statutory funding requirements, provide sufficient reliability that projected plan assets will be adequate to pay future retiree benefits. Therefore, we used the plan’s long-term expected investment return as the liability discount rate. G. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability (asset) of the Association, calculated using the discount rate of 6.50 percent, as well as what the Association’s net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (5.50 percent) or 1-percentage-point higher (7.50 percent) than the current rate: 1% Decrease in Current 1% Increase in Discount Rate Discount Rate Discount Rate (5.50%) (6.50%) (7.50%) Association’s net pension liability (asset) 830,493$ 221,767$ (294,905)$ H. Pension Plan Fiduciary Net Position The Association issues a publicly available financial report. This report may be obtained by writing to the Apple Valley Firefighters’ Relief Association, 7100 147th Street West, Apple Valley, MN 55124. -68- NOTE 10 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN A. Plan Description The City provides post-employment benefits to certain eligible employees and their spouses through the City’s OPEB Plan, a single-employer defined benefit plan administered by the City. All post-employment benefits are based on contractual agreements with employee groups. These contractual agreements do not include any specific contribution or funding requirements. The plan does not issue a publicly available financial report. These benefits are summarized as follows: Post-Employment Insurance Benefits – All retirees of the City have the option under state law to continue their medical insurance coverage through the City from the time of retirement until the employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree must pay the full premium to continue coverage for medical and dental insurance. The City is legally required to include any retirees for whom it provides health insurance coverage in the same insurance pool as its active employees, whether premiums are paid by the City or the retiree. Consequently, participating retirees are considered to receive a secondary benefit known as an “implicit rate subsidy.” This benefit relates to the assumption that the retiree is receiving a more favorable premium rate than they would otherwise be able to obtain if purchasing insurance on their own, due to being included in the same pool with the City’s younger and statistically healthier active employees. B. Funding Policy The required contributions are based on projected pay-as-you-go financing requirements, with additional amounts to pre-fund benefits as determined annually by the City. C. Annual OPEB Cost and Net OPEB Obligation The City’s annual OPEB cost (expense) is calculated based on annual required contributions (ARC) of the City, an amount determined on an actuarially determined basis in accordance with the parameters of GASB Statement No. 45. The ARC represents a level funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The annual OPEB cost is accrued in the accrual based statements. The liability is funded through payments from the City’s General Fund and enterprise funds. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and the changes in the City’s net OPEB obligation to the plan: ARC 218,807$ Interest on net OPEB obligation 64,887 Adjustment to ARC (56,290) Annual OPEB cost (expense)227,404 Contributions made 25,687 Increase in net OPEB obligation 201,717 Net OPEB obligation – beginning of year 1,441,936 Net OPEB obligation – end of year 1,643,653$ -69- NOTE 10 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the current and preceding years are as follows: Percentage of Fiscal Year Ended Annual Employer Annual OPEB Net OPEB December 31, OPEB Cost Contribution Cost Contributed Obligation 2014 228,926$ 64,398$ 28% 1,289,912$ 2015 236,671$ 84,647$ 36% 1,441,936$ 2016 227,404$ 25,687$ 11% 1,643,653$ D. Funded Status and Funding Progress As of January 1, 2016, the most recent actuarial valuation date, the actuarial accrued liability for benefits and unfunded actuarial accrued liability (UAAL) were both $1,966,565, as the plan was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $13,401,000 and the ratio of the UAAL to the covered payroll was 15 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the ARC of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress following the notes to basic financial statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. E. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the January 1, 2016 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included: a 4.50 percent investment rate of return (net of administrative expenses) based on the City’s own investments; an annual payroll growth rate of 3.50 percent; an annual healthcare cost trend rate of 9.00 percent initially, reduced by decrements to an ultimate rate of 5.00 percent after 12 years for medical insurance; and a general inflation rate of 2.75 percent. The UAAL is amortized on a level dollar basis over an open 30-year period. -70- NOTE 11 – STEWARDSHIP AND ACCOUNTABILITY A. Deficit Fund Balances The following funds have a deficit fund balance at December 31, 2016: Amount Governmental 2001/2008B Refunding Improvement Bonds 2,928,431$ Road Improvements 5,198,862$ Nonmajor funds Debt service Improvement Bonds of 2010 226,977$ Capital projects TIF District Parkside Village 566,962$ The deficits listed above will be eliminated by transfers from other funds, collection of special assessments, future special assessment bond issues, future tax levies, and state grant reimbursements. B. Budget to Actual Expenditures exceeded budgeted amounts in the Future Capital Projects Fund by $31,753 and EDA Operations Special Revenue Fund by $1,141,220. NOTE 12 – FUND BALANCES A. Classifications At December 31, 2016, the City had the following governmental fund balances: 2001/2008 Closed Refunding Future Nonmajor General Bond Improvement Road Capital Governmental Fund Issues Bonds Improvements Projects Funds Total Nonspendable Inventory 8,920$ –$ –$ –$ –$ –$ 8,920$ Prepaid items 111,027 – – – – 600 111,627 Total nonspendable 119,947 – – – – 600 120,547 Restricted Debt service – – – – – 16,337,148 16,337,148 Economic development – – – – – 167,940 167,940 Tax increment financing – – – – – 1,286,048 1,286,048 Police forfeiture – – – – – 13,048 13,048 Capital acquisition 911 system – – – – – 4,912 4,912 Cable capital equipment – – – – – 538,127 538,127 Tax increment financing – – – – – 2,999,441 2,999,441 Park improvements – – – – – 226,760 226,760 Park dedication – – – – – 1,836,939 1,836,939 Electric projects – – – – – 3,290,941 3,290,941 Cable TV – – – – – 209,112 209,112 Other purposes Energy grant – – – – – – – Solid waste grant – – – – – 52,066 52,066 Lodging tax – – – – – 116,665 116,665 Total restricted – – – – – 27,079,147 27,079,147 Debt Service Capital Projects -71- NOTE 12 – FUND BALANCES (CONTINUED) 2001/2008 Closed Refunding Future Nonmajor General Bond Improvement Road Capital Governmental Fund Issues Bonds Improvements Projects Funds Total Committed Home improvement guide 20,000 – – – – – 20,000 Aquatic Center equipment 13,000 – – – – – 13,000 Fire security camera improvements 25,700 – – – – – 25,700 Fire station signage improvements 16,350 – – – – – 16,350 Fire recognition awards 3,280 – – – – – 3,280 IT laptop replacement 60,000 – – – – – 60,000 IT server backup system 20,000 – – – – – 20,000 Community development comp plan update 30,000 – – – – – 30,000 Municipal building computer equipment 3,000 – – – – – 3,000 Municipal building flooring update – – – – – 15,000 15,000 Municipal building CMF projects – – – – – 125,000 125,000 Community Center workstation replacement 27,650 – – – – – 27,650 Redwood diving board replacement 15,000 – – – – – 15,000 Aquatic Center electric updates 19,000 – – – – – 19,000 City clerk chair replacement 5,000 – – – – – 5,000 CMF fleet fuel system repairs 8,000 – – – – – 8,000 Staff training and development 12,000 – – – – – 12,000 Staff training and development 2,000 – – – – – 2,000 Building inspection workspace furniture 28,500 – – – – – 28,500 Police HVAC system replacement 120,000 – – – – – 120,000 Police workspace furniture 36,000 – – – – – 36,000 Administration service counter 40,000 – – – – – 40,000 Senior center audio visual equipment 20,000 – – – – – 20,000 Community Center fire alarm system 85,000 – – – – – 85,000 Building inspection electronic forms workflows 80,000 – – – – – 80,000 Finance AP Automation Project 3,665 – – – – – 3,665 Total committed 693,145 – – – – 140,000 833,145 Assigned Community Center fire alarm improvements 56,000 – – – – – 56,000 Debt service – 8,843,565 – – – 1,601,312 10,444,877 Other capital projects – – – – 14,675,768 705,341 15,381,109 Equipment – – – – – 16,016 16,016 Police special projects – – – – – 174,802 174,802 Tree preservation – – – – – 363,562 363,562 Ponds – – – – – 244,464 244,464 Pathways and sidewalks – – – – – 251,203 251,203 Dodd Road – – – – – 237,603 237,603 Former City Hall building – – – – – 781,971 781,971 Capital building – – – – – 376,009 376,009 Park improvement development – – – – – 2,925 2,925 Physical improvement – – – – – 152,248 152,248 Fire capital purchases – – – – – 27,466 27,466 Total assigned 56,000 8,843,565 – – 14,675,768 4,934,922 28,510,255 Unassigned 15,740,362 – (2,928,431) (5,198,862) – (793,939) 6,819,130 Total 16,609,454$ 8,843,565$ (2,928,431)$ (5,198,862)$ 14,675,768$ 31,360,730$ 63,362,224$ Debt Service Capital Projects B. Minimum Fund Balance Policy The City Council has formally adopted a fund balance policy. The policy establishes the City will strive to maintain a minimum unassigned General Fund balance of 50 percent of the subsequent year’s budgeted expenditures. At December 31, 2016, the unassigned fund balance of the General Fund was 50 percent of the subsequent year’s budgeted expenditures, including transfers. NOTE 13 – JOINT POWERS AGREEMENT WITH DAKOTA COUNTY In July 1987, the City and Dakota County (the County) entered into an agreement whereby the City and the County jointly acquired certain real estate for the purpose of building a library facility to serve the City and surrounding communities. The City’s portion of the cost of the property was $348,414. As part of this agreement, the City transferred its interest in the property to the County but maintains a lien for 30 years. If during this time, the County terminates its library use, the County will pay the City the unamortized cost of the property. -72- NOTE 14 – TAX ABATEMENT AGREEMENTS The City, in order to spur economic development and redevelopment, has entered into private development and redevelopment agreements to encourage a developer to construct, expand, or improve new or existing properties and building or clean-up and redevelop blighted areas. The City has four agreements that would be considered a tax abatement under GASB Statement No. 77. The City is authorized to create a tax increment finance plan under Minnesota Statutes, Chapter 469.175. The criteria that must be met under the statute are that, in the opinion of the municipality: The proposed development or redevelopment would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less that the increase in the market value estimated to result from the proposed development after subtracting the present value of the of the projected tax increments for the maximum duration of the tax increment district permitted in the plan. The requirements of this item do not apply if the district is a housing district; That the tax increment financing plan conforms to the general plan for the development or redevelopment of the municipality as a whole; and That the tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the development or redevelopment of the project by private enterprise. The City has entered into private development agreements regarding certain properties within a tax increment district. Included in the development agreement was the reimbursement of eligible development costs. The vehicle used for this reimbursement is called a tax increment revenue note. These notes provide for the payment of principal, equal to the developer’s eligible costs, plus interest at a set rate. Payments on the note will be made at the lesser of the note payment or a percent of the available tax increment received during the specific year as stated in the agreement. Payments are first applied to accrued interest and then to the principal balance. The notes are to be cancelled at the end of the term, whether or not the note has been repaid in full. The outstanding principal balances as of December 31, 2016 for these agreements are as follows. The agreements are not a general obligation of the City and are payable solely from available tax increments, received from the property owner. The City’s position is that these are obligations to assign future and uncertain revenues sources and, as such, is not actual debt in substance. -73- NOTE 14 – TAX ABATEMENT AGREEMENTS (CONTINUED) District Name Purpose Percentage of Taxes Returned During the Fiscal Year Amount of Taxes Returned During the Fiscal Year Outstanding Principal at Year-End Date of Required Decertification TIF 14 – Apple Valley Business Campus Construction of 147th St. and Felton Ct., 100,000 sq. ft. expansion of warehouse/office facilities and the addition of minimum of 40 full-time jobs. 45% $170,267 $1,603,381 12/31/2022 TIF 15 – Parkside Village - Gabella Housing district, including the construction of multi-family residential buildings of 196 units with 20% affordable units. 0% $0 $2,684,000 12/31/2041 TIF 16 – Uponor Creation of 86,000 sq. ft. of manufacturing facilities and the addition of 75 full-time jobs. 0% $0 $504,000 12/31/2025 TIF 17 – Karamella Creation of 73,000 sq. ft. manufacturing facilities and the addition of 76 full-time jobs. 0% $0 $736,000 12/31/2026 NOTE 15 – COMMITMENTS AND CONTINGENCIES A. Legal Claims The City has the usual and customary type of miscellaneous legal claims pending at year-end. Although the outcome of these lawsuits is not presently determinable, the City’s management believes that the City will not incur any material monetary loss resulting from these claims. No loss has been recorded on the City’s financial statements relating to these claims. B. Freeway Landfill In February 2017, the Environmental Protection Agency (EPA) sent letters to potentially responsible parties (PRPs) related to the clean-up of the Freeway Landfill property under the federal Superfund Program. The City is working with other PRPs and the Minnesota Pollution Control Agency on legislation limiting the liability for PRPs and moving forward on clean-up under the state’s Closed Landfill Program. The liability for any individual PRP cannot be determined at this point in time as the EPA is in the investigative stage of the process. C. Federal and State Funding Amounts recorded or receivable from federal and state agencies are subject to agency audit and adjustment. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of claims which may be disallowed by the grantor agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. -74- NOTE 15 – COMMITMENTS AND CONTINGENCIES (CONTINUED) D. Tax Increment Districts The City’s tax increment districts are subject to review by the state of Minnesota Office of the State Auditor. Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. E. Construction Commitments At December 31, 2016, the City is committed to various construction contracts for the improvement of city property. The City’s remaining commitment under these contracts is approximately $234,000. F. Operating Lease On December 13, 2012, the City entered into an agreement to extend the existing liquor store building lease at Apple Valley Shopping Center with Time Square Shopping Center II, LLP for three years commencing February 1, 2013, and ending January 31, 2016 at a base rent of $10,500 per month. On October 22, 2015, the City entered into an agreement to extend the lease for an additional term of three years commencing February 1, 2016, and ending January 31, 2019 at a base rent of $11,000 per month. Lease expenditures for the year ending December 31, 2016 were $131,500. The following is a schedule by years of future minimum payments required under the leases as of December 31, 2016: Year Ending December 31, Amount 2017 132,000$ 2018 132,000 2019 11,000 Total 275,000$ NOTE 16 – SUBSEQUENT EVENT Capital Lease On February 15, 2017, the City entered into a capital lease for golf course equipment in the amount of $215,419 and a 2.17 percent interest rate. Payments will be made monthly commencing on May 15, 2017 and continuing through November 2020. Future minimum payments on this lease are as follows: Year Principal Interest Total 2017 $ 39,893 $ 4,492 $ 44,385 2018 38,728 5,657 44,385 2019 40,106 4,279 44,385 2020 96,692 2,693 99,385 $ 215,419 $ 17,121 $ 232,540 REQUIRED SUPPLEMENTARY INFORMATION City’s Net Pension Proportionate Liability and City’s Share of the the City’s Proportionate Plan Fiduciary State of Share of the Share of the Net Position City’s City’s Minnesota’s State of Net Pension as a PERA Fiscal Proportion Proportionate Proportionate Minnesota’s Liability as a Percentage Year-End Date of the Net Share of the Share of the Share of the City’s Percentage of of the Total (Measurement Pension Net Pension Net Pension Net Pension Covered Covered Pension Date)Liability Liability Liability Liability Payroll Payroll Liability 06/30/2015 0.1634% 8,468,235$ –$ 8,468,235$ 9,603,176$ 88.18% 78.20% 06/30/2016 0.1561% 12,674,544$ 165,598$ 12,840,142$ 9,680,914$ 130.92% 68.90% Contributions Contributions PERA Fiscal in Relation to as a Year-End Date Statutorily the Statutorily Contribution Percentage (Measurement Required Required Deficiency Covered of Covered Date)Contributions Contributions (Excess)Payroll Payroll 06/30/2015 750,987$ 750,987$ –$ 10,013,141$ 7.50% 06/30/2016 741,397$ 741,397$ –$ 9,885,306$ 7.50% Note 1: Note 2: Note 3: 12/31/2015 12/31/2016 Changes in Plan Provisions.On January 1,2015,the Minneapolis Employees Retirement Fund was merged into the GERF,which increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892 million.Upon consolidation,state and employer contributions were revised. Changes in Actuarial Assumptions.(1)2015 Changes –The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2030 and 2.50 percent per year thereafter to 1.00 percent per year through 2035 and 2.50 percent per year thereafter.(2)2016 Changes –The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2035 and 2.50 percent per year thereafter to 1.00 percent per year for all future years.The assumed investment return was changed from 7.90 percent to 7.50 percent.The single discount rate was changed from 7.90 percent to 7.50 percent.Other assumptions were changed pursuant to the experience study dated June 30,2015.The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. The City implemented GASB Statement No.68 in fiscal 2015 (using a June 30,2015 measurement date).This information is not available for previous fiscal years. CITY OF APPLE VALLEY Schedule of City’s and Non-Employer Proportionate Share of Net Pension Liability PERA – General Employees Retirement Fund Year Ended December 31, 2016 Schedule of City Contributions PERA – General Employees Retirement Fund City Fiscal Year-End Year Ended December 31, 2016 City Fiscal Year-End 12/31/2015 12/31/2016 -75- City’s Proportionate Plan Fiduciary Share of the Net Position City’s City’s Net Pension as a PERA Fiscal Proportion Proportionate Liability as a Percentage Year-End Date of the Net Share of the City’s Percentage of of the Total (Measurement Pension Net Pension Covered Covered Pension Date)Liability Liability Payroll Payroll Liability 06/30/2015 0.5150% 5,851,604$ 4,711,902$ 124.19% 86.60% 06/30/2016 0.5190% 20,828,373$ 4,976,069$ 418.57% 63.90% Contributions Contributions PERA Fiscal in Relation to as a Year-End Date Statutorily the Statutorily Contribution Percentage (Measurement Required Required Deficiency Covered of Covered Date)Contributions Contributions (Excess)Payroll Payroll 06/30/2015 818,071$ 818,071$ –$ 5,049,825$ 16.20% 06/30/2016 808,641$ 808,641$ –$ 4,991,606$ 16.20% Note 1: Note 2: Note 3: CITY OF APPLE VALLEY Schedule of City’s Proportionate Share of Net Pension Liability PERA – Public Employees Police and Fire Fund Year Ended December 31, 2016 PERA – Public Employees Police and Fire Fund Schedule of City Contributions 12/31/2015 City Fiscal Year-End Date 12/31/2016 Changes in Actuarial Assumptions. (1)2015 Changes –The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2030 and 2.50 percent per year thereafter to 1.00 percent per year through 2037 and 2.50 percent per year thereafter. (2)2016 Changes –The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2037 and 2.50 percent thereafter to 1.00 percent per year for all future years. The assumed investment return was changed from 7.90 percent to 7.50 percent. The single discount rate was changed from 7.90 percent to 5.60 percent. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. The City implemented GASB Statement No.68 in fiscal 2015 (using a June 30, 2015 measurement date). This information is not available for previous fiscal years. Changes in Plan Provisions. The post-retirement benefit increase to be paid after attainment of the 90.0 percent funding threshold was changed, from inflation up to 2.5 percent, to a fixed rate of 2.5 percent. 12/31/2016 Year Ended December 31, 2016 Year-End City Fiscal Date 12/31/2015 -76- City fiscal year-end date December 31, 2016 December 31, 2015 Apple Valley Firefighters’ Relief Association year-end date (measurement date)December 31, 2015 December 31, 2014 Total pension liability Service cost 181,221$ 168,532$ Interest 398,162 369,565 Differences between expected and actual experience 12,130 – Changes of assumptions (209,787) – Change in benefit terms – 265,088 Benefit payments (600,659) (269,330) Net change in total pension liability (218,933) 533,855 Total pension liability – beginning of year 6,489,705 5,955,850 Total pension liability – end of year 6,270,772$ 6,489,705$ Plan fiduciary net position Contributions (state and local)477,537$ 526,217$ Net investment income (219,523) 239,737 Benefit payments (600,659) (269,330) Administrative costs (35,434) (22,641) Net change in plan fiduciary net position (378,079) 473,983 Plan fiduciary net position – beginning of year 6,427,084 5,953,101 Plan fiduciary net position – end of year 6,049,005$ 6,427,084$ Net pension liability – ending 221,767$ 62,621$ Plan fiduciary net position as a percentage of the total pension liability 96.46%99.04% Note: Schedule of Changes in the Relief Association’s Net Pension Liability and Related Ratios Apple Valley Firefighters’ Relief Association The City implemented GASB Statement No.68 in fiscal 2015 (using a December 31,2014 measurement date).This information is not available for previous fiscal years. CITY OF APPLE VALLEY -77- Contributions in Relation to the Statutorily Statutorily Contribution Determined Determined Deficiency Contribution Contributions (Excess) 404,811$ 476,537$ (71,726)$ 442,233$ 541,408$ (99,175)$ Note: 12/31/2015 The City implemented GASB Statement No.68 in fiscal 2015 (using a June 30,2014 measurement date).This information is not available for previous fiscal years. 12/31/2016 CITY OF APPLE VALLEY Schedule of City Contributions Apple Valley Firefighters’ Relief Association City Fiscal Year-End Date -78- Unfunded Unfunded Actuarial Actuarial Liability as a Actuarial Accrued Actuarial Value Accrued Covered Percentage of Valuation Date Liability of Plan Assets Liability Payroll Payroll January 1, 2016 1,966,565$ –$ 1,966,565$ – %13,401,000$ 14.7% January 1, 2014 2,145,589$ –$ 2,145,589$ – %12,506,433$ 17.2% January 1, 2012 2,131,117$ –$ 2,131,117$ – %11,616,482$ 18.3% CITY OF APPLE VALLEY Other Post-Employment Benefits Plan Schedule of Funding Progress December 31, 2016 Ratio Funded -79- SUPPLEMENTARY INFORMATION THIS PAGE INTENTIONALLY LEFT BLANK COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Special Debt Capital Revenue Service Projects Total Assets Cash and investments 523,643$ 7,488,830$ 13,583,800$ 21,596,273$ Restricted cash with fiscal agent – 12,100,456 – 12,100,456 Receivables Accounts 22,468 4,118 129,846 156,432 Special assessments Current – 283,524 27,127 310,651 Delinquent – 3,307 – 3,307 Deferred – 1,261,970 271,269 1,533,239 Interest – 16,647 – 16,647 Due from other governmental units 10,072 – – 10,072 Prepaids 600 – – 600 Advances to other funds – – 16,016 16,016 Total assets 556,783$ 21,158,852$ 14,028,058$ 35,743,693$ Liabilities Accrued salaries payable 3,696$ –$ 64$ 3,760$ Accounts payable 19,501 369,879 1,116,258 1,505,638 Contracts payable – – 232,117 232,117 Due to other governmental units – – 148 148 Due to other funds – 216,794 1,307 218,101 Advances from other funds – – 576,000 576,000 Total liabilities 23,197 586,673 1,925,894 2,535,764 Deferred inflows of resources Unavailable revenue – special assessments – 1,548,803 298,396 1,847,199 Fund balances (deficit) Nonspendable 600 – – 600 Restricted 532,986 17,649,041 8,897,120 27,079,147 Committed – – 140,000 140,000 Assigned – 1,601,312 3,333,610 4,934,922 Unassigned – (226,977) (566,962) (793,939) Total fund balances 533,586 19,023,376 11,803,768 31,360,730 Total liabilities, deferred inflows of resources, and fund balances 556,783$ 21,158,852$ 14,028,058$ 35,743,693$ CITY OF APPLE VALLEY Nonmajor Governmental Funds Combining Balance Sheet as of December 31, 2016 -80- Special Debt Capital Revenue Service Projects Total Revenues Taxes –$ 1,369,245$ 199,214$ 1,568,459$ Other taxes 90,592 – – 90,592 Franchise taxes 60,954 – 758,803 819,757 Special assessments – 449,609 1,491,329 1,940,938 Intergovernmental – 607,700 600,500 1,208,200 Investment earnings 17,815 250,861 124,289 392,965 Other 250,161 – 2,190,145 2,440,306 Total revenue 419,522 2,677,415 5,364,280 8,461,217 Expenditures Current General government 921,008 192,539 301,350 1,414,897 Public safety 153,778 – 143,018 296,796 Public works 11,846 – 203,697 215,543 Parks and recreation 224,237 – 154,745 378,982 Capital outlay 352,415 – 3,107,905 3,460,320 Debt service Principal – 2,650,000 – 2,650,000 Interest and fiscal charges – 956,722 – 956,722 Total expenditures 1,663,284 3,799,261 3,910,715 9,373,260 Excess (deficiency) of revenues over expenditures (1,243,762) (1,121,846) 1,453,565 (912,043) Other financing sources (uses) Sale of capital assets 42,279 – 71,370 113,649 Transfers in 84,072 1,052,324 950,678 2,087,074 Transfers (out)– (545,018) (95,058) (640,076) Total other financing sources (uses)126,351 507,306 926,990 1,560,647 Net change in fund balances (1,117,411) (614,540) 2,380,555 648,604 Fund balances Beginning of year 1,650,997 19,637,916 9,423,213 30,712,126 End of year 533,586$ 19,023,376$ 11,803,768$ 31,360,730$ CITY OF APPLE VALLEY Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended December 31, 2016 -81- THIS PAGE INTENTIONALLY LEFT BLANK -82- NONMAJOR SPECIAL REVENUE FUNDS Nonmajor special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. Nonmajor special revenue funds presently established are as follows: Cable TV Fund – Accounts for the operating costs of the cable TV functions funded by cable franchise fees. Solid Waste Grant Fund – Accounts for the expenses related to recycling activities and the semiannual cleanup day funded by grants from Dakota County. Police Forfeiture Fund – Administers the resources received through court-ordered forfeitures. EDA Operations Fund – Accounts for the operating activities of the Apple Valley Economic Development Authority. Lodging Tax Fund – Administers the resources received from the lodging tax process. Solid Waste Police Cable TV Grant Forfeiture (2010)(2040)(2060) Assets Cash and investments 187,632$ 52,066$ 13,078$ Receivables Accounts 15,443 – – Due from other governmental units 10,072 – – Prepaids 600 – – Total assets 213,747$ 52,066$ 13,078$ Liabilities Accrued salaries payable 3,696$ –$ –$ Accounts payable 339 – 30 Total liabilities 4,035 – 30 Fund balances Nonspendable 600 – – Restricted 209,112 52,066 13,048 Total fund balances 209,712 52,066 13,048 Total liabilities and fund balances 213,747$ 52,066$ 13,078$ CITY OF APPLE VALLEY Nonmajor Special Revenue Funds Combining Balance Sheet as of December 31, 2016 -83- EDA Lodging Operations Tax (3210)(7000)Totals 149,143$ 121,724$ 523,643$ – 7,025 22,468 – – 10,072 – – 600 149,143$ 128,749$ 556,783$ –$ –$ 3,696$ 7,048 12,084 19,501 7,048 12,084 23,197 – – 600 142,095 116,665 532,986 142,095 116,665 533,586 149,143$ 128,749$ 556,783$ -84- Solid Waste Police Cable TV Grant Forfeiture (2010)(2040)(2060) Revenues Other taxes –$ –$ –$ Franchise taxes 60,954 – – Investment earnings 1,360 614 1,352 Other revenue Miscellaneous 160,100 6,315 350 Total revenue 222,414 6,929 1,702 Expenditures Current General government – – – Public safety – – 153,778 Public works – 11,846 – Parks and recreation 224,237 – – Capital outlay – – – Total expenditures 224,237 11,846 153,778 Excess (deficiency) of revenue over expenditures (1,823) (4,917) (152,076) Other financing sources Sale of capital assets 226 – 42,053 Transfers in 84,072 – – Total other financing sources 84,298 – 42,053 Net change in fund balances 82,475 (4,917) (110,023) Fund balances Beginning of year 127,237 56,983 123,071 End of year 209,712$ 52,066$ 13,048$ CITY OF APPLE VALLEY Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended December 31, 2016 -85- EDA Lodging Operations Tax (3210)(7000)Totals –$ 90,592$ 90,592$ – – 60,954 13,292 1,197 17,815 83,396 – 250,161 96,688 91,789 419,522 835,305 85,703 921,008 – – 153,778 – – 11,846 – – 224,237 352,415 – 352,415 1,187,720 85,703 1,663,284 (1,091,032) 6,086 (1,243,762) – – 42,279 – – 84,072 – – 126,351 (1,091,032) 6,086 (1,117,411) 1,233,127 110,579 1,650,997 142,095$ 116,665$ 533,586$ -86- THIS PAGE INTENTIONALLY LEFT BLANK -87- NONMAJOR DEBT SERVICE FUNDS Nonmajor debt service funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal, interest, and related costs on long-term debt of governmental funds. The individual nonmajor debt service funds presented are to distinguish between the various bond issues. 2003/2009A Improvement Improvement 1998/2008 Refunding G.O. Closed Bonds Bonds Improvement Improvement Bond Issues of 2006 of 2007 Bonds Bonds (3075)(3330)(3340)(3195)(3305) Assets Cash and investments 1,601,194$ 787,255$ 2,329,222$ –$ 728,064$ Restricted cash with fiscal agent – – – – – Receivables Special assessments Current – 115,652 13,635 – – Delinquent – 3,237 70 – – Deferred – 498,955 54,541 – – Accounts 118 – – – – Interest – – – – – Total assets 1,601,312$ 1,405,099$ 2,397,468$ –$ 728,064$ Liabilities Accounts payable –$ 358,855$ –$ –$ –$ Due to other funds – – – – – Total liabilities – 358,855 – – – Deferred inflows of resources Unavailable revenue – special assessments – 617,845 68,247 – – Fund balances (deficit) Restricted – 428,399 2,329,221 – 728,064 Assigned 1,601,312 – – – – Unassigned – – – – – Total fund balances (deficit)1,601,312 428,399 2,329,221 – 728,064 Total liabilities, deferred inflows of resources, and fund balances 1,601,312$ 1,405,099$ 2,397,468$ –$ 728,064$ CITY OF APPLE VALLEY Nonmajor Debt Service Funds Combining Balance Sheet as of December 31, 2016 -88- Taxable Tax G.O.Tax Taxable Increment Tax Improvement Equipment Increment Tax Refunding Increment Bonds Certificates Economic Downtown Increment Bonds of Fischer of 2010 of 2006 Development Redevelopment Bonds of 2003 1985–1992A Marketplace (3320)(3335)(3215)(3260)(3270)(3220)(3275) –$ –$ 25,845$ 182,164$ 1,099,195$ 4,689$ 841$ – – – – – – – 24,237 – – – – – – – – – – – – – 48,474 – – – – – – – – – – – – – – – – – – – – 72,711$ –$ 25,845$ 182,164$ 1,099,195$ 4,689$ 841$ 10,183$ –$ –$ –$ –$ –$ 841$ 216,794 – – – – – – 226,977 – – – – – 841 72,711 – – – – – – – – 25,845 182,164 1,099,195 4,689 – – – – – – – – (226,977) – – – – – – (226,977) – 25,845 182,164 1,099,195 4,689 – 72,711$ –$ 25,845$ 182,164$ 1,099,195$ 4,689$ 841$ (continued) -89- G.O.G.O. G.O.G.O. Park G.O. Park Equipment Refunding Park Bonds Bonds Bonds Certificates Bonds of 2007 of 2008 of 2011 of 2012 of 2012 (3345)(3355)(3360)(3370)(3375) Assets Cash and investments 186,301$ 187,289$ 43,933$ 43,367$ 176,230$ Restricted cash with fiscal agent – – – – – Receivables Special assessments Current – – – – – Delinquent – – – – – Deferred – – – – – Accounts – 4,000 – – – Interest – – – – – Total assets 186,301$ 191,289$ 43,933$ 43,367$ 176,230$ Liabilities Accounts payable –$ –$ –$ –$ –$ Due to other funds – – – – – Total liabilities – – – – – Deferred inflows of resources Unavailable revenue – special assessments – – – – – Fund balances (deficit) Restricted 186,301 191,289 43,933 43,367 176,230 Assigned – – – – – Unassigned – – – – – Total fund balances (deficit)186,301 191,289 43,933 43,367 176,230 Total liabilities, deferred inflows of resources, and fund balances 186,301$ 191,289$ 43,933$ 43,367$ 176,230$ Nonmajor Debt Service Funds Combining Balance Sheet (continued) as of December 31, 2016 CITY OF APPLE VALLEY -90- G.O.G.O.G.O. Improvement Refunding Equipment G.O.Equipment Bonds Bonds Certificates Park Bonds Certificates of 2012 of 2013 of 2014 of 2015 of 2015 (3380)(3385)(3390)(3395)(3400)Total 39,691$ 17,415$ 19,564$ 10,226$ 6,345$ 7,488,830$ – 8,486,722 – 3,613,734 – 12,100,456 130,000 – – – – 283,524 – – – – – 3,307 660,000 – – – – 1,261,970 – – – – – 4,118 – 11,840 – 4,807 – 16,647 829,691$ 8,515,977$ 19,564$ 3,628,767$ 6,345$ 21,158,852$ –$ –$ –$ –$ –$ 369,879$ – – – – – 216,794 – – – – – 586,673 790,000 – – – – 1,548,803 39,691 8,515,977 19,564 3,628,767 6,345 17,649,041 – – – – – 1,601,312 – – – – – (226,977) 39,691 8,515,977 19,564 3,628,767 6,345 19,023,376 829,691$ 8,515,977$ 19,564$ 3,628,767$ 6,345$ 21,158,852$ -91- 2003/2009A Improvement Improvement 1998/2008 Refunding G.O. Closed Bonds Bonds Improvement Improvement Bond Issues of 2006 of 2007 Bonds Bonds (3075)(3330)(3340)(3195)(3305) Revenues Taxes –$ –$ –$ –$ –$ Special assessments – 31,838 257,565 – – Intergovernmental – – – – 607,700 Investment earnings 19,802 5,585 25,306 – 7,780 Total revenue 19,802 37,423 282,871 – 615,480 Expenditures Current General government 112,944 – – – – Debt service Principal – – 225,000 – 590,000 Interest and fiscal charges – 1,000 71,325 – 17,700 Total expenditures 112,944 1,000 296,325 – 607,700 Excess (deficiency) of revenue over expenditures (93,142) 36,423 (13,454) – 7,780 Other financing sources (uses) Transfers in – – – 92,324 – Transfers (out)(484,408) – – – – Total other financing sources (uses)(484,408) – – 92,324 – Net change in fund balances (577,550) 36,423 (13,454) 92,324 7,780 Fund balances (deficit) Beginning of year 2,178,862 391,976 2,342,675 (92,324)720,284 End of year 1,601,312$ 428,399$ 2,329,221$ –$ 728,064$ CITY OF APPLE VALLEY Nonmajor Debt Service Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended December 31, 2016 -92- Taxable Tax G.O.Tax Taxable Increment Tax Improvement Equipment Increment Tax Refunding Increment Bonds Certificates Economic Downtown Increment Bonds of Fischer of 2010 of 2006 Development Redevelopment Bonds of 2003 1985–1992A Marketplace (3320)(3335)(3215)(3260)(3270)(3220)(3275) –$ –$ –$ –$ –$ –$ –$ 30,206 – – – – – – – – – – – – – – 659 1,069 1,975 11,748 49 – 30,206 659 1,069 1,975 11,748 49 – 1,499 – 74,190 2,916 – – – – – – – – – – – 1,000 – – – – – 1,499 1,000 74,190 2,916 – – – 28,707 (341) (73,121) (941) 11,748 49 – – – – – – – – – (60,610) – – – – – – (60,610) – – – – – 28,707 (60,951) (73,121) (941) 11,748 49 – (255,684)60,951 98,966 183,105 1,087,447 4,640 – (226,977)$ –$ 25,845$ 182,164$ 1,099,195$ 4,689$ –$ (continued) -93- G.O.G.O. G.O.G.O. Park G.O. Park Equipment Refunding Park Bonds Bonds Bonds Certificates Bonds of 2007 of 2008 of 2011 of 2012 of 2012 (3345)(3355)(3360)(3370)(3375) Revenues Taxes 425,000$ 420,000$ 91,000$ 180,000$ –$ Special assessments – – – – – Intergovernmental – – – – – Investment earnings 1,700 1,792 452 482 2,397 Total revenue 426,700 421,792 91,452 180,482 2,397 Expenditures Current General government – – – 570 – Debt service Principal 160,000 165,000 50,000 165,000 970,000 Interest and fiscal charges 237,705 235,427 39,362 16,200 38,100 Total expenditures 397,705 400,427 89,362 181,770 1,008,100 Excess (deficiency) of revenue over expenditures 28,995 21,365 2,090 (1,288) (1,005,703) Other financing sources (uses) Transfers in – – – – 960,000 Transfers (out)– – – – – Total other financing sources (uses)– – – – 960,000 Net change in fund balances 28,995 21,365 2,090 (1,288) (45,703) Fund balances (deficit) Beginning of year 157,306 169,924 41,843 44,655 221,933 End of year 186,301$ 191,289$ 43,933$ 43,367$ 176,230$ Nonmajor Debt Service Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (continued) Year Ended December 31, 2016 CITY OF APPLE VALLEY -94- G.O.G.O.G.O. Improvement Refunding Equipment G.O.Equipment Bonds Bonds Certificates Park Bonds Certificates of 2012 of 2013 of 2014 of 2015 of 2015 (3380)(3385)(3390)(3395)(3400)Total –$ –$ 120,000$ –$ 133,245$ 1,369,245$ 130,000 – – – – 449,609 – – – – – 607,700 386 114,169 122 55,388 – 250,861 130,386 114,169 120,122 55,388 133,245 2,677,415 420 – – – – 192,539 110,000 – 100,000 – 115,000 2,650,000 16,100 183,412 11,900 75,591 11,900 956,722 126,520 183,412 111,900 75,591 126,900 3,799,261 3,866 (69,243) 8,222 (20,203) 6,345 (1,121,846) – – – – – 1,052,324 – – – – – (545,018) – – – – – 507,306 3,866 (69,243) 8,222 (20,203) 6,345 (614,540) 35,825 8,585,220 11,342 3,648,970 – 19,637,916 39,691$ 8,515,977$ 19,564$ 3,628,767$ 6,345$ 19,023,376$ -95- -96- NONMAJOR CAPITAL PROJECTS FUNDS Nonmajor capital projects funds used are to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition and construction of capital facilities and other capital assets. Capital projects funds exclude those types of capital-related outflows financed by proprietary funds. Nonmajor capital projects funds presently established are as follows: Equipment Certificates Fund – Accounts for purchases of equipment financed with the issuance of equipment certificates. Park Dedication Fund – Accounts for expenditures for the expansion of the City’s park facilities funded by the collection of park dedication fees charged to developing property. Energy Grant Fund – Accounts for the expenditures for energy improvement projects funded by a federal grant. Police Special Projects Fund – Accounts for police department projects funded with specific funding sources. Police 911 Fund – Accounts for costs funded by the fees received from the 911 system. Tree Preservation Fund – Accounts for the amounts received in the development process related to tree preservation efforts. Pond Fund – Accounts for the amounts received in the development process related to ponding efforts on privately-developed projects. Pathways and Sidewalks Fund – Accounts for the amounts received in the development process related to pathways and sidewalk development efforts. Dodd Road Fund – Accounts for the amounts received from the development process on Dodd Road. Former City Hall Building Fund – Accounts for the costs and revenues associated with the use of the former City Hall building. Capital Building Fund – Accounts for the cost of the construction of the municipal center and other city facilities. Park Improvement Development Fund – Accounted for park improvement costs in the development process. Dakota County Construction Projects Fund – Accounts for county construction projects that the City shares in the costs. C.I.P. Development Fund – Accounts for the proceeds from and expenses related to the Fraser land sale. 1999 Improvement Construction Fund – Accounts for the improvements funded with the 1999 General Obligation Bonds. 2000 Improvement Construction Fund – Accounts for the improvements funded with the 2000 General Obligation Bonds. 2008 Construction Projects Fund – Accounted for the improvements funded with the 2008 General Obligation Bonds. Engineer Developer Review Nonreimbursable Fund – Accounts for engineer review costs that will not be reimbursed through the development process. 2012 Improvement Construction Fund – Accounted for the improvements initiated in 2012 to be funded with development charges or developer reimbursements. Cable Capital Equipment Fund – Accounts for capital equipment needs of the cable TV function funded with portions of the cable franchise fees. Physical Improvement Fund – Accounts for developer projects funded by developers. -97- NONMAJOR CAPITAL PROJECTS FUNDS (CONTINUED) Private Development Fund – Accounts for developer projects funded by developers. 2003 Improvement Construction Fund – Accounts for the improvements funded with the 2003 General Obligation Bonds. TIF District No. 7 Fund – Accounts for project costs included in within TIF District 7. Electric Franchise Fee Fund – Accounts for project costs and revenues associated with the electric franchise fee. 2007 Park Bond Fund – Accounts for the improvements funded with the Park Bonds of 2007 and 2008. Fire Grants Project Fund –Accounts for Fire Department projects funded with specific funding sources. TIF District No. 1 Fund – Accounts for project costs included within TIF District No. 1. TIF District Parkside Village Fund – Accounts for project costs included within TIF District 15-Parkside Village. TIF District No. 14 Business Campus Fund – Accounts for project costs included within TIF District 14 – Apple Valley Business Campus. Construction Projects Capital Projects Fund – This fund accounts for development projects, the costs of which will be recovered through the development process, including specially assessing the benefiting properties. Equipment Park Energy Police Special Certificates Dedication Grant Projects Police 911 (2005)(2015)(2050)(2055)(2065) Assets Cash and investments –$ 1,836,939$ –$ 174,802$ 4,912$ Receivables Accounts – – – – – Special assessments Current – – – – – Deferred – – – – – Advances to other funds 16,016 – – – – Total assets 16,016$ 1,836,939$ –$ 174,802$ 4,912$ Liabilities Accounts payable –$ –$ –$ –$ –$ Accrued salaries payable – – – – – Contracts payable – – – – – Due to other governmental units – – – – – Due to other funds – – – – – Advances from other funds – – – – – Total liabilities – – – – – Deferred inflows of resources Unavailable revenue – special assessments – – – – – Fund balances (deficit) Restricted – 1,836,939 – – 4,912 Committed – – – – – Assigned 16,016 – – 174,802 – Unassigned – – – – – Total fund balances (deficit)16,016 1,836,939 – 174,802 4,912 Total liabilities, deferred inflows of resources, and fund balances 16,016$ 1,836,939$ –$ 174,802$ 4,912$ as of December 31, 2016 CITY OF APPLE VALLEY Nonmajor Capital Projects Funds Combining Balance Sheet -98- Former Park Tree Pathways and City Hall Capital Improvement Preservation Pond Sidewalks Dodd Road Building Building Development (2070)(2075)(2080)(2085)(2090)(4000)(4010) 363,562$ 244,464$ 251,203$ 237,603$ 793,270$ 590,308$ 2,925$ – – – – – – – – – – – – – – – – – – – – – – – – – – – – 363,562$ 244,464$ 251,203$ 237,603$ 793,270$ 590,308$ 2,925$ –$ –$ –$ –$ 9,992$ 71,901$ –$ – – – – – – – – – – – – 2,398 – – – – – – – – – – – – 1,307 – – – – – – – – – – – – – 11,299 74,299 – – – – – – – – – – – – – – – – – – – – 140,000 – 363,562 244,464 251,203 237,603 781,971 376,009 2,925 – – – – – – – 363,562 244,464 251,203 237,603 781,971 516,009 2,925 363,562$ 244,464$ 251,203$ 237,603$ 793,270$ 590,308$ 2,925$ (continued) -99- Dakota County 1999 2000 2008 Construction C.I.P.Improvement Improvement Construction Projects Development Construction Construction Projects (4030)(4045)(4225)(4245)(4400) Assets Cash and investments –$ 263,193$ –$ –$ –$ Receivables Accounts – – – – – Special assessments Current – – – – – Deferred – – – – – Advances to other funds – – – – – Total assets –$ 263,193$ –$ –$ –$ Liabilities Accounts payable –$ –$ –$ –$ –$ Accrued salaries payable – – – – – Contracts payable – – – – – Due to other governmental units – – – – – Due to other funds – – – – – Advances from other funds – – – – – Total liabilities – – – – – Deferred inflows of resources Unavailable revenue – special assessments – – – – – Fund balances (deficit) Restricted – – – – – Committed – – – – – Assigned – 263,193 – – – Unassigned – – – – – Total fund balances (deficit)– 263,193 – – – Total liabilities, deferred inflows of resources, and fund balances –$ 263,193$ –$ –$ –$ CITY OF APPLE VALLEY Nonmajor Capital Projects Funds Combining Balance Sheet (continued) as of December 31, 2016 -100- Engineer Developer 2012 2003 Review Improvement Cable Capital Physical Private Improvement TIF District Nonreimbursable Construction Equipment Improvement Development Construction No. 7 (4600)(4715)(4800)(4900)(4920)(4300)(4710) –$ 26,175$ 538,886$ 299,150$ 128,866$ 121,053$ 1,810,778$ – – – – – 2,057 – – – – – – – – – – – – – – – – – – – – – – –$ 26,175$ 538,886$ 299,150$ 128,866$ 123,110$ 1,810,778$ –$ 988$ 695$ 146,902$ –$ 24,943$ –$ – – 64 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 988 759 146,902 – 24,943 – – – – – – – – – – 538,127 – – – 1,810,778 – – – – – – – – 25,187 – 152,248 128,866 98,167 – – – – – – – – – 25,187 538,127 152,248 128,866 98,167 1,810,778 –$ 26,175$ 538,886$ 299,150$ 128,866$ 123,110$ 1,810,778$ (continued) -101- Electric 2007 Fire Grants TIF District TIF District Franchise Fee Park Bond Project No. 1 Parkside Village (4750)(4935)(7600)(4730)(4740) Assets Cash and investments 3,175,206$ 258,623$ 30,231$ 1,107,710$ 9,038$ Receivables Accounts 127,592 – 197 – – Special assessments Current – – – – – Deferred – – – – – Advances to other funds – – – – – Total assets 3,302,798$ 258,623$ 30,428$ 1,107,710$ 9,038$ Liabilities Accounts payable 11,857$ 31,863$ 2,962$ –$ –$ Accrued salaries payable – – – – – Contracts payable – – – 30,000 – Due to other governmental units – – – – – Due to other funds – – – – – Advances from other funds – – – – 576,000 Total liabilities 11,857 31,863 2,962 30,000 576,000 Deferred inflows of resources Unavailable revenue – special assessments – – – – – Fund balances (deficit) Restricted 3,290,941 226,760 – 1,077,710 – Committed – – – – – Assigned – – 27,466 – – Unassigned – – – – (566,962) Total fund balances (deficit)3,290,941 226,760 27,466 1,077,710 (566,962) Total liabilities, deferred inflows of resources, and fund balances 3,302,798$ 258,623$ 30,428$ 1,107,710$ 9,038$ as of December 31, 2016 CITY OF APPLE VALLEY Nonmajor Capital Projects Funds Combining Balance Sheet (continued) -102- TIF District No. 14 Construction Business Campus Projects (4735)(4500)Total 110,953$ 1,203,950$ 13,583,800$ – – 129,846 – 27,127 27,127 – 271,269 271,269 – – 16,016 110,953$ 1,502,346$ 14,028,058$ –$ 814,155$ 1,116,258$ – – 64 – 199,719 232,117 – 148 148 – – 1,307 – – 576,000 – 1,014,022 1,925,894 – 298,396 298,396 110,953 – 8,897,120 – – 140,000 – 189,928 3,333,610 – – (566,962) 110,953 189,928 11,803,768 110,953$ 1,502,346$ 14,028,058$ -103- Equipment Park Energy Police Special Certificates Dedication Grant Projects Police 911 (2005)(2015)(2050)(2055)(2065) Revenues Taxes –$ –$ –$ –$ –$ Franchise taxes – – – – – Investment earnings 3,608 10,008 117 2,525 890 Special assessments – – – – – Other revenue Contributions – – – 3,100 – Rentals – – – – – Miscellaneous – 1,287,997 – 104 – Total revenue 3,608 1,298,005 117 5,729 890 Expenditures Current General government – – – – – Public safety – – – 64,713 78,305 Public works – – – – – Parks and recreation – 154,745 – – – Capital outlay 515,550 238,000 – – – Total expenditures 515,550 392,745 – 64,713 78,305 Excess (deficiency) of revenue over expenditures (511,942) 905,260 117 (58,984) (77,415) Other financing sources (uses) Sale of capital assets 71,370 – – – – Transfers in 84,019 – – – – Transfers (out)– – (10,986)– – Total other financing sources (uses)155,389 – (10,986) – – Net change in fund balances (356,553) 905,260 (10,869) (58,984) (77,415) Fund balances (deficit) Beginning of year 372,569 931,679 10,869 233,786 82,327 End of year 16,016$ 1,836,939$ –$ 174,802$ 4,912$ CITY OF APPLE VALLEY Nonmajor Capital Projects Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended December 31, 2016 -104- Former Park Tree Pathways and City Hall Capital Improvement Preservation Pond Sidewalks Dodd Road Building Building Development (2070)(2075)(2080)(2085)(2090)(4000)(4010) –$ –$ –$ –$ –$ –$ –$ – – – – – – – 3,885 2,612 2,685 2,539 7,956 1,794 33 – – – – – – – – – – – – – – – – – – 133,300 – – – – – – – – – 3,885 2,612 2,685 2,539 141,256 1,794 33 – – – – 85,800 – – – – – – – – – – – – – – – – – – – – – – – – – – – – 149,755 – – – – – 85,800 149,755 – 3,885 2,612 2,685 2,539 55,456 (147,961) 33 – – – – – – – – – – – – 552,486 – – – – – – – – – – – – – 552,486 – 3,885 2,612 2,685 2,539 55,456 404,525 33 359,677 241,852 248,518 235,064 726,515 111,484 2,892 363,562$ 244,464$ 251,203$ 237,603$ 781,971$ 516,009$ 2,925$ (continued) -105- Dakota County 1999 2000 2008 Construction C.I.P.Improvement Improvement Construction Projects Development Construction Construction Projects (4030)(4045)(4225)(4245)(4400) Revenues Taxes –$ –$ –$ –$ –$ Franchise taxes – – – – – Investment earnings – 2,813 – – – Special assessments – – – – – Other revenue Contributions – – – – – Rentals – – – – – Miscellaneous – – – – – Total revenue – 2,813 – – – Expenditures Current General government – – – – – Public safety – – – – – Public works – – – – – Parks and recreation – – – – – Capital outlay – – – – – Total expenditures – – – – – Excess (deficiency) of revenue over expenditures – 2,813 – – – Other financing sources (uses) Sale of capital assets – – – – – Transfers in 130,330 – 48,807 18,621 78,282 Transfers (out)– – – – – Total other financing sources (uses)130,330 – 48,807 18,621 78,282 Net change in fund balances 130,330 2,813 48,807 18,621 78,282 Fund balances (deficit) Beginning of year (130,330) 260,380 (48,807) (18,621) (78,282) End of year –$ 263,193$ –$ –$ –$ CITY OF APPLE VALLEY Nonmajor Capital Projects Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (continued) Year Ended December 31, 2016 -106- Engineer Developer 2012 2003 Review Improvement Cable Capital Physical Private Improvement TIF District Nonreimbursable Construction Equipment Improvement Development Construction No. 7 (4600)(4715)(4800)(4900)(4920)(4300)(4710) –$ –$ –$ –$ –$ –$ –$ – – 182,347 – – – – – 1,596 4,788 3,756 1,376 1,294 19,352 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 1,596 187,135 3,756 1,376 1,294 19,352 – – – – – – – – – – – – – – – 100,908 8,713 37,921 – – – – – – – – – – – – – – – – – – 100,908 8,713 37,921 – – – – (99,312) 178,422 (34,165) 1,376 1,294 19,352 – – – – – – – 38,133 – – – – – – – – (84,072) – – – – 38,133 – (84,072) – – – – 38,133 (99,312) 94,350 (34,165) 1,376 1,294 19,352 (38,133) 124,499 443,777 186,413 127,490 96,873 1,791,426 –$ 25,187$ 538,127$ 152,248$ 128,866$ 98,167$ 1,810,778$ (continued) -107- Electric 2007 Fire Grants TIF District TIF District Franchise Fee Park Bond Project No. 1 Parkside Village (4750)(4935)(7600)(4730)(4740) Revenues Taxes –$ –$ –$ –$ 10,028$ Franchise taxes 576,456 – – – – Intergovernmental – 598,000 2,500 – – Investment earnings 28,948 807 351 17,189 – Special assessments – – – – – Other revenue Contributions – – 700 – – Rentals – – – – – Miscellaneous – – – – – Total revenue 605,404 598,807 3,551 17,189 10,028 Expenditures Current General government – – – – 88,490 Public safety – – – – – Public works 56,155 – – – – Parks and recreation – – – – – Capital outlay – 698,413 8,450 530,740 – Total expenditures 56,155 698,413 8,450 530,740 88,490 Excess (deficiency) of revenue over expenditures 549,249 (99,606) (4,899) (513,551) (78,462) Other financing sources (uses) Sale of capital assets – – – – – Transfers in – – – – – Transfers (out)– – – – – Total other financing sources (uses)– – – – – Net change in fund balances 549,249 (99,606) (4,899) (513,551) (78,462) Fund balances (deficit) Beginning of year 2,741,692 326,366 32,365 1,591,261 (488,500) End of year 3,290,941$ 226,760$ 27,466$ 1,077,710$ (566,962)$ CITY OF APPLE VALLEY Nonmajor Capital Projects Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (continued) Year Ended December 31, 2016 -108- TIF District No. 14 Construction Business Campus Projects (4735)(4500)Total 189,186$ –$ 199,214$ – – 758,803 – – 600,500 308 3,059 124,289 – 1,491,329 1,491,329 – – 3,800 – – 133,300 – 764,944 2,053,045 189,494 2,259,332 5,364,280 127,060 – 301,350 – – 143,018 – – 203,697 – – 154,745 – 966,997 3,107,905 127,060 966,997 3,910,715 62,434 1,292,335 1,453,565 – – 71,370 – – 950,678 – – (95,058) – – 926,990 62,434 1,292,335 2,380,555 48,519 (1,102,407) 9,423,213 110,953$ 189,928$ 11,803,768$ -109- Over (Under) Original Final Actual Budget Revenue Taxes Current 22,431,000$ 22,431,000$ 22,497,696$ 66,696$ Delinquent 200,000 200,000 44,050 (155,950) Total taxes 22,631,000 22,631,000 22,541,746 (89,254) Other taxes 99,180 99,180 94,976 (4,204) Franchise taxes 490,000 490,000 490,000 – Special assessments 14,000 14,000 6,939 (7,061) Licenses and permits General government 156,970 156,970 184,250 27,280 Public safety 5,260 5,260 9,553 4,293 Public works 934,200 934,200 1,858,240 924,040 Total licenses and permits 1,096,430 1,096,430 2,052,043 955,613 Intergovernmental Federal grants General government 2,300 2,300 – (2,300) Public safety – – 4,360 4,360 State grants PERA aid 36,000 36,000 37,719 1,719 Fire relief aid – public safety 270,225 270,225 281,578 11,353 Police relief aid – public safety 335,000 335,000 418,953 83,953 Other – public safety 29,400 29,400 64,299 34,899 Total intergovernmental 672,925 672,925 806,909 133,984 Charges for services Administration charges – general government Construction funds 52,500 52,500 – (52,500) Enterprise funds 739,000 739,000 688,500 (50,500) Investment charges – general government 110,000 110,000 110,000 – Engineering charges – public works – construction 722,000 722,000 585,999 (136,001) General government 30,500 30,500 28,989 (1,511) Public safety 231,735 231,735 223,436 (8,299) Public works 15,500 15,500 34,658 19,158 Parks and recreation 979,550 979,550 1,067,581 88,031 Total charges for services 2,880,785 2,880,785 2,739,163 (141,622) Fines and forfeitures 274,000 274,000 273,372 (628) Investment earnings 173,000 173,000 157,028 (15,972) Other Rentals 567,700 567,700 699,554 131,854 Refunds and reimbursements 60,000 60,000 77,727 17,727 Donations – – 3,509 3,509 Miscellaneous 23,200 23,200 110,598 87,398 Total other 650,900 650,900 891,388 240,488 Total revenue 28,982,220 28,982,220 30,053,564 1,071,344 (continued) Budgeted Amounts CITY OF APPLE VALLEY General Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Year Ended December 31, 2016 Budget and Actual -110- Over (Under) Original Final Actual Budget Expenditures General government Mayor and City Council Personal services 117,805 117,805 116,657 (1,148) Supplies 655 655 599 (56) Other current expenditures 28,145 28,145 16,403 (11,742) Total Mayor and City Council 146,605 146,605 133,659 (12,946) Administration Personal services 431,365 431,365 414,024 (17,341) Supplies 265 265 87 (178) Other current expenditures 15,460 15,460 15,736 276 Total administration 447,090 447,090 429,847 (17,243) Finance and data processing Personal services 573,665 543,665 470,760 (72,905) Supplies 11,770 11,770 7,405 (4,365) Other current expenditures 306,575 319,200 310,822 (8,378) Total finance and data processing 892,010 874,635 788,987 (85,648) Information technology Personal services 417,970 417,970 400,511 (17,459) Supplies 12,800 12,800 6,570 (6,230) Other current expenditures 187,500 194,500 220,205 25,705 Capital outlay 126,900 136,900 50,245 (86,655) Total information technology 745,170 762,170 677,531 (84,639) Human resources Personal services 478,330 478,330 477,972 (358) Supplies 300 300 1,588 1,288 Other current expenditures 52,175 57,175 55,718 (1,457) Total human resources 530,805 535,805 535,278 (527) City clerk/elections Personal services 226,375 226,375 233,025 6,650 Supplies 3,200 3,200 2,102 (1,098) Other current expenditures 151,231 151,231 132,677 (18,554) Capital outlay – 11,000 5,925 (5,075) Total city clerk/elections 380,806 391,806 373,729 (18,077) Legal Other current expenditures 509,580 509,580 518,521 8,941 General government buildings Personal services 184,855 184,855 190,356 5,501 Supplies 26,650 26,650 13,350 (13,300) Other current expenditures 151,575 151,575 154,286 2,711 Capital outlay – 220,200 78,771 (141,429) Total general government buildings 363,080 583,280 436,763 (146,517) (continued) CITY OF APPLE VALLEY General Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Year Ended December 31, 2016 Budgeted Amounts Budget and Actual (continued) -111- Over (Under) Original Final Actual Budget Expenditures (continued) General government (continued) Community development Personal services 594,435 554,435 515,668 (38,767) Supplies 900 900 1,683 783 Other current expenditures 89,875 89,875 42,510 (47,365) Total community development 685,210 645,210 559,861 (85,349) Code enforcement Personal services 201,860 201,860 194,943 (6,917) Supplies 3,000 3,000 1,197 (1,803) Other current expenditures 18,700 18,700 14,054 (4,646) Total code enforcement 223,560 223,560 210,194 (13,366) Unallocated Personal services 6,200 6,200 10,571 4,371 Other current expenditures 444,560 444,560 309,471 (135,089) Total unallocated 450,760 450,760 320,042 (130,718) Total general government 5,374,676 5,570,501 4,984,412 (586,089) Public safety Police protection Personal services 7,135,605 7,054,105 7,209,486 155,381 Supplies 243,721 193,721 188,892 (4,829) Other current expenditures 1,334,088 1,343,188 1,306,637 (36,551) Capital outlay – 53,500 8,558 (44,942) Total police protection 8,713,414 8,644,514 8,713,573 69,059 Fire protection Personal services 1,148,335 1,148,335 1,010,554 (137,781) Supplies 121,017 121,017 99,650 (21,367) Other current expenditures 617,642 617,642 571,699 (45,943) Total fire protection 1,886,994 1,886,994 1,681,903 (205,091) Fire relief Other current expenditures 530,055 530,055 543,017 12,962 Civil defense Supplies 2,000 2,000 180 (1,820) Other current expenditures 20,585 20,585 16,652 (3,933) Total civil defense 22,585 22,585 16,832 (5,753) Animal control Personal services 85,920 82,120 71,030 (11,090) Supplies 6,625 6,625 4,768 (1,857) Other current expenditures 9,300 9,300 6,367 (2,933) Total animal control 101,845 98,045 82,165 (15,880) (continued) CITY OF APPLE VALLEY General Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual (continued) Year Ended December 31, 2016 Budgeted Amounts -112- Over (Under) Original Final Actual Budget Expenditures (continued) Public safety (continued) Building inspection Personal services 630,390 630,390 636,985 6,595 Supplies 30,905 30,905 17,785 (13,120) Other current expenditures 92,065 132,065 119,794 (12,271) Capital outlay – 30,000 5,296 (24,704) Total building inspection 753,360 823,360 779,860 (43,500) Total public safety 12,008,253 12,005,553 11,817,350 (188,203) Public works Public works administration Personal services 410,815 410,815 400,844 (9,971) Supplies 12,460 12,460 3,870 (8,590) Other current expenditures 69,020 69,020 54,174 (14,846) Total public works administration 492,295 492,295 458,888 (33,407) Central maintenance facility Personal services 478,855 478,855 458,600 (20,255) Supplies 31,020 31,020 25,887 (5,133) Other current expenditures 143,090 143,090 113,163 (29,927) Total central maintenance facility 652,965 652,965 597,650 (55,315) Streets Personal services 1,568,060 1,546,560 1,447,728 (98,832) Supplies 507,347 528,847 404,898 (123,949) Other current expenditures 355,210 355,210 291,501 (63,709) Capital outlay – – 16,853 16,853 Total streets 2,430,617 2,430,617 2,160,980 (269,637) Engineering Personal services 549,015 549,015 472,614 (76,401) Supplies 14,810 14,810 12,814 (1,996) Other current expenditures 84,280 84,280 22,660 (61,620) Capital outlay 500 500 – (500) Total engineering 648,605 648,605 508,088 (140,517) Total public works 4,224,482 4,224,482 3,725,606 (498,876) Parks and recreation Parks and recreation administration Personal services 761,994 761,994 710,551 (51,443) Supplies 4,750 4,750 2,267 (2,483) Other current expenditures 144,900 144,900 156,647 11,747 Total parks and recreation administration 911,644 911,644 869,465 (42,179) (continued) CITY OF APPLE VALLEY Year Ended December 31, 2016 Budgeted Amounts Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual (continued) General Fund -113- Over (Under) Original Final Actual Budget Expenditures (continued) Parks and recreation (continued) Recreation programs Personal services 215,260 215,260 214,893 (367) Supplies 45,700 45,700 47,500 1,800 Other current expenditures 120,075 120,075 120,790 715 Total recreation programs 381,035 381,035 383,183 2,148 Parks maintenance Personal services 1,668,355 1,668,355 1,674,658 6,303 Supplies 314,900 314,900 270,723 (44,177) Other current expenditures 778,295 778,295 763,245 (15,050) Capital outlay 30,500 30,500 4,367 (26,133) Total parks maintenance 2,792,050 2,792,050 2,712,993 (79,057) Redwood pool Personal services 67,215 67,215 71,636 4,421 Supplies 6,600 6,600 2,188 (4,412) Other current expenditures 38,550 38,550 30,646 (7,904) Total Redwood pool 112,365 112,365 104,470 (7,895) Aquatic swim center Personal services 326,040 326,040 326,127 87 Supplies 33,800 33,800 41,965 8,165 Other current expenditures 265,900 265,900 261,494 (4,406) Capital outlay – 13,000 – (13,000) Total aquatic swim center 625,740 638,740 629,586 (9,154) Apple Valley Community Center Personal services 194,010 194,010 193,231 (779) Supplies 18,950 18,950 20,542 1,592 Other current expenditures 92,025 92,025 71,572 (20,453) Capital outlay 3,000 153,000 102,443 (50,557) Total Apple Valley Community Center 307,985 457,985 387,788 (70,197) Apple Valley Senior Center Personal services 273,140 273,140 300,951 27,811 Supplies 14,000 14,000 12,072 (1,928) Other current expenditures 58,150 58,150 55,369 (2,781) Capital outlay – 20,000 3,113 (16,887) Total Apple Valley Senior Center 345,290 365,290 371,505 6,215 Total parks and recreation 5,476,109 5,659,109 5,458,990 (200,119) Total expenditures 27,083,520 27,459,645 25,986,358 (1,473,287) Excess of revenues over expenditures 1,898,700 1,522,575 4,067,206 2,544,631 (continued) Year Ended December 31, 2016 Budgeted Amounts Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual (continued) CITY OF APPLE VALLEY General Fund -114- Over (Under) Original Final Actual Budget Other financing sources (uses) Sale of capital assets 20,000 20,000 18,844 (1,156) Transfers in 1,281,000 1,281,000 1,281,000 – Transfers (out)(3,199,700) (3,199,700) (4,849,700) (1,650,000) Total other financing sources (uses)(1,898,700) (1,898,700) (3,549,856) (1,651,156) Net change in fund balances –$ (376,125)$ 517,350 893,475$ Fund balances Beginning of year 16,092,104 End of year 16,609,454$ General Fund Year Ended December 31, 2016 CITY OF APPLE VALLEY Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual (continued) Budgeted Amounts -115- Over (Under) Budget Actual Budget Revenue Special assessments 792,580$ 144,144$ (648,436)$ Intergovernmental 1,869,350 590,660 (1,278,690) Other – 1,900 1,900 Total revenue 2,661,930 736,704 (1,925,226) Expenditures Capital outlay Public works 8,491,130 4,694,712 (3,796,418) Excess (deficiency) of revenue over expenditures (5,829,200) (3,958,008) 1,871,192 Other financing sources Transfers in 5,829,200 3,028,200 (2,801,000) Net change in fund balances –$ (929,808) (929,808)$ Fund balances (deficit) Beginning of year (4,269,054) End of year (5,198,862)$ CITY OF APPLE VALLEY Road Improvements Capital Projects Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Year Ended December 31, 2016 Budget and Actual -116- Over (Under) Budget Actual Budget Revenue Investment earnings 187,491$ 160,797$ (26,694)$ Expenditures Current Public works – 31,753 31,753 Excess of revenue over expenditures 187,491 129,044 (58,447) Other financing sources (uses) Transfers in – 1,650,000 1,650,000 Transfers (out)(1,330,000) (1,330,000) – Total other financing sources (uses)(1,330,000) 320,000 1,650,000 Net change in fund balances (1,142,509)$ 449,044 1,591,553$ Fund balances Beginning of year 14,226,724 End of year 14,675,768$ CITY OF APPLE VALLEY Future Capital Projects Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Year Ended December 31, 2016 Budget and Actual -117- Over (Under) Budget Actual Budget Revenue Franchise taxes 71,000$ 60,954$ (10,046)$ Intergovernmental 145,026 – (145,026) Investment earnings 2,000 1,360 (640) Other Miscellaneous 52,026 160,100 108,074 Total revenue 270,052 222,414 (47,638) Expenditures Current Parks and recreation 229,852 224,237 (5,615) Capital outlay 60,200 – (60,200) Total expenditures 290,052 224,237 (65,815) Excess (deficiency) of revenue over expenditures (20,000) (1,823) 18,177 Other financing sources Sale of capital assets – 226 226 Transfers in 20,000 84,072 64,072 Total other financing sources 20,000 84,298 64,298 Net change in fund balances –$ 82,475 82,475$ Fund balances Beginning of year 127,237 End of year 209,712$ CITY OF APPLE VALLEY Cable TV Special Revenue Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual Year Ended December 31, 2016 -118- Over (Under) Budget Actual Budget Revenue Investment earnings 2,100$ 13,292$ 11,192$ Other revenue Miscellaneous – 83,396 83,396 Total revenue 2,100 96,688 94,588 Expenditures Current General government 46,500 835,305 788,805 Capital outlay – 352,415 352,415 Total expenditures 46,500 1,187,720 1,141,220 Net change in fund balances (44,400)$ (1,091,032) (1,046,632)$ Fund balances Beginning of year 1,233,127 End of year 142,095$ CITY OF APPLE VALLEY EDA Operations Special Revenue Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual Year Ended December 31, 2016 -119- Over (Under) Budget Actual Budget Revenue Investment earnings 3,900$ 3,608$ (292)$ Expenditures Capital outlay 527,000 515,550 (11,450) Excess (deficiency) of revenue over expenditures (523,100) (511,942) 11,158 Other financing sources Bonds issued 470,000 – (470,000) Sale of capital assets 65,000 71,370 6,370 Transfers in – 84,019 84,019 Total other financing sources 535,000 155,389 (379,611) Net change in fund balances 11,900$ (356,553) (368,453)$ Fund balances Beginning of year 372,569 End of year 16,016$ CITY OF APPLE VALLEY Equipment Certificate Capital Projects Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual Year Ended December 31, 2016 -120- Over (Under) Budget Actual Budget Revenue Franchise fees 100,000$ 182,347$ 82,347$ Investment earnings 1,910 4,788 2,878 Total revenue 101,910 187,135 85,225 Expenditures Current Public works 38,135 8,713 (29,422) Excess of revenue over expenditures 63,775 178,422 114,647 Other financing sources (uses) Transfers (out)(20,000) (84,072) (64,072) Net change in fund balances 43,775$ 94,350 50,575$ Fund balances Beginning of year 443,777 End of year 538,127$ CITY OF APPLE VALLEY Cable Capital Equipment Capital Projects Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual Year Ended December 31, 2016 -121- THIS PAGE INTENTIONALLY LEFT BLANK -122- INTERNAL SERVICE FUNDS Internal service funds account for the financing of goods and services provided by one department or agency to other departments or agencies of the City on a cost reimbursement basis. The City utilizes a Dental Insurance Internal Service Fund, a Benefits/Other Insurance Internal Service Fund, and a Vehicle Equipment Replacement Internal Service Fund in managing city operations. Benefits/Vehicle Dental Other Equipment Insurance Insurance Replacement (7100)(7200)(7400–7430)Totals Current assets Cash and investments 31,140$ 3,269,600$ 746,045$ 4,046,785$ Receivables Accounts – 8,321 – 8,321 Prepaids – 166,617 – 166,617 Total current assets 31,140 3,444,538 746,045 4,221,723 Noncurrent assets Capital assets Furniture and equipment – – 7,337,651 7,337,651 Less accumulated depreciation – – (4,035,314) (4,035,314) Total noncurrent assets – – 3,302,337 3,302,337 Total assets 31,140$ 3,444,538$ 4,048,382$ 7,524,060$ Current liabilities Accounts payable 3,907$ 55,898$ 30,400$ 90,205$ Claims payable 7,560 – – 7,560 Accrued compensated absences – 1,510,400 – 1,510,400 Total current liabilities 11,467 1,566,298 30,400 1,608,165 Noncurrent liabilities Accrued compensated absences – 1,303,671 – 1,303,671 Total liabilities 11,467 2,869,969 30,400 2,911,836 Net position Net investment in capital assets – – 3,302,337 3,302,337 Unrestricted 19,673 574,569 715,645 1,309,887 Total net position 19,673 574,569 4,017,982 4,612,224 Total liabilities and net position 31,140$ 3,444,538$ 4,048,382$ 7,524,060$ CITY OF APPLE VALLEY Internal Service Funds Combining Statement of Net Position as of December 31, 2016 Liabilities and Net Position Assets -123- Benefits/Vehicle Dental Other Equipment Insurance Insurance Replacement (7100)(7200)(7400–7430)Totals Operating revenue Charges to other funds 212,579$ 1,442,753$ 716,355$ 2,371,687$ Operating expenses Personal services 203,790 648,037 – 851,827 Contractual services – 22,277 – 22,277 Other charges – 867,004 6,624 873,628 Depreciation – – 608,976 608,976 Total operating expenses 203,790 1,537,318 615,600 2,356,708 Operating income (loss)8,789 (94,565) 100,755 14,979 Nonoperating revenue Investment earnings 261 35,869 8,567 44,697 Gain on sale of capital assets – – 71,088 71,088 Total nonoperating revenue 261 35,869 79,655 115,785 Income (loss) before Capital contributions and transfers 9,050 (58,696) 180,410 130,764 Capital contributions – – 1,105,470 1,105,470 Transfer in – – 461,000 461,000 Change in net position 9,050 (58,696) 1,746,880 1,697,234 Net position Beginning of year 10,623 633,265 2,271,102 2,914,990 End of year 19,673$ 574,569$ 4,017,982$ 4,612,224$ CITY OF APPLE VALLEY Internal Service Funds Combining Statement of Revenue, Expenses, and Changes in Net Position Year Ended December 31, 2016 -124- Benefits/Vehicle Dental Other Equipment Insurance Insurance Replacement (7100)(7200)(7400–7430)Totals Cash flows from operating activities Cash receipts on interfund services provided 212,579$ 1,435,820$ 745,236$ 2,393,635$ Cash payments to suppliers (199,090) (1,513,738) (6,624) (1,719,452) Cash payments to employees for services – (90,571) – (90,571) Net cash flows from operating activities 13,489 (168,489) 738,612 583,612 Cash flows from capital and related financing activities Acquisition and construction of capital assets – – (1,015,915) (1,015,915) Proceeds from sale of capital assets – – 147,182 147,182 Transfers from other funds – – 461,000 461,000 Net cash flows from capital and related financing activities – – (407,733) (407,733) Cash flows from investing activities Interest received on investments 261 35,869 8,567 44,697 Net increase in cash and cash equivalents 13,750 (132,620) 339,446 220,576 Cash and investments Beginning of year 17,390 3,402,220 406,599 3,826,209 End of year 31,140$ 3,269,600$ 746,045$ 4,046,785$ Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss)8,789$ (94,565)$ 100,755$ 14,979$ Adjustments to reconcile operating income (loss) to net cash flows from operating activities Depreciation – – 608,976 608,976 Change in assets and liabilities Receivables Accounts – (6,933) – (6,933) Prepaids – (99,401) – (99,401) Accounts payable 3,907 (61,756) 28,881 (28,968) Claims payable 793 – – 793 Accrued compensated absences – 94,166 – 94,166 Net cash flows from operating activities 13,489$ (168,489)$ 738,612$ 583,612$ Net book value of capital asset disposals –$ –$ (76,080)$ (76,080)$ CITY OF APPLE VALLEY Internal Service Funds Combining Statement of Cash Flows Year Ended December 31, 2016 -125- STATISTICAL SECTION Page Contents: Financial Trends 126 Revenue Capacity 136 Debt Capacity 143 Demographic and Economic Information 152 Operating Indicators 154 Source: Unless otherwise noted, the information in these schedules is derived from the CAFR for the relevant year These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides, and the activities it performs. STATISTICAL SECTION (UNAUDITED) This part of the City of Apple Valley,Minnesota’s (the City)Comprehensive Annual Financial Report (CAFR)presents detailed information as a context for understanding what the information in the financial statements,note disclosures,and required supplementary information says about the City’s overall financial health. These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. These schedules contain information to help the reader assess the City’s most significant revenue source, including property tax and utility revenue. These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. Fiscal Year 2007 2008 2009 2010 Governmental activities Net investment in capital assets 34,412,008$ 41,867,201$ 43,981,788$ 45,477,393$ Restricted 44,173,435 30,525,737 24,664,257 24,656,491 Unrestricted 12,745,088 30,010,778 36,290,872 38,798,761 Total governmental activities net assets 91,330,531$ 102,403,716$ 104,936,917$ 108,932,645$ Business-type activities Net investment in capital assets 97,927,988$ 100,280,579$ 101,447,457$ 102,320,160$ Restricted – 275,000 289,049 291,591 Unrestricted 19,088,334 17,998,903 19,100,650 20,094,976 Total business-type activities net assets 117,016,322$ 118,554,482$ 120,837,156$ 122,706,727$ Primary government Net investment in capital assets 132,339,996$ 142,147,780$ 145,429,245$ 147,797,553$ Restricted 44,173,435 30,800,737 24,953,306 24,948,082 Unrestricted 31,833,422 48,009,681 55,391,522 58,893,737 Total primary government net assets 208,346,853$ 220,958,198$ 225,774,073$ 231,639,372$ Note 1: Note 2: The City implemented GASB Statement No.65 in 2012.Net position for 2011 was restated for the effects of implementing this standard. Net position for previous years has not been restated. The City implemented GASB Statement No.68 in 2015,resulting in a restatement of beginning net position for the effects of implementing this standard. Net position for previous years has not been restated. CITY OF APPLE VALLEY Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) -126- 2011 2012 2013 2014 2015 2016 54,928,735$ 64,226,520$ 70,526,658$ 78,398,734$ 86,664,918$ 93,945,022$ 21,580,777 17,001,111 18,619,396 15,253,042 16,541,831 16,141,535 42,115,459 43,609,670 38,654,601 36,056,447 26,805,077 24,394,132 118,624,971$ 124,837,301$ 127,800,655$ 129,708,223$ 130,011,826$ 134,480,689$ 104,198,009$ 110,376,210$ 118,410,631$ 120,092,250$ 118,288,727$ 119,417,084$ 309,518 319,582 303,823 329,167 178,529 178,977 19,431,679 19,030,882 13,228,257 14,998,933 14,230,604 17,104,636 123,939,206$ 129,726,674$ 131,942,711$ 135,420,350$ 132,697,860$ 136,700,697$ 159,126,744$ 174,602,730$ 188,937,289$ 198,490,984$ 204,953,645$ 213,362,106$ 21,890,295 17,320,693 18,923,219 15,582,209 16,720,360 16,320,512 61,547,138 62,640,552 51,882,858 51,055,380 41,035,681 41,498,768 242,564,177$ 254,563,975$ 259,743,366$ 265,128,573$ 262,709,686$ 271,181,386$ Table 1 -127- Fiscal Year 2007 2008 2009 2010 Expenses Governmental activities General government 7,856,220$ 8,147,712$ 8,685,487$ 10,081,345$ Public safety 9,543,225 10,223,407 10,306,540 10,092,977 Public works 6,212,755 7,349,899 8,393,981 7,008,886 Park and recreation 5,235,779 5,011,287 5,754,969 6,261,801 Interest on long-term debt 1,540,980 2,102,579 1,773,863 1,556,130 Total governmental activities expenses 30,388,959$ 32,834,884$ 34,914,840$ 35,001,139$ Business-type activities Municipal Liquor 6,247,330$ 6,985,584$ 8,062,876$ 8,285,841$ Municipal Golf Course 886,143 1,047,254 1,011,443 1,057,715 Sports Arena 714,437 755,102 771,198 748,541 Water and Sewer 7,265,384 7,983,126 7,226,393 7,302,254 Storm Drainage 1,228,726 926,799 869,376 846,743 Cemetery 46,284 45,882 56,518 68,868 Street Light Utility – – – 410,787 Total business-type activities 16,388,304 17,743,747 17,997,804 18,720,749 Total primary government expenses 46,777,263$ 50,578,631$ 52,912,644$ 53,721,888$ Program revenues Governmental activities Charges for services General government 3,520,909$ 3,470,858$ 2,363,002$ 2,423,051$ Public safety 565,351 647,651 603,425 755,339 Public works 211,770 112,651 457,516 1,046,007 Park and recreation 1,027,078 1,027,675 1,259,959 1,721,486 Operating grants and contributions 1,028,408 1,153,964 1,577,419 1,872,316 Capital grants and contributions 5,926,863 10,345,742 2,451,327 3,271,761 Total governmental activities program revenues 12,280,379$ 16,758,541$ 8,712,648$ 11,089,960$ CITY OF APPLE VALLEY Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) -128- Table 2 2011 2012 2013 2014 2015 2016 7,086,321$ 7,398,895$ 5,012,638$ 6,107,245$ 5,468,843$ 6,974,444$ 10,548,223 11,101,520 11,336,972 11,946,671 12,464,603 15,097,659 5,744,780 6,382,138 6,905,011 9,011,324 7,038,033 7,746,304 6,169,552 6,166,397 6,345,937 6,403,907 6,543,162 7,025,281 1,459,728 1,235,352 1,194,974 1,037,527 1,037,567 912,007 31,008,604$ 32,284,302$ 30,795,532$ 34,506,674$ 32,552,208$ 37,755,695$ 8,177,679$ 8,377,991$ 8,419,472$ 8,332,921$ 7,772,369$ 7,872,023$ 1,051,605 1,292,371 1,507,451 1,526,108 1,653,759 1,728,605 799,993 778,931 759,930 853,315 770,215 770,666 7,309,277 7,194,007 7,794,274 8,186,262 8,154,989 9,336,567 917,054 1,001,140 1,052,087 1,257,566 1,444,800 1,481,121 69,004 69,376 51,472 51,646 49,086 60,790 398,114 447,954 444,106 424,670 446,644 437,439 18,722,726 19,161,770 20,028,792 20,632,488 20,291,862 21,687,211 49,731,330$ 51,446,072$ 50,824,324$ 55,139,162$ 52,844,070$ 59,442,906$ 2,435,834$ 2,413,190$ 2,315,613$ 2,828,709$ 1,696,786$ 1,768,008$ 587,486 554,820 549,371 541,947 496,566 543,950 1,055,995 1,543,446 892,267 1,001,148 2,620,283 2,489,539 1,314,377 1,504,546 1,271,031 2,030,716 1,989,084 2,740,747 534,041 579,675 900,223 837,763 771,220 1,531,412 4,398,403 4,445,816 3,250,152 1,897,081 5,918,652 5,489,541 10,326,136$ 11,041,493$ 9,178,657$ 9,137,364$ 13,492,591$ 14,563,197$ (continued) -129- Fiscal Year 2007 2008 2009 2010 Program revenues (continued) Business-type activities Charges for services Municipal liquor 6,974,113$ 7,390,696$ 8,772,571$ 9,032,194$ Municipal golf course 922,648 1,049,707 1,085,429 1,114,395 Sports arena 555,262 538,694 627,595 606,262 Water and sewer 8,635,246 8,670,265 9,250,812 8,439,232 Storm drainage 1,141,260 1,227,331 1,233,346 1,360,483 Cemetery 93,780 110,175 95,320 89,695 Street light utility – – – 465,552 Operating grants and contributions 142,686 47,285 25,190 – Capital grants and contributions – 324,323 316,200 645,427 Total business-type activities program revenues 18,464,995 19,358,476 21,406,463 21,753,240 Total primary government program revenues 30,745,374$ 36,117,017$ 30,119,111$ 32,843,200$ Net (expense) revenue Governmental activities (18,108,580)$ (16,076,343)$ (26,202,192)$ (23,911,179)$ Business-type activities 2,076,691 1,614,729 3,408,659 3,032,491 Total primary government net expense (16,031,889)$ (14,461,614)$ (22,793,533)$ (20,878,688)$ General revenues and other changes in net position Governmental activities Property taxes 19,027,159$ 19,942,701$ 21,892,939$ 21,697,421$ Tax increments 1,981,344 2,040,480 2,185,762 2,311,405 Franchise taxes 972,270 1,023,368 1,096,578 1,160,771 Lodging tax 42,038 65,073 56,300 67,311 Gravel tax 26,378 37,209 40,692 36,314 Unallocated state and county aids 959,190 584,294 292,225 95,019 Other general revenue 119,010 143,403 433,956 271,622 Unrestricted investment earnings 2,166,594 1,352,749 912,413 643,741 Transfers (2,018,882) 955,251 1,824,528 1,623,303 Total governmental activities 23,275,101$ 26,144,528$ 28,735,393$ 27,906,907$ Business-type activities Unrestricted investment earnings 992,512$ 672,485$ 426,300$ 320,166$ Property taxes 121,500 125,000 120,000 125,000 Other – 81,197 152,243 15,217 Transfers 2,018,882 (955,251) (1,824,528) (1,623,303) Total business-type activities 3,132,894 (76,569) (1,125,985) (1,162,920) Total primary government 26,407,995$ 26,067,959$ 27,609,408$ 26,743,987$ Change in net position Governmental activities 5,166,521$ 10,068,185$ 2,533,201$ 3,995,728$ Business-type activities 5,209,585 1,538,160 2,282,674 1,869,571 Total primary government 10,376,106$ 11,606,345$ 4,815,875$ 5,865,299$ Note 1: Note 2: The Street Light Utility was established in fiscal year 2010; the street light activity prior to 2010 was included in the Water and Sewer Fund. Fiscal 2012 and prior data has not been restated for the reclassifications made in fiscal 2013. CITY OF APPLE VALLEY Changes in Net Position (continued) Last Ten Fiscal Years (accrual basis of accounting) -130- Table 2 (continued) 2011 2012 2013 2014 2015 2016 9,005,660$ 9,231,890$ 9,380,818$ 9,292,269$ 8,480,414$ 8,738,804$ 1,023,866 1,122,791 1,168,154 1,289,089 1,387,821 1,356,436 650,350 647,134 643,855 746,351 722,270 783,962 8,361,750 9,256,709 8,951,798 8,913,191 8,995,642 9,754,601 1,370,348 1,517,090 1,525,136 1,567,066 1,631,761 1,718,352 114,365 127,735 123,197 104,128 132,305 160,716 433,464 454,477 449,885 465,584 483,680 500,877 10,170 13,890 80,707 – – – 643,164 3,201,690 1,497,501 1,612,392 2,110,667 3,631,836 21,613,137 25,573,406 23,821,051 23,990,070 23,944,560 26,645,584 31,939,273$ 36,614,899$ 32,999,708$ 33,127,434$ 37,437,151$ 41,208,781$ (20,682,468)$ (21,242,809)$ (21,616,875)$ (25,369,310)$ (19,059,617)$ (23,192,498)$ 2,890,411 6,411,636 3,792,259 3,357,582 3,652,698 4,958,373 (17,792,057)$ (14,831,173)$ (17,824,616)$ (22,011,728)$ (15,406,919)$ (18,234,125)$ 21,460,141$ 21,769,647$ 22,144,883$ 23,067,164$ 23,038,450$ 23,894,359$ 2,240,269 2,012,281 544,283 611,662 489,617 199,214 1,177,715 1,197,288 1,262,393 1,272,428 1,259,271 1,309,757 74,105 75,472 73,504 89,859 93,492 90,592 38,666 36,439 45,890 50,612 39,215 40,794 117,000 145,755 40,397 36,710 40,061 37,719 176,575 116,558 186,872 78,478 7,387 6,888 2,372,693 1,026,594 (1,056,882) 1,562,329 863,798 801,038 2,717,630 1,075,105 1,338,889 507,636 4,681,392 1,281,000 30,374,794$ 27,455,139$ 24,580,229$ 27,276,878$ 30,512,683$ 27,661,361$ 888,863$ 388,923$ (358,333)$ 506,693$ 235,424$ 204,464$ 120,000 120,000 121,000 121,000 121,000 121,000 50,835 43,845 – – – – (2,717,630) (1,075,105) (1,338,889) (507,636) (4,681,392) (1,281,000) (1,657,932) (522,337) (1,576,222) 120,057 (4,324,968) (955,536) 28,716,862$ 26,932,802$ 23,004,007$ 27,396,935$ 26,187,715$ 26,705,825$ 9,692,326$ 6,212,330$ 2,963,354$ 1,907,568$ 11,453,066$ 4,468,863$ 1,232,479 5,889,299 2,216,037 3,477,639 (672,270) 4,002,837 10,924,805$ 12,101,629$ 5,179,391$ 5,385,207$ 10,780,796$ 8,471,700$ -131- 2007 2008 2009 2010 General Fund Reserved 161,283$ 122,232$ 40,515$ 53,113$ Unreserved 11,005,460 11,103,476 12,181,208 12,594,013 Nonspendable – – – – Committed – – – – Assigned – – – – Unassigned – – – – Total General Fund 11,166,743$ 11,225,708$ 12,221,723$ 12,647,126$ All other governmental funds Reserved reported in Special revenue funds –$ –$ –$ –$ Debt service funds – – – – Capital projects funds – – – – Unreserved reported in Special revenue funds 286,647 361,472 342,464 324,251 Debt service funds 19,405,845 20,923,916 16,996,037 15,892,926 Capital projects funds 12,051,437 12,447,954 10,965,444 14,011,232 Nonspendable – – – – Restricted – – – – Committed – – – – Assigned – – – – Unassigned – – – – Total all other governmental funds 31,743,929$ 33,733,342$ 28,303,945$ 30,228,409$ Total all funds 42,910,672$ 44,959,050$ 40,525,668$ 42,875,535$ Note:Fund balance descriptions changed due to GASB Statement No. 54 implementation effective January 1, 2011. Fiscal Year CITY OF APPLE VALLEY Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) -132- Table 3 2011 2012 2013 2014 2015 2016 –$ –$ –$ –$ –$ –$ – – – – – – 118,661 239,462 90,745 337,564 345,004 119,947 165,872 210,005 154,100 146,300 405,990 693,145 278,724 279,973 151,502 54,416 20,000 56,000 12,142,496 12,646,076 13,830,037 14,617,170 15,321,110 15,740,362 12,705,753$ 13,375,516$ 14,226,384$ 15,155,450$ 16,092,104$ 16,609,454$ –$ –$ –$ –$ –$ –$ – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 1,750 – – 1,750 600 15,537,787 11,435,144 20,966,147 21,772,784 27,424,225 27,079,147 – – – – – 140,000 28,795,063 31,538,043 26,215,087 27,614,620 27,008,733 28,454,255 (13,395,872) (12,381,234) (9,561,124) (11,108,352) (9,539,062) (8,921,232) 30,936,978$ 30,593,703$ 37,620,110$ 38,279,052$ 44,895,646$ 46,752,770$ 43,642,731$ 43,969,219$ 51,846,494$ 53,434,502$ 60,987,750$ 63,362,224$ -133- Fiscal Year 2007 2008 2009 2010 Revenues General property taxes 18,994,579$ 19,916,783$ 21,544,567$ 21,709,126$ Tax increments 1,981,344 2,040,480 2,185,762 2,311,405 Other taxes 68,416 102,282 96,992 103,625 Special assessments 2,384,730 1,419,869 2,471,962 2,055,783 Licenses and permits 1,094,222 561,594 755,444 1,018,847 Intergovernmental 2,344,740 1,934,886 2,429,800 2,996,658 Charges for services 1,358,148 1,454,353 1,145,890 1,349,123 Franchise taxes 972,270 1,023,368 1,096,578 1,160,771 Fines and forfeits 339,819 324,461 316,324 258,165 Investment income 2,102,608 1,256,353 840,898 593,336 Rentals 311,731 271,758 444,877 592,831 Contributions and donations 3,561 11,045 7,150 11,484 Administrative fees 915,543 1,311,479 651,052 778,400 Other 218,690 772,437 509,778 697,054 Refunds and reimbursements 235,531 341,756 165,345 450,972 Total revenues 33,325,932 32,742,904 34,662,419 36,087,580 Expenditures Current General government 5,961,983 6,310,842 6,159,832 7,418,012 Public safety 8,757,650 9,470,152 9,635,166 9,728,340 Public works 2,812,372 3,355,405 3,501,792 3,593,951 Park and recreation 4,106,632 4,373,278 4,692,052 4,768,656 Capital outlay 10,615,297 11,666,201 11,727,599 5,879,024 Debt service Principal 5,125,000 5,070,000 5,060,000 4,160,000 Interest and fiscal charges 1,468,677 2,001,578 1,880,399 1,615,929 Total expenditures 38,847,611 42,247,456 42,656,840 37,163,912 Excess (deficiency) of revenues over expenditures (5,521,679) (9,504,552) (7,994,421) (1,076,332) Other financing sources (uses) Transfers in 20,100,223 4,290,930 17,777,689 5,734,691 Transfers out (21,303,155) (2,967,903) (14,701,754) (3,680,241) Bonds issued 10,000,000 11,520,000 2,775,000 3,965,000 Payment of refunded debt – (2,360,000) (2,400,000) (2,750,000) Premium on debt issued – 54,759 61,795 47,191 Discount on debt issued (116,483) (110,621) – – Sale of capital assets 106,442 120,765 48,309 109,558 Total other financing sources (uses)8,787,027 10,547,930 3,561,039 3,426,199 Net change in fund balances 3,265,348$ 1,043,378$ (4,433,382)$ 2,349,867$ Debt service as a percentage of noncapital expenditures 23.4%23.1%22.4%18.5% CITY OF APPLE VALLEY Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) -134- 2011 2012 2013 2014 2015 2016 21,408,873$ 21,773,048$ 22,252,162$ 23,161,124$ 22,969,161$ 23,910,991$ 2,240,269 2,012,281 544,283 611,662 489,617 199,214 152,020 154,126 169,413 193,018 186,512 185,568 2,125,776 4,015,591 4,073,061 5,457,959 3,859,401 4,150,527 796,316 1,033,797 1,140,603 1,644,338 2,147,477 2,052,043 2,407,596 2,642,018 2,388,922 3,459,585 2,330,695 2,605,769 1,436,256 1,783,390 1,712,660 1,763,940 2,711,884 2,739,163 1,177,715 1,197,288 1,262,393 1,272,428 1,259,271 1,309,757 288,946 278,913 257,345 236,943 225,804 273,372 2,232,966 965,333 (991,703) 1,461,765 817,230 756,341 511,453 559,702 642,422 774,364 806,915 832,854 2,750 1,801 51,425 13,176 4,852 7,309 828,999 788,171 785,927 770,000 809,000 2,054,475 321,565 338,142 545,994 1,497,913 312,708 202,540 139,581 127,166 99,024 202,518 90,148 236,416 36,071,081 37,670,767 34,933,931 42,520,733 39,020,675 41,516,339 4,679,394 4,355,811 4,518,602 5,655,482 5,014,867 6,264,368 9,890,086 9,987,493 10,538,043 11,118,268 11,467,187 12,105,588 3,675,687 3,674,876 4,031,492 4,010,339 3,621,872 3,956,049 4,855,184 4,847,194 4,978,896 5,135,573 5,198,446 5,728,049 6,370,109 13,266,487 8,716,540 13,453,625 6,462,646 8,425,307 4,665,000 8,280,000 3,625,000 3,415,000 3,575,000 2,650,000 1,487,399 1,224,409 1,268,227 1,072,847 1,100,649 964,997 35,622,859 45,636,270 37,676,800 43,861,134 36,440,667 40,094,358 448,222 (7,965,503) (2,742,869) (1,340,401) 2,580,008 1,421,981 5,874,339 5,634,873 11,182,608 9,800,593 9,678,084 8,046,274 (3,156,709) (4,559,768) (9,843,719) (7,745,923) (8,139,084) (7,226,274) 1,345,000 6,775,000 9,000,000 680,000 4,255,000 – (3,920,000) – – – (1,030,000) – 6,568 330,981 81,545 25,505 113,988 – – – – – – – 169,776 110,905 199,710 168,234 95,252 132,493 318,974 8,291,991 10,620,144 2,928,409 4,973,240 952,493 767,196$ 326,488$ 7,877,275$ 1,588,008$ 7,553,248$ 2,374,474$ 20.5%27.5%16.7%13.1%15.3%11.4% Table 4 -135- Industrial Residential Commercial and Utility Agricultural Property Property Property Property Apartments 43,306,059$ 8,773,678$ 1,222,863$ 98,543$ 2,666,783$ 44,078,807 9,483,581 1,331,742 113,556 2,639,548 43,107,127 10,171,716 1,225,657 127,972 2,564,523 39,692,580 10,053,775 1,238,900 130,237 2,498,076 36,918,099 9,363,833 1,038,862 130,124 2,319,888 32,937,899 9,210,935 1,004,132 116,719 2,445,781 30,220,442 9,015,644 829,980 92,210 2,704,250 31,239,597 9,045,624 837,008 88,030 2,723,667 34,412,031 9,071,960 859,888 85,694 2,864,337 36,561,330 9,186,796 874,912 78,636 3,038,517 Note: Source:Dakota County The tax capacity (assessed taxable value)of the property is calculated by applying a statutory formula to the estimated market value of the property. 2014 2009 Payable Year 2007 2008 2011 2012 2013 2015 2016 CITY OF APPLE VALLEY Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years 2010 -136- Table 5 Estimated Total Actual Taxable Total Direct Taxable Personal Assessed Tax Capacity Market Other Property Value Rate Value 4,613$ 656,378$ 56,728,917$ 34.891 5,082,798,800$ 1.12 % 4,829 684,166 58,336,229 35.537 5,202,130,200 1.12 4,760 701,073 57,902,828 37.086 5,135,644,200 1.13 4,283 688,202 54,306,053 39.867 4,787,691,200 1.13 3,959 764,694 50,539,459 42.388 4,457,368,700 1.13 2,316 773,692 46,491,474 44.110 4,061,762,557 1.14 2,159 755,422 43,620,107 49.210 3,791,294,766 1.15 2,194 763,784 44,699,904 47.891 3,897,057,902 1.15 2,369 790,695 48,086,974 45.274 4,228,421,500 1.14 2,564 835,973 50,578,728 44.721 4,464,893,416 1.13 Actual Value Taxable Assessed Percentage of Value as a -137- Fiscal School District Year General Debt Service Total City Dakota County (1)Other (2) 2007 34.881 0.010 34.891 25.127 23.607 5.024 2008 35.528 0.009 35.537 25.184 21.136 4.996 2009 37.078 0.008 37.086 25.821 21.109 4.916 2010 39.861 0.006 39.867 27.269 25.391 4.987 2011 42.382 0.006 42.388 29.149 26.959 5.199 2012 44.104 0.006 44.110 31.426 28.440 5.562 2013 49.199 0.011 49.210 33.421 27.956 5.884 2014 47.880 0.011 47.891 31.827 27.606 5.538 2015 45.265 0.009 45.274 29.633 23.271 5.033 2016 44.711 0.010 44.721 28.570 24.317 5.063 Total Direct and Fiscal School District Total Overlapping Year Debt Service Total City Dakota County (1)Overlapping Tax Rate 2007 0.000171 0.000171 0.000052 0.002082 0.002134 0.002305 2008 0.000174 0.000174 0.000047 0.002127 0.002175 0.002348 2009 0.000311 0.000311 0.000047 0.002103 0.002150 0.002461 2010 0.000337 0.000337 0.000050 0.002227 0.002277 0.002614 2011 0.000375 0.000375 0.000054 0.002260 0.002314 0.002689 2012 0.000417 0.000417 0.000055 0.002213 0.002268 0.002685 2013 0.000212 0.000212 – 0.002354 0.002354 0.002566 2014 0.000212 0.000212 – 0.002581 0.002581 0.002793 2015 0.000204 0.000204 – 0.002548 0.002548 0.002752 2016 0.000199 0.000199 – 0.002700 0.002700 0.002899 Note 1: Note 2:Not all overlapping rates apply to all of the City’s property owners. (1)Independent School District No. 196 (2) Source: Dakota County City Direct Tax Capacity Rate Overlapping Tax Capacity Rates City Direct Market Value Tax Rate Overlapping Market Value Tax Rates Overlapping rates are those of local and county governments that apply to property owners within the City. Includes Metropolitan Council,Mosquito Control Abatement,Metro Transit,Dakota County CDA,Light Rail, and Vermillion River Watershed CITY OF APPLE VALLEY Property Tax Capacity Rates Direct and Overlapping Governments Last Ten Fiscal Years -138- Total Direct and Total Overlapping Overlapping Tax Rate 53.758 88.649 51.316 86.853 51.846 88.932 57.647 97.514 61.307 103.695 65.428 109.538 67.261 116.471 64.971 112.862 57.937 103.211 57.950 102.671 Table 6 Overlapping Tax Capacity Rates -139- THIS PAGE INTENTIONALLY LEFT BLANK Percentage Net Tax Net Tax Capacity Capacity Taxpayer Value Rank Value Rank Principal Life Insurance Co.510,934$ 1 1.0 %620,734$ 1 1.1 % Individual 472,934 2 0.9 425,000 3 0.7 CAR Apple Valley Square, LLC 372,974 3 0.7 456,772 2 0.8 Centro Bradley Southport Centre, LLC 329,028 4 0.7 – – – Apple Valley Leased Housing Assoc. III 325,237 5 0.6 312,500 6 0.6 Dakota Electric Association 302,468 6 0.6 360,738 4 0.6 Regent at Apple Valley LLC 293,908 7 0.6 – – – Target Corporation 278,290 8 0.6 269,450 9 0.5 Menards 277,134 9 0.5 – – – Wal-Mart 264,752 10 0.5 – – – Bradley Operating Ltd. Partnership – – – 322,804 5 0.6 Fischer Sand & Aggregate Co.– – – 287,874 7 0.5 Wings Financial Federal Credit Union – – – 278,932 8 0.5 Fischer Sand & Aggregate LLP – – – 222,136 10 0.4 Total 3,427,659$ 6.8 %3,556,940$ 6.3 % Source: Dakota County CITY OF APPLE VALLEY Principal Property Taxpayers Current Fiscal Year and Nine Years Prior 20072016 Table 7 of Total City Tax Capacity Value Percentage of Total City Tax Capacity Value -140- Taxes Levied for the Fiscal Year MVHC/ Ag Credit and Fiscal Fiscal Gross Operating Disparities Total Net Year Tax Levy Received Tax Levy Amount 2007 20,094,045$ (2,717,715)$ 17,334,233$ 17,047,283$ 98.34 % 2008 20,998,612 (2,955,499) 18,037,810 17,724,935 98.27 2009 22,627,731 (3,436,931) 19,190,369 18,828,050 98.11 2010 22,839,554 (3,815,622) 19,000,860 18,723,194 98.54 2011 22,700,000 (3,612,353) 19,087,647 18,846,881 98.74 2012 22,025,249 (2,821,637) 19,203,612 18,996,562 98.92 2013 22,410,946 (2,751,166) 19,659,780 19,411,582 98.74 2014 22,727,000 (2,994,265) 19,732,735 19,607,759 99.37 2015 23,134,000 (2,881,124) 20,252,876 20,069,635 99.10 2016 24,058,000 (2,784,776) 21,273,224 21,138,944 99.37 Percentage of Levy CITY OF APPLE VALLEY Property Tax Levies and Collections Last Ten Fiscal Years Fiscal Year of Levy Collected Within the -141- Delinquencies Collected as of Most Recent Report Amount 270,489$ 17,317,772$ 99.91 % 306,765 18,031,700 99.97 295,040 19,123,090 99.65 102,808 18,826,002 99.08 107,135 18,954,016 99.30 151,249 19,147,811 99.71 214,033 19,625,615 99.83 106,012 19,713,771 99.90 183,241 20,252,876 100.00 – 21,138,944 99.37 Percentage of Levy Table 8 Total Collections to Date -142- General Obligation Tax General Special MSA Increment Obligation Assessments Road Revenue Capital Bonds Bonds Bonds Bonds Bonds Lease 1,405,000$ 21,940,000$ 19,120,000$ –$ 2,547,304$ –$ 1,230,000 25,795,000 19,530,000 – 5,321,037 50,505 1,050,000 24,295,000 13,750,000 2,775,000 4,649,229 40,918 865,000 20,535,000 14,750,000 2,775,000 4,014,416 109,211 – 19,925,000 9,000,000 2,760,000 6,020,717 77,975 – 20,128,873 8,062,109 2,320,000 5,531,461 44,884 – 27,922,953 6,247,398 1,760,000 5,044,929 190,645 – 27,023,868 4,972,687 1,185,000 13,209,567 138,799 – 29,669,149 2,637,976 590,000 13,420,425 97,919 – 27,900,442 2,298,265 – 12,653,255 56,285 Note: (1) (2) CITY OF APPLE VALLEY Ratios of Outstanding Debt by Type Last Ten Fiscal Years Business-Type ActivitiesGovernmental Activities Year Fiscal 2009 2008 2007 2016 2015 2014 2013 2012 City personal income not available for 2016. See the Demographic and Economic Statistics schedule for personal income and population data. Details regarding the City’s outstanding debt can be found in the notes to basic financial statements.All figures are presented net of related premiums, discounts, and adjustments if applicable. 2011 2010 -143- Table 9 Total Primary Per Government Capita (1) 45,012,304$ 2.68 %910$ 51,926,542 2.81 1,039 46,560,147 2.61 943 43,048,627 2.47 877 37,783,692 2.10 759 36,087,327 2.00 723 41,165,925 2.22 818 46,529,921 2.40 924 46,415,469 2.44 925 42,908,247 N/A (2)836 Percentage Income (1) of Personal -144- Less Amounts General General Special MSA Available Obligation Tax Obligation Assessments Road in Debt Increment Bonds Bonds Bonds Bonds Service Funds (3) 1,405,000$ 24,487,304$ 19,120,000$ –$ 6,792,199$ 1,230,000 27,875,444 19,530,000 – 7,816,415 1,050,000 25,815,420 13,750,000 2,775,000 10,034,145 865,000 21,547,391 14,750,000 2,775,000 14,386,682 – 23,075,476 9,000,000 2,760,000 9,455,268 – 22,885,334 8,062,109 2,320,000 8,176,337 – 30,337,882 6,247,398 1,760,000 15,297,560 – 37,753,435 4,972,687 1,185,000 13,581,184 – 41,504,574 2,637,976 590,000 17,807,062 – 40,553,697 2,298,265 – 17,649,041 Note: (1) (2) (3)Amounts shown here are the total restricted fund balances for all debt serbice funds and include restricted amounts held in escrow for advance refunding bond issues. Details regarding the City’s outstanding debt can be found in the notes to the financial statements.All debt is presented net of related premiums, discounts, and adjustments if applicable. City personal income not available for 2016. See the Demographic and Economic Statistics schedule for personal income and population data. CITY OF APPLE VALLEY Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Year Fiscal -145- Table 10 Per Total Capita (1) 38,220,105$ 0.75 %2.28 %773$ 40,819,029 0.78 2.21 817 33,356,275 0.65 1.87 676 25,550,709 0.53 1.47 521 25,380,208 0.57 1.41 510 25,091,106 0.62 1.39 503 23,047,720 0.61 1.24 458 30,329,938 0.78 1.57 603 26,925,488 0.64 1.41 537 25,202,921 0.56 N/A (2)491 Personal Income Percentage of Percentage of Taxable Market Value of Property -146- THIS PAGE INTENTIONALLY LEFT BLANK Table 11 City of Apple Valley’s Share of Net Debt Overlapping Outstanding (1)Debt Overlapping Dakota County (2)–$ 11.22 %–$ School districts ISD No. 191, Burnsville – Eagan – Savage 156,285,000 0.81 1,265,909 ISD No. 196, Rosemount – Apple Valley – Eagan 180,075,000 30.12 54,238,590 Metropolitan Council (3)10,440,000 1.38 144,072 Metro Transit (4)177,190,000 1.58 2,799,602 Total overlapping 523,990,000 58,448,173 City of Apple Valley direct debt 30,198,707 100.00 30,198,707 Total direct and overlapping debt 554,188,707$ 88,646,880$ Note: (1)As of December 31, 2016, unless noted otherwise. (2) (3) (4) Source: to City Overlapping governments are those that coincide,at least in part,with the geographic boundaries of the City.This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City.This process recognizes that,when considering the City’s ability to issue and repay long-term debt,the entire debt burden borne by the residents and businesses should be taken into account. However,this does not imply that every taxpayer is a resident and,therefore,responsible for repaying the debt,of each term debt,the entire debt burden borne by the residents and businesses should be taken into account. However,this does not imply that every taxpayer is a resident,and,therefore,responsible for repaying the debt,of each overlapping government. Metro Transit has bond indebtedness of $177,190,000 as of December 31,2016.Transit debt is issued by the Metropolitan Council for all public transit operations in the transit district and is payable from ad valorem taxes levied on all taxable property within the Metropolitan Transit District. Dakota County.Percentage of debt applicable is calculated by dividing a portion of tax capacity of the authority that lies in the City divided by the total tax capacity that lies in Dakota County. CITY OF APPLE VALLEY Direct and Overlapping Governmental Activities Debt December 31, 2016 Percentage of Debt Applicable Dakota County has bond indebtedness of $87,665,000 as of December 31,2016,of which $87,665,000 has been excluded as it is payable from housing revenues. Metropolitan Council has $10,440,000 of general obligation debt outstanding as of December 31,2016.This debt is payable from ad valorem taxes levied on all taxable property within the Metropolitan Taxing District.This amount excludes $1,256,325,294 of general obligation debt payable from wastewater and sewer revenues,and lease agreements. -147- 2007 2008 2009 2010 Debt limit 101,655,976$ 156,063,906$ 154,069,326$ 143,630,736$ Total net debt applicable to limit 21,940,000 25,795,000 24,295,000 20,535,000 Legal debt margin 79,715,976$ 130,268,906$ 129,774,326$ 123,095,736$ Total net debt applicable to the limit as a percentage of debt limit 21.58%16.53%15.77%14.30% Note: The debt limit was raised from 2 percent to 3 percent of taxable market value, effective June 30, 2008. Fiscal Year CITY OF APPLE VALLEY Legal Debt Margin Information Last Ten Fiscal Years -148- Table 12 2011 2012 2013 2014 2015 2016 133,721,061$ 121,852,877$ 123,111,918$ 116,911,737$ 126,852,645$ 133,946,802$ 19,830,000 19,845,000 27,590,000 26,700,000 29,275,000 27,550,000 113,891,061$ 102,007,877$ 95,521,918$ 90,211,737$ 97,577,645$ 106,396,802$ 14.83%16.29%22.41%22.84%23.08%20.57% Market value 4,464,893,416$ Debt limit (3% of assessed value)133,946,802 Debt applicable to limit 27,550,000 Legal debt margin 106,396,802$ Legal Debt Margin Calculation for Fiscal Year 2016 -149- Operating Less Net Operating Less Net Fiscal Revenues/Operating Available Debt Service Revenues/Operating Available Year Gross Profit Expense Revenue Principal Interest Coverage Gross Profit Expense Revenue 2007 1,939,508$ 1,212,725$ 726,783$ –$ –$ N/A 1,141,260$ 1,179,089$ (37,829)$ 2008 1,883,996 1,383,688 500,308 – 66,105 1,227,331 883,299 344,032 2009 2,501,430 1,656,559 844,871 115,000 132,210 1,233,346 818,151 415,195 2010 2,486,461 1,607,986 878,475 130,000 129,220 1,360,483 806,506 553,977 2011 2,557,573 1,601,269 956,304 135,000 125,450 1,370,348 872,369 497,979 2012 2,528,423 1,557,994 970,429 140,000 121,333 1,517,090 936,991 580,099 2013 2,685,372 1,595,221 1,090,151 145,000 116,436 1,505,136 989,295 515,841 2014 2,692,077 1,612,171 1,079,906 150,000 111,850 1,562,067 1,196,115 365,952 2015 2,443,210 1,626,498 816,712 200,000 71,256 1,629,361 1,376,670 252,691 2016 2,567,113 1,682,574 884,539 230,000 29,127 1,717,350 1,399,093 318,257 N/A – Not Applicable Note: Details regarding the City’s outstanding debt can be found in the notes to basic financial statements. 3.414 4.170 4.124 3.011 7.568 3.418 3.389 3.672 3.713 CITY OF APPLE VALLEY Liquor Store – Revenue Bonds G.O. Storm Water – Revenue Bonds Pledged Revenue Coverage Last Ten Fiscal Years -150- Operating Less Net Debt Service Revenues/Operating Available Debt Service Principal Interest Coverage Gross Profit Expense Revenue Principal Interest Coverage 290,000$ 50,175$ (0.111) 8,635,246$ 7,241,321$ 1,393,925$ 90,000$ 24,063$ 12.22 285,000 41,787 1.053 8,670,265 7,961,763 708,502 95,000 21,363 6.09 300,000 48,416 1.192 8,876,346 6,832,611 2,043,735 170,000 18,275 10.86 315,000 31,035 1.601 8,423,373 7,285,380 1,137,993 105,000 12,495 9.69 220,000 63,313 1.758 8,358,787 7,361,390 997,397 120,000 8,820 7.74 225,000 68,558 1.976 9,256,709 7,214,372 2,042,337 – – – 230,000 64,553 1.751 8,949,608 7,776,510 1,173,098 – – – 240,000 59,908 1.220 8,911,018 7,997,799 913,219 320,000 129,223 2.03 150,000 73,036 1.133 8,988,411 7,950,081 1,038,330 365,000 215,125 1.79 155,000 84,979 1.326 9,450,362 9,130,962 319,400 370,000 207,825 0.55 G.O. Water – Revenue Bonds Table 13 -151- Table 14 Per Capita Personal Personal School Unemployment Population (1)Income Income (2)Enrollment (3)Rate (4) 49,456 1,679,525,760$ 33,960$ 11,445 3.60% 49,983 1,850,720,541 37,027 11,348 5.30% 49,376 1,782,325,472 36,097 11,216 6.80% 49,084 1,740,027,800 35,450 11,291 6.50% 49,801 1,801,750,379 36,179 11,264 4.80% 49,895 1,801,658,555 36,109 11,219 4.20% 50,326 1,855,167,338 36,863 11,189 3.60% 50,330 1,934,886,520 38,444 11,312 2.80% 50,161 1,903,961,077 37,957 11,272 2.60% 51,338 N/A N/A 11,883 3.00% N/A – Not Available Sources: (1)U.S. Census Bureau, Population Division (2) (3)Schools located in the City’s boundaries: Independent School District No. 196, including Dakota Ridge School School enrollment defined as adjusted ADMs (average daily membership) ADM is weighted as follows in computing adjusted ADMs: Secondary Fiscal 2007 1.250 1.000 0.557 0.557 1.115 1.060 1.300 Fiscal 2008 through 2014 1.250 1.000 0.612 0.612 1.115 1.060 1.300 Fiscal 2015 through 2016 1.000 1.000 0.550 1.000 1.000 1.000 1.200 (4)Minnesota Department of Employment and Economic Development 2016 City of Apple Valley, American Community Survey, U.S. Census Bureau (2016 data for the City not yet available) Pre-Kindergarten Handicapped Kindergarten Half-Day Kindergarten Full-Day Kindergarten Elementary 1–3 Elementary 4–6 2015 CITY OF APPLE VALLEY Demographic and Economic Statistics Last Ten Fiscal Years Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 -152- Table 15 Taxpayer Employees Rank Employees Rank ISD No. 196 1,414 1 9.27 %1,913 1 14.06 % Target 520 2 3.41 500 2 3.68 Uponor 400 3 2.62 – – – Dakota County 384 4 2.52 349 3 2.57 Walmart 350 5 2.29 340 4 2.50 Augustana Health Care Center 265 6 1.74 – – – Menard’s 250 7 1.64 – – – Wings Financial Federal Credit Union 225 8 1.47 – – – Minnesota Zoo 220 9 1.44 260 7 1.91 Apple Valley Medical Clinic 200 10 1.31 250 8 1.84 Cub Foods – – – 300 5 2.21 Fischer Sand and Aggregate Co.– – – 295 6 2.17 Apple Valley Red-E-Mix, Inc.– – – 199 9 1.46 Sam’s Club – – – 196 10 1.44 Total 4,228 27.72 %4,207 30.92 % Source: City of Apple Valley Community Development Department 20072016 CITY OF APPLE VALLEY Principal Employers Current Fiscal Year and Nine Years Ago Percentage of Total Employment Percentage of Total Employment -153- Fiscal Year 2007 2008 2009 2010 2011 General government Administration 3.00 3.00 3.00 3.00 2.81 Finance and data processing 5.00 5.00 4.95 5.00 5.00 Information and technology 3.21 3.21 3.20 3.17 3.21 Human resources 5.98 5.67 5.92 6.00 5.38 City clerk/elections 1.42 1.68 1.50 1.65 1.73 General government buildings 3.00 3.00 3.00 3.00 2.46 Community development 4.87 5.00 5.00 5.01 5.02 Code enforcement 3.00 2.98 2.15 2.00 1.71 Total general government 29.48 29.54 28.72 28.83 27.32 Public safety Police 63.62 63.97 64.00 62.00 60.09 Fire 17.43 16.49 18.94 16.44 18.45 Animal Control Building inspections 5.86 5.91 5.99 4.93 4.02 Total public safety 86.91 86.37 88.93 83.37 82.56 Public works Public works administration 4.76 5.90 6.00 7.13 8.48 Central maintenance facility 5.53 5.51 5.50 5.52 5.48 Streets 16.17 17.36 17.07 17.19 17.32 Engineering (1)– – – – 0.73 Total public works 26.46 28.77 28.57 29.84 32.01 Culture and recreation Park and recreation administration 7.78 8.26 7.29 7.81 7.82 Recreation programs 7.32 7.25 7.02 7.84 7.41 Park maintenance 25.00 25.93 25.96 25.27 25.06 Redwood Pool 2.40 2.50 2.80 2.13 1.94 Aquatic swim center 9.81 9.27 13.92 12.85 11.28 Community center 4.65 4.15 4.56 3.76 4.03 Apple Valley Senior Center – – 1.15 2.04 1.89 Cable TV 2.32 2.65 2.58 2.61 2.43 Total culture and recreation 59.28 60.01 65.28 64.31 61.86 Total general government 202.13 204.69 211.50 206.35 203.75 Enterprise funds Municipal liquor (2)14.98 16.85 19.91 19.49 18.99 Municipal golf (3)12.33 13.25 13.83 13.76 14.44 Sports arena 6.28 6.04 6.29 6.05 6.72 Stormwater Drainage Utility (4)– – – – – Water and sewer 17.94 18.11 18.88 18.58 18.45 Total enterprise funds 51.53 54.25 58.91 57.88 58.60 Total 253.66 258.94 270.41 264.23 262.35 (1)The City engineering function began in 2011 (2)Liquor store number three opened in 2008 (3)New expanded golf clubhouse opened September 2012 (4)The Stormwater Drainage FTEs were included in Public Works Administration prior to 2014 Source: CITY OF APPLE VALLEY Full-Time Equivalent (FTE) City Government Employees by Function Last Ten Fiscal Years City of Apple Valley Human Resources Office –FTEs based on hours worked during the fiscal year.Part-time employees converted to FTE based on 2,080 hours per year. -154- Table 16 2012 2013 2014 2015 2016 3.00 3.00 3.00 3.00 3.00 4.71 4.00 4.00 4.00 4.00 3.33 3.24 3.53 3.64 3.78 3.97 4.00 4.63 5.00 5.00 2.05 1.81 4.84 2.00 5.39 2.00 2.00 2.00 2.00 2.00 5.16 5.00 5.00 4.77 4.35 1.82 2.00 2.00 2.44 2.40 26.04 25.05 29.00 26.85 29.92 58.72 61.16 60.22 62.27 62.58 18.40 18.63 16.21 15.46 15.54 5.07 5.22 5.75 6.93 6.76 82.19 85.01 82.18 84.66 84.88 6.25 5.99 5.30 3.83 3.80 5.25 5.34 5.44 5.51 5.29 16.63 16.66 16.66 16.92 16.95 4.28 4.24 4.49 4.03 4.48 32.41 32.23 31.89 30.29 30.52 7.28 7.87 7.82 7.83 7.45 6.16 6.76 5.06 6.88 6.23 25.02 23.09 23.24 22.97 24.18 2.32 2.47 2.55 2.35 2.63 13.25 12.80 11.95 12.25 12.65 5.07 5.67 5.95 4.64 4.72 1.92 2.27 3.13 3.03 3.36 2.27 2.44 2.46 2.61 2.74 63.29 63.37 62.16 62.56 63.96 203.93 205.66 205.23 204.36 209.28 18.98 18.86 18.51 17.51 17.47 15.96 20.41 20.10 19.68 18.89 6.47 6.88 7.09 6.57 6.85 – – 0.28 1.96 2.00 18.84 18.14 18.26 18.07 17.61 60.25 64.29 64.24 63.79 62.82 264.18 269.95 269.47 268.15 272.10 -155- Fiscal Year 2007 2008 2009 2010 General government Elections 1 2 N/A 2 Registered voters 30,341 36,003 N/A 32,094 Number of voters casting votes 4,518 29,262 N/A 21,271 Number of absentee ballots received 126 3,348 N/A 1,316 Percentage of absentee ballots to total votes 2.8% 11.4% N/A 6.2% Voter participation (registered) (elections are held every other year)14.89% 81.28% N/A 66.28% Public safety Police Crimes – Part I 1,002 1,555 1,366 1,565 Crimes – Part II 2,087 2,901 2,542 2,364 Total arrests 2,400 2,278 2,137 1,985 DWI arrests 294 251 288 205 Traffic citations issued 9,717 8,088 7,997 6,329 Total calls for service 39,860 41,682 41,049 38,335 Fire Calls for service 1,261 1,380 1,307 1,340 Medical 742 840 735 712 Fire 519 540 572 628 Fire call responses times under 5 minutes N/A 40% 41% 37% Fire call responses times 6–10 minutes N/A 51% 48% 52% Fire call responses times over 10 minutes N/A 9% 11% 11% Public works Building permits issued 745 672 577 1,241 Permits issued for new dwelling units 92 41 91 228 Commercial building permits issued 118 110 73 102 Plumbing permits issued 1,024 900 912 920 Heating permits issued 622 521 557 771 Building permits issued 3,439 3,017 2,688 2,995 Building inspections 4,510 4,028 3,470 3,621 Streets maintained (lane miles)401 404 405 407 Cul-de-sacs maintained 313 313 314 329 Snow/ice events 34 50 48 35 Signs replaced 315 271 385 500 Boulevard trees trimmed 1,000 1,256 1,600 1,800 Fleet division vehicle work orders 1,561 1,689 1,733 1,735 Diseased elm and oak trees mitigated 738 863 729 588 Lakes and ponds monitored with water quality samples 17 17 18 18 Sump catch basins cleaned 1,338 1,492 1,406 1,505 Sewage pumped (million gallons)1.2 1.2 1.2 1.2 Miles of sanitary sewer cleaned 57.0 69.2 47.6 64.2 Sanitary lift station inspections 1,716 1,716 1,716 1,716 Water produced (million gallons)2.6 2.5 2.4 2.1 Water samples taken 1,128 1,098 1,098 1,128 Fire hydrants maintained 2,230 2,388 2,401 2,405 Pressure stations inspected 13 13 13 13 Air relief manholes inspected 15 15 15 15 Hydrant flushing 3,845 7,045 3,050 5,250 Hydrant flushing (minutes)– – – – Water breaks repaired 9 7 20 12 Burial sites sold 43 59 50 44 Burials 37 40 32 36 N/A – Not Available Source: Various city departments Function/Program CITY OF APPLE VALLEY Operating Indicators by Function Last Ten Years -156- Table 17 2011 2012 2013 2014 2015 2016 N/A 2 N/A 2 N/A 2 N/A 35,354 N/A 32,370 N/A 35,836 N/A 29,715 N/A 19,351 N/A 29,853 N/A 2,993 N/A 2,100 N/A 8,692 N/A 10.1% N/A 10.9% N/A 29.1% N/A 84.05% N/A 59.78% N/A 83.30% 1,230 1,187 1,124 1,098 1,207 1,232 2,072 1,970 1,756 1,627 1,833 1,936 1,963 1,962 1,307 1,096 969 1,234 213 145 160 152 120 87 7,587 6,670 5,726 4,735 4,246 5,441 40,272 39,223 35,215 34,497 35,510 39,548 1,408 1,417 1,454 1,412 1,397 1,622 792 639 636 623 668 812 616 778 818 789 729 810 40% 42% 44% 43% 43% 38% 51% 49% 46% 46% 48% 51% 9% 9% 10% 11% 9% 11% 1,630 1,398 1,005 1,893 1,785 1,883 31 47 63 71 115 140 71 96 113 115 197 98 886 1,027 1,090 1,173 1,334 1,560 540 692 786 851 951 1,076 4,248 4,248 4,248 5,430 5,755 1,883 5,187 6,890 6,848 8,636 10,543 10,702 408 410 410 416 416 418 329 330 331 322 324 325 29 25 53 45 29 29 460 700 411 657 451 354 5,200 2,137 1,990 1,175 1,250 939 1,751 1,850 1,890 2,148 1,486 2,138 486 260 430 340 322 326 18 18 18 17 18 18 1,303 1,400 885 1,455 983 1,106 1.2 1.2 1.3 1.1 1.2 1.1 72.1 75.0 77.0 79.0 54.0 62.0 1,716 1,716 1,716 1,716 1,716 1,716 2.3 2.4 2.4 2.1 2.0 2.0 1,098 1,098 1,098 1,098 1,098 1,098 2,410 2,410 2,444 2,454 2,466 2,484 13 13 13 13 13 13 15 15 15 15 16 16 1,020 – – – – – – 24,455 24,189 23,987 24,916 26,687 16 10 16 11 16 8 56 70 59 57 69 75 38 43 45 34 50 46 -157- Function/Program 2007 2008 2009 2010 Public safety Police Stations 1 1 1 1 Marked squad units 18 18 18 20 Fire Stations 3 3 3 3 Fire engine trucks 5 5 5 5 Fire ladder trucks 2 2 2 2 Fire brush/rescue trucks 1 1 1 1 Public works City-owned lights 107 107 126 246 Dakota Electric Association-owned 2,066 2,076 2,124 2,207 Xcel owned lights 301 301 301 301 Streets (centerline miles)171 171 171 171 Cul-de-sacs 313 313 314 329 Roundabouts 3 3 3 3 Trees (number of boulevard trees)7,000 7,000 9,500 9,500 Parks Parks 49 49 49 50 Total park acreage 847 847 847 879 Trails – street side trails (miles)65 65 65 65 Athletic complexes 4 4 4 5 Golf course 1 1 1 1 Community centers 2 2 2 2 Senior center 1 1 1 1 Pools/aquatic centers 2 2 2 2 Ice arenas 2 2 2 2 Water Number of connections 15,342 15,413 15,464 15,518 Miles of water mains and laterals 235 240 240 241 Wells 19 19 19 19 Water valves 3,600 3,680 3,705 3,712 Fire hydrants 2,230 2,388 2,401 2,405 Water reservoirs 5 5 5 5 Reservoir capacity (millions of gallons)12.5 12.5 12.5 12.5 Sanitary sewer Number of connections 14,940 14,989 15,033 15,087 Miles of sanitary sewer mains and laterals 191 193 193 193 Sanitary lift stations 9 9 9 9 Sanitary manholes 5,315 5,335 5,360 5,372 Storm sewer Lift stations 11 12 12 12 Mile of storm sewers N/A N/A 162 162 N/A – Not Available Source: Various city departments Fiscal Year CITY OF APPLE VALLEY Capital Assets Statistics by Function/Program Last Ten Years -158- Table 18 2011 2012 2013 2014 2015 2016 1 1 1 1 1 1 23 23 23 24 24 24 3 3 3 3 3 3 5 5 5 5 5 5 2 2 2 2 2 2 1 1 1 1 1 1 246 261 261 271 271 302 2,270 2,494 2,718 2,942 3,167 3,303 301 301 301 301 301 343 172 172 175 177 177 179 329 329 329 329 324 325 3 3 3 3 4 4 9,500 9,500 9,330 9,250 9,175 9,100 50 50 50 50 50 50 879 879 879 879 879 879 65 65 65 65 65 75 5 5 5 5 5 5 1 1 1 1 1 1 2 2 2 2 2 2 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 15,566 15,596 15,674 15,752 15,874 16,024 241 241 245 247 248 250 19 19 19 19 19 20 3,726 3,751 3,774 3,812 3,836 3,872 2,410 2,410 2,438 2,454 2,466 2,484 5 5 5 5 5 5 12.5 12.5 13 13 13 13 15,130 15,160 15,229 15,307 15,422 15,563 194 194 200 204 204 204 9 9 9 9 9 9 5,384 5,384 5,466 5,514 5,538 5,587 12 12 12 12 12 12 163 164 165 167 170 173 -159- THIS PAGE INTENTIONALLY LEFT BLANK Management Report for City of Apple Valley, Minnesota December 31, 2016 THIS PAGE INTENTIONALLY LEFT BLANK To the City Council and Management City of Apple Valley, Minnesota We have prepared this management report in conjunction with our audit of the City of Apple Valley, Minnesota’s (the City) financial statements for the year ended December 31, 2016. We have organized this report into the following sections: Audit Summary Governmental Funds Overview Enterprise Funds Overview Government-Wide Financial Statements Legislative Updates Accounting and Auditing Updates We would be pleased to further discuss any of the information contained in this report or any other concerns that you would like us to address. We would also like to express our thanks for the courtesy and assistance extended to us during the course of our audit. The purpose of this report is solely to provide those charged with governance of the City, management, and those who have responsibility for oversight of the financial reporting process comments resulting from our audit process and information relevant to city finances in Minnesota. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota June 2, 2017 THIS PAGE INTENTIONALLY LEFT BLANK -1- AUDIT SUMMARY The following is a summary of our audit work, key conclusions, and other information that we consider important or that is required to be communicated to the City Council, administration, or those charged with governance of the City. OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA AND GOVERNMENT AUDITING STANDARDS We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended December 31, 2016, and the related notes to the financial statements. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information to you verbally and in our audit engagement letter. Professional standards also require that we communicate the following information related to our audit. PLANNED SCOPE AND TIMING OF THE AUDIT We performed the audit according to the planned scope and timing previously discussed and coordinated in order to obtain sufficient audit evidence and complete an effective audit. AUDIT OPINION AND FINDINGS Based on our audit of the City’s financial statements for the year ended December 31, 2016: We have issued an unmodified opinion on the City’s basic financial statements. We reported one matter involving the City’s internal control over financial reporting that we considered to be a significant deficiency. Due to the limited size of the City’s staff, the City has limited segregation of duties over cash receipts, community center refunds and reimbursements, and utility billing adjustments. This finding is further detailed in the City’s Special Purpose Audit Reports. The results of our testing disclosed no instances of noncompliance required to be reported under Government Auditing Standards. We reported no findings based on our testing of the City’s compliance with Minnesota laws and regulations. FOLLOW-UP ON PRIOR YEAR FINDINGS AND RECOMMENDATIONS As a part of our audit of the City’s financial statements for the year ended December 31, 2016, we performed procedures to follow-up on the findings and recommendations that resulted from our prior year audit. We reported the following two findings that were corrected by the City in the current year: 1. In our previous audit, we reported that for one of five contracts tested, the City did not have language in the contract requiring prime contractors to pay subcontractors within the terms established under Minnesota Statutes § 471.425. As part of our follow-up procedures, we are pleased to report that this was not a current year finding. -2- 2. In our previous audit, we reported that for one of five contracts tested, the City did not obtain verification of compliance with the minimum criteria set forth in Minnesota Statutes § 16C.285 (Responsible Contractor Requirements). As part of our follow-up procedures, we are pleased to report that this was not a current year finding. OTHER OBSERVATIONS AND RECOMMENDATIONS Golf Course Inventory and Event Revenue Tracking As part of our audit, we noted the City does not have an adequate process for tracking both food and beverage inventory at the golf course. Due to the size and nature of the golf course operations, segregation of duties is limited in the ordering, receiving, and recording of inventory, and there are no standardized processes for interim or annual physical counts. Additionally, the usage of food and beverage inventories that occurs during events held at the golf course is not accurately captured by the current inventory software due to system limitations and internal modification deficiencies made to the software. These conditions expose the City to a higher risk that errors or fraud could occur and not be detected in a timely manner in the normal course of business. One way to help mitigate this risk would be to implement monthly physical inventory counts which are then reviewed in conjunction with the financial activities and results that occur during the same time period. The effectiveness of this type of control procedure is somewhat dependent upon the frequency and timeliness with which it is performed. During our audit, we also evaluated the golf course’s information systems, policies and procedures surrounding event management, including the billing of its customers. During our procedures, we noted it was necessary for the golf course to utilize a stand-alone system for event tracking due to the inability of the golf course point-of-sale system and the City’s finance system to generate itemized invoices for events. The particular sale details are then later manually entered into the point-of-sale system at the golf course in order for the data to be transferred into the City’s finance software. We recommend the City review the systems for event management and billing in order to implement controls that ensure all events held at the golf course are properly included in the City’s point-of-sale and financial systems. Furthermore, we recommend the City standardize the billing process for events held at the golf course, including assessing whether these functions should be centralized and completed within the finance department. SIGNIFICANT ACCOUNTING POLICIES Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 of the notes to basic financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended December 31, 2016. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. -3- ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: Depreciation – Management’s estimates of depreciation expense are based on the estimated useful lives of the assets. Net Other Post-Employment Benefit (OPEB) Liabilities and Pension Benefits – The City has recorded liabilities and activity for net other post-employment benefits (OPEB) and pension benefits. These obligations are calculated using actuarial methodologies described in the Governmental Accounting Standards Board (GASB) Statement Nos. 45 and 68. These actuarial calculations include significant assumptions, including projected changes, healthcare insurance costs, investment returns, retirement ages, proportionate share, and employee turnover. Compensated Absences – Management’s estimate is based on current rates of pay and unused compensated absence balances. Self-Insurance Reserves – Management’s estimates of self-insurance reserves are based on the estimated liability for incurred but not reported claims. Land Held for Resale – Management’s estimates of these assets are based on net realizable value (lower of cost or estimated sales price). We evaluated the key factors and assumptions used to develop these accounting estimates in determining that they are reasonable in relation to the basic financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Where applicable, management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management, when applicable, were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT We encountered no significant difficulties in dealing with management in performing and completing our audit. DISAGREEMENTS WITH MANAGEMENT For purposes of this report, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. -4- MANAGEMENT REPRESENTATIONS We have requested certain representations from management that are included in the management representation letter dated June 2, 2017. MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. OTHER AUDIT FINDINGS OR ISSUES We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. OTHER MATTERS We applied certain limited procedures to the management’s discussion and analysis (MD&A) and the pension and OPEB-related required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the supplementary information accompanying the financial statements which is not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it. -5- GOVERNMENTAL FUNDS OVERVIEW This section of the report provides you with an overview of the financial trends and activities of the City’s governmental funds, which includes the General, special revenue, debt service, and capital project funds. These funds are used to account for the basic services the City provides to all of its citizens, which are financed primarily with property taxes. The governmental fund information in the City’s financial statements focuses on budgetary compliance and the sufficiency of each governmental fund’s current assets to finance its current liabilities. PROPERTY TAXES Minnesota cities rely heavily on local property tax levies to support their governmental fund activities. For the 2015 fiscal year, local ad valorem property tax levies provided 39.8 percent of the total governmental fund revenues for cities over 2,500 in population, and 35.6 percent for cities under 2,500 in population. Property tax levies certified by Minnesota cities for 2016 increased about 4.8 percent over 2015, compared to an increase of 4.0 percent the prior year. The total market value of property in Minnesota cities increased about 5.7 percent for the 2016 levy year. While the percentage of market value growth was less than the 8.5 percent increase for levy year 2015, it was considerably larger than the 1.1 percent growth experienced in levy year 2014. Market values increased across all property categories for 2016, with gains in the market values of nonhomestead residential properties (9.1 percent) and other properties (7.3 percent) outpacing the market value gain of residential homestead properties (5.0 percent), commercial/industrial properties (4.9 percent), and farms (0.1 percent). The market values used for levying property taxes are based on the previous fiscal year (e.g., market values for taxes levied in 2016 were based on assessed values as of January 1, 2015), so the trend of change in these market values lags somewhat behind the housing market and economy in general. The City’s taxable market value increased 8.5 percent for taxes payable in 2015 and increased 5.6 percent for taxes payable in 2016. The following graph shows the City’s changes in taxable market value over the past 10 years: $– $1,000,000,000 $2,000,000,000 $3,000,000,000 $4,000,000,000 $5,000,000,000 $6,000,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Taxable Market Value -6- Tax capacity is considered the actual base available for taxation. It is calculated by applying the state’s property classification system to each property’s market value. Each property classification, such as commercial or residential, has a different calculation and uses different rates. Consequently, a city’s total tax capacity will change at a different rate than its total market value, as tax capacity is affected by the proportion of the City’s tax base that is in each property classification from year-to-year, as well as legislative changes to tax rates. The City’s tax capacity increased 7.6 percent for taxes payable in 2015 and increased 5.2 percent for taxes payable in 2016. The following graph shows the City’s change in tax capacities over the past 10 years: $– $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Tax Capacity The improvement in property tax capacities contributed to decreases to the overall state-wide and metro area tax rates for 2016. The following table presents the average tax rates applied to city residents for each of the last two levy years, along with comparative state-wide and metro area rates: Rates expressed as a percentage of net tax capacity 2015 2016 2015 2016 2015 2016 Average tax rate City 46.9 46.5 43.4 43.0 45.3 44.7 County 44.7 44.1 42.9 42.3 29.6 28.6 School 27.1 27.5 28.3 28.6 23.3 24.4 Special taxing 6.9 6.9 8.8 8.7 5.0 5.0 Total 125.6 125.0 123.4 122.6 103.2 102.7 Apple ValleyMetro Area Seven-CountyAll Cities State-Wide City of As seen in the table above, the average tax rate in 2016 for the City decreased from the prior year. The City certified a total levy that increased in the current year but also had an increase in tax capacity, resulting in an average tax rate decrease. -7- GOVERNMENTAL FUND BALANCES The following table summarizes the changes in the fund balances of the City’s governmental funds during the years ended December 31, 2016 and 2015, presented both by fund balance classification and by fund: Increase 2015 2016 (Decrease) Fund balances of governmental funds Total by classification Nonspendable 346,754$ 120,547$ (226,207)$ Restricted 27,424,225 27,079,147 (345,078) Committed 405,990 833,145 427,155 Assigned 27,028,733 28,510,255 1,481,522 Unassigned 5,782,048 6,819,130 1,037,082 Total governmental funds 60,987,750$ 63,362,224$ 2,374,474$ Total by fund General 16,092,104$ 16,609,454$ 517,350$ Closed Bond Issues 7,242,770 8,843,565 1,600,795 2001/2008B Refunding Improvement Bonds (3,016,920) (2,928,431) 88,489 Road Improvements (4,269,054) (5,198,862) (929,808) Future Capital Projects 14,226,724 14,675,768 449,044 Nonmajor 30,712,126 31,360,730 648,604 Total governmental funds 60,987,750$ 63,362,224$ 2,374,474$ Governmental Funds Change in Fund Balance Fund Balance as of December 31, In total, the fund balances of the City’s governmental funds increased by $2,374,474 during the year ended December 31, 2016. -8- GOVERNMENTAL FUND REVENUES The following table presents the per capita revenue of the City’s governmental funds for the past three years, along with state-wide averages. We have included the most recent comparative state-wide averages available from the Office of the State Auditor to provide a benchmark for interpreting the City’s data. The amounts received from the typical major sources of governmental funds revenue will naturally vary between cities based on factors such as a city’s stage of development, location, size and density of its population, property values, services it provides, and other attributes. It will also differ from year-to-year due to the effect of inflation and changes in its operation. Also, certain data on these tables may be classified differently than how they appear on the City’s financial statements in order to be more comparable to the state-wide information, particularly in separating capital expenditures from current expenditures. We have designed this section of our management report using per capita data in order to better identify unique or unusual trends and activities of your city. We intend for this type of comparative and trend information to complement, rather than duplicate, information in the MD&A. An inherent difficulty in presenting per capita information is the accuracy of the population count, which for most years is based on estimates. Year 2014 2015 2016 Population 2,500–10,000 10,000–20,000 20,000–100,000 50,330 50,161 51,338 Property taxes 443$ 414$ 443$ 460$ 458$ 466$ Tax increments 26 33 37 12 10 4 Franchise fees and other taxes 33 42 39 29 29 29 Special assessments 59 52 59 108 77 81 Licenses and permits 31 31 43 33 43 40 Intergovernmental revenues 285 322 156 69 46 51 Charges for services 110 85 94 50 54 53 Other 69 62 58 83 61 85 Total revenue 1,056$ 1,041$ 929$ 844$ 778$ 809$ December 31, 2015 Governmental Funds Revenue per Capita With State-Wide Averages by Population Class State-Wide City of Apple Valley The City’s governmental funds have generated significantly less revenue per capita in total than other Minnesota cities in its population class. As noted above, the City receives a lower level of intergovernmental revenue than the average city, causing the City to rely on property taxes and other forms of revenue to operate the governmental activities of the City. The City generated $41,516,339 of total revenue in its governmental funds in 2016, an increase of $2,495,664 (6.4 percent) from the prior year. The City’s per capita governmental funds revenue for 2016 was $809, an increase of $31, or 4.0 percent, from the prior year. The largest changes occurred in property taxes and other revenue. Property revenues increased $8 per capita as a result of an overall increase in property tax levies in the current year. The increase in other revenue of $24 per capita is due to additional project escrow deposits and park dedications being received in the current year. -9- The expenditures of governmental funds will also vary from state-wide averages and from year-to-year, based on the City’s circumstances. Expenditures are classified into three types as follows: Current – These are typically the general operating type expenditures occurring on an annual basis, and are primarily funded by general sources such as taxes and intergovernmental revenues. Capital Outlay and Construction – These expenditures do not occur on a consistent basis, more typically fluctuating significantly from year-to-year. Many of these expenditures are project-oriented, and are often funded by specific sources that have benefited from the expenditure, such as special assessment improvement projects. Debt Service – Although the expenditures for debt service may be relatively consistent over the term of the respective debt, the funding source is the important factor. Some debt may be repaid through specific sources such as special assessments or redevelopment funding, while other debt may be repaid with general property taxes. The City’s expenditures per capita of its governmental funds for the past three years, together with state-wide averages, are presented in the following table: Year 2014 2015 2016 Population 2,500–10,000 10,000–20,000 20,000–100,000 50,330 50,161 51,338 Current General government 134$ 109$ 89$ 112$ 100$ 123$ Public safety 255 244 261 221 229 236 Street maintenance 119 117 99 80 72 76 Parks and recreation 88 108 94 102 104 112 All other 64 70 89 – – – 660$ 648$ 632$ 515$ 505$ 547$ Capital outlay and construction 372$ 389$ 286$ 267$ 129$ 164$ Debt service Principal 181$ 178$ 117$ 68$ 71$ 52$ Interest and fiscal 51 40 33 21 22 19 232$ 218$ 150$ 89$ 93$ 71$ State-Wide December 31, 2015 Governmental Funds Expenditures per Capita With State-Wide Averages by Population Class City of Apple Valley As the above table reflects, the City’s current expenditures per capita have also been below the state-wide average. Total expenditures in the City’s governmental funds for 2016 were $40,094,358, an increase of $3,653,691 (10.0 percent). The City’s per capita governmental funds current expenditures increased $42, which was mainly in the general government and public safety functions. Capital outlay experienced an increase of $35 per capita, consistent with the increase in street reconstruction improvements completed in the current year. Debt service expenditures experienced a decrease of $22 per capita as established with the scheduled payment plans approved at the time of issuing debt. -10- GENERAL FUND The City’s General Fund accounts for the financial activity of the basic services provided to the community. The primary services included within this fund are the administration of the municipal operation, police and fire protection, building inspection, streets and highway maintenance, and parks and recreation. The graph below illustrates the change in the General Fund financial position over the last five years. We have also included a line representing annual expenditures to reflect the change in the size of the General Fund operation over the same period. $– $2,500,000 $5,000,000 $7,500,000 $10,000,000 $12,500,000 $15,000,000 $17,500,000 $20,000,000 $22,500,000 $25,000,000 $27,500,000 2012 2013 2014 2015 2016 General Fund Financial Position Year Ended December 31, Fund Balance Cash Balance Expenditures The City’s General Fund cash and investments balance at December 31, 2016 was $14,202,606, a decrease of $96,698 from the previous year. This was mainly due to an increase in accounts receivable at year-end. Total fund balance at December 31, 2016 was $16,609,454, an increase of $517,350 from the prior year. Having an appropriate fund balance is an important factor in assessing the City’s financial health because a government, like any organization, requires a certain amount of equity to operate. Generally, the amount of equity required typically increases as the size of the operation increases. A healthy financial position allows the City to avoid volatility in tax rates; helps minimize the impact of state funding changes; allows for the adequate and consistent funding of services, repairs, and unexpected costs; and can be a factor in determining the City’s bond rating and resulting interest costs. The City Council has formally adopted a fund balance policy that states the City will strive to maintain a minimum unassigned General Fund balance of 50 percent of the subsequent year’s budgeted expenditures. This fund balance calculation excludes other specifically assigned fund balance items. At December 31, 2016, the unassigned fund balance of the General Fund was 50 percent of the subsequent year’s budgeted expenditures, including transfers. -11- The following graph reflects the City’s General Fund revenue sources for 2016 compared to budget: Other Charges for Services Intergovernmental Licenses and Permits Taxes General Fund Revenue Budget Actual Total General Fund revenues for 2016 were $1,071,344 (3.7 percent) over the final budget. Licenses and permits, other revenue (as presented above), and intergovernmental were over budget $955,613, $216,827, and $133,984, respectively. The licenses and permits variance was due to more than anticipated building-related activities. Other revenue was over budget as a result of cell tower rentals being more than anticipated. Intergovernmental revenue exceeded budget due to police and fire aid received being more than anticipated. The following graph presents the City’s General Fund revenues by source for the last five years: $– $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 $22,000,000 $24,000,000 Taxes Intergovernmental Other General Fund Revenue by Source Year Ended December 31, 2012 2013 2014 2015 2016 Total General Fund revenues for 2016 were $30,053,564, an increase of $1,001,415 (3.5 percent) from the previous year. Taxes increased $900,710, due to an overall increase in the general tax levy. The jump in tax revenue from 2012 to 2013 results from a change in accounting for the levy for the Pavement Management Program now reflected in the General Fund beginning with 2013. -12- The following graph reflects the City’s General Fund expenditures compared to budget for 2016: Parks and Recreation Public Works Public Safety General Government General Fund Expenditures Budget Actual Total General Fund expenditures for 2016 were $25,986,358, which was $1,473,287 (5.4 percent) less than budget. This variance was spread across all functions. General government was under budget $586,089, mostly in the finance, data processing, and information technology departments as well as an unspent budget for general government buildings. Public safety was under budget $188,203, mostly in the fire protection and building inspection departments. Public works expenditures were $498,876 under budget, mostly in the streets department. The remaining variance was in parks and recreation expenditures, which was $200,119 under budget, mostly in the parks maintenance and community center departments. The following graph presents the City’s General Fund expenditures by function for the last five years: $– $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 $11,000,000 $12,000,000 General Government Public Safety Public Works Parks and Recreation General Fund Expenditures by Function Year Ended December 31, 2012 2013 2014 2015 2016 General Fund expenditures increased by $1,058,599, or 4.2 percent, from the prior year. General government, public safety, and parks and recreation expenditures increased $191,817, $427,146, $351,180, respectively. General government expenditures increased mainly in the city clerk and general government buildings departments. The increase in public safety expenditures is mainly due to the increased personal services in the police protection department. Parks and recreation increased mainly in the park maintenance department. Typical to other cities we audit, public safety costs for the City comprise the largest portion of General Fund spending and have seen the largest increases over the past five years. -13- ENTERPRISE FUNDS OVERVIEW The City maintains several enterprise funds to account for services the City provides that are financed primarily through fees charged to those utilizing the service. This section of the report provides you with an overview of the financial trends and activities of the City’s enterprise funds, which includes the Municipal Liquor, Municipal Golf Course, Sports Arena, Water and Sewer, Storm Drainage, Street Light Utility, and Cemetery Funds. ENTERPRISE FUNDS FINANCIAL POSITION The following table summarizes the changes in the financial position of the City’s enterprise funds during the years ended December 31, 2016 and 2015, presented both by classification and by fund: Increase 2015 2016 (Decrease) Net position of enterprise funds Total by classification Net investment in capital assets 118,288,727$ 119,417,084$ 1,128,357$ Restricted 178,529 178,977 448 Unrestricted 14,321,165 17,208,279 2,887,114 Total enterprise funds 132,788,421$ 136,804,340$ 4,015,919$ Total by fund Municipal Liquor 4,780,752$ 5,044,315$ 263,563$ Municipal Golf Course 1,257,761 887,471 (370,290) Sports Arena 896,236 1,031,749 135,513 Water and Sewer 84,571,734 86,900,598 2,328,864 Storm Drainage 39,236,836 40,721,016 1,484,180 Street Light Utility 190,198 254,712 64,514 Cemetery 1,854,904 1,964,479 109,575 Total enterprise funds 132,788,421$ 136,804,340$ 4,015,919$ Enterprise Funds Change in Financial Position Net Position as of December 31, In total, the net position of the City’s enterprise funds increased by $4,015,919 during the year ended December 31, 2016. This increase was primarily recognized in the Water and Sewer and Storm Drainage Funds, which increased $2,328,864 and $1,484,180, respectively. -14- MUNICIPAL LIQUOR FUND The following graph presents five years of operating results for the Municipal Liquor Fund: $– $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 2012 2013 2014 2015 2016 Municipal Liquor Fund Year Ended December 31, Sales Cost of Sales Operating Expenses Operating Income (Loss) The Municipal Liquor Fund ended 2016 with a net position of $5,044,315, an increase of $263,563 from the prior year. Of this, $2,304,376 represents the investment in liquor capital assets, $178,977 is restricted for debt service, and $2,560,962 is in unrestricted net position. Liquor sales for 2016 were $8,738,804, $258,390 (3.1 percent) higher than the prior year. The Municipal Liquor Fund generated operating income of $884,539 in 2016, or 10.1 percent, of gross sales, which is an increase from the 9.6 percent reported in fiscal 2015. The Municipal Liquor Fund gross profit margin was 29.4 in fiscal 2016, slightly more than 28.8 in fiscal 2015. -15- MUNICIPAL GOLF COURSE FUND The following graph presents five years of operating results for the Municipal Golf Course Fund: $(200,000) $– $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 2012 2013 2014 2015 2016 Municipal Golf Course Fund Year Ended December 31, Operating Revenue Operating Expenses (Excluding Depreciation) Cost of Goods Sold Depreciation Operating Income (Loss) (Excluding Depreciation) The Municipal Golf Course Fund ended 2016 with a net position of $887,471, a decrease of $370,290 from the prior year. Of this, $4,129,533 represents the investment in golf course land and capital assets, leaving a deficit of ($3,242,062) in unrestricted net position. Municipal Golf Course Fund operating revenues for 2016 were $1,354,645, which is $33,176 less than last year. Operating expenses (excluding depreciation) for 2016 were $1,301,452, an increase of $92,998 from the prior year. On an annual basis, this fund has had to borrow from other funds to fund cash flow and capital needs. This interfund borrowing was a total of $2,858,363 at December 31, 2016. Interfund borrowing for cash flow needs totals $867,176 at December 31, 2016. The remainder, $1,991,187, is for capital needs and is to be repaid over multiple years. We recommend the City continue to monitor the financial results in this fund and continue to update the long-range financial plan for this fund. -16- SPORTS ARENA FUND The following graph presents five years of operating results for the Sports Arena Fund: $– $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 2012 2013 2014 2015 2016 Sports Arena Fund Year Ended December 31, Sales and User Fees Operating Expenses (Excluding Depreciation) Nonoperating Revenue (Expense) Income (Loss) The Sports Arena Fund ended 2016 with a net position of $1,031,749, an increase of $135,513 from the prior year. Of the net position balance, $1,188,872 represents investments in sports arena capital assets, leaving a deficit of ($157,123) of unrestricted net position. Sports Arena Fund operating revenues for 2016 were $783,089, an increase of $60,819 from the prior year. Operating expenses (including cost of goods sold and excluding depreciation) for 2016 were $618,747, an increase of $11,770 from the prior year. On an annual basis, this fund has had to borrow from other funds to fund cash flow needs. This interfund borrowing was a total of $230,427 at December 31, 2016. We recommend the City continue to monitor the financial results in this fund and continue to update the long-range financial plan for this fund. -17- WATER AND SEWER FUND The following graph presents five years of operating results for the Water and Sewer Fund: $– $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 2012 2013 2014 2015 2016 Water and Sewer Fund Year Ended December 31, Operating Revenue Operating Expenses Operating Income (Loss) The Water and Sewer Fund ended 2016 with a net position of $86,900,598, an increase of $2,328,864 from the prior year. Of this, $73,292,345 represents the investment in water and sewer distribution system capital assets, leaving $13,608,253 of unrestricted net position. Water and Sewer Fund operating revenue was $9,450,362 for 2016, an increase of $461,951 (5.1 percent) from the prior year, due to an increase in rates of 3.0 percent. Operating expenses of $9,130,962 were $1,180,881 (14.9 percent) higher than last year, which includes an increase in depreciation of $881,609. Although this fund is in a healthy financial position, we suggest that the City continue to review the water and sewer rates on an annual basis. Water and sewer rates are generally designed to cover operating costs and provide an accumulation of resources for significant repairs and replacements, and an operating cushion for potential negative years in financial operations. -18- STORM DRAINAGE FUND The following graph presents five years of operating results for the Storm Drainage Fund: $– $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 2012 2013 2014 2015 2016 Storm Drainage Fund Year Ended December 31, Operating Revenue Operating Expenses Operating Income (Loss) The Storm Drainage Fund ended 2016 with a net position of $40,721,016, an increase of $1,484,180 from the prior year. Of this, $37,522,835 represents the investment in storm drainage capital assets and $3,198,181 of unrestricted net position. Storm Drainage Fund operating revenues for 2016 were $1,717,350, which was an increase of $87,989 from the prior year, due to the increased rates. Operating expenses for 2016 were $1,399,093, which was $22,423 higher than the prior year, mainly due to increased personal and contractual services in the current year. -19- STREET LIGHT UTILITY FUND The following graph presents five years of operating results for the Street Light Utility Fund: $– $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 $550,000 2012 2013 2014 2015 2016 Street Light Utility Fund Year Ended December 31, Operating Revenue Operating Expenses Operating Income (Loss) The Street Light Utility Fund ended 2016 with a net position of $254,712, an increase of $64,514 from the prior year, which is all in unrestricted net position. Street Light Utility Fund operating revenues for 2016 were $500,877, a slight increase of $17,197 from the prior year. Operating expenses for 2016 were $437,439, a decrease of $9,205 from the previous year. -20- CEMETERY FUND The following graph presents five years of operating results for the Cemetery Fund: $– $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 2012 2013 2014 2015 2016 Cemetery Fund Year Ended December 31, Operating Revenue Operating Expenses Operating Income (Loss) The Cemetery Fund ended 2016 with a net position of $1,964,479, an increase of $109,575 from the prior year. Of the net position balance, $979,123 represents investments in cemetery capital assets, leaving $985,356 of unrestricted net position. Cemetery Fund operating revenues for 2016 were $160,716, an increase of $28,411 from the prior year. Operating expenses for 2016 were $60,790, an increase of $11,704 from the prior year. -21- GOVERNMENT-WIDE FINANCIAL STATEMENTS In addition to fund-based information, the current reporting model for governmental entities also requires the inclusion of two government-wide financial statements designed to present a clear picture of the City as a single, unified entity. These government-wide statements provide information on the total cost of delivering services, including capital assets and long-term liabilities. STATEMENT OF NET POSITION The Statement of Net Position essentially tells you what your city owns and owes at a given point in time, the last day of the fiscal year. Theoretically, net position represents the resources the City has leftover to use for providing services after its debts are settled. However, those resources are not always in spendable form, or there may be restrictions on how some of those resources can be used. Therefore, the Statement of Net Position divides the net position into three components: Net Investment in Capital Assets – The portion of net position reflecting equity in capital assets (i.e., capital assets minus related debt). Restricted Net Position – The portion of net position equal to resources whose use is legally restricted minus any noncapital-related liabilities payable from those same resources. Unrestricted Net Position – The residual balance of net position after the elimination of net investment in capital assets and restricted net position. The following table presents the components of the City’s net position as of December 31, 2016 and 2015, for governmental activities and business-type activities: Increase 2015 2016 (Decrease) Net position Governmental activities Net investment in capital assets 86,664,918$ 93,945,022$ 7,280,104$ Restricted 16,541,831 16,141,535 (400,296) Unrestricted 26,805,077 24,394,132 (2,410,945) Total governmental activities 130,011,826 134,480,689 4,468,863 Business-type activities Net investment in capital assets 118,288,727 119,417,084 1,128,357 Restricted 178,529 178,977 448 Unrestricted 14,230,604 17,104,636 2,874,032 Total business-type activities 132,697,860 136,700,697 4,002,837 Total net position 262,709,686$ 271,181,386$ 8,471,700$ As of December 31, The City’s total net position at December 31, 2016 was $8,471,700 higher than the previous year-end, which was comprised of increases of $4,468,863 and $4,002,837 in the governmental and business-type activities, respectively. -22- STATEMENT OF ACTIVITIES The Statement of Activities tracks the City’s yearly revenues and expenses, as well as any other transactions that increase or reduce total net position. These amounts represent the full cost of providing services. The Statement of Activities provides a more comprehensive measure than just the amount of cash that changed hands, as reflected in the fund-based financial statements. This statement includes the cost of supplies used, depreciation of long-lived capital assets, and other accrual-based expenses. The following table presents the change in the net position of the City for the years ended December 31, 2016 and 2015: 2015 2016 Net (expense) revenue Governmental activities General government (3,761,329)$ (5,255,652)$ Public safety (11,198,273) (13,022,297) Public works 1,491,630 281,992 Parks and recreation (4,554,078) (4,284,534) Interest and fiscal charges (1,037,567) (912,007) Business-type activities Municipal liquor 708,045 866,781 Municipal golf course (265,938) (372,169) Sports arena (47,945) 13,296 Water and sewer 2,319,808 2,855,345 Storm drainage 818,473 1,431,756 Cemetery 83,219 99,926 Street light utility 37,036 63,438 Total net (expense) revenue (15,406,919) (18,234,125) General revenues Property taxes 23,595,262 24,160,391 Other taxes 186,512 185,568 Franchise taxes 1,259,271 1,309,757 Grants and contributions not restricted to specific programs 40,061 37,719 Other general revenues 7,387 6,888 Investment earnings (net of market value adjustment) 1,099,222 1,005,502 Total general revenues 26,187,715 26,705,825 Change in net position 10,780,796 8,471,700 Net position – beginning 251,928,890 262,709,686 Net position – ending 262,709,686$ 271,181,386$ Net Change One of the goals of this statement is to provide a side-by-side comparison to illustrate the difference in the way the City’s governmental and business-type operations are financed. The table clearly illustrates the dependence of the City’s governmental operations on general revenues, such as property taxes and unrestricted grants. It also shows if the City’s business-type activities are generating sufficient program revenues (service charges and program-specific grants) to cover expenses. This is critical given the current downward pressures on the general revenue sources. -23- LEGISLATIVE UPDATES The 2016 legislative session, falling in the second half of the state’s fiscal biennium, was scheduled to be a short session lasting only 11 weeks. Since biennial budgets are adopted in odd-year legislative sessions, less time is usually needed for the even-year sessions. However, because the 2015 Legislature adjourned without passing funding bills in several significant areas, it was anticipated that the 2016 legislative session would be considerably more active than the typical short session. In spite of this, only a few funding bills were brought forth to the Governor by the end of the 2016 regular legislative session, including a supplemental budget bill and an omnibus tax bill. The Governor chose not to sign the tax bill due to a drafting error that would have resulted in an unintended reduction of state revenues. When the framework for a special session could not be agreed upon, the fiscal year ended without the adoption of a new tax bill, capital bonding bill, or transportation funding package. The following is a summary of recent legislation affecting Minnesota cities: Border-to-Border Broadband Grants – The 2016 supplemental budget act appropriated $35 million in fiscal 2017 for a Border-to-Border Broadband Grant Program. The grants, available through the Office of Broadband Development in the Department of Employment and Economic Development (DEED), provide funding to help communities meet state goals for the development of state-wide high-speed broadband access, focusing on areas currently considered to be underserved or with a high concentration of low-income households. Equity-Related Programs and Grants – The 2016 supplemental budget act also appropriated $35 million in fiscal 2017 for the financing of equity-related programs through DEED, the majority of which was allocated for programs and grants for communities of color, people with disabilities, seniors, and youth. Sales Tax Exemption – Effective January 1, 2017, the sales tax exemption on the purchase of goods or services enacted for cities in 2014 is expanded to include all special districts; city, county, or township instrumentalities; economic development authorities; housing and redevelopment authorities; and all joint power boards or organizations. Taxes Covered Under Debt Management Services – Amendments were made to the statutes governing debt management and debt settlement services to clarify the status of delinquent taxes owed to Minnesota local governments and political subdivisions as debt with regard to those services, and include those entities as creditors for the purpose of debt management services. Elections – An omnibus elections law was passed making several changes to elections administration requirements. In addition to establishing a presidential primary to take the place of the current caucus system beginning in 2020, the law modified election procedures in a number of areas, including: absentee balloting, voting station dimensions, election canvassing, candidate filing, the extension of polling hours to accommodate voters in line at closing, and emergency election plans. Police-Worn Body Cameras – A number of new laws were enacted related to portable recording systems (police-worn body cameras) and the data derived from their use, addressing: data retention and destruction, permitted uses of the systems, audits of the data, and vendor practices. Among the changes are a requirement for gathering public input before purchasing or implementing the use of portable recording systems, and requirements for the adoption and dissemination of written policies over the use of portable recording systems. Veteran Preference Act – New language was added to state statutes clarifying that Minnesota cities and towns may require a veteran to complete an initial probationary period when hired. -24- Charitable Gambling – Cities that require charitable gambling organizations to contribute 10 percent of their net profits to the city for charitable purposes are now required to acknowledge the source of the funds, either in communications about the receipt or distribution of the funds. Donation of Surplus Equipment – Local governments are now permitted to donate surplus public works equipment, cell phones, or emergency medical and firefighting equipment to nonprofit organizations. The donation of surplus equipment was added to the list of exceptions to municipal tort liability. Prior to making any such donations, a city must adopt a policy on how it will determine what equipment is considered surplus and eligible for donation and how it will determine which nonprofit organizations will receive such donations. The policy must address the city’s obligation to disclose that the donated equipment may be defective and cannot be relied upon for safety. Temporary Family Health Care Housing Permits – A new special land use permit system was established for a specific type of mobile health care-related mobile housing, intended to provide transitional housing for seniors. Cities will be required to implement the new permit system unless they officially act to opt out of the program. The program sets forth requirements for structure and placement, the permit process and duration, applicants, inspections, and the process for opting out. Partition Fence Viewing Exemption – Cities now have the authority to pass a resolution to exempt adjoining owners or occupants from the partition fence law when their land is considered to be less than 20 acres combined, thereby relieving the city of the responsibility of participating in a potentially costly “fence-viewing” process to mediate disputes between adjoining landowners required to share the costs of constructing fences. -25- ACCOUNTING AND AUDITING UPDATES GASB STATEMENT NO. 73, ACCOUNTING AND FINANCIAL REPORTING FOR PENSIONS AND RELATED ASSETS THAT ARE NOT WITHIN THE SCOPE OF GASB STATEMENT 68, AND AMENDMENTS TO CERTAIN PROVISIONS OF GASB STATEMENTS 67 AND 68 This statement extends the approach to accounting and financial reporting established in GASB Statement No. 68 to all pensions, including those not administered through a trust. Governmental employers participating in such plans will be required to report the total of any unfunded pension liability related to the plan in their accrual basis financial statements, rather than the net pension liability. The requirements of this statement that address accounting and financial reporting by employers and governmental nonemployer contributing entities for pensions not within the scope of GASB Statement No. 68, are effective for financial statements for fiscal years beginning after June 15, 2016. This statement also clarified the application of certain provisions of GASB Statement Nos. 67 and 68 regarding 10-year schedules of required supplementary information (RSI) and other recognition issues pertaining to employers and nonemployer contributing entities effective for financial statements for fiscal years beginning after June 15, 2015. GASB STATEMENT NO. 74, FINANCIAL REPORTING FOR POSTEMPLOYMENT BENEFIT PLANS OTHER THAN PENSION PLANS This statement establishes new accounting and financial reporting requirements for other post-employment benefits (OPEB) plans, replacing GASB Statement Nos. 43 and 57. It also includes requirements for defined contribution OPEB plans that replace the requirements for those OPEB plans in GASB Statement Nos. 25, 43, and 50. This statement will improve financial reporting primarily through enhanced note disclosures and schedules of RSI that will be presented by OPEB plans administered through trusts meeting the specified criteria. The new information will enhance the decision-usefulness of the financial reports of those OPEB plans, their value for assessing accountability, and their transparency by providing information about measures of net OPEB liabilities and explanations of how and why those liabilities changed from year-to-year. The net OPEB liability information, including ratios, will offer an up-to-date indication of the extent to which the total OPEB liability is covered by the fiduciary net position of the OPEB plan. The comparability of the reported information for similar types of OPEB plans will be improved by the changes related to the attribution method used to determine the total OPEB liability. The contribution schedule will provide measures to evaluate decisions related to the assessment of contribution rates in comparison with actuarially determined rates, if such rates are determined. In addition, new information about rates of return on OPEB plan investments will inform financial report users about the effects of market conditions on the OPEB plan’s assets over time and provide information for users to assess the relative success of the OPEB plan’s investment strategy and the relative contribution that investment earnings provide to the OPEB plan’s ability to pay benefits to plan members when they come due. This statement is effective for financial statements for fiscal years beginning after June 15, 2016. Earlier application is encouraged. -26- GASB STATEMENT NO. 75, ACCOUNTING AND FINANCIAL REPORTING FOR POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, establishes new accounting and financial reporting requirements for governments whose employees are provided with OPEB, as well as for certain nonemployer governments that have a legal obligation to provide financial support for OPEB provided to the employees of other entities. This statement replaces the requirements of GASB Statement Nos. 45 and 57. This statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. Similar to changes implemented for pensions, this statement requires the liability of employers and nonemployer contributing entities to employees for defined benefit OPEB (net OPEB liability) to be measured as the portion of the present value of projected benefit payments to be provided to current active and inactive employees that is attributed to those employees’ past periods of service (total OPEB liability), less the amount of the OPEB plan’s fiduciary net position. Note disclosure and RSI requirements about defined benefit OPEB also are addressed. This statement is effective for fiscal years beginning after June 15, 2017. Earlier application is encouraged. GASB STATEMENT NO. 80, BLENDING REQUIREMENTS FOR CERTAIN COMPONENT UNITS—AN AMENDMENT OF GASB STATEMENT NO. 14 The objective of this statement is to clarify the financial statement presentation requirements for certain component units. This statement amends the blending requirements for the financial statement presentation of component units of all state and local governments. The additional criterion requires blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member. The additional criterion does not apply to component units included in the financial reporting entity pursuant to the provisions of GASB Statement No. 39, Determining Whether Certain Organizations Are Component Units—an amendment of GASB Statement No. 14. The requirements of this statement are effective for reporting periods beginning after June 15, 2016. Earlier application is encouraged. GASB STATEMENT NO. 81, IRREVOCABLE SPLIT-INTEREST AGREEMENTS This statement provides recognition and measurement guidance for the accounting and financial reporting of irrevocable split-interest agreements by governments that are the beneficiary of such an agreement. Split-interest agreements are a type of giving agreement used by donors to provide resources to two or more beneficiaries, including governments. This statement requires that a government that receives resources pursuant to an irrevocable split-interest agreement (1) recognize assets, liabilities, and deferred inflows of resources at the inception of the agreement, (2) recognize assets representing its beneficial interests in irrevocable split-interest agreements that are administered by a third party if the government controls the present service capacity of the beneficial interests, and (3) recognize revenue when the resources become applicable to the reporting period. The requirements of this statement are effective for financial statements for periods beginning after December 15, 2016, and should be applied retroactively. Earlier application is encouraged. -27- GASB STATEMENT NO. 82, PENSION ISSUES—AN AMENDMENT OF GASB STATEMENTS NO. 67, NO. 68, AND NO. 73 The intent of this statement is to address certain issues raised with respect to GASB Statement Nos. 67, 68, and 73. This statement amends GASB Statement Nos. 67 and 68, changing the definition of “covered payroll” utilized in schedules of RSI from the payroll of employees that are provided with pensions through the pension plan, to the payroll on which contributions to a pension plan are based. It clarifies that a deviation, as the term is used in Actuarial Standards of Practice, is not considered to be in conformity with the requirements of GASB Statement Nos. 67, 68, or 73 for the selection of assumptions used in determining the total pension liability and related measures. It also clarifies that payments made by an employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements should be classified as plan member contributions for purposes of Statement No. 67 and as employee contributions for purposes of Statement No. 68, and requires that an employer’s expense and expenditures for those amounts be recognized in the period for which the contribution is assessed and classified in the same manner as the employer classifies similar compensation other than pensions. The requirements of this statement are effective for reporting periods beginning after June 15, 2016, except for the requirements of this statement for the selection of assumptions in a circumstance in which an employer’s pension liability is measured as of a date other than the employer’s most recent fiscal year-end. In that circumstance, the requirements for the selection of assumptions are effective for that employer in the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017. Earlier application is encouraged. GASB STATEMENT NO. 83, CERTAIN ASSET RETIREMENT OBLIGATIONS This statement addresses accounting and financial reporting for certain asset retirement obligations (ARO), which are legally enforceable liabilities associated with the retirement of a tangible capital asset. This statement establishes criteria for determining the timing and pattern of recognition of a liability and a corresponding deferred outflow of resources for ARO. A government that has legal obligations to perform future asset retirement activities related to its tangible capital assets should recognize a liability when it is both incurred and reasonably estimable. The measurement of an ARO is required to be based on the best estimate of the current value of outlays expected to be incurred, and a deferred outflow of resources associated with an ARO is required to be measured at the amount of the corresponding liability upon initial measurement. This statement requires the current value of a government’s AROs to be adjusted for the effects of general inflation or deflation at least annually, and a government to evaluate all relevant factors at least annually to determine whether the effects of one or more of the factors are expected to significantly change the estimated asset retirement outlays. A government should remeasure an ARO only when the result of the evaluation indicates there is a significant change in the estimated outlays. Deferred outflows of resources should be reduced and recognized as outflows of resources in a systematic and rational manner over the estimated useful life of the tangible capital asset. If a government owns a minority interest in a jointly owned tangible asset where a nongovernmental entity is the majority owner or has operational responsibility for the jointly owned asset, the government’s minority share of an ARO should be reported using the measurement produced by the nongovernmental majority owner or the nongovernmental minority owner that has operational responsibility, without adjustment to conform to the liability measurement and recognition requirements of this statement. -28- The statement also requires disclosures of any funding or financial assurance requirements a government has related to the performance of asset retirement activities, along with any assets restricted for the payment of the government’s AROs. This statement also requires disclosure of information about the nature of a government’s AROs, the methods and assumptions used for the estimates of the liabilities, and the estimated remaining useful life of the associated tangible capital assets. If an ARO (or portions thereof) has been incurred by a government but is not yet recognized because it is not reasonably estimable, the government is required to disclose that fact and the reasons therefor. This statement requires similar disclosures for a government’s minority shares of AROs. The requirements of this statement are effective for reporting periods beginning after June 15, 2018. Earlier application is encouraged. GASB STATEMENT NO. 84, FIDUCIARY ACTIVITIES This statement establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities. An activity meeting the criteria should be reported in a fiduciary fund in the basic financial statements, which should present a statement of fiduciary net position and a statement of changes in fiduciary net position. This statement describes four fiduciary funds that should be reported, if applicable: (1) pension (and other employee benefit) trust funds, (2) investment trust funds, (3) private-purpose trust funds, and (4) custodial funds. Custodial funds generally should report fiduciary activities that are not held in a trust or equivalent arrangement that meets specific criteria. A fiduciary component unit, when reported in the fiduciary fund financial statements of a primary government, should combine its information with its component units that are fiduciary component units and aggregate that combined information with the primary government’s fiduciary funds. This statement also provides for recognition of a liability to the beneficiaries in a fiduciary fund when an event has occurred that compels the government to disburse fiduciary resources, defined as when a demand for the resources has been made or when no further action, approval, or condition is required to be taken or met by the beneficiary to release the assets. The requirements of this statement are effective for reporting periods beginning after December 15, 2018. Earlier application is encouraged. CITY OF APPLE VALLEY DAKOTA COUNTY, MINNESOTA Special Purpose Audit Reports Year Ended December 31, 2016 THIS PAGE INTENTIONALLY LEFT BLANK Page Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 1–2 Independent Auditor’s Report on Minnesota Legal Compliance 3 Schedule of Findings and Responses 4 Table of Contents CITY OF APPLE VALLEY DAKOTA COUNTY, MINNESOTA THIS PAGE INTENTIONALLY LEFT BLANK -1- INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the City Council and Management City of Apple Valley, Minnesota We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Apple Valley, Minnesota (the City) as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 2, 2017. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be a material weakness. We did identify one deficiency in internal control, described in the accompanying Schedule of Findings and Responses as item 2016-001, that we consider to be a significant deficiency. (continued) -2- COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. CITY’S RESPONSE TO FINDING The City’s response to the finding identified in our audit is described in the accompanying Schedule of Findings and Responses. The City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota June 2, 2017 -3- INDEPENDENT AUDITOR’S REPORT ON MINNESOTA LEGAL COMPLIANCE To the City Council and Management City of Apple Valley, Minnesota We have audited, in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Apple Valley, Minnesota (the City) as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 2, 2017. MINNESOTA LEGAL COMPLIANCE The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota Statute § 6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our audit considered all of the listed categories. In connection with our audit, nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities. 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. PURPOSE OF THIS REPORT 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 report is not suitable for any other purpose. Minneapolis, Minnesota June 2, 2017 CITY OF APPLE VALLEY Schedule of Findings and Responses Year Ended December 31, 2016 -4- FINDINGS – SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER FINANCIAL REPORTING 2016-001 INADEQUATE SEGREGATION OF DUTIES Criteria – Internal control over financial reporting. Condition – The City of Apple Valley, Minnesota (the City) has limited segregation of duties over cash receipts, community center refunds and reimbursements, and utility billing adjustments. Context – This is a current year and prior year finding. Cause – The limited segregation of duties is primarily caused by the limited size of the City’s finance department staff. Effect – One important element of internal accounting controls is an adequate segregation of duties such that no one individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transaction. A lack of segregation of duties subjects the City to a higher risk that errors or fraud could occur and not be detected in a timely manner in the normal course of business. Recommendation – We recommend that the City continue to review its accounting procedures and internal controls and make improvements on an ongoing basis within the limits of the staff available. Management Response – There is no disagreement with the audit finding. The City has made improvements during the current year and is in the process of making additional improvements to its internal control structure to maximize the segregation of duties in all areas within the limits of the staff available. I T E M: 4.M. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A dopt Resolution Adopting 2017 P erformance Measures and Approving P articipation in P erformance Measurement P rogram S taff Contact: J ake B osley, F inance Analyst D epartment / D ivision: F inance Department AC T I O N RE Q UE S T E D: Adopt resolution adopting 2017 performance measures and approve participation in performance measurement program. S UM M ARY: In 2010, the Minnesota State Legislature created the C ouncil on Local Results and Innovation (C LRI). T he C LRI created a standard set of ten performance measures for cities intended to aid residents, taxpayers, and state and local elected officials in determining the efficacy of cities in providing services and to measure residents' opinions on those services. In February of 2012, the C LRI created a comprehensive performance measurement system for cities and counties to implement. In 2013, the C LRI revised the performance measures, removing the need to include community survey results, and clarified the system requirements to increase participation in the program. T he C ity of Apple Valley participated in the program in the past, but did not have the community survey results to continue participating at the time. T he measures now provide for performance measurements other than what would be obtained through a community survey. T he C ity C ouncil is now being asked to continue its participation in the program for 2017. B AC K G RO UND : Participation in the program is voluntary. However, participating cities are eligible for a reimbursement of $0.14 per capita in local government aid and are exempt from levy limits under sections 275.70 t o 275.74 for taxes payable in the following calendar year, if levy limits are in effect. T he C ity is required to file a report on the collected measurements by J uly 1st. Attached is a draft of the performance data that was collected in 2016 that staff intends to submit to the State Auditor. T he first page is the summary scorecard, followed by a graphical presentation. T he results need to be publicized and shared with the community. Staff proposes to publish the survey on the City's website and include the information in an upcoming newsletter. Attached is a draft report that would be used to share the data. Staff recommends the C ity C ouncil approve the attached resolution adopting 2017 performance measures as recommended by the C LRI. B UD G E T I M PAC T: N/A AT TAC HM E NT S: R esolution Exhibit CITY OF APPLE VALLEY RESOLUTION NO. 2017- A RESOLUTION ADOPTING AND REPORTING PERFORMANCE MEASURES WHEREAS, benefits to the City of Apple Valley for participation in the Minnesota Council on Local Results and Innovation’s comprehensive performance measurement program are outlined in Minn. Stat. § 6.91 and include eligibility for a reimbursement as set by State Statute; and WHEREAS, any city/county participating in the comprehensive performance measurement program is also exempt from state levy limits under Minn. Stat. § 275.70 to 275.74 for taxes payable, if levy limits are in effect; and WHEREAS, the City Council of Apple Valley has adopted and implemented at least 10 of the performance measures, as developed by the Council on Local Results and Innovation, and a system to use this information to help plan, budget, manage and evaluate programs and processes for optimal future outcomes. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Apple Valley, Dakota County, Minnesota, that this Council will continue to report the results of the performance measures to its citizenry by the end of the year through publication, direct mailing, posting on the City’s website, or through a public hearing at which the budget and levy will be discussed and public input allowed. BE IT FURTHER RESOLVED, by the City Council of the City of Apple Valley, Dakota County, Minnesota, that this Council will submit to the Office of the State Auditor the actual results of the performance measures adopted by the City. ADOPTED this 8th day of June, 2017. ___________________________________ Mary Hamann-Roland, Mayor ATTEST: _____________________________________ Pamela J. Gackstetter, City Clerk 2017 City Performance Measurement Program Results (Data from 2012-2016, Unless Otherwise Noted) Background In 2010, the Minnesota Legislature created the Council on Local Results and Innovation (CLRI). Currently, the CLRI has a standard set of 27 performance measurements for counties and 29 performance measurements for cities that they believe will aid residents, taxpayers, and state and local elected officials in determining the efficacy of counties and cities in providing services. Participation in the standard measures program by a city or a county is voluntary. Cities and counties that choose to participate in the standards measure program may be eligible for funding of 14 cent per capita from the State of MN. The Apple Valley City Council chose to participate in the program for the 2017 reporting year. In order to receive the per capita reimbursement for the following calendar year, cities must adopt and implement a minimum of ten performance measures from the CLRI’s list of 29 measures and file a report with the Office of the State Auditor. The measurements are divided into six different categories: General, Police Services, Fire & EMS Services, Streets, Water, and Sanitary Sewer. As part of this process, the City submitted five years of data (generally 2012 to 2016, sometimes 2011 to 2015) for 15 of the 29 standard performance measurements, which were selected from each of the six categories. Below are the data related to each of the measurements the City chose to track. GENERAL MEASURES Percent Change in the Taxable Property Market Value: Nuisance Code Enforcement Cases per 1,000 Population: -8.88% -6.64% 2.77% 8.50% 5.59% -10.00% -5.00% 0.00% 5.00% 10.00% 2012 2013 2014 2015 2016 Property Values are Recovering Following the Latest Recession % Change 53.33 37.58 32.23 38.50 46.89 - 10.00 20.00 30.00 40.00 50.00 60.00 2012 2013 2014 2015 2016 Nuisance Code Enforcement Cases per 1,000 Population Cases/1,000 Population City of Apple Valley Bond Rating: The City of Apple Valley maintains the highest possible credit rating from both Moody’s and Standard & Poor’s ratings agencies. The City did not start receiving ratings from Standard & Poor’s until 2014. Accuracy of Post-Election Audit (% of Ballots Counted Accurately): One precinct in the City of Apple Valley was selected for the Post-Election Review in each of the last three elections (2012, 2014, and 2016). There were no elections held in 2013 or 2015. The results from each election met the standard of acceptable performance of the voting system. In 2012, of the 2,080 ballots audited, there was one ballot that had been marked with an “X” outside the oval or target, which prevented the ballot tabulator from counting the vote. The intent of the mark was clear during the manual counting of the Post-Election Review. There were 1,532 and 2,072 ballots audited in 2014 and 2016, respectively. The manual counts for both years matched 100 percent to the machine counts taken on Election Day. 99.95% 100.00% 100.00% 98.00% 98.50% 99.00% 99.50% 100.00% 2012 2014 2016 Percent of Ballots Counted Accurately Percent of Ballots Counted Accurately POLICE SERVICES MEASURES Part I and II Crime Rates, per the Minnesota Bureau of Criminal Apprehension: Part I and II Crime Clearance Rates, per the Minnesota Bureau of Criminal Apprehension: Part I crimes include murder, rape, aggravated assault, burglary, larceny, motor vehicle theft, arson, and human trafficking. Part II crimes include other assaults, forgery and counterfeiting, embezzlement, stolen property, vandalism, weapons, prostitution, other sex offenses, narcotics, gambling, family and children crime, DUI, liquor laws, disorderly conduct, and other offenses. 2016 data will not be available until July 2017. Therefore, the date range shown is 2011 to 2015. 1,235 1,159 1,214 1,088 1,207 2,088 1,893 1,756 1,640 1,919 - 500 1,000 1,500 2,000 2,500 2011 2012 2013 2014 2015 Part I and II Crime Rates Part I Part II 31.74% 32.61% 34.43% 33.73% 38.44% 62.16% 61.44% 63.95% 61.65% 62.69% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 2011 2012 2013 2014 2015 Part I and II Crime Clearance Rates Part I Cleared Rate Part II Cleared Rate FIRE SERVICES MEASURES Insurance Industry Rating of Fire Services: The City of Apple Valley completed a Public Protection Classification (PPC™) survey evaluating the community’s structural fire suppression capabilities in 1997 and again in 2011. In 2011, the City’s overall score was a Class 3 rating. Due to a recent revision in how the Insurance Service Office (ISO) rates certain properties, those located over 1,000 feet from a fire hydrant are now categorized Class 9. Fire Calls per 1,000 Population: Emergency Medical Services (EMS) Calls per 1,000 Population: NOTE: EMS services for the City of Apple Valley are provided by Allina Medical Transportation. 15.59 16.25 15.68 14.53 15.78 13.50 14.00 14.50 15.00 15.50 16.00 16.50 2012 2013 2014 2015 2016 Fire Calls per 1,000 Population Fire Calls/1,000 Population 12.81 12.64 12.38 13.32 15.82 - 5.00 10.00 15.00 20.00 2012 2013 2014 2015 2016 EMS Calls per 1,000 Population EMS Calls/1,000 Population STREETS MEASURES Average City Street Pavement Condition Rating: The implementation of the City’s Pavement Management Program in 2013 is resulting in improving street quality. The Pavement Condition Index target rating is 73. Expenditures for Road Rehabilitation per Paved Lane Mile Rehabilitated: $144,548 $104,611 $206,540 $220,715 $133,695 - 50,000 100,000 150,000 200,000 250,000 2012 2013 2014 2015 2016 Expenditures per Paved Lane Mile Expenditures per Paved Land Mile Percentage of all Jurisdiction Lane Miles Rehabilitated in the Year: Average Hours to Complete Road System During Snow Event: 2.93% 2.88% 4.59% 2.64% 1.75% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2012 2013 2014 2015 2016 Percentage of Lane Miles Rehabilitated Percentage of Lane Miles Rehabilitated 9.5 7.6 7.9 7.4 8.0 - 2.0 4.0 6.0 8.0 10.0 2012 2013 2014 2015 2016 Average Hours to Complete Road System During Snow Event of Over 2 Inches Average hours to complete road system during snow event WATER & SANITARY SEWER MEASURES Operating Cost per 1,000,000 Gallons of Water Pumped/Produced: Note: Expanded Water Treatment Plant began operations in 2015. Number of Sewer Blockages on City System per 100 Connections: $1,220 $1,500 $1,654 $1,797 $2,017 - 500 1,000 1,500 2,000 2,500 2012 2013 2014 2015 2016 Cost/1,000,000 Gallons Cost/1,000,000 Gallons 0.04 0.02 0.00 0.01 0.03 - 0.005 0.010 0.015 0.020 0.025 0.030 0.035 0.040 0.045 2012 2013 2014 2015 2016 Blockages/100 Connections Blockages/100 Connections I T E M: 4.N. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove Release of Various Financial Guarantees S taff Contact: J oan Murphy, D epartment Assistant D epartment / Division: C ommunity D evelopment Department AC T I O N RE Q UE S T E D: Approve release of various financial guarantees. S UM M ARY: T he City holds numerous financial guarantees to ensure the installation of certain improvements in new developments, as well as to assure protection of natural resources. Staff review of the status of these developments indicates that the following actions are in order: 1.C ortland T hird Addition (PC 14-06-F) LO C #SLC MMSP07358 O riginal Deposit on 7/10/14 $674,790.28 Reduced 1/28/16 to $27,200.00 Reduce now to $ 0.00 2.C ortland Fourth Addition (PC 15-17-F) LO C #005904647 O riginal Deposit on 9/8/15 $872,000.00 Reduced 12/22/15 to $341,495.00 Reduced 5/26/16 to $174,400.00 Reduced 1/12/17 to $10,000.00 Reduce now to $ 0.00 3 C ortland Fifth Addition (PC 16-16-F) LO C 006115848 O riginal Deposit on 6/23/16 $1,202,654.00 Reduced 12/22/16 to $61,550.00 Reduce now to $ 0.00 B AC K G RO UND : N/A B UD G E T I M PAC T: N/A I T E M: 4.O. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A dopt Resolution Approving Plans and S pecifications f or P roject 2017-135, C S A H 42 & Embry P ath I ntersection I mprovements, and A uthorizing Advertising for Receipt of B ids at 10:00 a.m. on J uly 11, 2017 S taff Contact: B randon A nderson, City E ngineer D epartment / D ivision: P ublic Works D epartment AC T I O N RE Q UE S T E D: Adopt resolution approving plans and specifications and authorizing receipt of bids at 10:00 a.m. on J uly 11, 2017, for Project 2017-135, C SA H 42 & Embry Path Intersection Improvements. S UM M ARY: Attached for consideration is a resolution approving plans and specifications and setting the date for receipt of bids for the C S A H 42 & Embry Path Intersection Improvements project. T he Final Addition of the C ortland and Embry Place Developments are currently under construction and require an additional access point onto C SA H 42 from Embry Path under the terms of the previous approved Private D evelopment Agreements. T he City of A pple Valley 2017 Capital Improvement Program also identifies Embry Path as a collector street and includes some cost share with the Developer for the oversizing. A J oint Powers Agreement (J PA) between Dakota C ounty and the C ity of Apple Valley is also under consideration for approval for definition of the cost share requirements. T he scope of the project generally includes total reconstruction of the C SA H 42 and Embry Path intersection, converting it from a full movement intersection to a 3/4 intersection and the addition of a designated right turn lane from C S A H 42. Maps of the proposed project area are attached (Figure:1). T his project is tentatively scheduled for construction in 2017. B AC K G RO UND : N/A B UD G E T I M PAC T: Project costs and funding included in the preliminary 2017 operating budget are summarized as follows: Estimated Project C osts: C onstruction C ost $ 628,250 Design, C onstruction Admin and C ontingency 169,664 Total Estimated Cost $ 797,914 Estimated Project Funding: Municipal State Aid $45,416 Dakota C ounty Cost Share 269,400 Road Improvement Fund 175,000 Private Development (Assessment)308,098 Total Estimated Funding $ 797,914 AT TAC HM E NT S: Map R esolution Exhibit G±WX G±WX G£WX G£WX LebanonCemetary CortlandPark IntersectionConversion 3/4 Access Added 2016 EASTER AVEEAMES WAY 150TH ST W EAGL EBAYDRDUNBAR AVEDUNDEECTEL Y P A T H DUPONTPATHDUTCHES S CT ECHO WA YEMBERCT DUNBAR BLVDDODDBLVD153RD ST W 154TH ST W 155TH ST WPILOT KNOB RDD U N D E E AVEEMORY AVEE A GLE BAY W A Y D UTCHMAN WAY ELYAVEEM B L EM W A Y EAGLE CREEKWAY151ST ST W DUNLIN CTEMBRY PATHEL Y C I R C L E EAG L E B A Y W A YEMORYCIRCLE 152ND ST W (2017) Embry 2ndAddition(2016) Future Embry3rd Addition(2017) Cortland 4thAddition(2015) Cortland5th Addition(2016)FutureCortland 6thAddition (2017) Google 2017 Map Document: \\Metrosouth1\gis\APVA\N14112533\ESRI\Maps\112533_CSAH42andEmbry_22x34L.mxd Date Saved: 1/10/2017 6:30:06 PMCounty Highway 42 at Embry Path City of Apple Valley January, 2017Intersection Conversion Legend Parcels 0 100 Feet Source: City of Apple Valley, Dakota County, MnDOT, MnDNR !I CITY OF APPLE VALLEY RESOLUTION NO. 2017- RESOLUTION APPROVING PLANS AND SPECIFICATIONS AND DIRECTING RECEIPT OF SEALED BIDS FOR PROJECT 2017-135, CSAH 42 & EMBRY PATH INTERSECTION IMPROVEMENTS WHEREAS, the Apple Valley City Council has reviewed plans and specifications for Project 2017-135, CSAH 42 & Embry Path Intersection Improvements; and WHEREAS, the City Council believes that the interests of the City would be best served by receiving sealed bids based on said plans and specifications. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, as follows: 1. Such plans and specifications for Project 2017-135, CSAH 42 & Embry Path Intersection Improvements, a copy of which is on file in the office of the City Clerk and made a part hereof, are hereby approved. 2. The City Clerk is hereby authorized to receive sealed bids for Project 2017-135, CSAH 42 & Embry Path Intersection Improvements at the time and place specified in the form of notice attached hereto as Exhibit A. 3. The City Clerk is further authorized and directed to cause an advertisement for said bids to be posted on the City’s website and on the online Quest Construction Data Network, not less than ten (10) days prior to the opening of said bids. ADOPTED this 8th day of June, 2017 __________________________________ Mary Hamann-Roland, Mayor ATTEST: _________________________________ Pamela J. Gackstetter, City Clerk ADVERTISEMENT FOR BIDS CITY OF APPLE VALLEY | 2017-135 00 11 13 - 1 SECTION 00 11 13 ADVERTISEMENT FOR BIDS Sealed Bids will be received by the City of Apple Valley, Minnesota, in the Apple Valley Municipal Center 7100 147th Street West, until 10:00 a.m., CST, Tuesday, July 11, 2017, at which time they will be publicly opened and read aloud for the furnishing of all labor, materials, and all else necessary for the following: City Project 2017-135, CSAH 42 & Embry Path Intersection Improvements 3,250 LF Remove Concrete Curb 4,550 SF Remove Concrete Median 6,460 SY Remove Bit Pavement 460 LF Storm Sewer 8 EA Storm Structures 3,775 CY Common Excavation 5,035 TN Select Granular Borrow 2,475 TN Cl 5 Aggregate Base 3,350 TN Bituminous Mixture 4,900 LF Pavement Markings 3,500 LF Concrete Curb and Gutter 8,350 SF Concrete Median 1,950 SF Concrete Walk or Pedestrian Ramp 0.5 AC Seeding 450 CY Topsoil & Compost Mixture With related items Bidders desiring Bidding Documents may purchase them for a non-refundable fee of $20 by visiting www.cityofapplevalley.org or www.questcdn.com.Contact Cheryl Groves at (952) 953-2400 for questions about ordering. The Bidding Documents may be viewed at the office of the City Clerk, 7100 147th Street West, Apple Valley, MN. Direct inquiries to Engineer’s Project Manager Brandon Anderson at (952) 953-2490. Bid Security in the amount of 5 percent of the amount of the Bid must accompany each Bid in accordance with the Instructions to Bidders. The Owner reserves the right to retain the deposits of the 3 lowest Bidders for a period not to exceed 60 days after the date and time set for the Opening of Bids. No Bids may be withdrawn for a period of 60 days after the date and time set for the Opening of Bids. The Owner reserves the right to reject any and all Bids, to waive irregularities and informalities therein, and further reserves the right to award the Contract to the best interests of the Owner. A full and complete copy of all solicitations of bids is disseminated on the City’s website at www.cityofapplevalley.org. Pamela J. Gackstetter, City Clerk City of Apple Valley, Minnesota I T E M: 4.P. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A dopt Resolution Approving Plans and S pecifications f or Old City Hall HVA C Upgrade, and A uthorizing A dvertising for R eceipt of B ids at 10:00 a.m. on J uly 13, 2017 S taff Contact: B ruce Nordquist, C ommunity Development Director, A I C P D epartment / Division: C ommunity D evelopment Department AC T I O N RE Q UE S T E D: Adopt the resolution approving plans and specifications for the Apple Valley Old C ity Hall HVA C Upgrade at 14200 C edar Avenue, and authorizing advertising for receipt of bids at 10:00 a.m. on J uly 13, 2017. S UM M ARY: Attached for consideration is a resolution approving plans and specifications and setting the date for receipt of bids for the Apple Valley Old C ity Hall HVA C Upgrade at 14200 C edar Avenue. T he units have reached the end of their useful lifespan, experience frequent failures, and require replacement. B AC K G RO UND : N/A B UD G E T I M PAC T: T he project cost estimate for the Apple Valley O ld C ity Hall HVA C Upgrade with controls is $218,000. Resources are available from the Old C ity Hall reserve account. AT TAC HM E NT S: R esolution Exhibit CITY OF APPLE VALLEY RESOLUTION NO. 2017 -___ RESOLUTION APPROVING PLANS AND SPECIFICATIONS AND DIRECTING RECEIPT OF SEALED BIDS FOR APPLE VALLEY OLD CITY HALL HVAC UPGRADE WHEREAS, the Apple Valley City Council has reviewed plans and specifications for Apple Valley Old City Hall HVAC upgrade at 14200 Cedar Avenue; and WHEREAS, the City Council believes that the interests of the City would be best served by receiving sealed bids based on said plan and specification. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, as follows: 1. The City Clerk is hereby authorized to receive sealed bids at the time and place specified in the form of notice attached hereto as Exhibit A. 2. The Clerk is further authorized and directed to cause an advertisement for said bids to be posted on the City’s website and on the online Quest Construction Data Network, not less than ten (10) days prior to the opening of said bids. ADOPTED this 8th day of June, 2017. Mary Hamann-Roland, Mayor ATTEST: Pamela J. Gackstetter, City Clerk EXHIBIT A ADVERTISEMENT FOR BIDS Sealed bids will be received by the City of Apple Valley, Minnesota, in the Apple Valley Municipal Center, 7100 147th Street West, until 10:00 a.m., Thursday, July 13, 2017, at which time they will be publicly opened and read aloud for the furnishing of all labor, materials, and all else necessary for the following. Apple Valley Old City Hall HVAC Upgrade. - Mechanical and electrical main floor, basement and roof modifications at Old City Hall, located at 14200 Cedar Avenue. Bidders desiring Bidding Documents may purchase them for a non-refundable fee of $20 by visiting www.cityofapplevalley.org or www.questcdn.com . Contact Cheryl Groves at (952) 953-2400 for questions about ordering. The Bidding Documents may be viewed at the office of the City Clerk, 7100 147th Street West, Apple Valley, MN. Direct inquires to Engineer’s Project Manager Daniel Sieben at (952) 843-6204. Bid Security in the amount of 5 percent of the amount of the Bid must accompany each Bid in accordance with the Instruction to Bidders. The Owner reserves the right to retain the deposits of the 3 lowest Bidders for a period not to exceed 60 days after the date and time set for the Opening of Bids. No Bids may be withdrawn for a period of 60 days after the date and time set for the Opening of Bids. The Owner reserves the right to reject any and all Bids, to waive irregularities and informalities therein, and further reserves the right to award the Contract to the best interests of the Owner. A full and complete copy of all solicitations of bids is disseminated on the City’s website at www.cityofofapplevalley.org . Pamela J. Gackstetter, City Clerk City of Apple Valley, Minnesota I T E M: 4.Q. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A dopt Resolution Approving Sponsoring A gency Agreement with Minnesota Task Force One Urban S earch and R escue Team S taff Contact: Nealon P. T hompson, F ire Chief D epartment / D ivision: F ire Department AC T I O N RE Q UE S T E D: Adopt the resolution approving Sponsoring Agency Agreement between Minnesota Task Force One Urban Search and Rescue Team and the City of Apple Valley. S UM M ARY: In 2012, the C ity C ouncil authorized the execution of an agreement to allow C ity personnel to participate in Minnesota Task Force O ne (MN-T F1), as members of the Dakota C ounty Special Operations Team. As the MN-T F1 program evolved, a new agreement was crafted and approved late in 2016. Per the new agreement each Sponsoring entity needs to execute a new Addendum A - Sponsoring Agency Agreement. Execution of this addendum will continue authorization of City staff to participate in MN-T F1. Staff is recommending adoption of the resolution and execution of addendum so as to continue supporting a joint effort in discipline of emergency technical response. B AC K G RO UND : In 2004, the Dakota C ounty Domestic Preparedness Committee's Special Operations Team (SO T ) was selected by the State of Minnesota Department of Public Safety, Division of Homeland Security and Emergency Management (MN HSEM) to be one of five teams that would form the basis of MN-T F1. Participation in this statewide program was complementary to the S O T 's operation and provided additional funding for training and equipment. T hese resources allowed the S O T to significantly enhance their response capabilities benefiting the citizens of A pple Valley and Dakota C ounty. Technical rescue capabilities include rope rescue, confined space, trench rescue, and structural collapse. While enhancing S O T 's capabilities and providing statewide support should an emergency take place anywhere in the state, there are other primary benefits; first is access to funding as described above, second are liability protections provided by the State of Minnesota, and through a memorandum of understanding liability and workers' compensation coverage by MN HSEM should MN-T F1 be deployed under MN Statute 12.351. Addendum A of the attached J oint Powers Agreement for Minnesota Task Force One Urban Search and Rescue and the City of Apple Valley has been reviewed by the C ity Attorney and approved. B UD G E T I M PAC T: Budget impacts involve personnel costs associated with participating staff's time. T hese costs are on-going and included in each year's operational budget (Fire and Police), to include 2017/2018. All other funding for Minnesota Task Force One is provided through Homeland Security Grants and the Minnesota Fire Safety A ccount. AT TAC HM E NT S: R esolution Agreement CITY OF APPLE VALLEY RESOLUTION 2017- RESOLUTION APPROVING SPONSORING AGENCY AGREEMENT BETWEEN MINNESOTA TASK FORCE ONE URBAN SEARCH AND RESCUE TEAM AND CITY OF APPLE VALLEY WHEREAS, the Council supports efforts to be better prepared for any potential disasters/emergencies in the City and Dakota County; and WHEREAS, Apple Valley is a member of the Dakota County Domestic Preparedness Committee joint powers entity that supports the Dakota County Special Operations Team that provides response capabilities in the event of structural collapses and other technical rescues in Dakota County and through an approval process to other neighboring communities: and WHEREAS, the Dakota County Special Operations Team is one of five teams identified by the State of Minnesota Department of Public Safety, Division of Homeland Security and Emergency Management (MN HSEM) to host a structural collapse team to respond to structural collapses and other technical rescues along with the Cities of Minneapolis, St. Paul, Edina and Rochester and partially supported by HSEM to develop an equipment cache and roster trained personnel able to respond in the event of structural collapses and other technical rescues; and WHEREAS, MN HSEM has required the formalization of the Minnesota Structural Collapse/Technical Rescue MN-TF1 Organization (MN-TF1) joint powers entity in order to streamline funding, ensure better coordination of training and equipment purchases and to enable the State to designate the members of the MN-TF1 as a Specialized Emergency Response Team under MN Stat. Sec. 12.351 to provide liability and workers’ compensation coverage during a State activation. WHEREAS, on December 27, 2012 the City Council authorized the execution of an agreement with the Minnesota Task Force One organization for the City of Apple Valley’s participation in the program; and WHEREAS, the original agreement has been amended to allow the participation of the five charter teams of the Minnesota Task Force One program; and WHEREAS, the City Council desires to maintain City of Apple Valley personnel on the Minnesota Task Force One Urban Search and Rescue Team through a Sponsoring Agency Agreement with the Minnesota Task Force One Urban Search and Rescue Team that takes the place of the City’s previous participation in the Joint Powers Agreement for Minnesota Task Force One. NOW, THEREFORE, BE IT RESOLVED the City Council approves executing the Sponsoring Agency Agreement between Minnesota Task Force One Urban Search and Rescue Team and the City of Apple Valley. ADOPTED this 8th day of June, 2017. ______________________________ Mary Hamann-Roland, Mayor ATTEST: ___________________________________ Pamela J. Gackstetter, City Clerk MN-TF1 JPA [Rev 11/03/16] Page 1 Joint Powers Agreement For Minnesota Task Force One Urban Search and Rescue Team This Joint Powers Agreement (“Agreement”) is by and among the Cities of Minneapolis, St. Paul, Rochester, Edina, and the County of Dakota, all political subdivisions under the laws of the State of Minnesota (collectively referred as Participants). This Agreement supersedes all prior Joint Powers Agreements for Minnesota Task Force One by the same group of municipal corporations and the County of Dakota. This Agreement is made pursuant to the authority conferred upon the Participants by Minn. Stat. §471.59. The Participants to this Agreement are all “governmental units” as defined by Minnesota Statute §471.59, Subdivision 1. 1.0 GENERAL PURPOSE. The purpose of this Agreement is to establish the Minnesota Task Force One Urban Search and Rescue Team for the purpose of establishing, training, equipping, maintaining and deploying Minnesota Task Force One to incidents inside and outside the State of Minnesota as may be requested by a local agency or other unit of government pursuant to Minnesota Statute §§12.33, 12.331, 12.351, 192.89, or 192.91. 2.0 DEFINITIONS. In addition to the standard definitions found in the National Incident Management System (2008 and as amended from time to time), the following definitions apply to this Agreement. 2.1 “Minnesota Task Force One Urban Search and Rescue Team (referred to herein as ‘MN-TF1’) – The collective resources of Minneapolis, St. Paul, Edina, Rochester and the County of Dakota, governed by a Board of Directors as described herein, who provide response to incident activities pursuant to this Agreement. 2.3 “Team Member” – A trained and qualified person, as designated and approved by the Board, who is employed by, contracted to, or volunteering with a Participant or a Sponsoring Agency approved by the Board, as described below, who is or may be available to be activated to support incident response activities pursuant to this Agreement. 2.4 “Board” – The Board of Directors of MN-TF1 established by this Agreement. 2.5 “Director” – A member of the Board of Directors, or as other qualified as defined under this Agreement, who is employed by, contracted to, or volunteering with the Cities of Minneapolis, St. Paul, Edina, and Rochester, or Dakota County and is appointed by them to serve on the Board of Directors. MN-TF1 JPA [Rev 11/03/16] Page 2 2.6 “Participant” – Any governmental unit as defined by Minnesota Statute §471.59, Subdivision 1, which is a signatory to this Agreement, including: the Cities of Minneapolis, St. Paul, Rochester, Edina, and the County of Dakota. 2.7 “Sponsoring Agency” – Any agency, not a party to this Agreement, that allows one or more of it employees, contractors or volunteers to be a Team Member. All requests to become a Sponsoring Agency shall be reviewed and either accepted or denied by the Board. If approved, the new agency shall sign the ‘Sponsoring Agency Agreement’ attached hereto as Addendum A. All Sponsoring Agencies must execute the Sponsoring Agency Agreement and comply with all of the obligations imposed upon a Sponsoring Agency by that Agreement and this Joint Powers Agreement. 2.8 “Program Manager’s Group (PMG)” – A working group advisory to the Board that provides recommendations on all aspects of the team, including, but not limited to: planning, operations, training, logistics, administration and finance. At least one, but no more than two representatives shall be appointed to the PMG by the Director of their respective agency and shall have taken the FEMA equivalent Structural Collapse Technician Training, and all other applicable pre-requisite training as determined by the Board. 2.9 “Task Force Administrator” - An employee of a Participant who meets the qualifications as established by the Board, selected by the Board, serves at the direction of the Board, and performs executive duties assigned by the Board. MN- TF1 shall reimburse the Participant for the time and expenses incurred by the Participant for providing an employee to perform the duties of Administrator up to a maximum amount determined by action of the Board. A person serving in the role of Administrator remains an employee of the Participant and is not an employee of MN-TF1. 3.0 PARTICIPANTS. 3.1 Status: No change in governmental boundaries, structure, organizational status or character shall affect the eligibility of any Participant to be represented on the Board as long as such Participant continues to exist as a separate political subdivision. 3.2 Right to Withhold Assets: A Participant or Sponsoring Agency may decline some or all requested asset deployments if conditions within the borders of the Participant or Sponsoring Agency require retention of assets. 3.3 Responsibility for Employees: All persons engaged in the work to be performed on behalf of a Participant or Sponsoring Agency under this Agreement are not employees of any other Participant or Sponsoring Agency for any purpose, including worker’s compensation and other claims that may or might arise out of the employment context on behalf of the employees. A Participant or Sponsoring Agency shall not be responsible for the acts or omissions of another Participant’s or Sponsoring Agency’s employees or agents while engaged in any of the work performed under this Agreement. Each Participant and Sponsoring Agency is responsible for injuries to or death of its own employees and agents while performing work under this Agreement. Each Participant and Sponsoring Agency will maintain workers' compensation MN-TF1 JPA [Rev 11/03/16] Page 3 insurance or self-insurance coverage, covering its own employees while they are providing services under this Agreement. Each Participant and Sponsoring Agency waives the right to bring legal action against any other Participant or Sponsoring Agency for any workers' compensation benefits paid to its own employees or volunteers or their dependents, even if the injuries were caused wholly or partially by the negligence of any other Participant or Sponsoring Agency or their respective officers, employees, or volunteers. Should any portion of this section conflict with the provisions of the laws under which MN-TF1 is activated, the terms of the applicable laws will control. 3.4 Emergency Management Assistance Compact EMAC: Any Participant or Sponsoring Agency with employees or volunteers engaged as a member of MN- TF1 and deployed as part of an EMAC request are afforded all the protections and coverage as stated in Minn. Stat. §192.89, and retains all stated protections and coverage while engaged as part of an EMAC request. 3.5 State Specialized Emergency Response Team Activation: Any Participant or Sponsoring Agency with employees or volunteers engaged as a member of MN- TF1 and activated by the state director of Homeland Security and Emergency Management as a Specialized Emergency Response Team are afforded all the protections and coverage as stated in Minn. Stat. §12.351, and retains all stated protections and coverage while deployed as part of this activation. 4.0 BOARD OF DIRECTORS. 4.1 Directors. MN-TF1 shall be governed by a Board of Directors which consists of seven Directors including one Director from each of Minneapolis, St. Paul, Edina, Rochester and Dakota County, one Director representing all of the Dakota County cities participating as Sponsoring Agencies, and one Director representing all other Sponsoring Agencies. Any Director may designate a member of his/her agency or group of agencies to attend a meeting of the Board. The Dakota County cities participating as Sponsoring Agencies shall collectively select one representative to serve as the Director for the Dakota County cities and notify the chair of the Board of the person selected. Similarly, all other Sponsoring Agencies shall collectively select one representative to serve as the Director for all Sponsoring Agencies not located within Dakota County and notify the chair of the Board of the person selected. 4.2 Compensation. Directors shall serve without compensation from the MN-TF1 or the Board. This shall not prevent a Participant or Sponsoring Agency from providing compensation to a Director for serving on the Board. 4.3 Director Term. Each Director appointed by a Participant or Sponsoring Agency group shall serve until replaced, or until the Director ceases to be an employee or volunteer of the appointing entity. MN-TF1 JPA [Rev 11/03/16] Page 4 5.0 VOTING/QUORUM 5.1 Voting. The Board Chair shall be notified in writing in advance of each meeting of an alternate representative from a Participant or Sponsoring Agency group, if that alternative representative is to have voting authority at the meeting. 5.1 Quorum. A majority of all of the Directors (4) shall constitute a quorum. A simple majority vote of the Directors present at a meeting with a valid quorum shall be required for the Board to take action, unless otherwise provided in this Agreement or by law. 6.0 BOARD OFFICERS AND ELECTIONS 6.1 Officers. The officers of the Board shall be a Chair and Vice-Chair. 6.2 Elections. At its first meeting, the Board shall elect a Chair and Vice-Chair. Each officer will serve a two-year term, ending on December 31. Officers elected to partial or unexpired terms shall serve out the partial term but must then stand for election with the other officers for the following term. 6.3 Vacancies. An officer shall be elected in the same manner as above to fill out an unexpired term of any office which becomes vacant. 6.4 Other Officers. The Board may elect or appoint such other officers as it deems necessary to conduct its meetings and affairs. 7.0 MEETINGS. 7.1 Annual Meeting. The Board shall meet at least annually, with the date as determined by the Board Chair after consulting with the other Directors. 7.2 Call. Meetings of the Board may be called by the Chair or upon the request of any four Directors. Directors shall receive at least three day’s notice of all meetings 7.3 Open Meeting/Data Practices. The MN-TF1 shall comply with data practices and open meeting laws which are applicable to the Participants and Sponsoring Agencies. 8.0 POWERS OF THE BOARD. The powers of the Board include, but are not limited to, those enumerated in this section. 8.1 Program Managers Group. The PMG shall provide recommendations and assist the Board in the response, training and equipping, and deployment and recovery of MN-TF1 assets, as stipulated below. 8.1.1 Response. Prepare, adopt, and implement a plan to provide MN-TF1 response according to the terms and conditions herein. MN-TF1 JPA [Rev 11/03/16] Page 5 8.1.2 Training and Equipping. Establish standard procedures, as well as train, equip, maintain, and govern the day-to-day organization and operation of MN-TF1. 8.1.3 Deployment and Recovery. Provide for the deployment and recovery of MN-TF1 assets to incidents as may be requested by other governmental units, or other established procedures, approved verbally or by proxy, by the Board. 8.1.4 Purchasing. Purchase apparatus, equipment, protective gear and goods and services, as established herein, as necessary for the performance of MN-TF1. 8.2 Budget. The Board shall approve an annual budget for MN-TF1. 8.3 Insurance. The Board may contract for or purchase such insurance as the Board deems necessary for the protection of the Board, Participants, Sponsoring Agencies and its property. At a minimum the Board shall maintain liability coverage for the actions of the Board with a limit of coverage equal to or greater than the liability limits under Minn. Stat. Ch. 466. The Board shall also obtain tail coverage following termination of the Agreement to cover the statute of limitations period during which a claim could be made against the Board. Any insurance obtained shall name each Participant and Sponsoring Agency as a covered party. 8.4 Contracts, Consultants, Expenses and Expenditures. The Board may make contracts, employ consultants, incur expenses and make expenditures necessary and incidental to the effectuation of its purposes and powers. 8.5 Audits. The Board shall cause to be made an annual audit of the books and accounts of the Board and shall make and file a report to the Participants and Sponsoring Agencies at least once each year. Strict accountability of all funds and report of all receipts and disbursements shall be made. 8.6 Committees. The Board may appoint such committees as it deems necessary to exercise the powers of the Board in accordance with by-laws adopted by the Board and as allowed by law. 8.7 Lawful Powers and By-Laws. The Board may exercise all other lawful powers necessary and incidental to the implementation of the purposes and powers set forth herein, including, without limitation, the adoption of by-laws to govern the functioning of the Board, provided that no by-law or action of the Board shall be contrary to the terms of this Agreement. 9.0 FINANCE. 9.1 No Bonding Authority. The joint powers board created by this Agreement is not authorized and does not possess the power to issue bonds or obligations pursuant to Minn. Stat. § 471.59, subd. 11. 9.2 Funding. MN-TF1 is funded through Federal and State appropriations. Participants and Sponsoring Agencies are not obligated under this Agreement to fund MN-TF1 in any other fashion without an amendment to this Agreement as described herein. MN-TF1 may MN-TF1 JPA [Rev 11/03/16] Page 6 accept funds, services and goods from non-governmental agencies, specifically for the non- profit operation of MN-TF1. 9.3 Internal Audits. The Board’s books, reports and records shall be available for and open to inspection by its Participants and Sponsoring Agencies at all reasonable times, but shall be subject to review at least annually, as stipulated above. 9.4 External Audits. The Board’s records shall be available for inspection by the public pursuant to Minnesota Statutes, Chapter 13. 9.5 Disbursements. MN-TF1 may make disbursements from public funds to carry out the purposes of this agreement. 9.6 Fiscal Agent. The Board shall designate one Participant, with that Party’s consent, to serve as the Fiscal Agent for MN-TF1. Funds may be disbursed by that Fiscal Agent, provided the method of disbursement shall agree as far as practicable with the method provided by law for the disbursement of funds by the parties to the Agreement. 9.7 Purchasing. Contracts let and purchases made under this Agreement shall conform to the requirements applicable to contracts and purchases of the Fiscal Agent. 9.8 Accountability. The Fiscal Agent shall maintain accountability of all funds and report on all receipts and disbursements. 9.9 Distribution of Property. In the event any Participant withdraws from this Agreement as provided for herein or by law, any property acquired by the withdrawing Participant that was purchased by the Fiscal Agent of MN-TF1 after July 1, 2015 will be returned to MN-TF1 and distributed to the remaining Participants based on the decisions of the Board of Directors. In the event of Termination of the Agreement as provided for herein or by law, any property acquired as the result of such joint or cooperative exercise of powers after July 1, 2015 shall remain the property of the Participant to which the Board of Directors has assigned the property. Participants agree to follow any applicable grant or other contractual obligations, or, if none, pursuant to Participants property disposal procedures after termination of this Agreement. Any surplus money shall be distributed on a pro rata basis to the Participants. Property acquired by Participants and Sponsoring Agencies prior to participating in MN-TF1 shall remain the property of the Participant or Sponsoring Agency. 10.0 INDEMNIFICATION. The Board shall defend, indemnify and hold harmless the Participants and Sponsoring Agencies and any Team Members against all claims, losses, liability, suits, judgments, costs and expenses by reason of the action or inaction of the Board. This agreement to indemnify and hold harmless does not constitute a waiver by any Participant or Sponsoring Agency of the limitations on liability provided under Minnesota Statutes, Chapter 466 or §3.736 or a waiver of any available immunities or defenses. To the fullest extent permitted by law, actions by the Participants and Sponsoring Agencies pursuant to this Agreement are intended to be and shall MN-TF1 JPA [Rev 11/03/16] Page 7 be construed as a “cooperative activity,” and it is the intent of the Participants and Sponsoring Agencies that they shall be deemed a “single governmental unit” for the purposes of liability, all as set forth in Minnesota Statutes, §471.59, subd. 1a(a); provided further that for purposes of that statute, each Participant and Sponsoring Agency expressly declines responsibility for the acts or omissions of any other Participant, Sponsoring Agency and Team Member from another Participant or Sponsoring Agency. Any excess or uninsured liability shall be borne equally by each Participant, excluding the liability of any individual officer, employee, or agent which arises from his or her own malfeasance, willful neglect of duty, or bad faith. Nothing herein shall be construed to provide insurance coverage or indemnification to an officer, employee or volunteer of any member for any act or omission for which the officer, employee or volunteer is guilty of malfeasance in office, willful neglect of duty, or bad faith. 11.0 EXECUTION, DURATION AND AUTO-CONTINUATION 11.1 Execution. This Agreement shall be considered in effect and executed on the last date of signature from all of the (five) Participants 11.2 Duration. This Agreement shall remain in full force and effect for 10 years from the date of execution. 11.3 Auto-Continuation. If not specifically amended, this Agreement will automatically renew for additional one-year terms until amended or terminated by the Participants. 12.0 RECORDKEEPING AND FILING. 12.1 Joint Powers Agreement. The signed Agreement, along with a certified copy of the resolution authorizing the Agreement, shall be filed with the Office of the Commissioner of the Minnesota Department of Public Safety. 12.2 Standard Record Keeping and Filing. All official records of MN-TF1 shall be kept and maintained by the designated Fiscal Agent for retention and auditing as described herein. 13.0 AMENDMENTS. This Agreement may be amended only by the unanimous agreement of all the (five) Participants, acting by and through their governing bodies. 14.0 WITHDRAWAL, CONTINUING ORGANIZATION AND TERMINATION. 14.1 Withdrawal Notification. Any Participant shall have the right to withdraw from this Agreement (MN-TF1) in the following manner: MN-TF1 JPA [Rev 11/03/16] Page 8 14.1.1 Notice. Notice of intent to withdraw shall be given in writing to the Chair of the Board, declaring intent to withdraw from MN-TF1, effective on a specified date which shall not be less than ninety (90) days from the date of notice, and shall be hand- delivered or sent certified mail such that the Chair of the Board receives said notice not less than ninety (90) days before the effective date with withdrawal. 14.1.2 Approval. Upon receipt of the notice of withdrawal, the Chair of the Board shall call a meeting as provided in Section 7 of this Agreement for the purpose of reviewing the impact of a Participant withdrawal on MN-TF1. 14.2 Continuing Organization. Notwithstanding the Participant’s authority to withdraw, this Agreement and MN-TF1 shall continue in force until all remaining Participants mutually agree to terminate this Agreement. 14.3 Termination. The Office of the Commissioner of the Minnesota Department of Public Safety shall be notified in writing, not less than ninety (90) days from the effective date of termination of this Agreement. The Board shall continue to exist for the limited purpose of settling its affairs, disposing of its property and surplus monies, and discharging any debts, liabilities or other obligations of MN-TF1 that require formal severance. 15.0 CAPTIONS. The captions of this Agreement are for convenience and reference only; they in no way define, limit, or describe the scope or intent of this Agreement. 16.0 SEVERABILITY. The provisions of this Agreement are severable. If any section, paragraph, subdivision, sentence, clause, or phrase of the Agreement is held to be contrary to law, rule, or regulation having the force and effect of law, such decision shall not affect the remaining portions of this Agreement. 17.0 COUNTERPARTS. This Agreement shall not be executed in any number of counterparts, without express approval by the Board under established Amendment procedures herein. Unless specifically delegated, the Chair of the Board shall maintain copies of the document to and ensure its availability to all Participants. 18.0 CONSTRUCTION. Each provision of this Agreement has been reviewed and negotiated, and represents the combined work product of all Participants hereto. No presumption or other rules of construction that would interpret the provisions of this Agreement in favor of, or against each Participant preparing the same, shall be applicable in connection with the construction or interpretation of any of the provision of this Agreement. MN-TF1 JPA [Rev 11/03/16] Page 9 19.0 GOVERNING LAW. This Agreement and the rights of the Participants and Sponsoring Agencies shall be governed by and construed in accordance with the laws of the State of Minnesota. 20.0 ENTIRE AGREEMENT. The entire agreement between the Participants hereto is contained in this Agreement, and this Agreement supersedes all of their previous understandings and agreements, written and oral, with respect to the subject matter of this Agreement. IN WITNESS WHEREOF - the undersigned governmental units, by action of their governing bodies, have caused this Agreement to be executed in accordance with the authority of Minnesota Statute 471.59. MN-TF1 JPA [Rev 11/03/16] Page 10 Execution Page For the Joint Powers Agreement For Minnesota Task Force One Urban Search and Rescue Team The party listed below has read, agreed to and executed this Agreement on the date indicated. This agreement is in effect for 10 years from date of execution, as described herein. City of Minneapolis By: _________________________ John Fruetel, Fire Chief Date: ____________ MN-TF1 JPA [Rev 11/03/16] Page 11 City of Saint Paul By: _____________________________ Title: Fire Chief Date: ___________________________ By: _____________________________ Title: City Attorney Date: ____________________________ By: ______________________________ Title: Director of Financial Services Date: ____________________________ By: _____________________________ Title: Mayor Date: ____________________________ MN-TF1 JPA [Rev 11/03/16] Page 12 City of Edina By: _________________________ Tom Schmitz, Fire Chief Date: ____________ MN-TF1 JPA [Rev 11/03/16] Page 13 CITY OF ROCHESTER, a Minnesota municipal corporation BY__________________________ ITS MAYOR ATTEST:_____________________ ITS CLERK STATE OF MINNESOTA) )SS COUNTY OF OLMSTED) The foregoing instrument was acknowledged before me this _______day of _______________, 2016, by Ardell F. Brede and Aaron S. Reeves, the Mayor and City Clerk, respectively, of the City of Rochester, a Minnesota municipal corporation, for and on behalf of the corporation. ___________________________________ Notary Public MN-TF1 JPA [Rev 11/03/16] Page 14 County of Dakota By: ________________________________ Nancy Schouweiler County Board Chair Date: ____________ Approved as to Form _____________________________________ Assistant County Attorney Date KS14-316 Task Force 1 JPA Rev 11-3-16 MN-TF1 JPA [Rev 11/03/16] Page 15 ADDENDUM A Sponsoring Agency Agreement between Minnesota Task Force One Urban Search and Rescue Team And CITY OF APPLE VALLEY, MINNESOTA For Minnesota Task Force One Urban Search and Rescue Team Participation The parties to this Agreement are the Minnesota Task Force One Urban Search and Rescue Team, a joint powers entity of municipal corporations within the State of Minnesota (referred to herein as ‘MN-TF1’) and City of Apple Valley, Minnesota, a municipal corporation of the State of Minnesota (referred to herein as ‘Sponsoring Agency’). 1. Purpose. The purpose of this agreement is to enable the Sponsoring Agency to assign one or more of its employees or volunteers as a Team Member to MN-TF1 and to enable the MN-TF1 to accept such employees and volunteers as participants, on the terms and conditions stated herein. Team Members, for purposes of this Agreement, includes firefighters, licensed peace officers, emergency medical technicians, building inspectors, public works employees, public health workers, information technology workers, among others. Whenever the term “employee” or “employees” appears in the Agreement, the term includes employees and volunteers of a Sponsoring Agency unless stated otherwise. 2. Term. This Agreement shall be in effect as of the date that it is executed by both parties and shall remain in effect indefinitely or until either party terminates the Agreement pursuant to Section 6. 3. Assignment of Employees. a. Assignment. The Sponsoring Agency may assign its employees to the Task Force, only with the consent of MN-TF1, which consent may be withdrawn by MN-TF1 at any time, and in accordance with the procedures of MN-TF1. Employees so assigned remain employees or volunteers of the Sponsoring Agency and are not employees of MN-TF1. When MN-TF1 is providing assistance to a party of MN-TF1, Sponsoring Agency shall compensate its employees just as if they were performing the duties within and for the Sponsoring Agency. b. Workers’ Compensation. Sponsoring Agency shall be responsible for injuries to or death of its own employees and shall maintain workers’ compensation coverage or self-insurance coverage, covering its own employees and volunteers MN-TF1 JPA [Rev 11/03/16] Page 16 while they are providing assistance as a member of the MN-TF1. The Sponsoring Agency waives its right to commence legal action against the MN-TF1 or any of its members for any workers’ compensation benefits paid to its employees or their dependents, even if the injuries were caused wholly or partially by the negligence of the MN TF-1 or any of the members thereof. c. Damage to Equipment. The Sponsoring Agency shall be responsible for damage to or loss of its own equipment occurring during training or deployment of the MN-TF1. The Sponsoring Agency waives the right to commence legal action against MN-TF1 or any of the members for any damages to or loss of its equipment, even if the damages or losses were caused by the negligence of MN- TF1 or any member thereof. d. Liability. For purposes of the Minnesota Municipal Tort Liability Act (Minn. Stat. Ch. 466), employees or volunteers assigned by the Sponsoring Agency to the Task Force are employees of Sponsoring Agency. The Sponsoring Agency agrees to defend, indemnify and hold harmless MN-TF1 and any of the members thereof against any claims brought or actions filed against MN-TF1 or any of the members thereof or any officer, employee or agent thereof for injury to, death of, or damage to the property of any third person or persons, arising from the action or omission of its employees or volunteers while providing assistance as a member of the MN-TF1. Under no circumstances shall the Sponsoring Agency be required to pay on behalf of itself and MN-TF1 and any of the members thereof any amounts in excess of the limits of liability established in Minn. Stat. Ch. 466 applicable to any one entity. The limits of liability for MN-TF1, any of its members and the Sponsoring Agency may not be added together to determine the maximum amount of liability for any of them. e. Costs. Sponsoring Agencies are not entitled to reimbursement by MN-TF1 or any member thereof of its costs incurred in connection with activities undertaken pursuant to this agreement, except for its costs which are reimbursable pursuant to policies established by the Board of Directors of MN-TF1. MN-TF1 may voluntarily reimburse other costs to the extent that grant funds are available. 4. MN-TF1. a. Consent. MN-TF1 hereby consents to the assignment by Sponsoring Agency of its employees or volunteers to participate on the MN-TF1, on the condition that the Sponsoring Agency and its employees or volunteers comply with all applicable MN-TF1 policies and procedures. MN-TF1 hereby reserves the right, at any time it deems appropriate, to withdraw its consent provided hereunder and terminate this Agreement for any reason. b. Charges. MN-TF1 agrees to remit to the Sponsoring Agency any funds that it receives with respect to services provided by the Sponsoring Agency while participating on the MN-TF1, to the same extent as if the Sponsoring Agency MN-TF1 JPA [Rev 11/03/16] Page 17 were a party to said MN-TF1 Joint Powers Agreement. Except as provided in this Section 4(b), MN-TF1 shall have no obligation to reimburse any costs incurred by Sponsoring Agency for assigning its employees and volunteers to participate on the MN-TF1. 5. Sponsoring Agency. By executing this Agreement Sponsoring Agency agrees to comply with all terms of the Joint Powers Agreement for Minnesota Task Force One Urban Search and Rescue Team that apply to sponsoring agencies. Sponsoring Agency acknowledges that the Indemnification and Liability provisions of Section 10 of the MN FT-1 Joint Powers Agreement also apply to Sponsoring Agency. 6. Miscellaneous. a. Notices. Notices required pursuant to this agreement shall be provided to the following named persons and addresses unless otherwise stated in this Agreement, or in a modification of this Agreement: Sponsoring Agency: Fire Chief, City of Apple Valley 7100 147th Street West Apple Valley, MN 55124 fire@applevalleyfire.org MN-TF1: A party providing written notice of intent to terminate this Agreement shall also provide such notice to the Fiscal Agent of the MN-TF1, each Participant entity of the Minnesota Task Force One Urban Search and Rescue Team Joint Powers Agreement, and to the Office of the Dakota County Attorney, Civil Division, 1560 Highway 55, Hastings, Minnesota 55033. b. Termination. Either party may terminate this agreement without cause upon thirty days’ written notice to the other. On the effective date of termination the entity executing this Agreement shall no longer be a Sponsoring Agency of MN-TF1. c. Effect of Termination. Termination of this Agreement shall not discharge any liability, responsibility or other right of either party which arises from the performance of or failure to adequately perform the terms of this Agreement prior to the effective date of termination. d. Amendments. This Agreement may be amended only in writing and upon the consent of the governing bodies of the parties. e. Records, accounts, reports. The books and records of the Sponsoring Agency related to participation as a Sponsoring Agency shall be subject to the provisions of Minn. Stat. Ch. 13 and Minn. Stat. § 16B.06, subd. 4. MN-TF1 JPA [Rev 11/03/16] Page 18 f. Severability. The provisions of this Agreement are deemed severable. If any part of this Agreement is rendered void, invalid or unenforceable, such rendering shall not affect the validity and enforceability of the remainder of this Agreement unless the part or parts that are void, invalid or unenforceable shall substantially impair the value of the entire Agreement with respect to either party. In Witness Whereof, the parties have executed this Agreement on the dates indicated below. Minnesota Task Force One Mary Hamann-Roland, Mayor Urban Search and Rescue Team City of Apple Valley, Minnesota By: By: Print Name: Print Name: Title: Title: Date: Date: Approved as to form: Assistant County Attorney Date KS14-316 MN Task Force One Sponsoring Agency Agreement Rev 11-03-2016 I T E M: 4.R. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove Water Quality I mprovement C ost S hare Program Agreement with Elizabeth A. Bennett f or Native Garden I nstallation at 13940 E xley Court S taff Contact: J ane Byron, Water Quality Technician D epartment / D ivision: Natural R esources Division AC T I O N RE Q UE S T E D: Approve Water Q uality Improvement C ost Share Program Agreement with Elizabeth A . Bennett for native garden installation at 13940 Exley C ourt; payment not to exceed $500.00 per project. S UM M ARY: T he following water quality cost share application was received by C ity staff and the project was determined to be eligible for the program. Name Address P roject Watershed Eliabeth A. Bennett 13940 Exley C ourt Native G arden Long Lake T he standard C ity water quality improvement cost share program agreement approved by the City Attorney was utilized for this project. B AC K G RO UND : In 2009 the City of Apple Valley began a voluntary cost share program for residential, multiple-family, or institutional property owners to promote the installation of water quality improvements. T hese improvements typically consist of rain gardens, native gardens, buffers, and shoreline stabilization projects to reduce and treat stormwater runoff prior to its entering the stormwater system. T his cost share program assists the C ity in meeting State and Federal storm water management requirements. T he program provides for reimbursement of 50 percent of qualifying expenses, not to exceed a total reimbursement from the City of $500.00. T he program requires that the property owner maintain their project to meet program standards for a period of no less than seven years. T his is the first Water Quality Improvement Cost Share application the C ity has received in 2017. B UD G E T I M PAC T: T he maximum allowable reimbursement is $500.00 per lot or project. Funding for this program is included in the 2017 operating budget for the Storm Drainage Utility. I T E M: 4.S . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove J oint P owers A greement with Dakota C ounty f or Cost S hare R elated to P roject 2017- 135, C S A H 42 & Embry P ath I ntersection I mprovements S taff Contact: B randon A nderson, City E ngineer D epartment / D ivision: P ublic Works D epartment AC T I O N RE Q UE S T E D: Approve the J oint Powers Agreement with Dakota County for cost share related to Project 2017-135, C SA H 42 & Embry Path Intersection Improvements S UM M ARY: Attached for consideration is a J oint Powers Agreement (J PA) between Dakota County and the C ity of Apple Valley for cost sharing related to the construction of Project 2017-135, C S A H 42 & Embry Path Intersection Improvements. Minor modifications to the J PA are expected. Due to the project timeline, staff is recommending approval of the J PA subject to final revisions and changes as approved by the C ity Administrator and C ity Attorney. B AC K G RO UND : N/A B UD G E T I M PAC T: T he J PA defines the C ity and C ounty cost share requirements and results in an estimated County cost contribution of 55% and City of Apple Valley cost share of 45%. T he C ounty participation is anticipated at $269,400 and the C ity of Apple Valley share is $220,416. As part of the Approved D evelopment Agreement with D.R. Horton, Inc., the assessed cost share contribution by the developer is estimated in the amount of $308,098. AT TAC HM E NT S: Agreement Dakota County Contract C00XXXXX JOINT POWERS AGREEMENT FOR ENGINEERING AND HIGHWAY CONSTRUCTION BETWEEN THE COUNTY OF DAKOTA AND THE CITY OF APPLE VALLEY FOR DAKOTA COUNTY PROJECT NO. 42-147 CITY PROJECT NO. 17-xx SYNOPSIS: Dakota County and the City of Apple Valley agree to intersection improvements at the intersection of County State Aid Highway (CSAH) 42 and Embry Avenue in Apple Valley, Dakota County. County Project 42-147 C00XXXXX City Project 17-XX January 10, 2017 2 THIS AGREEMENT, made and entered into by and between the County of Dakota, referred to in this Agreement as the “County"; and the City of Apple Valley, referred to in this Agreement as the “City" and witnesses the following: WHEREAS, under Minnesota Statutes Section 162.17, subdivision 1 and 471.59, subdivision 1, two governmental units may enter into an Agreement to cooperatively exercise any power common to the contracting parties, and one of the participating governmental units may exercise one of its powers on behalf of the other governmental units; and WHEREAS, it is mutually desirable to improve the intersection of CSAH 42 and Embry Avenue in Apple Valley, Dakota County; the ‘Project’; and WHEREAS, the Project will accomplish several important objectives including: connecting Embry Avenue to CSAH 42 from the south, improving safety by adding turn lanes for traffic turning from CSAH 42 to Embry Avenue, improving safety by addressing Dakota County access spacing guidelines and the County Highway 42 Corridor Study, improving safety by restricting left turns onto CSAH 42 and by restricting through movements across CSAH 42 at the Embry Avenue intersection, improving traffic flow, assisting in facilitating land development plans, and accommodating forecasted increases in traffic volumes; and WHEREAS, the City is the lead agency for engineering and construction of the Project; and WHEREAS, the County and the City have included this Project in their Capital Improvement Programs and will jointly participate in the costs of said road construction as set forth herein. NOW, THEREFORE, it is agreed that the County and the City will share project responsibilities and jointly participate in the project costs associated with highway construction and related activities as described in the following sections: 1. Engineering. Costs incurred by the County and the City for design engineering all aspects of the Project (including public involvement, agency involvement, preliminary/final design etc.), surveying, mapping, construction engineering, construction management, construction inspection and all related materials testing, including the cost of County and City staff time for these purposes, shall be split based on the County’s and City’s share of the final construction costs. 2. Construction Items. County Project 42-147 C00XXXXX City Project 17-XX January 10, 2017 3 2.1. All costs for constructing Embry Avenue south of existing CSAH 42, the eastbound CSAH 42 right turn lane to Embry Avenue and the westbound CSAH 42 left turn lane to Embry Avenue shall be 100% City responsibility. 2.2. The costs for the construction of the median on CSAH 42 and the elements of the project necessary to restrict turning movements at the intersection shall be shared in the amount of fifty-five (55%) by the County and forty-five (45%) by the City. The forgoing cost sharing includes all highway construction items; mitigation required by state and federal permits including accessibility requirements; storm sewer and other drainage facilities eligible for County State Aid funding based on contributing flows; replacement or restoration of fences, landscaping and driveways when affected by construction; replacement, removal, or adjustment of sanitary sewer, water and storm sewer systems, if required due to construction; relocating or adjusting privately owned utilities when not performed at the expense of the utility; County’s share of water pollution best management practices, based on contributing flows, meeting National Urban Runoff Protection (NURP) standards; mitigation required for access modifications; replacement or adjustment of lighting, if required due to construction, and all other construction aspects outlined in the plan except for elements identified with a different cost sharing allocation under this Agreement. 3. Aesthetic Elements. Aesthetic elements for the Project consist of decorative pavements, landscaping and plantings. The County will participate up to 50% of the cost of aesthetic elements up to a maximum amount of three percent of the County’s share of highway construction costs. Highway construction costs exclude costs for items such as right of way, storm sewer and ponding. The City shall be responsible for 50% of the costs of all aesthetic elements and 100% of the costs that exceed the County’s maximum participation for aesthetic elements. 4. City Utilities. Except as stated in the above sections of this Agreement, the City shall pay all other costs for new sanitary sewer, water mains and appurtenances constructed as part of this Project. Further, the City shall be responsible for the maintenance of all such facilities after completion of the Project. 5. Plans and Specifications. The City is the lead agency for design and construction administration of the Project, effective upon execution of this Agreement by both Parties. The City and the County shall approve the plans and specifications prior to advertising for bids. The City will advertise for bids for the construction of the Project in accordance with applicable state laws and will provide the County with an analysis of the bids received. The City Council may award the County Project 42-147 C00XXXXX City Project 17-XX January 10, 2017 4 contract for construction to the lowest responsive and responsible bidder in accordance with state law. If a bid is not awarded, this Agreement shall terminate and all costs incurred as of the date of termination shall be apportioned in accordance with the terms of this agreement 6. Construction Standards. All such construction, including traffic control, shall be accomplished in accordance with applicable State Aid, County and City standards, specifications, and policies. To authorize and regulate construction activities, the County will issue permits for construction within County right-of-way. Work on County right-of-way is not authorized until County permits are approved. Construction shall be performed to minimize the duration of traffic delays on CSAH 42 and provide for safe and convenient travel in the project area. The County reserves the right to inspect construction materials and methods as needed. 7. Pavement Marking and Signing Maintenance and Operations. Pavement markings will be installed as applicable for the operation of the highway and intersections along the Project area as outlined in the plans. Signing and markings along CSAH 42 will be maintained by the County. Signing and markings along Embry Avenue will be maintained by the City. 8. Operation. The geometric configuration of the CSAH 42 intersection including lane alignments and traffic assignments for all approaches, traffic signing, and traffic operations will be determined by the County. The City agrees to make no changes to the intersection operation through pavement marking, signing, or other construction measures (including changes to the Embry Ave. approach) without the approval of the County. 9. Project Cost Updates. The City will provide updated cost estimates to the County showing the County and City shares of Project costs annually at the time of Capital Improvement Program development. Updated cost estimates will also be provided by the City to the County at the following times: • prior to advertising a construction contract, • after bid opening (prior to contract award), • during construction if total contract changes exceed $100,000, • once per year following the construction season until the Project is complete. Project cost estimate updates include actual and estimated costs for engineering, utility relocation and construction. The Parties acknowledge that Project cost estimates are subject to numerous variables causing the estimates to be subject to change, and that the updates are provided for informational County Project 42-147 C00XXXXX City Project 17-XX January 10, 2017 5 purposes in good faith. Each agency is responsible for informing their respective council or board regarding Project cost estimates. 10. Payment. The City will administer the contract and act as the paying agent for all payments to the Contractor. Payments to the Contractor will be made as the project work progresses and when certified by the City Engineer. The City will request payment on a quarterly basis for any Project costs incurred. Upon presentation of an itemized claim by one agency to the other, the receiving agency shall reimburse the invoicing agency for its share of the costs incurred under this agreement within 35 days from the presentation of the claim. If any portion of an itemized claim is questioned by the receiving agency, the amount of the claim not in question shall be promptly paid, and accompanied by a written explanation concerning the amount in question. Payment of any outstanding amount will be made following good faith negotiation and documentation of actual costs incurred in carrying out the work. 11. Amendments. Any amendments to this Agreement will be effective only after approval by both governing bodies and execution of a written amendment document by duly authorized officials of each agency. 12. Effective Dates. This Agreement will be effective upon execution by duly authorized officials of each governing body and shall continue in effect until all work to be carried out in accordance with this Agreement has been completed. Except for on-going maintenance activities including, sidewalk, trail, storm sewer, landscape and lighting maintenance, in no event will this Agreement continue in effect after December 31, 2017, unless the parties mutually agree to an extension of the Project term or unless the project has not been completed. 13. Change Orders and Supplemental Agreements. Any change orders or supplemental agreements that affect the Project cost participation must be approved by appointed representatives of both Parties prior to execution of work. For the purposes of this section, the City’s appointed representative for approving change orders is Brandon Anderson, City Engineer, subject to City contracting policies, or their successors. The County’s appointed representative is Jeanine Briol, Construction Engineer, subject to County contracting policies, or their successors. Both Parties shall endeavor to provide timely approval of change orders and supplemental agreements so as not to delay construction operations. 14. Final completion. Final completion of the Project must be approved by both the County and the City. County Project 42-147 C00XXXXX City Project 17-XX January 10, 2017 6 15. Storm Sewer Construction. The City shall be responsible for assisting with storm sewer inspection including having an inspector on-site during storm sewer installation. 16. Maintenance. Upon completion of the Project, maintenance of the improvements shall be as follows: 16.1. Storm Sewer. Maintenance of storm sewer systems shall be provided in accordance with the current County and City Maintenance Agreement No. C0025412 dated November 4, 2013. The County will participate in replacement or repair of storm sewer constructed by the Project in accordance with County policies stated in the Dakota County Transportation Plan as now in effect or as it is subsequently updated, amended, revised or replaced by the County Board of Commissioners. 16.2. Sidewalks and Trails. Maintenance of sidewalk and trails shall be provided in accordance with the current Maintenance Agreement for County Bikeway Trails between the County and the City dated March 14, 1995. The County and the City shall be responsible for the costs of trail resurfacing or reconstruction in accordance with the Dakota County Transportation Plan as now in effect or as it is subsequently updated, amended, revised or replaced by the County Board of Commissioners. 16.3. Highway Pavement. The County shall be responsible for all pavement maintenance within County right of way unless necessitated by a failure of a municipal utility system or installation of new municipal utility facilities. 16.4. Aesthetic Elements. The responsibility for maintenance of all aesthetic elements shall be in accordance with County policies stated in the Dakota County Transportation Plan as now in effect or as it is subsequently updated, amended, revised or replaced by the County Board of Commissioners. 16.5. Miscellaneous Elements. General maintenance will be handled in accordance with County policies stated in the Dakota County Transportation Plan as now in effect or as it is subsequently updated, amended, revised or replaced by the County Board of Commissioners. 17. Subsequent Excavation. After completion of the Project, and after expiration of the warranty period regarding repair, if excavation within the highway right-of-way is necessary to repair or install water, sanitary sewer, or other city utilities, the City shall apply for a permit from the County Project 42-147 C00XXXXX City Project 17-XX January 10, 2017 7 County and shall be responsible to restore the excavated area and road surface to its original condition at the time of disturbance. If the City fails to have the highway properly restored, the County Engineer may have the work done and the City shall pay for the work within 30 days following receipt of a written claim by the County. 18. Rules and Regulations. The County and the City shall abide by Minnesota Department of Transportation standard specifications, rules and contract administration procedures. 19. Indemnification. The County agrees to defend, indemnify, and hold harmless the City against any and all claims, liability, loss, damage, or expense arising under the provisions of this Agreement and caused by or resulting from negligent acts or omissions of the County and/or those of County employees or agents. The City agrees to defend, indemnify, and hold harmless the County against any and all claims, liability, loss, damage, or expense arising under the provisions of this Agreement for which the City is responsible, including future operation and maintenance of facilities owned by the City and caused by or resulting from negligent acts or omissions of the City and/or those of City employees or agents. All Parties to this Agreement recognize that liability for any tort claims arising under this Agreement are subject to the provisions of the Minnesota Municipal Tort Claims Law; Minnesota Statutes, Chapter 466. In the event of any tort claims or actions filed against either party, nothing in this Agreement shall be construed to allow a claimant to obtain separate judgments or separate liability caps from the individual Parties. 20. Employees of Parties. Any and all persons engaged in the work to be performed by the County shall not be considered employees of the City, for any purpose, including Worker’s Compensation, and any and all claims that may or might arise out of said employment context on behalf of said employees while so engaged, and any and all claims made by any third party as a consequence of any act or omission on the part of said employees while so engaged on any of the work contemplated herein shall not be the obligation or responsibility of the City. Any and all persons engaged in the work to be performed by the City shall not be considered employees of the County for any purpose, including Worker’s Compensation, and any and all claims that may or might arise out of said employment context on behalf of said employee while so engaged. Any and all claims made by any third party as a consequence of any act or omissions of the part of the City’s employees while so engaged on any of the work contemplated herein shall not be the obligation or responsibility of the County. 21. Audits. Pursuant to Minnesota Statutes Sec 16 C. 05, Subd. 5, any books, records, documents, and accounting procedures and practices of the County and the City relevant to this County Project 42-147 C00XXXXX City Project 17-XX January 10, 2017 8 Agreement are subject to examination by the County or the City and either the Legislative Auditor or the State Auditor as appropriate. The County and the City agree to maintain these records for a period of six years from the date of performance of all services covered under this Agreement. 22. Integration and Continuing Effect. The entire and integrated agreement of the Parties contained in this Agreement shall supersede all prior negotiations, representations or agreements between the City and the County regarding the Project; whether written or oral. All agreements for future maintenance or cost responsibilities shall survive and continue in full force and effect after completion of the highway construction provided for in this Agreement. 23. Authorized Representatives. The authorized representatives for the purpose of the administration of this Agreement are: Mark Krebsbach (or successor) Brandon Anderson (or successor) Dakota County Engineer Apple Valley City Engineer 14955 Galaxie Avenue 7100 147th Street W Apple Valley, MN. 55124 Apple Valley, MN 55124 (952) 891-7100 (952) 953-2400 mark.krebsbach@co.dakota.mn.us banderson@ci.apple-valley.mn.us All notices or communications required or permitted by this Agreement shall be either hand delivered or mailed by certified mail, return receipt requested, to the above addresses. Either party may change its address by written notice to the other party. Mailed notice shall be deemed complete two business days after the date of mailing. [SIGNATURE PAGE TO FOLLOW] N:\Highway\Agreements\2017\42-147 Apple Valley C00xxxxx.docx IN WITNESS THEREOF, the parties have caused this agreement to be executed by their duly authorized officials. CITY OF APPLE VALLEY RECOMMENDED FOR APPROVAL: __________________________ By_________________________ City Engineer Mayor (SEAL) By_________________________ City Clerk Date_______________________ --------------------------------------------------------------------------------------------------------------------------- DAKOTA COUNTY RECOMMENDED FOR APPROVAL: By Physical Development Director __________________________ Date________________ County Engineer APPROVED AS TO FORM: Assistant County Attorney Date KS-2017-_____________ COUNTY BOARD RESOLUTION No. 17-xxx Date: February 7, 2017 I T E M: 4.T. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove Agreement with C & C C ourts, I nc., for Project 2017-169, AV C C Gym F loor Replacement S taff Contact: Director, Barry B ernstein Department / Division: Parks and Recreation Department AC T I O N RE Q UE S T E D: A p prove a greement with C & C C ourts, Inc., for Project 2017-169, AVC C Gym Floor Replacement, in the amount of $90,513.00, as the lowest responsible proposal. S UM M ARY: Staff is seeking authorization to enter into an agreement with C & C C ourts, Inc. for Project 2017-169, AVC C Gym Floor Replacement, in the amount of $90,513.00. T he standard agreement form will be used. B AC K G RO UND : T he current sport court gymnasium was an addition to the Apple Valley C ommunity C enter in 1998. At that time, the sport court floor was chosen to add versatility without the upkeep costs of a hardwood floor. T he floor has held up very well, but is showing signs of age including "dead spots", and is in need of replacement. Staff researched several flooring options, including hardwood, poured in place, and rolled mat. Rolled mat was the top choice for versatility, functionality, appearance and cost. Research found that it is a popular surface for volleyball and basketball play. It is becoming popular for pickleball courts but to ensure the selection, members of the pickleball playing community were invited to try out a sample floor in the sales showroom. T he players that attended had positive feedback and look forward to the update. Potential vendors were asked to provided quotes for the removal and replacement of A pple Valley Community C enter's sport court gymnasium floor. T hree vendors responded: FLR Sanders, Inc.$98,422.32 Anderson Ladd, Inc. $98,282.00 C & C Courts, Inc.$90,513.00 Funds have been allocated within the 2017 Budget for this project. B UD G E T I M PAC T: $90,513.00 (2017 Budget item) AT TAC HM E NT S: Quotation I T E M: 4.U. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove Acceptance and F inal Payment on Agreement with Horizon C hemical Company, I nc., d/b/a Horizon Commercial P ool Supply, f or P roject 2017-122, AV FA C Pool S hell Repair S taff Contact: B arry B ernstein, Director Department / Division: Parks and Recreation Department AC T I O N RE Q UE S T E D: Accept Project 2017-122, AVFA C Pool Shell Repair, as complete and authorize final payment in the amount of $82,795.00. S UM M ARY: Horizon C hemical C ompany, Inc., d/b/a Horizon C ommercial Pool Supply, has completed the specified repair work on the pool at Apple Valley Family Aquatic C enter. T hey have also submitted applicable final paperwork for payment. Staff finds the results of the project acceptable and recommends final payment on Project 2017-122, AVFA C Pool Shell Repair. B AC K G RO UND : Horizon C hemical C ompany, Inc., d/b/a Horizon C ommercial Pool Supply was contracted for removal and re-application of pool shell material on a portion of the A pple Valley Family Aquatic C enter. B UD G E T I M PAC T: $82,795.00 - 2017 budgeted item AT TAC HM E NT S: F inal Pay Documents I T E M: 4.V. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove P ersonnel R eport S taff Contact: Melissa Haas, Human Resources Manager D epartment / D ivision: Human Resources D ivision AC T I O N RE Q UE S T E D: Approve the personnel report. S UM M ARY: T he employment actions attached to this memo are recommended for City Council Approval. B AC K G RO UND : T he C ity C ouncil's approval of the Personnel Report includes the ratification of the C ity Administrator's actions in carrying out the terms and conditions of the employment of the City personnel. B UD G E T I M PAC T: Budgeted positions. AT TAC HM E NT S: Personnel Report PERSONNEL REPORT June 8, 2017 City of Apple Valley Human Resources EMPLOYMENT ACTIONS The following employment actions are recommended for City Council approval: First Name Last Name Action Position Status Dept. Base Pay Rate Pay Type Pay Scale Date (on or about) Connor Allen Hire Lifeguard II Seasonal 1940 $ 10.75 Hourly C‐03 5/31/2017 Emma Banks Hire Water Safety Instructor Seasonal 1930 $ 11.30 Hourly C‐04 5/31/2017 Nina Boguslawski Hire Pool Attendant Seasonal 1940 $ 9.75 Hourly C‐01 5/31/2017 Jordan Burdi Rehire Recreation Program Leader Seasonal 1800 $ 10.75 Hourly C‐02 6/1/2017 Kaya Chaput Hire Lifeguard Seasonal 1930 $ 10.25 Hourly C‐02 6/1/2017 Mark Deming Accept Retirement Police Sergeant Full‐Time, Regular 1200 6/2/2017 Evan DeSutter Rehire Lifeguard Seasonal 1930 $ 10.50 Hourly C‐02 5/31/2017 Gracie Dexter Hire Pool Attendant Seasonal 1940 $ 9.75 Hourly C‐01 5/31/2017 Soren Gloege Torp Rehire Lifeguard Seasonal 1940 $ 10.50 Hourly C‐02 5/31/2017 Jan Graff Rehire Clerical Assistant Part‐Time, Variable 1015 $ 20.00 Hourly C‐10 8/1/2017 Brooke Hager Hire Lifeguard II Seasonal 1940 $ 10.75 Hourly C‐03 5/31/2017 Serena Hall Hire Lifegaurd Seasonal 1940 $ 10.25 Hourly C‐02 5/31/2017 Hayden Hanlon Rehire Maintenance I Seasonal 1710 $ 12.54 Hourly SM1 5/22/2017 Katelyn Hanson Hire Recreation Program Leader Seasonal 1800 $ 10.25 Hourly C‐02 6/1/2017 Miles Hendrickseon Rehire Golf Outside Service Attendant Seasonal 5105 $ 10.25 Hourly C‐01 6/1/2017 Brett Hestness Rehire Maintenance I Seasonal 5365 $ 12.15 Hourly SM1 5/22/2017 Mason Hille Hire Maintenance I Seasonal 1600 $ 11.83 Hourly SM1 6/15/2017 Madison Holtze Rehire Lead Puppet Performer Seasonal 1800 $ 11.60 Hourly C‐04 6/1/2017 Brian Kilmartin Promotion Fire Marshal Full‐Time, Regular 1300 $ 82,642.00 Annual 190E 6/9/2017 Harmony Knudsen Rehire Lead Food & Beverage Server Seasonal 5105 $ 10.75 Hourly C‐03 5/26/2017 Jonathan Koenig Rehire Maintenance I Seasonal 5105 $ 12.15 Hourly SM1 5/27/2017 Elaine Lundberg Hire Liquor Clerk Part‐Time, Regular 5020 $ 11.00 Hourly L‐1 5/27/2017 Tess Matalamaki Hire Pool Attendant Seasonal 1940 $ 9.75 Hourly C‐01 5/31/2017 Lillian McCollum Rehire Puppet Performer Seasonal 1800 $ 10.00 Hourly C‐01 6/1/2017 The Council’s approval of the Personnel Report includes the ratification of the City Administrator’s actions in carrying out the terms and conditions of the employment of the City personnel. Page 1 of 2 PERSONNEL REPORT June 8, 2017 City of Apple Valley Human Resources First Name Last Name Action Position Status Dept. Base Pay Rate Pay Type Pay Scale Date (on or about) John Mead Hire Lifeguard Seasonal 1940 $ 10.25 Hourly C‐02 5/31/2017 Jamie Meyers Rehire Lifeguard II Seasonal 1940 $ 11.60 Hourly C‐03 5/31/2017 Mason Morse Hire Maintenance I Seasonal 1710 $ 11.83 Hourly SM1 6/1/2017 Mariah Mullenberg Hire Lifeguard Seasonal 1940 $ 10.25 Hourly C‐02 5/31/2017 Alexander Perkins Rehire Lifeguard II Seasonal 1940 $ 12.20 Hourly C‐03 5/31/2017 Samantha Piekarski Rehire Pool Manager Seasonal 1940 $ 16.05 Hourly C‐08 5/31/2017 Alexander Poncelet Rehire Maintenance I Seasonal 1600 $ 12.15 Hourly SM1 5/22/2017 Brooke Roberts Hire Recreation Program Leader Seasonal 1800 $ 10.25 Hourly C‐02 6/1/2017 Maxwell Schaefer Hire Lifegaurd Seasonal 1940 $ 10.25 Hourly C‐02 5/31/2017 Jennifer Scheffel Rehire Lifeguard II Seasonal 1940 $ 11.30 Hourly C‐03 5/31/2017 Chelsi Serba Rehire Lifeguard II Seasonal 1930 $ 11.60 Hourly C‐02 5/31/2017 Makaila Smith Hire Lifeguard Seasonal 1940 $ 10.25 Hourly C‐02 5/31/2017 Nicole Stevens Rehire Pool Manager Seasonal 1930 $ 16.45 Hourly C‐08 5/31/2017 Samantha Stevens Rehire Water Safety Instructor Seasonal 1930 $ 11.90 Hourly C‐04 5/31/2017 Melanie Wagner Rehire Pool Manager Seasonal 1930 $ 16.85 Hourly C‐08 5/31/2017 Kaylee Walter Hire Food & Beverage Support Part‐Time, Variable 5105 $ 9.75 Hourly C‐01 6/15/2017 Emily Westcot Hire Pool Attendant Seasonal 1940 $ 9.75 Hourly C‐01 5/31/2017 The Council’s approval of the Personnel Report includes the ratification of the City Administrator’s actions in carrying out the terms and conditions of the employment of the City personnel. Page 2 of 2 I T E M: 4.W. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:C onsent Agenda Description: A pprove Claims and Bills S taff Contact: Ron Hedberg, F inance Director D epartment / D ivision: F inance Department AC T I O N RE Q UE S T E D: Approve claims and bills. S UM M ARY: Attached for C ity C ouncil review and approval are check registers for recent claims and bills. B AC K G RO UND : N/A B UD G E T I M PAC T: Check registers dated May 17, 2017, and May 24, 2017, in the amounts of $1,622,912.65 and $669,388.96, respectively. AT TAC HM E NT S: C laims and B ills C laims and B ills I T E M: 5.A . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:Regular Agenda Description: A dopt Resolution P roclaiming "51st Annual A pple Valley F reedom Days C elebration" S taff Contact: Director Barry B ernstein and Freedom D ays Coordinator Pat S chesso Department / Division: Parks and Recreation Department AC T I O N RE Q UE S T E D: Adopt resolution proclaiming "51st Annual Apple Valley Freedom D ays C elebration." S UM M ARY: Apple Valley Freedom Days C ommittee has organized an event worthy of the 51st anniversary of the annual Freedom Days celebration. T hey ask C ity C ouncil recognition of the event by proclaiming it the "51st Annual Apple Valley Freedom Days Celebration." T hey also encourage community participation in the many fun activities surrounding the event. B AC K G RO UND : Some of the "51st Annual Apple Valley Freedom Days Celebration" events include: Tuesday, J une 27 - Kids Fishing Derby (Lac Lavon) Saturday, J uly 1 - C ar/Truck/Motorcycle Show (J C RP-E) Sunday, J uly 2 - Music in the Park (J C RP-E) Monday, J uly 3 - Family Fun Night (J C RP-E) Tuesday, J uly 4 - Regular Events – Fun Run, Parade, Pre-Fireworks Entertainment, Fireworks Wednesday, J uly 5 - Rain Out Date for Fireworks only B UD G E T I M PAC T: 2017 Budget Items 4th of J uly Fireworks $25,000.00 4th of J uly Parade $20,000.00 AT TAC HM E NT S: R esolution C alendar Presentation CITY OF APPLE VALLEY RESOLUTION NO. 2017- A RESOLUTION PROCLAIMING APPLE VALLEY FREEDOM DAYS CELEBRATION WHEREAS, the City of Apple Valley is proud to be a part of this great Nation and its heritage; and WHEREAS, this Nation became Independent on July 4, 1776, and Apple Valley wishes to honor this momentous occasion with a community-wide celebration; and WHEREAS, the Apple Valley residents, civic organizations, business community, Parks and Recreation Department, and Apple Valley Freedom Days Committee have joined together to develop a fantastic community celebration for this the 51st year. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley that June 27, 2017 through July 4, 2017, is hereby proclaimed to be: “The 51st Annual Apple Valley Freedom Days Celebration” and this Council encourages the citizens to support and participate in the celebration. ADOPTED this 8th day of June, 2017. ___________________________________ Mary Hamann-Roland, Mayor ATTEST: _____________________________________ Pamela Gackstetter, City Clerk 2012012012017777 FREEDOM DAYS SCHEDULE OF EVENTSFREEDOM DAYS SCHEDULE OF EVENTSFREEDOM DAYS SCHEDULE OF EVENTSFREEDOM DAYS SCHEDULE OF EVENTS Tuesday, June 27 Valleywood's Annual Freedom Days Junior Golf Classic Where: 4851 McAndrews Road Interested players can call Valleywood for more information Fishing Derby at Lac Lavon Fishing Pier Where: Lac Lavon Fishing Pier, off Gardenview Drive, Apple Valley When: 6:00 pm - 8:00 pm (registration starts at 5:30) Bring your fishing pole. Bait will be provided. Mom & Dad should bring a lawn chair and/or blanket. Registration starts at 5:30 pm at the site. This event is sponsored by the Minnesota In-Valley Fisherman. Saturday, July 1 Car and Motorcycle Show Dancin' & Cruisin' Where: Johnny Cake Ridge Park - East Time: 4:00 pm - 9:00 pm Fee: Entry fee is $15.00 which goes towards our fundraising efforts. Register for the car show. Includes dash plaque, first 100 vehicles receive a goodie bag. Music by DJ Sounds. Food for purchase. Awards will be presented. Vendor Fair at Johnnycake 4:00 to 9:00pm Booth space $100.00 J & K Amusements Carnival OPENING DAY!!! Time: 1:00PM – 10:00PM Where: Johnny Cake Ridge Park East: 5800 140th St W – Apple Valley Sunday, July 2 Music in the Park Freedom Days celebrates their 51st Anniversary with music by Saddle Sores. Featuring classic country music from the 50s, 60s and 70s. Johnnycake Ridge Park 6:00 - 7:30 pm Monday, July 3 Cub Foods Family Fun Night Time: 5:00PM - 9:00PM Where: Johnny Cake Park East: 5800 140th St W – Apple Valley • Petting Zoo – $3.00 per child (parents free!!) • Pony Rides – $3.00 per child • Zuhrah Funsters • Food • Kids dance • Games • Apple Valley Police and Fire units on site for tours! • LOTS OF FUN FOR ALL!!!! J & K Amusements Carnival: Time: 11:00AM – 10:00PM Where: Johnny Cake Ridge Park East: 5800 140th St W – Apple Valley $10 Wristband special from 1:00pm-5:00pm and 6:00 pm - 10:00 pm Tuesday, July 4 Parks and Recreation Fun Run Where: Hayes Park: 14603 Hayes Road – Apple Valley Apple Valley Freedom Days Parade: Time: 1:00PM • Parade starts at Fireside Lane and Pennock Ave • Remember – 24 hour ordinance for chairs and blankets – click here for information • High School Bands, Drum and Bugle, Clowns, Horses, carriages, FAMILY FUN!! J & K Amusements Carnival: Time: Noon – 11:00PM Where: Johnny Cake Ridge Park East: 5800 140th St W – Apple Valley FAMILY LEISURE: Pre-Fireworks Party: Time: 6:00PM – 10:00PM Where: Johnny Cake Ridge Park East: 5800 140th St W – Apple Valley • Music, dancing, games • Food Vendors • Playground for kids FIREWORKS SHOW: Time: 10:00PM Where: Johnny Cake Ridge Park East: 5800 140th St W – Apple Valley 2017 Apple Valley Freedom Days June 27 – July 4 Tuesday, June 27 Youth Golf Tournament Valleywood Golf Course Noon Fishing Derby Lac Lavon Fishing Pier 6-8pm Saturday, July 1 Dancin’ & Cruisin’ Car and Motorcycle Show –Music by DJ Sounds Johnny Cake Ridge Park East 4 pm – 9 pm J & K Carnival – Opening Day 1pm-10pm Vendor Fair – 4pm-9pm Sunday, July 2 Music in the Park - Saddle Sores Johnny Cake Ridge Park – East; Soccer Stadium 6:00 pm – 7:30 pm Monday, July 3 J & K Carnival 11am-10pm Cub Foods Family Fun Night 5-9pm July 4: Fun Runs (2 & 5 Mile) Hayes Park; 8:00 a.m. start July 4: Parade Pennock Avenue to 145th Street to Hayes Road 1:00 p.m. start Tuesday, July 4 FAMILY LEISURE: Pre-Fireworks Party 6pm – 10 pm •Music •Dancing •Games •Food Vendors Tuesday, July 4 Fireworks Display 10:00 p.m. www.avfreedomdays.com I T E M: 5.B . C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:Regular Agenda Description: A uthorize Helicopter L anding and L ift-Off in J ohnny C ake R idge P ark on J uly 3, 2017 S taff Contact: Director Barry B ernstein Department / Division: Parks and Recreation Department AC T I O N RE Q UE S T E D: Authorize helicopter landing and Lift-off in J ohnny Cake Ridge Park on J uly 3, 2017. S UM M ARY: As part of the Apple Valley Freedom Days C elebration, Cub Foods Family Fun Night is scheduled at J ohnny C ake Ridge Park East on Monday, J uly 3rd from 5:00 p.m. to 9:00 p.m. A helicopter will land on and lift-off from one of the soccer fields. Helicopter staff will provide information to the public while the helicopter is on display. B AC K G RO UND : Apple Valley Freedom Days has traditionally coordinated the helicopter landing and lift-off during Family Fun Night. T here have been no issues in previous years. B UD G E T I M PAC T: N/A I T E M: 5.C. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:Regular Agenda Description: A dopt Resolution Approving Site P lan f or O utdoor D ining Area at F ive G uys Restaurant, 14658 Cedar Avenue, S uite G S taff Contact: K athy Bodmer, A I C P, P lanner D epartment / Division: C ommunity D evelopment Department Applicant: B &B of Apple Valley L L C d/b/a Five Guys P roject Number: P C17-17-B Applicant Date: 5/4/2017 60 Days: 7/2/2017 120 Days: 8/31/2017 AC T I O N RE Q UE S T E D: Adopt resolution appoving site plan for 6' x 29' outdoor dining area at Five Guys Restaurant, 14658 C edar Ave, Suite G. S UM M ARY: I ntroduction: Five Guys restaurant at 14658 C edar Avenue, Suite G, requests Site Plan Review and Approval to create a 6’ x 29’ outdoor dining area for three tables with a total of 18 seats. T he 6’ tables are placed immediately adjacent to the building, which will maintain the minimum 5’ wide sidewalk for pedestrian circulation around the shopping center required by code. No alcohol is proposed to be served on the outdoor patio, which will help to reduce noise impacts to adjacent properties and tenants. Fencing will not be required for this small outdoor area because no alcohol is being served. One additional parking space would be required for an 18-seat outdoor dining area. A review of the parking requirements confirms that there is adequate parking available on the site to accommodate the requested outdoor dining area. P lanning C ommission Recommendation on Outdoor Music: At its May 17, 2017, meeting, the Planning Commission added a condition to the motion of approval which would prohibit outdoor music and intercom systems. T he Planning Commission recalled that this condition was placed on the outdoor dining area at El Loro (now Masu Sushi) because residential property is located north of the C edar Marketplace property. Unfortunately, the petitioner was not in attendance at the meeting and was not able to provide feedback on the condition. T he petitioner requests reconsideration of the requirement prohibiting outdoor music. T he Five G uys restaurant is located on the south end of the 14658 building; the previously approved outdoor dining area was located at the 14638 building which immediately abuts residential properties. T he petitioner explains that there are a number of elements that will screen the sound of the outdoor area from the residential area. T he nearest home is approximately 350', and buildings, parking lot, landscaping and other features will help to screen the sound of the music from the residential properties. No outdoor intercom is used in connection with the Five Guys restaurant. Staff proposes two conditions which will address the Planning C ommission's concern of ensuring the adjacent property owners are not negatively impacted by the outdoor music: 4 . No outdoor music or intercom system shall be used on the patio [recommended by Planning C ommission]. T he outdoor dining area is located less than 600’ from residential properties. No outdoor music, radio, or intercom system shall be permitted after 10:00 p.m. 5. T he volume of the outdoor music, radio or intercom shall not exceed the sound level limit at the property lines allowed by the Minnesota Pollution C ontrol Agency in accordance with § 155.344(A ) or the electronic sound system requirements of § 130.58. B AC K G RO UND : At its meeting of M ay 17, 2017, the Planning C ommission voted unanim ously to recommend approval of the project with the following motion and conditions: Recommend A pproval of the Site Plan for an outdoor dining area in accordance with the site plan dated May 4, 2017, the floor plan dated May 4, 2017, and subject to compliance with §155.383, and the following conditions: 1. T he outdoor dining area shall consist of three tables with six seats each for a total of 18 seats on the sidewalk. 2. T he outdoor dining area shall be maintained to keep a minimum 5’ wide clear sidewalk area in front of the restaurant for pedestrian circulation. 3. T he outdoor dining area shall be restricted to the confines of the area delineated on the site plan and floor plan. 4. T he outdoor dining area shall be kept in a neat, clean and orderly condition at all times. 5. An Outdoor D ining A rea permit shall be obtained from the Building Inspections Department prior to placing the tables on the sidewalk. 6. T he site plan for the additional seating in the outdoor dining area shall be submitted to the Met C ouncil for a sewer availability charge (S A C ) determination. A SA C determination letter shall be submitted at the time of application of the Outdoor Dining Permit. A ll SA C fees shall be paid to the C ity prior to issuing the Outdoor Dining Permit and placing the tables on the sidewalk. 7. No outdoor music or intercom system shall be used on the patio. B UD G E T I M PAC T: N/A AT TAC HM E NT S: R esolution C orrespondence Background Material Presentation CITY OF APPLE VALLEY RESOLUTION NO. 2017 -__ A RESOLUTION APPROVING SITE PLAN FOR FIVE GUYS OUTDOOR DINING AREA AND ATTACHING CONDITIONS THERETO WHEREAS, pursuant to Minnesota Statutes 462.357 the City of Apple Valley has adopted, as Chapter 155 of the City Code of Ordinances, zoning regulations to control land uses throughout the City; and WHEREAS, said regulations provide that an outdoor dining area in conjunction with a Class I restaurant requires the specific review and approval of a site plan by the Apple Valley Planning Commission and City Council; and WHEREAS, approval of such site plan review and approval has been requested for the above-referenced project; and WHEREAS, the Apple Valley Planning Commission reviewed the development plan and made a recommendation as to its approval at a public meeting held on May 17, 2017. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Apple Valley, Dakota County, Minnesota, that the site plan for the Five Guys Outdoor Dining Area is hereby approved, subject to conformance with all applicable City ordinances and construction standards and the following conditions: 1. The Site Plan approval for an Outdoor Dining Area shall be applicable to property identified as Lot 2, Block 1, Cedar Marketplace Addition at 14658 Cedar Ave, Suite G. 2. The Outdoor Dining Area shall consist of three tables with six seats each for a total of 18 seats on the sidewalk. 3. Construction shall occur in conformance with the site plan dated May 4, 2017, and floor plan dated May 4, 2017, subject to the following: a. The outdoor dining area shall be maintained to keep a minimum five feet (5’) wide clear sidewalk in front of the restaurant. b. The outdoor dining area shall be restricted to the confines of the area delineated on the site plan and floor plan. 4. No outdoor music or intercom system shall be used on the patio. The outdoor dining area is located less than 600’ from residential properties. No outdoor music, radio, or intercom system shall be permitted after 10:00 p.m. 5. The volume of the outdoor music, radio or intercom shall not exceed the sound level limit at the property lines allowed by the Minnesota Pollution Control Agency 2 in accordance with § 155.344(A) or the Electric Sound System requirements of § 130.58. 6. The outdoor dining area shall be kept in a neat, clean and orderly condition at all times. 7. An Outdoor Dining Area permit shall be obtained from the Building Inspections Department prior to placing the tables on the sidewalk. 8. The site plan for the additional seating in the outdoor dining area shall be submitted to the Met Council for a sewer availability charge (SAC) determination. A SAC determination letter shall be submitted at the time of application of the Outdoor Dining Permit. All SAC fees shall be paid to the City prior to issuing the Outdoor Dining Permit and placing the tables on the sidewalk. 9. The ongoing use and occupancy of the premises is predicated on the ongoing maintenance of the dining area and all required site improvements as listed in the preceding. No alteration, removal, or change to the preceding plans or required site improvements shall occur without the express authorization of the City. Site improvements which have deteriorated due to age or wear shall be repaired or replaced in a timely fashion. BE IT FURTHER RESOLVED by the City Council of the City of Apple that such approval is subject to a finding of compliance of the construction plans with the Minnesota State Building Code, as determined by the Apple Valley Building Official, and with the Minnesota State Uniform Fire Code, as determined by the Apple Valley Fire Marshal. ADOPTED this 8th day of June, 2017. __________________________________ Mary Hamann-Roland, Mayor ATTEST: ___________________________________ Pamela J. Gackstetter, City Clerk From: Scott Lesser [mailto:slesser@fiveguysmn.net] Sent: Wednesday, May 24, 2017 9:45 PM To: Bodmer, Kathy Cc: Ryan Dussault Subject: Apple Valley - Outdoor Seating Kathy, Pursuant to our phone conversation earlier today, attached you will find an exhibit that depicts the various distances from the proposed outdoor seating area in front of the Five Guys store to the nearest residential dwellings. These distances, as measured using Google Earth, range from 357 to 550 feet and are buffered by landscaping, fencing, road noise and in some cases other buildings and dwellings. I understand the City’s reasoning in restricting music from being played at the outdoor seating areas of the north building (Caribou building) due to the building’s proximity to the nearby residential dwellings. However, there are significant differences and a number of mitigating factors that should allow the City to treat the Five Guys outdoor seating area differently and permit the existing outdoor speaker to remain operational: As noted on the attached exhibit, the distance from the proposed Five Guys outdoor seating area to the nearest residential dwelling units is quite far and ranges from 357 ft. to 550 ft. This distance is many times greater than the distance from the north building to the same residential dwellings. The mathematical relationship between sound intensity and distance is referred to as an inverse square relationship. The intensity varies inversely with the square of the distance from the source. So if the distance from the source is doubled (increased by a factor of 2), then the intensity is quartered (decreased by a factor of 4). Similarly, if the distance from the source is quadrupled, then the intensity is decreased by a factor of 16, and so on. There currently is a single existing speaker outside our storefront under one of our awnings. When music is playing it generally can only be heard within the immediate vicinity of the front of our store, which is the proposed outdoor seating area. Please note that the speaker is used only to play music and is not connected to any type PA System. In fact, we do not have or permit any form of PA Systems in our stores. We do not call out orders over any type of speaker system in or out of the store. There are various and multiple buffers between the proposed outdoor seating area and the residential dwellings including: fencing, landscaping, parking lots filled with cars, road noise from Cedar Avenue, the north retail building (Caribou) and in some cases other residential dwellings. Based upon all of the above, it would be almost impossible for the music emitted from the existing exterior speaker to be heard at any of the residential dwellings. However, if you are still concerned, I invite you and any City staff or member of the City Council or Plan Commission to stand at any of the residential dwellings and listen for music emanating from our exterior speaker. Accordingly, I would ask that the condition prohibiting our current practice of playing music through the existing exterior speaker, be removed from the approval of the outdoor seating for Five Guys. Thank you for your consideration. Sincerely, Scott M. Lesser B & B of Apple Valley LLC 125 Schelter Road P.O. Box 258 Lincolnshire, IL 60069 slesser@fiveguysmn.net W: 847.943.9533 F: 847.892.7008 M: 847.946.7666 **** IMPORTANT NOTICE **** This electronic message and any attachment(s) is intended for use by the recipient(s) to whom it is addressed and may contain legally privileged information and or confidential information. If you are not the intended recipient, you are hereby notified that any disclosure, dissemination, distribution or copying of this communication (including any attachments), is strictly prohibited. If you have received this communication in error, please notify the sender of the error immediately and permanently delete the original (including any attachments) and any copy and printout thereof. 357 ft 395 ft 443 ft 550 ft 500 ft 506 ft Five Guys Outdoor Dining Area PROJECT REVIEW Existing Conditions Property Location: 14658 Cedar Ave, Suite G Legal Description: Lot 2, Block 1 CEDAR MARKETPLACE ADDITION Comprehensive Plan Designation C-Commercial Zoning Classification PD-290, Zone 4 (Neighborhood-oriented commercial) Existing Platting Platted Lot Current Land Use Multi-use retail buildings Size: Lot: 4.19 acres w/ two buildings totaling 27,149 sq. ft. Five Guys restaurant 2,402 sq. ft. Topography: Flat Existing Vegetation Urban landscaping Other Significant Natural Features None Adjacent Properties/Land Uses NORTH (Vacant Suite F) Carpet King Suite E Comprehensive Plan C-Commercial Zoning/Land Use PD-290, Zone 4 SOUTH Apple Valley Professional Building Comprehensive Plan C-Commercial Zoning/Land Use PD-290, Zone 1 EAST Detached Garage for Garrett Square Condominiums Comprehensive Plan HD-High Density Residential, 12+ units/acre Zoning/Land Use M-8C – Multiple Family, 12 to 24 units/acre WEST Applebee’s Comprehensive Plan C-Commercial Zoning/Land Use PD-290, Zone 4 Background Information Page 3 of 10 "W"W SITE 147TH ST WGLENDA DRCEDAR AVE SGLAZIER AVE146 T H W A Y W UPPER 146TH ST W146TH ST W GLAZIER AVEFIVE GUYSOUTDOOR DININGAREA µ LOCATION MAP ^ Background Information Page 4 of 10 SITE P A P P P LB RB RB GB RB LB GB RB GB RB GB RB LB RB LB RB LB GBLB RB RB 244 244 PD-R-3 R-3 PD- I-1 R-3 R-3 R-3 R-3 R-3 R-3 R-3R-3 M-5C M-6C M-4C M-3C M-6C PD-541 PD-290 PD-244 PD-290 PD-290 PD-409 PD-244 147TH ST W 150TH ST W CEDAR AVEGALAXIE AVEGLENDA DRPENNOCK AVE145TH ST W GARRETT AVEGUTHRIE AVE146TH ST W 149TH ST W 152ND ST WGRANADADRGLAZIER AVE 151ST ST WPENNOC KLNG E N E SEEAVE GARLAND AVEG A NNONWAYFIRESIDE DR 146TH WAY W 148TH ST W FRONTAGE RD143RDST W HOOVER LNUPPER 146TH ST W 144T H C T GLEASON PATHGARDENIA AVE150TH ST W 143RD S T W GLAZIER AVE145TH S T W GARRETT AVE146TH ST W CEDAR AVE151ST ST W 1 1 2 2 3 4 1 1 2 2 2 2 2 1 5 1 3 1 1 4B 4A µ FIVE GUYSOUTDOOR DININGAREA ZONING MAP ^ Background Information Page 5 of 10 OBLIQUE AERIAL Outdoor Dining Area Background Information Page 6 of 10 SITE PLAN MAY 4, 2017 5 Guys 6’ x 29’ Outdoor Dining Area Background Information Page 7 of 10 FLOOR PLAN MAY 4, 2017 6’ 29’ Outdoor Dinging Area Background Information Page 8 of 10 ZONING CODE EXCERPT OUTDOOR DINING AREAS §155.383 OUTDOOR DINING AREAS (A) Purpose. Outdoor dining areas are permitted accessory uses in conjunction with a Class I, Class II, or Class III restaurant provided that the following requirements are met: (1) Site Plan Review Required. The use and proposed site plan shall be reviewed by the Planning Commission and City Council, pursuant to § 155.402(B). (2) Performance Standards. a) No portion of the outdoor dining area shall be located or occur within any public right-of-way, including sidewalks/trails, boulevard areas or streets. b) No portion of the outdoor dining area shall be located or occur closer than two feet from any property line. (c) If the outdoor dining area is proposed to be within a City drainage & utility easement, then the property owner shall be required to execute a license agreement prepared by the City Attorney authorizing the use of the City’s easement. (d) The City Council may restrict days, hours, nature and volume, and other aspects of entertainment in any outdoor dining area, including a prohibition against all forms of music, radio, television, and other entertainment, to protect the safety, repose, and welfare of residents, businesses and other uses near the establishment. (e) The outdoor dining area shall be handicap accessible and not restrict accessibility in other areas inside or outside the restaurant or food establishment. (f) If the outdoor dining area is located on a private sidewalk area abutting the restaurant building or within a parking area for the building, then the outdoor dining area shall not interfere with any pedestrian or vehicular traffic on the site. A minimum 5’ wide area of sidewalk shall remain clear for pedestrian travel. (g) The outdoor dining area shall be subordinate to the principal restaurant Background Information Page 9 of 10 building and shall not exceed 40% in area of the square footage of the principal restaurant building. (h) The outdoor dining area shall be kept in a clean and orderly manner. No food or beverages may be stored outdoors, unless a suitable means for such storage has been reviewed and approved by the City. (i) The City Council may restrict the hours of operation of an outdoor dining area based upon the proximity of the area to residential dwelling units, and upon considerations relating to the safety, repose, and welfare of residents, businesses, and other uses near the establishment. (j) A fence surrounding an outdoor dining area shall be suitable for the intended use. If a fence is required, a fencing plan shall be submitted with the site plan for the outdoor dining area for review and approval by the City. (k) The outdoor dining area must conform to all Fire and Building Codes related to the number and types of exits that are required. (l) The Planning Commission or City Council may require the notification of property owners if the outdoor dining area is located closer than 600 feet from residential properties. (m) The parking regulations related to minimum required spaces as set forth in this Chapter shall apply and compliance met. (n) The maximum impervious surface requirements set forth in this Chapter shall apply and compliance met. Background Information Page 10 of 10 6/8/2017 1 Five Guys Outdoor Dining Area City Council Meeting June 8, 2017 Requested Actions 1.Site Plan Review and Approval for 6’ x 29’ outdoor dining area for three tables with total of 18 seats. 6/8/2017 2 Location Map 14658 Cedar Ave, Suite G 6/8/2017 3 Zoning Map Site Plan 6/8/2017 4 Photo Photo 6/8/2017 5 Photo Planning Commission Recommendation At its meeting of May 17, 2017, the Planning Commission voted unanimously to recommend approval of the outdoor dining area with conditions. At the meeting, the Planning Commission added the following condition: •No outdoor music or intercom system shall be used on the patio. 6/8/2017 6 Distances to Nearby Residential Proposed Revised Condition 4. No outdoor music or intercom system shall be used on the patio. The outdoor dining area is located less than 600’ from residential properties. No outdoor music, radio, or intercom system shall be permitted after 10:00 p.m. 6/8/2017 7 Questions? Floor Plan Floor Plan May 4, 2017 29’ 6’ 6/8/2017 8 PC Recommendation Recommend approval of the Site Plan Review and Approval for an outdoor dining area in accordance with the site plan dated May 4, 2017, the floor plan dated May 4, 2017, and subject to compliance with §155.383, and the following conditions: •The outdoor dining area shall consist of three tables with six seats each for a total of 18 seats on the sidewalk. •The outdoor dining area shall be maintained to keep a minimum 5’ wide clear sidewalk area in front of the restaurant for pedestrian circulation. •The outdoor dining area shall be restricted to the confines of the area delineated on the site plan and floor plan. PC Recommendation •The outdoor dining area shall be kept in a neat, clean and orderly condition at all times. •An Outdoor Dining Area permit shall be obtained from the Building Inspections Department prior to placing the tables on the sidewalk. •The site plan for the additional seating in the outdoor dining area shall be submitted to the Met Council for a sewer availability charge (SAC) determination. A SAC determination letter shall be submitted at the time of application of the Outdoor Dining Permit. All SAC fees shall be paid to the City prior to issuing the Outdoor Dining Permit and placing the tables on the sidewalk. •No outdoor music or intercom system shall be used on the patio. 6/8/2017 9 §155.383 OUTDOOR DINING AREAS A.Purpose. Outdoor dining areas are permitted accessory uses in conjunction with a Class I, Class II, or Class III restaurant provided that the following requirements are met: 1.Site Plan Review Required. The use and proposed site plan shall be reviewed by the Planning Commission and City Council, pursuant to § 155.402(B). §155.383 OUTDOOR DINING AREAS 2.Performance Standards. a)No portion of the outdoor dining area shall be located or occur within any public right-of-way, including sidewalks/trails, boulevard areas or streets. b)No portion of the outdoor dining area shall be located or occur closer than two feet from any property line. c)If the outdoor dining area is proposed to be within a City drainage & utility easement, then the property owner shall be required to execute a license agreement prepared by the City Attorney authorizing the use of the City’s easement. 6/8/2017 10 §155.383 OUTDOOR DINING AREAS 2.Performance Standards. d)The City Council may restrict days, hours, nature and volume, and other aspects of entertainment in any outdoor dining area, including a prohibition against all forms of music, radio, television, and other entertainment, to protect the safety, repose, and welfare of residents, businesses and other uses near the establishment. e)The outdoor dining area shall be handicap accessible and not restrict accessibility in other areas inside or outside the restaurant or food establishment. f)If the outdoor dining area is located on a private sidewalk area abutting the restaurant building or within a parking area for the building, then the outdoor dining area shall not interfere with any pedestrian or vehicular traffic on the site. A minimum 5’ wide area of sidewalk shall remain clear for pedestrian travel. g)The outdoor dining area shall be subordinate to the principal restaurant building and shall not exceed 40% in area of the square footage of the principal restaurant building. §155.383 OUTDOOR DINING AREAS 2.Performance Standards. h)The outdoor dining area shall be kept in a clean and orderly manner. No food or beverages may be stored outdoors, unless a suitable means for such storage has been reviewed and approved by the City. i)The City Council may restrict the hours of operation of an outdoor dining area based upon the proximity of the area to residential dwelling units, and upon considerations relating to the safety, repose, and welfare of residents, businesses, and other uses near the establishment. j)A fence surrounding an outdoor dining area shall be suitable for the intended use. If a fence is required, a fencing plan shall be submitted with the site plan for the outdoor dining area for review and approval by the City. k)The outdoor dining area must conform to all Fire and Building Codes related to the number and types of exits that are required. 6/8/2017 11 §155.383 OUTDOOR DINING AREAS 2.Performance Standards. l)The Planning Commission or City Council may require the notification of property owners if the outdoor dining area is located closer than 600 feet from residential properties. m)The parking regulations related to minimum required spaces as set forth in this Chapter shall apply and compliance met. n)The maximum impervious surface requirements set forth in this Chapter shall apply and compliance met. I T E M: 7. C O UNC I L ME E T I NG D AT E:J une 8, 2017 S E C T I O N:Calendar of Upcoming Events Description: Approve Calendar of Upcoming Events Staff Contact: Stephanie Marschall, D eputy City Clerk Department / Division: City Clerk’s Office AC T IO N RE Q UE S T E D : Approve the calendar of upcoming events as listed in the summary below, and noting each event listed is hereby deemed a Special Meeting of the C ity Council. S UM M ARY: Day/Date Time Location Ev ent Mon./J une 5 7:00 p.m.Municipal C enter Telecommunications Advisory Committee Meeting Tue./J une 6 10:00-11:00 a.m.Uponor Uponor Groundbreaking Ceremony Wed./J une 7 12:00-1:00 p.m.T BD Chamber ‘Surprise’ Luncheon Wed./J une 7 5:30 p.m.Science Museum, St. Paul, MN Flint Hills Resources Discovery Scholarship Awards Banquet Wed./J une 7 7:00 p.m.Municipal C enter Planning Commission Meeting C A N C ELLED T hur./J une 8 5:30 p.m.Municipal C enter Informal C ity C ouncil Meeting T hur./J une 8 7:00 p.m.Municipal C enter Regular City C ouncil Meeting * Mon./J une 12 5:00-6:30 p.m.Radisson Blu Mall of America Greater MSP Reception for Uponor Tue./J une 13 7:30-9:00 a.m.Title Boxing Club, Lakeville, MN Chamber C offee Connection June 14-16 Rochester, MN League of Minnesota C ities Annual C onference Fri./J une 16 6:00-9:00 p.m.Kelley Park Apple Valley Arts Foundation Music in Kelley Park C oncert Series Wed./J une 21 9:00 a.m.Municipal C enter Firefighters Relief Association Meeting Wed./J une 21 7:00 p.m.Municipal C enter Planning Commission Meeting T hur./J une 22 7:00 p.m.Municipal C enter Regular City C ouncil Meeting * Fri./J une 23 6:00-9:00 p.m.Kelley Park Apple Valley Arts Foundation Music in Kelley Park C oncert Series B AC K GRO UND : Each event is hereby deemed a Special Meeting of the City Council, the purpose being informational or social gathering. Only at events marked with an asterisk will any action of the Council take place. B UD GE T IM PACT: N/A