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06-22-15 CC Reg Mtg Agenda CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD CITY COUNCIL REGULAR MEETING COUNCIL CHAMBERS MONDAY, JUNE 22, 2015 7:00 P.M. AGENDA 1. CONVENE CITY COUNCIL MEETING A. Roll Call Mayor Zerby___ Labadie___ Siakel___ Sundberg___ Woodruff___ B. Review Agenda Attachments 2. APPROVAL OF MINUTES A. City Council Regular Meeting Minutes of June 8, 2015 Minutes 3. CONSENT AGENDA – Motion to approve items on the Consent Agenda & Adopt Resolutions Therein: A. Approval of the Verified Claims List Claims List B. Establishing Dates for the 2015 Deer Management Program Planning Director’s memo C. Accepting a Donation for Shorewood Parks Finance Director’s memo D. Participation in Local Performance Measures Finance Director’s memo, Resolution E. Approve Plans and Specifications and Authorize Ad for Bids for the 2015 Engineer’s memo Sealcoat Project Resolution F. Approve Plans and Specifications and Authorize Ad for Bids for the Lift Director of Public Station 11 Rehabilitation Project Works, Memo Resolution 4. MATTERS FROM THE FLOOR (No Council Action will be taken) 5. PUBLIC HEARING 6. REPORTS AND PRESENTATIONS A. 2014 Audit Report by Abdo, Eick and Meyers Finance Director’s memo, Audit Report B. Public Information Meeting on the Storm Water Pollution Prevention Program CITY COUNCIL REGULAR MEETING AGENDA – June 22, 2015 Page 2 7. PARKS A. Report by Justin Mangold on the June 9, 2015 Park Commission Park Tours 8. PLANNING A. Accept and Provide Feedback on the Minnetonka Country Club Report Planning Director’s from the Planning Advisory Committee memo 9. ENGINEERING/PUBLIC WORKS A. Galpin Lake Road Speed Study Director of Public Works’ memo, Resolution B. Speed Limit Review Policy WSB Engineer’s memo, Resolution C. Minnetonka Boulevard Roadway Improvement-Shorewood and Greenwood Engineer’s memo D. Excelsior Boulevard Trail Contract Modifications Engineer’s memo 10. GENERAL/NEW BUSINESS A. Southshore Center Landscape Maintenance Proposal Administrator’s memo 11. STAFF AND COUNCIL REPORTS A. Administrator and Staff 1. Trails Schedule Trail Schedule 2. Spring Clean Up Report Report 3. Dump Trucks 4. Christmas Lake Update 5. Minnetonka Country Club Schedule 6. Succession Planning 7. Police Process Update 8. Southshore Center Greenwood Corres. B. Mayor and City Council 12. ADJOURN CITY OF SHOREWOOD  5755 Country Club Road Shorewood, Minnesota 55331 952-960-7900  Fax: 952-474-0128 www.ci.shorewood.mn.us cityhall@ci.shorewood.mn.us Executive Summary Shorewood City Council Regular Meeting Monday, June 22, 2015 7:00 p.m. 6:00 PM – A Council WS is scheduled for updates from Xcel Energy and the Alternative Energy Study Consultant Agenda Item #2A: Approval of Minutes from the June 8, 2015 Regular Council meeting Agenda Item #3A: Approval of the verified claims list. Agenda Item #3B: Staff has worked with MBRB to propose four weekends in October and November for the 2015 Deer Management Program. A motion approving the 2015 program schedule is in order. Unfortunately, we are operating this year without benefit of the annual aerial survey, due to lack of snow cover. Agenda Item #3C: This motion accepts a $20 donation from Eagle Scout candidate Jeremy Livingston for Shorewood Parks. Agenda Item #3D: This resolution commits the city to participate in the Council on Local Results and Innovation performance measures program for 2015. The benefits are a cash payment of approximately $1,000. Agenda Item #3E: This is an authorization to advertise for bids for the 2015 Sealcoating of streets. Agenda Item #3F: This resolution approves the plans specifications and estimate for lift station 11 and authorizes advertisement of bids. Agenda Item #4: Matters from the floor – no Council action will be taken. Agenda Item #5: There are no public hearings scheduled this evening. Agenda Item #6A: Andrew Berg, CPA, with Abdo, Eick & Meyers, LLP will present the 2014 Comprehensive Annual Financial Report this evening. Staff recommends Council accept the 2014 annual financial report. Agenda Item #6B: This is the annual public information meeting on the Storm Water Pollution Prevention program. A PowerPoint presentation will be provided at the meeting. Executive Summary – City Council Meeting of June 22, 2015 Page 2 Agenda Item #7: Justin Mangold will report on the June 9, 2015 Park Commission Park tours. Agenda Item #8A: Per Council’s request at its last meeting, staff has prepared a graphic chart showing timeline scenarios for review of the MCC redevelopment project. Keep in mind that some of the overall time is dependent on the applicant’s consultants getting information in on time. Agenda Item #9A: This item reestablishes a 30 mph speed limit on Galpin Lake Road. Agenda Item #9B: Staff is requesting Council review the draft speed limit policy and provide direction to staff. Agenda Item #9C: Staff recommends approval of the expenditure of funds from the street reconstruction fund in the amount not to exceed $45,000 to rehabilitate approximately 750 feet of Minnetonka Blvd., cooperatively with the city of Greenwood. Agenda Item #9D: Staff requests Council authorize the Engineer to direct the MCES to make the construction modifications as indicated in the staff memo to the Excelsior Blvd. Trail between Manor Road and Barrington Way. Agenda Item #10A: Staff seeks direction from Council on accepting a quote for landscape maintenance of the Southshore Center from Mangold Horticulture. Agenda Item #11A: Staff reports are provided in the packet and will be given at the meeting. #2A CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD CITY COUNCIL REGULAR MEETING COUNCIL CHAMBERS MONDAY, JUNE 8, 2015 7:00 P.M. MINUTES 1. CONVENE CITY COUNCIL REGULAR MEETING Mayor Zerby called the meeting to order at 7:00 P.M. A. Roll Call Present. Mayor Zerby; Councilmembers Labadie, Siakel, and Woodruff; Attorney Keane; City Administrator Joynes; Park & Recreation Coordinator Grout; Finance Director DeJong; Planning Director Nielsen; Director of Public Works Brown; and, City Engineer Hornby Absent: Councilmember Sundberg B. Review Agenda Labadie moved, Woodruff seconded, approving the agenda as presented. Motion passed 4/0. 2. APPROVAL OF MINUTES A. City Council Regular Meeting Minutes, May 26, 2015 Woodruff moved, Siakel seconded, Approving the City Council Regular Meeting Minutes of May 26, 2015, as amended in Item 11.B, Page 21, Paragraph 3, Sentence 6, change “enforcement if very” to “enforcement is very”. Motion passed 4/0. 3. CONSENT AGENDA Mayor Zerby reviewed the items on the Consent Agenda. Woodruff moved, Labadie seconded, Approving the Motions Contained on the Consent Agenda and Adopting the Resolution Therein. A. Approval of the Verified Claims List B. Adopting RESOLUTION NO. 15-043, “A Resolution Approving a Temporary ‘On- Sale’ Liquor License to the Excelsior Firefighters Relief Association.” Motion passed 4/0. 4. MATTERS FROM THE FLOOR There were no matters from the floor presented this evening. 5. PUBLIC HEARING CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 2 of 18 6. REPORTS AND PRESENTATIONS A. Shorewood Excelsior Fire District Service Annual Report Mayor Zerby noted that he asked Excelsior Fire District (EFD) Chief Gerber to provide an update on what is happening with fire service in Shorewood. Chief Gerber noted that each year he and the EFD Administrative Specialist create a year in review document. It is generally published around March after it has been presented to the EFD Board. The 2014 Year in Review document can be found in its entirety on the EFD’s website www.excelsiorfire.org. He also noted that the EFD provides fire service to the Cities of Deephaven, Excelsior, Greenwood, Shorewood and Tonka Bay. He highlighted a few things from the 2014 Year in Review. The highlights are as follows. The total call comparison for 2010 – 2014 was: 2010 – 732; 2011 – 651; 2012 – 639; 2013 – 677;  and, 2014 – 769. On average the EFD responds to 700 – 800 calls for service annually. Suppression calls (fires, fire alarms, gas leaks, gas line breaks, smoke and wire down/arching) –  in 2014 there were 236 call responses and 242 in 2013. Rescue calls (medicals and crashes, ride a longs in an ambulance, situations that required  technical rescue, assistance to police departments for lift assist for citizens, and mental health incidents) – there were 456 rescue calls in 2014 and 357 in 2013. Special response calls (water and ice incidents, weather stand-by at the District stations and  responses for incidents resulting from severe weather, missing persons, animal rescue, hazmat incidents, and mutual aid and auto aid) – there were 77 special call responses in 2014 and 78 in 2013. There were graphs for the number of calls by day of the week and time of the day for 2013 and  2014. The call volume in 2014 was steadier from day to day. In 2013 the greatest calls volumes were on Friday, Saturday and Sunday. The busiest times of the day in 2014 were from 10:00 A.M. to 8:00 P.M. The breakdown of incidents by type for 2014 was 59 percent rescue (EMS), 31 percent  suppression (fire related), and 10 percent special response. Across the country 80 percent of the calls are EMS related. The EFD has been relatively consistent with 55 – 60 percent of its calls for service being EMS related. The breakdown of incidents by member city for 2014 was 33 percent for Shorewood, 31 percent  for Excelsior, 18 percent for Deephaven, 10 percent for Tonka Bay, 3 percent for Greenwood, and 5 percent for mutual aid. The five member cities have uniqueness. The 2011 – 2014 average number of firefighters responding to a call was 13.08 in 2014, 14.12 in  2013, 15.93 in 2012, and 14.98 in 2011. There are fire calls when 30 firefighters respond and others when 6 respond. It is getting increasingly harder to find firefighters. The 2011 – 2014 average to the scene response times (from the time the vehicle leaves a station  to the first vehicle on the scene) in minutes were 6.72 in 2014, 6.82 in 2013, 6.52 in 2012, and 6.47 in 2011. The District’s standard is 8 minutes. The response times were not the same for every location in the District; there were locations and times of the day when those response times were not achieved. To reach some areas in the District it takes more than 8 minutes to drive there. The 2011 – 2014 average turnout / in-service times (from the time the pager goes off to the time  when a truck goes into service) were 2.7 in 2014, 2.62 in 2013, 2.71 in 2012, and 2.89 in 2011. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 3 of 18 There are times a truck is out the door instantaneously and then other times it may take 6 – 7 minutes. The Department has 2 full-time staff – a fire chief and a fire inspector. It has 2 part-time staff – an  administrative specialist and a seasonal fire inspector primarily for special events. There are currently 44 paid-on-call firefighters. Of them 18 live in Shorewood – 17 respond to Station 1 and 1 responds to Station 2. In 2014 the EFD issued 282 recreational fire permits to residents in Shorewood. The EFD does  not charge for those permits. The permits help the Department monitor and enforce if someone is burning something they shouldn’t in a recreational fire. Chief Gerber noted that Administrator Joynes asked him to talk a little about the 2016 proposed budget. Gerber explained the first draft of the proposed 2016 budget was first discussed by the EFD Board during its April 15, 2015, work session. There is a joint EFD member City Councils work session scheduled for June 17, 2015, to discuss the budget. The proposed budget reflects an overall 2.79 percent increase when compared to the adopted 2015 budget. The overall budget includes $967,177 for operations and building maintenance; a $170,000 contribution to the Capital Improvement Program; and, $549,098 for bonded debt payments on the public safety facilities. The total member cities’ contribution reflects a $44,307 increase when comparted to the 2015 adopted budget. Gerber noted that Shorewood pays 37.63 percent of the overall budget for 2016 based on the joint powers agreement (JPA) funding formula. He explained the proposed 2016 budget reflects Shorewood’s contribution will increase $1,863 (or 0.3 percent) when compared to the 2015 adopted budget. Chief Gerber offered to entertain questions from Council. In response to a comment from Councilmember Woodruff, Chief Gerber stated the Department recruits every year and tries to bring a recruit class on in the fall. The Department has active applications on file. Finding firefighters is a very challenging part of eh Department’s job. If there are any people interested in learning more they can call the EFD’s general phone number (952) 401-8801. Mayor Zerby stated that for 2014 the breakdown of incidents by member city indicated 33 percent of the total incidents were in Shorewood. He asked if that percentage is relatively consistent from year to year. Chief Gerber stated he thought Shorewood’s percentage was pretty consistent. Zerby noted Shorewood provides around 38 percent of the funding for the EFD yet only 33 percent of the incidents occurred in Shorewood. Zerby asked Chief Gerber if he sees a change in how service is being provided throughout the EFD community. Chief Gerber stated one of the big opportunities going forward is continuing to look at how service will be provided with the type of people living in the District and the changing lifestyles people have today. People are busy, there are many two income families and many children are busy with activities and athletics so parents have to drive them around. He noted that one of the challenges down the road is how the EFD is going to provide quality, effective, short response time service by doing things the same as today. The model will likely be different 5 – 10 years out. Mayor Zerby asked how useful the fire lanes that go to the Lake Minnetonka are in Shorewood. He commented that he knows that Chief Gerber has weighed in a little on the proposed redevelopment of the Minnetonka County Club (MCC) property. He asked Gerber if there is any other input he can give to the CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 4 of 18 Shorewood Planning Director or Director of Public Works regarding how to help deal with the challenges the firefighters have. Gerber stated he talks frequently with Shorewood staff about construction projects. Shorewood staff does an excellent job of keeping public safety up to speed when construction is happening. Chief Gerber noted that it would be very helpful to have a fully hydranted community. Shorewood is not fully hydranted. He stated fire lanes are access points that allow firefighters to get to the Lake during both the winter and summer. It also provides the option to draft water from the lake. During 2015 it is not an option the Department is going to use. Mayor Zerby asked if Council needs to be aware of anything from a policy standpoint. Chief Gerber responded no. Zerby commented that there are many narrow roads in Shorewood and that creates challenges when providing fire service. Gerber stated those same challenges are throughout the EFD community. Councilmember Labadie stated the 2014 Incidents by City PowerPoint slide indicated 5 percent of the incidents were mutual aid. She asked what the means. Chief Gerber explained when the Fire Department travels to an adjoining community to provide help with an incident that community has going on that is where those incidents get categorized. About 10 years ago fire departments did more of their own thing and only called for help when it was absolutely needed. In 2015 it is much more regional in how fire service is provided. Departments are crossing boundaries and utilizing the best equipment available to provide the best service regardless of which community the incident is in. Labadie then stated that part of the islands in Shorewood receive fire service from the Mound Fire Department (MFD). If there is an incident there she asked if that goes into the mutual aid category or the Shorewood category. Chief Gerber stated if the EFD got called to help out it is categorized as mutual aid because it is not the EFD’s primary area. It is the MFD’s responsibility. Labadie went on to state that Eureka Road was closed the past weekend preventing access to Highway 7 because of the Tonka United Soccer Association’s Tonka Splash event. She asked if that caused issues for the Fire Department. Chief Gerber explained there had been a lot of discussion with Director Brown and the police department about Eureka Road being minimized at the access there. In previous years there had been access issues. This year there were no fire service emergency response needs in that area during the 2015 Tonka Splash event. Councilmember Siakel noted that she is Shorewood’s representative on the EFD Board and has learned a great deal about how the Fire Department operates. She thanked Chief Gerber for the outstanding job he does. She stated that working for a joint powers organization with five member cities is no small feat. Siakel stated that the South Lake Minnetonka Police Department (SLMPD) four member cities are in the process of hiring a new police chief. She noted that technically emergency management responsibilities have been under the chief of police. She stated she thought it prudent to consider moving that oversight responsibility to the fire chief and to provide the Fire Department the resources necessary to take that on. That may require bringing someone to full-time from part-time. She noted she thought that warrants serious discussion. Chief Gerber stated if that is the way the elected and appointed officials want to move forward then it deserves more discussion. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 5 of 18 Councilmember Siakel stated she thought that would serve the best interests of the community and it would be the smart thing to do for the future. Mayor Zerby thanked Chief Gerber for coming. B. Lake Minnetonka Communications Commission Bylaws Update Administrator Joynes noted that Jim Lundberg, Operations Manager for the Lake Minnetonka Communications Commission (LMCC) is present to review the proposed update to the LMCC’s Bylaws and to ask for Council’s approval of them. Mr. Lundberg stated it is his understanding that the meeting packet included a copy of the LMCC’s updated Bylaws as well as a copy of summary of the proposed changes. He explained the LMCC’s Bylaws were developed in 1983. Over the last few years there has been a reduction in the number of LMCC member cities and LMCC staff has been reduced. Progress has been made with having the full Commission consider large issues rather than have the Executive Committee discuss them first. Some of the proposed changes to the Bylaws are related to restructuring things so that the full Commission is the major decision maker and reducing the power of the Executive Committee. Also, a lot of the outdated language will be removed. The first thing that was done was the LMCC’s attorney updated the Bylaws and provided the Commission with a new four-page document; the original document was six pages. Next a LMCC Bylaws Committee was established and the Committee reviewed the attorney’s recommendations and made final changes to the Bylaws. The changes stream line processes, remove former member cities, make financial issues easier to deal with, and reduce the size of the Executive Committee (it will consist of the three officers and two at large commissioners). There are also some minor changes. He reviewed what the proposed changes were and in some instances why they were made. Councilmember Woodruff stated he was troubled by the change regarding weighted voting. He assumed Shorewood would continue to have more than one vote. Mr. Lundberg stated it would and clarified that the Joint Powers Agreement supersedes what the Bylaws say. He explained that any vote that comes before the Commission can be held as a weighted vote if a member city requests it. Woodruff then stated that the new Article 3, Section 4 states “Other legal instruments shall be executed …”. In that section there is no context for “other legal instruments”. He asked that be clarified in the document. Mayor Zerby stated the proposed Bylaws are to the point and noted that there had been some dissent over the last few years about how the Executive Committee operated. He then stated changes had been made to the Bylaws before and since then there was more thought put into the Bylaws. He noted he is fine with what is proposed subject to the one clarification Councilmember Woodruff asked for. Woodruff moved, Siakel seconded, Adopting RESOLUTION NO. 15-044, “A Resolution Regarding Amendments to the Lake Minnetonka Communications Commission Bylaws” subject to Article 3, Section 4, subject to adding context to the word “other”. Motion passed 4/0. C. Minnetonka Country Club Planning Advisory Committee Final Report CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 6 of 18 Mayor Zerby stated that on behalf of Council he would like to extend gratitude to the Planning Advisory Committee (PAC) for its efforts. The PAC consists of a broad and diverse group of community stakeholders from neighborhoods near the Minnetonka Country Club (MCC) property and the community at large. The PAC was established by Council to assist the Planning Commission and City Council establish a vision for the MCC property and the area nearby. He explained the PAC had a total of nine meetings and spent over 300 hours in total on their endeavor. Based on everything Council has heard and read the PAC members worked very well together. The process was civil and deliberate and the outcome was a lot of good ideas. Council was kept abreast of the process through feedback from staff, through meeting minutes and through the MindMixer website. He clarified that this is not the end of the public feedback process with regard to the redevelopment of the MCC property. There are a number of issues and challenges that have to be addressed before the redevelopment can move forward. He stated that traffic is one of the larger issues that has to be addressed. He commented there has been some discussion about establishing another group to focus solely on traffic, noting that is for Council to decide at another time. He noted there will public hearings throughout the upcoming redevelopment process. He stated he has asked Director Nielsen to provide Council with a diagram showing the stages in the process where public comments will be formally taken. He stated the MindMixer website will continue to be used as a tool for communicating. Zerby clarified that this evening is not a public hearing – it is not the time for Council to take public input. It is the opportunity for the PAC to provide its final report to Council. He stated if people have questions they can email Council and/or call staff. Or, they can submit their comments on MindMixer. Zerby introduced Stantec Consultant Services Inc. Senior Principal John Shardlow. Stantec was hired to provide planning consulting services for the upcoming MCC residential development project. Mr. Shardlow explained that during the January 29, 2015, Council and staff retreat, Stantec presented the concept of the PAC approach. He used that approach in the past with communities who were approaching large land use projects. The idea behind the PAC was to seek out people in the community who were willing to make/take the time to become fully informed about the subject and to share their opinions throughout the process. The PAC should be thought of a sophisticated focus group. PAC members did not give up their right to openly share their opinions. Many times a community gets involved through the public hearing process. During the hearing the developer makes a presentation and the residents come and present their positions. The public hearing is not a very good opportunity for an open dialogue. He noted that everything throughout the process has been well documented. He displayed a process diagram that was followed. He explained there was a series of educational workshops. One of them was about land use planning 101. The PAC was made aware of what the City’s authority is and what the rights of the property owner are. It learned that when a developer has control of the property it has the same rights as the property owner. There was discussion about natural resources in a workshop. There is a tremendous opportunity for logistical restoration on the site. There is very strong support on the part of developer and community to have passive open space with trails available to everyone within the development and outside. There was guided concern at the beginning of the process about there possibly being a gated community. The developer never proposed that and the community did not support that. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 7 of 18 In one workshop the PAC was made aware of what a planned unit development (PUD) was and what types of tradeoffs could be made available. A PUD should be a win for the City and a win for the developer. There was a workshop devoted to discussing transportation and traffic. Mr. Shardlow noted that he invited three members of the PAC to assist with the presentation this evening and to answer questions from Council. The members were Pat Arnst, Jeremy Norman and Laurale Chellen. There were also other members present in the audience. He also noted that the Planning Commission is charged by law with recommending a plan for the future of the community. The Planning Committee Members are part of the PAC. He went on to note that the Commission will take over as the Comprehensive (Comp) Plan amendment process and rezoning moves forward. Mr. Shardlow explained that during the January 29, 2015, Council and staff retreat Council affirmed it wanted the PAC to address the following: 1) explore housing alternatives; 2) evaluate ways to leverage the new value created through the redevelopment to help support redevelopment projects around the area and other public improvements; 3) evaluate potential street realignments; and, 4) consider park dedication and reuse options. He was told that traffic was a major issue during his interview process for this task. When PAC members were asked to identify issues traffic was listed as the top issue by a margin of two to one. Traffic currently is a concern and will continue to be a concern. It warrants continued discussion. The biggest challenge is the “cut through” (Country Club Road to Yellowstone Trail to Lake Linden Drive) route is designated as collector (a Minnesota State Aid (MSA)) route on the City’s adopted Comp Plan. Unfortunately, it is not improved to collector standards. Based on analysis, that collector route is not serving traffic that exceeds the capacity of a collector route. The net increase in traffic between a fully functioning golf course and the proposed development is not significant. Traffic conditions in the neighborhood are locally significant but not regionally significant. Any traffic solutions will have to be Shorewood solutions; they will be not be other government agencies’ solutions. He displayed a graphic showing the locations of various traffic issues/comments on the roadways surrounding the MCC property and on to CUB Foods and the intersection of Highway 7 and Highway 41. About 40 – 50 percent of the issues/comments are behavioral issues. He clarified he thought there are improvements that can be made and he encouraged the City to make them. Early on in the process three options were identified for addressing the Country Club Road traffic issue. The PAC was broken up into small groups and rated which of three options for dealing with Country Club Road was the best option. One option was to improve Country Club Road which to most people meant having a safe trail along the corridor. A second option was to close Country Club Road so it no longer served as a cut through roadway. The third option was status quo. Based on the PAC rankings and the other public input there was not a unanimous ranking of any option. The majority of the people did not favor closing the roadway. There was little support for widening the roadway. He noted traffic is an existing issue; it was an issue before the golf course closed. The developer will be subdividing the MCC property. That does provide the opportunity to address some of the right-of-way (ROW) concerns. The developer expects they will be corrected as part of this process. It is his understanding that the City is evaluating the possibility of tax abatement to help fund construction of some of the trails in the area. There is also an opportunity to have a trail paralleling Country Club Road on the MCC property. That provides the opportunity to save some trees and provide a safer place to walk. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 8 of 18 He reminded Council the process was about engaging and informing participants about issues that will affect the future of the project area and facilitating a process through which participants could provide input. He stated that often times at the end of a workshop the PAC members were given a handout and asked to submit any questions or concerns they had or wanted to bring to Council’s attention. All of that information has been collected; there has been no censorship of it. There was a point in the process when a number of residents from the area around the MCC property started to attend the PAC workshops. That was challenging for him at times because the workshops were not designed to be neighborhood meetings. Their input was gathered and summarized along with that from the PAC members. Comments made by non PAC members were noted as such. He noted that each member of the PAC is well aware that their input is advisory only to Council and the Planning Commission. He explained that to redevelop the MCC property as residential the Comp Plan must be amended. The Comp Plan currently designates the property as semi-public. For the project to move forward it must be rezoned. There is some potential for redevelopment of the commercial Smithtown Crossing area. If any of those parcels were to be redeveloped as mixed use their zoning would also need to be changed. If the MCC redevelopment project were to move forward and if 50 – 60 acres of the property were to be dedicated as open space that would have to be changed on the Land Use Plan. The MCC property is currently zoned R-1A. The two options to redevelop the MCC property are all single family or single family with some age targeted units. Either option would fit in the R-1C District standards. It remains to be seen if PUD zoning is necessary. It could be that R-1C zoning could allow the project to move forward. He clarified that he is a big proponent of PUD because there could be advantages for both the City and the developer. Mr. Shardlow turned the next part of the presentation over to PAC Member Arnst. PAC Member Arnst thanked Council for giving the PAC members the opportunity to serve on the Committee. She stated that she learned a great deal through the process. The group is very diverse. The process started with Stantec representatives providing extensive background information about comprehensive planning, zoning, the City’s authority, the developer’s rights and so forth. The PAC discussed traffic, drainage patterns, soil composition, existing infrastructure as well as other topics. The PAC took tours of the MCC property and assessed the contour of the property. During its first workshop the PAC members identified their individual issues; what they saw as problems with the proposed redevelopment. They were also asked to present potential opportunities. She commented that she was impressed by most of the members forward thinking in terms of the surrounding area (e.g., making the nearby area a town center). She clarified not all of the items listed on the slide titled Issues are technically issues. Traffic and drainage definitely are. Density is about a desire to offer a variety of housing types and costs. Trails are about incorporating the construction of them as part of the proposed project. There was discussion about how to protect the wetland on the MCC property and how to make that space open to the public. The idea of having a mini town center in the Smithtown Crossing area was discussed as was possibly changing the City Hall Campus. She noted Mr. Shardlow created a vision statement for the PAC based on feedback provided by PAC members during its first workshop. She stated the statement captured the different perspectives of the members. There were some very strong beliefs about housing choices, technology, conservation, and traffic. She explained that during various workshops the PAC split up into smaller groups to discuss certain topics in more detail. During the last workshop the outcomes of those discussions were consolidated. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 9 of 18 PAC Member Arnst turned the next part of the presentation over to PAC Member Norman. PAC Member Norman thanked Council for giving him and others the opportunity to serve on the PAC. He stated that in general there was active participation by all members of the Committee. He indicated that some of the items that have been classified as issues are really discussion points. He explained one of the small group discussion topics was related to the potential redevelopment of Badger Park, the redevelopment of the commercial southwest corner of the Smithtown Road /Country Road 19 intersection and the optimum best future use of the northwest corner of the intersection. The PAC members nearly unanimously supported aggressively pursuing the redevelopment of the areas around the intersection. Some of the members were open to relocating the Badger Park ball fields to the MCC property; doing so would prohibit the restoration of the large wetland on that site. The developer was not enthusiastic about lighted ball fields on the property. A couple of graphic renderings were displayed of how the entire area could be redeveloped. Another small group discussion topic was related to open space options. There was discussion about relocating the Badger Park ball fields to the Mattamy site (the MCC property) and passive open space and trails open to the public. There was also discussion about tradeoffs between having small, scattered wetlands/ponds on the site versus a larger restored wetland. Vegetation is easier to manage on larger wetlands, restoring to historic water levels will result in fewer invasive species and one larger patch of habitat is more beneficial to wildlife (e.g., pollinators). Tree preservation was also brought into that discussion as was drainage. Once the PAC members learned about the benefits of larger wetlands the Committee was more in favor of restoring the large wetland. The PAC learned that the drain tile on the site is in disrepair. PAC Member Norman turned the next part of the presentation over to PAC Member Chellen. PAC Member Chellen stated the diverse makeup of the Committee and the breadth of information provided to the Committee was very impressive. That information helped the members come up with more sound recommendations. One of the questions posed to the PAC was should the City explore the construction of a trail near the property. The PAC thought a trail is extremely important in and/or around the MCC redeveloped area. She explained the PAC was asked for its perspective on the City acquiring properties when they go on the market and banking them until the City has acquired a critical mass of properties and until there are willing sellers to allow a development to proceed. The PAC was generally open to future redevelopment of the north area near the MCC property when property owners are ready to sell. The Committee thought there would be value in planning for the redevelopment of the area in conjunction with discussions about the redevelopment of the MCC property. A number of the cul-de-sacs proposed in the Concept Plan for the MCC redeveloped site are longer than what is allowed in the Comp Plan because of safety and access needs. The PAC was educated about the different ways the City could finance some of the redevelopment in the area. But, it did not have enough time to discuss it and come up with a recommendation. When improvements to Country Club Road were discussed by the PAC it generally was referring to a trail alongside of the roadway. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 10 of 18 The PAC believes one of the benefits of extending the sidewalk east along Smithtown Road is it would help people get to the LRT Trail and it would connect with any future trails alongside of or within the MCC redevelopment. The PAC did discuss tax abatement as a way of funding it. A majority of the Committee favored the MCC redevelopment include some diversity in housing types and cost. A minority thought it should just be single family housing with varying price points. There was some support for workforce housing (i.e.; affordable). It discussed the possibility of having age targeted housing on the northwest and northeast corners of the property. PAC Member Chellen turned control of the presentation back over to Mr. Shardlow. Mr. Shardlow noted that all of the information and presentations that were reviewed; all of the questions, comments, suggestions and concerns conveyed; and, the tapes of all the meetings are available for review. There were some dissenting viewpoints on some items. But, there was strong consensus regarding all of the issues and recommendations presented this evening. Mr. Shardlow noted they were willing to entertain any questions Council may have. Councilmember Labadie thanked everyone who served on the PAC. She also thanked the members of the Planning Commission who served on the PAC in addition to serving as volunteer Commissioners. She stated the proposed legacy redevelopment is going to affect the City for generations. Therefore, the City needs to make sure the redevelopment is done correctly. She also thanked them for looking at trails in parallel and at the concept of other redevelopment near the MCC property. Labadie explained there was a slide titled Traffic that stated the net increase in traffic between a fully functioning golf course and the proposed development is not significant. The Developer’s Responsibility slide stated there would be very small net increase in traffic because of the redevelopment. She noted when the MCC closed its doors owners sent letters to its membership explaining that one of the reasons it was closing was because it was losing money financially. It was losing money because there were fewer people golfing. Therefore, there were fewer people driving on the roadways. The golf course and the tennis courts are used seasonally. The proposed redevelopment is not seasonal. The Planning Director’s memorandum dated January 1, 2015, for the Mattamy Homes preapplication states “Single-family residential development generates approximately 8-10 trips per day. The number of units proposed would therefore generate 968 to 1210 trips per day.” She questioned why that is not considered a significant impact on the City, its roadways and the traffic system when compared to a failing country club. She stated that depending on the time of the day it is difficult now to safely get to CUB Foods. Again, depending on the time of the day, it is sometimes difficult to safely cross Highway 7. She asked if people are going to be asked to take County Road 19 to Highway 7. She then asked Mr. Shardlow to explain why the anticipated increase in traffic is not deemed to have a significant impact. Mr. Shardlow noted that every time he speaks about traffic he attempts to clarify that traffic is a locally significant issue and it is a hassle. He stated he does not think it is appropriate to compare the reuse of the property to a failed existing use of the MCC property. The new development should be compared to a successful golf course and country club operation. If the property were to continue to have a golf course on it, it should be assumed someone would reinvest it in. Therefore, there would be a standard number of rounds of golf played and there would probably be more energy in the hospitality aspect of the Country Club. There were 42 or 43 weddings or other events there and there were other non-golf related events that also brought people to the site. It definitely had different traffic characteristics and it peaked at different times. One of the issues that is a concern is that a residential development there would have the same peak use characteristics as other uses around it since it is surrounded by residential. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 11 of 18 He noted that if he used the word insignificant he apologized for doing so. He explained that when talking about traffic engineering and generating traffic that goes on to collector level roadways the net difference is not great in terms of total volumes of traffic. And, every one of those roadways carries an amount of traffic that is well within the limits of what collector roadways can typically handle, again noting that this particular route has not been improved to collector standards. He noted that earlier in the presentation he had stated that this traffic issue warrants additional study. Mr. Shardlow explained that this comes down to two issues. One is the net difference in traffic between what is there today and what will be there in the future. The other is what the developer can do by right with the property zoned the way it is today and what is the incremental addition of traffic that might come as a result of PUD. Given just the geometrics of the alignments of the roadways there are limits as to what the City will be able to do. There is also a catch 22. If the City improves the route there will be more cut through traffic. Councilmember Labadie asked Mr. Shardlow to explain what he means by locally significant but not regionally significant. Mr. Shardlow explained when he talks about regionally specific it relates to the idea of going to the Hennepin County Transportation Department and demanding action because Shorewood’s situation is so significant that it needs to help the City. The traffic conditions in and around that intersection (Country Road 19 and Smithtown Road), for instance, are not significantly different than at the intersection of County Road 15 and Country Road 19 or any other places along County Road 19. There is similar traffic congestion and similar safety issues at that intersection. He noted he was not trying to diminish the way it has an adverse impact on peoples’ lives. He explained that he was saying that if the City holds up the issues being discussed and the traffic volumes the City is experiencing and tries to get Metropolitan Council’s attention, or MnDOT’s attention or Hennepin County Transportation Department’s attention since they invested in that intersection a few years ago. What he was trying to say is this is a local traffic issue and needs to be addressed locally with local resources and hopefully with the cooperation of those regional partners. Councilmember Siakel stated she thought the soils under and the condition of the tennis courts on the MCC property were better than for the courts in Badger Park. There were comments made about moving the Badger Park ball fields to the MCC property. She asked if the PAC discussed the broader issue of Badger Park. Was there any discussion about whether or not it would be best to leave the Park near the City Hall Campus or move it to the MCC site? She asked what discussion there was, if any, abut parks and open space. Mr. Shardlow explained that during the January 29, 2015, Council and staff retreat there was discussion about an idea to redevelop Badger Park for senior housing and possibly moving the ball fields to the MCC property. Relocating the ball fields was not consistent with the developer’s needs and it would preclude a large restoration of the wetland and the passive open space with the trails that would be open to the public. Nor withstanding the either or proposition of ball fields or wetland restoration, people were generally open to using this as an opportunity to beautify the City Hall Campus and to improve the experience of coming to the Southshore Center and to improve the street scape and movement around the intersection. He noted that during the various PAC workshops he heard strong support expressed for redeveloping the intersection. Councilmember Siakel stated that people who have lived in the community for a long time have a desire to remain here. They would like to have age specific, affordable housing. She asked if there was PAC consensus about where the ideal location for that housing would be. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 12 of 18 PAC Member Chellen stated the PAC did not have enough time to thoroughly discuss a number of topics in order to make a recommendation on them. There may be value in having the PAC continue to get together to do drill down further into some of the topics. Mr. Shardlow stated there was significant interest by a number of developers in looking at the area surrounding the intersection for redevelopment before the MCC property was up for sale. There had been a developer that was attempting to assemble properties at that location and when the MCC property went up for sale that developer withdrew. He noted that in the past cities had more tools at their disposal to acquire property for redevelopment. He stated the PAC thought there could be benefit of the City acquiring private property in that area when a private property owner was ready to sell. That may help in developing a better land plan. PAC Member Norman stated the PAC did discuss age specific housing. He then stated the Planning Commission has discussed redevelopment of the northwest quadrant of the Country Road 19/Smithtown Road intersection at great length. Councilmember Siakel stated that the PAC did a good job of discussing all of the issues. She then stated Council is aware there are traffic issues on Country Club Road and the City has taken some action to try and address some of them. Council does take traffic issues seriously. Council will continue to pay attention as the MCC property is redeveloped. She found it interesting that the majority of the PAC did not think it would be a good idea to close Country Club Road to through traffic. She thanked the PAC and staff for its time and efforts. Councilmember Woodruff also thanked the PAC and staff for their efforts and for all of the time the members spent serving on the Committee. He noted that he was glad he did not have to do what the PAC and staff did. He stated he is well aware that the PAC did not have enough time to draw any solid conclusions about some large issues and he did not expect that. PAC Member Arnst stated that maybe Council should consider having the well informed PAC, or at subset of it, continue to work with Council by going into more detail on some of the topics and issues. Mr. Shardlow noted that Rick Parker, with Mattamy Homes, would like to make a few comments. Mayor Zerby commented that he was aware there are people in the audience that are not PAC members. He stated that the redevelopment of the MCC property is a unique opportunity for Shorewood. The City has some ability to make it fit in the community. The City only has certain tools and mechanisms it can use to control that type of development and they are its Zoning Ordinances. Council has to make sure the City is consistent with the application of rules and with following procedures for all property owners and builders. The City is being consistent with Mattamy Homes and it needs to be consistent with future developers by using the same set of rules and the same scrutiny that is being used for the MCC redevelopment. Council will continue to listen to residents about what they view as issues. Council understands that traffic is the number one issue in the City. He noted that he has no doubt that the MCC property will be redeveloped at some point. It is private property and it has been transferred to an individual who has the right to develop it. The City will work cooperatively with the developer. Zerby extended his thanks to Rick Packer, with Mattamy Homes, and noted that he had been a passive participant with the PAC. He then extended a big thanks to Mr. Shardlow. He stated that when he first heard that the MCC property had been sold he told staff the City would need some outside professional help to help guide the City through this effort. Thankfully Stantec and Mr. Shardlow agreed to help with CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 13 of 18 that and give the City needed advice. He again extended his thanks to the PAC and staff for all of their time and effort. PAC Member Norman encouraged Council to read the notes that were kept about the PAC workshops and other input provided with a particular focus on the notes from the earlier workshops. Mayor Zerby invited Mr. Packer to comment if he would like. A resident in the audience strongly objected to that if other people in the audience are not allowed to comment. The agenda was to hear a report from the PAC and Mr. Packer was not a formal member of the PAC. Mayor Zerby stated that Mr. Packer wanted to thank the PAC and staff. Mr. Packer extended his thanks to the PAC, staff and Council. He stated people who do his job, including himself, can at times be viewed as pushy and they treat all of their projects very personally. He noted he was grateful for the opportunity to sit in on the PAC workshops and to answer questions when asked and to briefly explain the project. He stated that being able to observe the process and hear the comments in detail was very beneficial. He thanked Council for assembling the PAC with members of the community that cared. They were very considerate, polite and thoughtful during the process. He also thanked Mr. Shardlow for his efforts. Mayor Zerby noted staff has asked that this item be continued to Council’s June 22, 2015, meeting. Council will be asked to accept the report on June 22. He noted the PAC was formed as a result of Mattamy Homes’ preapplication late 2014. Zerby thanked everyone for coming. Mayor Zerby recessed the meeting at 8:36 P.M. Mayor Zerby reconvened the meeting at 8:39 P.M. 7. PARKS 8. PLANNING A. Report by Commissioner Dustin Maddy on the June 2, 2015, Planning Commission Meeting Planning Commissioner Maddy reported on matters considered and actions taken at the June 2, 2015, Planning Commission meeting (as detailed in the minutes of that meeting). 9. ENGINEERING/PUBLIC WORKS A. Accept Bids and Award Contract for the 2015 Mill & Overlay Project Engineer Hornby explained the bids for the 2015 Mill and Overlay project were opened on May 28. The City received seven bids. The 2015 Capital Improvement Program (CIP) has allocated $215,000 for road maintenance for bituminous mill and overlays. The lowest responsive bid was submitted by Park Construction Company for an amount of $195,206. It was a very good bid. He noted staff recommends CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 14 of 18 Council adopt the resolution accepting the bids and awarding the contract to Park Construction. He stated he thought the City hit a sweet spot in the bidding market. A lot of bids were rejected last fall and it is likely that many were rebid early this spring. Siakel moved, Labadie seconded, Adopting RESOLUTION NO. 15-045, “A Resolution Accepting Bids and Awarding Contract for the 2015 Mill & Overlay Project, City Project 15-02, to Park Construction Company for an Amount Not To Exceed $195,206.” Motion passed 4/0. 10. GENERAL/NEW BUSINESS A. Establishing the 2016 Budget Schedule Director DeJong explained that during its May 26, 2015, meeting Council directed staff to adjust the schedule so that the 2016 Capital Improvement Program (CIP) is discussed earlier in the schedule than staff originally proposed. It will be discussed during Council’s July 13 work session. After discussing the schedule with Mayor Zerby he moved the discussion about the Enterprise Budgets up to late September. Mayor Zerby expressed appreciation to staff for moving the budget schedule ahead. Councilmember Woodruff stated he thought the schedule is okay provided Council and staff understand an upper limit on total CIP spending needs to be established on July 13. He is okay if the allocation of CIP funds is not done until September 28. His concern in 2014 was the upper tax levy for 2015 was set before Council discussed the CIP. Woodruff moved, Siakel seconded, Adopting RESOLUTION NO. 15-037, “A Resolution Establishing the 2016 Budget Schedule.” Motion passed 4/0. 11. STAFF AND COUNCIL REPORTS A. Administrator and Staff 1. Trail Schedule Mayor Zerby noted at the dais this evening Council found an updated copy of the Trail Schedule at the dais. Engineer Hornby stated he, Mayor Zerby and Director Nielsen attended the June 3, 2015, neighborhood meeting for the Smithtown Road West Sidewalk Extension Project. About six people attended the meeting. The attendance may have been lower because it was a very rainy night. He thought attendees generally supported the project. Staff had the opportunity to talk to some of the attendees about finalizing easements. Mayor Zerby stated he thought staff did a great job explaining the map that was displayed. Engineer Hornby noted that the displays are kept at City Hall. 2. Galpin Lake Road Traffic Speed Update Director Brown explained that during Council’s May 26, 2015, meeting Jim Cradit appeared before Council to talk about speeding on Galpin Lake Road as well as the volume of traffic. WSB & Associates’ CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 15 of 18 traffic engineers were asked to place speed counters on the roadway to capture the time of day vehicles were traveling and the speed they were traveling at as well as the class of traffic. The analysis of the data captured was not analyzed before the packet for this meeting went out. Two sets of counters were put out – one north of Mayflower Road and one south of Mayflower Road. The raw data indicates that the majority of the vehicle speeds north of Mayflower Road were 24 – 42 miles th per hour (mph). He guessed that the 85 percentile, which is used as a common measure, would be around 35 mph. The majority of the vehicle speeds south of Mayflower Road were 32 – 46 mph. The speeds are quite high when compared to the posted speed of 25 mph. There are two 25 mph signs in each direction. Based on the data those signs do not change drivers’ behaviors. People drive at speeds that seem safe to them for the conditions. What will change the speeds is a change in the conditions and/or enforcement. Brown noted staff has asked WSB to do an analysis of the data so the results are available for Council’s next meeting on June 22 along with options for slowing traffic down. Staff hopes WSB will have a draft policy on when to post speeds of 25 mph available soon. He stated the City has received a number of requests for 25 mph signs. Mayor Zerby asked Director Brown to bring back to Council how the data fits into the policy Council approved in 2013 related to the speed concern evaluation process in decision diagram form. Jim Cradit, 5925 Galpin Lake Road, thanked Council and staff for the quick action of having speed counters put out. He commented there had been a third set of counters put out close to Highway 7 and he thought they should have been located further away from Highway 7. Director Brown stated that speeding is an issue throughout the metropolitan area and cities often end up with similar solutions to addressing the issue. Mr. Cradit asked someone to get clarification about whether or not a posted speed of 25 mph is enforceable and ticketable. Director Brown explained an officer currently is not able to enforce the 25 mph posted speed on Galpin Lake Road. Councils in the past had various roadways posted with an artificial speed limit. To set the limit Council needs to adopt a resolution. Council has the authority to adopt a resolution to post the speed at the designated limit it wants; hopefully it would be based on sound engineering judgment. Once that is done an officer can enforce the speed limit. Mr. Cradit stated Chaska Road is posted at 30 mph, Murray Street is posted 20 mph and Galpin Lake Road is posted 25 mph. Galpin Lake Road in the City of Chanhassen is posted 40 mph. He asked that Galpin Lake Road be posted at a speed that can be enforced. Director Brown stated south of the Shorewood boundary it is a County roadway. The speed limit increases to 40 mph until Lake Lucy Road and south of there it increases to 45 mph. Councilmember Woodruff stated when this comes back to Council he asked staff to provide a map showing the speed limits for the adjoining roadways. He then stated if the City were to take down the 25 mph signs the legal speed limit would be 30 mph. For non-posted roadways the legal speed limit is 30 mph per State Statute. Until Council gets the analysis it should not make a recommendation on what the speed should be. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 16 of 18 Mr. Cradit suggested the legal speed be changed to 30 mph so an officer can write a ticket for drivers traveling at speeds faster than that. Councilmember Siakel noted she agrees that Council needs to take some action. She stated she wants to understand the bigger picture before doing anything. Mayor Zerby noted that Mr. Cradit has gotten Council’s attention. Mr. Cradit thanked Director Brown for getting the counters out so quickly and Council for its time. 3. Informational Item: Special Event Permits Approved Administrator Joynes stated the meeting packet contains a document for information only listing the special event permits that have been approved. Director Brown explained the Minnewashta Elementary Back to School 5K run/walk event scheduled for September 12 is a new event. The route from the School is Smithtown Road, Grant Lorenz Road, Edgewood Road, Howards Point Road, Smithtown Road and back to the School. The event organizers propose to essentially block those roadways off. He and Engineer Hornby have discussed that and have serious concerns about it. School representatives have indicated that maybe they would cone off one half of each roadway or make them one way during the event. If they were one way each driveway along the route would have to be posted to show it is one way. Staff does not recommend approving that. Councilmember Woodruff noted that he does not like what is being proposed. He stated the two driveways to the Marsh Development would be closed off for the event. He expressed concern that it appears that the permit has already been approved because it has been signed. Administrator Joynes asked Council to give staff time to work with School representatives on this. 4. April 2015 General Fund Monthly Budget Report Mayor Zerby noted the meeting packet contains a copy of the April 2015 General Fund Monthly Budget Report. Other Director Brown stated that the Tonka United Soccer Association (TUSA) Splash Event held the previous weekend went better than expected on Saturday. But, the feedback received about Sunday was very dramatic. There were still a number of parking issues and a number of citations were issued. He received a number of phone calls earlier in the day from upset residents living along the adjoining roadways and from people coming to the event who could not find a place to park. He suggested the City require shuttling for any event the size of Tonka Splash. Councilmember Siakel stated the permit for the June 5 – 7 event was dated May 21 which put constraints on what staff could do in that short period of time. The permit application stated there would be 200 people at the site at any one time. There was many times more than that there at one time. She asked that staff let TUSA know in writing that next year the City will require TUSA to provide shuttle service. Mayor Zerby stated Council needs to set a policy for City parks for tournaments for overflow parking. He noted he wants the City to be able to recoup staff costs for special events. He asked staff to put together CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 17 of 18 ball park costs incurred by the City for events. He stated that when an event coordinator asks to use all of the fields simultaneously that is a clear indication that parking and traffic will be issues. Councilmember Labadie asked how the fields and parking lots survived the event. Director Brown stated the fields and the perimeter fared pretty well. Labadie suggested the City’s policy for large events require the event sponsors to repair any damage to the parks or public land. Councilmember Woodruff stated he likes the idea of having a policy for special events. He then stated that if there is an event that is too big for a park the City should not permit the event. Engineer Hornby noted that Council was emailed a link to the new DataLink GIS (graphic information system) System that Council authorized a few months ago. Staff has been using it for about two months and the feedback received from staff has been positive. He stated the version Council has is the same one staff is using so he asked Council not to share the link with someone who is not a City official. Mayor Zerby thanked Engineer Hornby for getting that done. He stated that he has sent Administrator Joynes and Engineer Hornby a link to policies other cities have for using their GIS information. Engineer Hornby stated the design for the proposed Galpin Lake Road trail includes realigning the Galpin Lake Road and Mayflower Road intersection. The reason for doing that is to pull the trail away from the wetland and to calm traffic. Hornby then stated that he and some Councilmembers received emails from a couple of people about the Boulder Bridge Pond Outlet Project. Most of the property owners in that area support the project but do not want to be assessed for the work. There are two properties that are impacted more dramatically than others. The owners of those two properties still have interest in the project. The intent had been to talk about Project during the April 9 Council and staff retreat. That did not happen because higher priority items were discussed. Mayor Zerby stated that he would like that to be brought back to Council. He noted that he thought the recommendation provided in the Feasibility Report for assessment amounts being based on parcel acreage and an acreage rate was good. Director DeJong stated he is working on budget activities and is reviewing the results of the 2014 audit. The audit will be presented during Council’s June 22 meeting. DeJong stated Excelsior Fire District (EFD) Chief Gerber had asked him if there are bonds callable for the public safety facilities. He and Administrator Joynes spoke with Springsted Senior Vice President Terri Heaton about possibly refunding those bonds. The bonds can be refunded now as a crossover advance refunding. They have already been advance refunded once. If that is done a second time in advance of the call date then they have to be issued as taxable bonds. There would still be enough savings to reach the State of Minnesota’s minimum savings requirement of 3 percent. The call date is February 1, 2016. The bonds can be issued within 90 days of the call date. The savings for the public safety facility bonds would be in excess of 7 percent. Councilmember Woodruff stated there are three or four other cities that would have to agree to that. He suggested the City take a position and pass that on to the other cities before September 1, 2015. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES June 8, 2015 Page 18 of 18 Director Nielsen stated the Park Commission will be doing park tours on June 9 and on July 14. He then stated he will be meeting with an Eagle Scout candidate who recently completed his Eagle Scout project in Manor Park. He put in mile posts around the perimeter of the Park. Administrator Joynes noted that applications for the South Lake Minnetonka Police Department police chief position must be received by June 12. The vetting process will begin next week. B. Mayor and City Council Councilmember Labadie asked if the City will be fully reimbursed by the developer for Stantec Consulting Services, Inc., costs for providing planning consulting services for the Minnetonka Country Club (MCC) residential development project. Director DeJong stated that is what the City is seeking. Councilmember Siakel noted there is a joint work session of the Excelsior Fire District (EFD) member City Councils scheduled for June 17 to discuss the proposed 2016 EFD budget. She encouraged Councilmembers to attend. 12. ADJOURN Woodruff moved, Labadie seconded, Adjourning the City Council Regular Meeting of June 8, 2015, at 9:23 P.M. Motion passed 4/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder ATTEST: Scott Zerby, Mayor Jean Panchyshyn, City Clerk #3A MEETING TYPE City of Shorewood Council Meeting Item Regular Meeting Title / Subject: Verified Claims Meeting Date: June 22 , 2015 Prepared by: Michelle Nguyen, Senior Accountant Bruce DeJong, Finance Director Attachments: Claims lists Policy Consideration: Should the attached claims against the City of Shorewood be paid? Background: Claims for council authorization. 61591 - 61592 & ACH 40,420.26 Pending 61593 -61635 & ACH 233,898.79 Total Claims $274,319.05 We have also included a payroll summary for the payroll period ending June 14, 2015. Financial or Budget Considerations: These expenditures are reasonable and necessary to provide services to our residents an budgeted and available for these purposes. Options: The City Council is may accept the staff recommendation to pay these claims or may r expenditure it deems not in the best interest of the city. Recommendation / Action Requested: Staff recommends approval of the claims list as presented. 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I"&)2$=6L=;6E;7 %<+,*-$.*"&/)$Q789:8;69:$<$$=2;:$%>R%&4*$O #3C MEETING TYPE City of Shorewood Council Meeting Item Regular Meeting Title / Subject: Accepting a Donation for Shorewood Parks Meeting Date: June 22, 2015 Prepared by: Bruce DeJong, Finance Director Policy Consideration: All donations to the City of Shorewood must be accepted by the City Council. Background: Eagle Scout candidate Jeremy Livingston had received donations for the project he did at Manor Park. He had $20 leftover from the donations he received, and has given it to the city for Shorewood Parks. Financial or Budget Considerations: This donation will be allocated to the Parks budget. Options:  Accept the Donation, or  Reject the Donation Recommendation / Action Requested: Staff recommends that the $20 donation be accepted, and a thank you note will be mailed to Mr. Livingston. Mission Statement: The City of Shorewood is committed to providing residents quality public services, a healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial management through effective, efficient, and visionary leadership. Page 1 #3D MEETING TYPE Regular Meeting City of Shorewood Council Meeting Item Title / Subject: Local Performance Measures Meeting Date: June 22, 2015 Prepared by: Bruce DeJong, Finance Director Reviewed by: Jean Panchyshyn, City Clerk Policy Consideration: Should the City participate in the Local Performance Measure program? Background: The Council on Local Results and Innovation was created by the Legislature to set benchmarks for city and county operations. The group adopted measures which are relatively easy to get using a citizen survey. The legislation comes with two incentives to participate. There is an appropriation for participants equal to 14 cents per capita or about $1,000. The other incentive is to exempt participating entities from levy limits. Fortunately there won’t be any levy limits for the 2016 budget year. The program does not require us to levy any more or less than whatever the City Council decides during budget deliberations. We may need to think about setting up a new survey to validate results as our previous survey information is getting dated. I do believe that a Survey Monkey-type survey run through our own web site and email contact list can continue to qualify for the program. Financial or Budget Considerations: Adoption of this resolution will allow Shorewood to receive approximately $1000 in state aid in 2015. Options: The City Council may choose to: 1.Decline to participate in the program; 2.Adopt the attached resolution to participate. Recommendation / Action Requested: Staff recommends the City Council adopt the resolution as submitted. Next Steps and Timelines: This resolution will be transmitted to the Office of State Auditor. Connection to Vision / Mission: This program contributes to sound financial management. Mission Statement: The City of Shorewood is committed to providing residents quality public services, a healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial management through effective, efficient, and visionary leadership. Page 1 CITY OF SHOREWOOD RESOLUTION NO. 15- A RESOLUTION ADOPTING PERFORMANCE MEASURES WHEREAS , the Minnesota Legislature created a Council on Local Results and Innovation; and WHEREAS , benefits to the City of Shorewood for participation in the Minnesota Council on Local Results and Innovation’s comprehensive performance measurement program are outlined in MS 6.91 and include eligibility for a reimbursement as set by State statute; and WHEREAS, The City Council of Shorewood has adopted and implemented at least10 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; and WHEREAS , the City of Shorewood desires to participate in the program; NOW THEREFORE, BE IT RESOLVED , that the City of Shorewood will continue to report the results of the performance measures to its citizenry by the end of the year through publication, direct mailing, and posting on the city’s web site, or through a public hearing at which the budget and levy will be discussed and public input allowed. BE IT FURTHER RESOLVED, The City of Shorewood will submit to the Office of the State Auditor the actual results of the performance measures adopted by the city/county. ADOPTED BY THE CITY COUNCIL OF THE CITY OF SHOREWOOD this 22nd day of June, 2015. ATTEST: Scott Zerby, Mayor _______________________________ Jean Panchyshyn, City Clerk SHOREWOOD, MINNESOTA FOR THE CITY OF LIFT STATION NO. 11 & FORCEMAIN IMPROVEMENTS SHOREWOOD, MINNESOTA FOR THE CITY OF LIFT STATION NO. 11 & FORCEMAIN IMPROVEMENTS CITY OF SHOREWOOD RESOLUTION NO. 15-___ A RESOLUTION APPROVING PLANS AND SPECIFICATIONS AND AUTHORIZING ADVERTISEMENTS FOR BIDS FOR LIFT STATION 11 REHABILITATION PROJECT CITY PROJECT 13-03 WHEREAS , the City of Shorewood, as part of the 2015 Capital Improvement Program, has identified that Lift Station 11, located at 20465 Radisson Road, needs to be reconstructed; and WHEREAS , WSB and Associates, Inc. has prepared Plans and Specifications for the Lift Station 11 Rehabilitation Project, City Project 13-03; and WHEREAS , the Director of Public Works has reviewed said plans and specifications and recommends approval of said documents. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Shorewood, Minnesota: 1.The Plans and Specifications prepared by WSB and Associates for such improvement, are hereby approved and shall be filed with the City Clerk. 2. The City Clerk shall prepare and cause to be inserted in the official paper and according to Minnesota State Law an advertisement for bids, upon the making of such improvement under such approved plans and specifications. The advertisement shall be published for 2 weeks, shall specify the work to be done, shall state that bids will be opened and considered by the city at the specified time and date, in the City Hall Council Chambers, and that no bids will be considered unless sealed and filed with the Clerk and accompanied by a cash deposit, cashier’s check, bid bond, or certified check payable to the Clerk for 5 percent of the amount of each bid. nd ADOPTED BY THE CITY COUNCIL OF THE CITY OF SHOREWOOD this 22 day of June, 2015. ATTEST: Scott Zerby, Mayor Jean Panchyshyn, City Clerk ADVERTISEMENT FOR BIDS LIFT STATION 11 IMPROVEMENTS FOR THE CITY OF SHOREWOOD HENNEPIN COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that sealed bids will be received by the City of Shorewood at the office of the City Clerk until 10:00 a.m. CST, Wednesday, July 22, 2015, at the Shorewood City Hall located at 5755 Country Club Road, Shorewood, Minnesota 55331 and will be publicly opened and read at said time and place by representatives of the City of Shorewood. Said proposals for the furnishing of all labor and materials for construction of the following approximate quantities: 1 L S Mobilization 1 L S Bypass Pumping 1,400 L F 4” HDPE FM (Directionally Drilled) 1 L S Construct Sanitary Sewer Lift Station 1 L S Remove Existing Drywell Miscellaneous Restoration The provisions of Minn. Stat. 16C.285 Responsible Contractor are imposed as a requirement of this contract. All bidders and persons or companies providing a response/submission to the Advertisement for Bids/RFP of the City shall comply with the provisions of the statute. The bids must be submitted on the Proposal Forms provided in accordance with the Contract Documents, Plans, and Specifications as prepared by WSB & Associates, Inc., 701 Xenia Avenue, Suite 300, Minneapolis, MN 55416, which are on file with the City Clerk of Shorewood and may be seen at the office of the Consulting Engineers or at the office of the City Clerk. Complete digital Proposal Forms, Plans, and Specifications for use by Contractors submitting a bid are available at www.questcdn.com. You may download the digital plan documents for a nonrefundable fee of $25.00 by inputting Quest project #3972297 on the website’s Project Search page. Please contact QuestCDN.com at 952-233-1632 or info@questcdn.com for assistance in free membership registration, downloading, and working with this digital project information. An optional paper set of Proposal Forms, Plans, and Specifications may be obtained from the Consulting Engineers, WSB & Associates, Inc., 701 Xenia Avenue South, Suite 300, Minneapolis, MN 55416, for a nonrefundable fee of $75.00 per set, check payable to WSB & Associates, Inc. Bids will only be accepted from Contractors who purchase digital or paper Bidding Documents as specified above. No bids will be considered unless sealed and filed with the City of Shorewood and accompanied by a cash deposit, cashier’s check, or certified check, or bid bond made payable to the City of Shorewood for five percent (5%) of the amount bid, to be forfeited as liquidated damages in the event that the bid be accepted and the bidder fail to enter promptly into a written contract and furnish the required bond. No bids may be withdrawn for a period of sixty (60) days from the date of opening of bids. The City of Shorewood reserves the right to reject any or all bids. DATED: June 22, 2015 BY ORDER OF THE CITY COUNCIL s/s William Joynes City Administrator Shorewood, MN PUBLISHED IN THE: Sun Sailor July 2, 2015 and July 9, 2015 Finance and Commerce July 2, 2015 and July 9, 2015 LIFT STATION 11 IMPROVEMENTS ADVERTISEMENT FOR BIDS CITY OF SHOREWOOD, MN WSB PROJECT NO. 1459-860 #6A MEETING TYPE Regular Meeting City of Shorewood Council Meeting Item Title / Subject: Accepting the 2014 Comprehensive Annual Financial Report Meeting Date: June 22, 2015 Prepared by: Bruce DeJong, Finance Director Reviewed by: Bill Joynes, City Administrator Attachment: Draft Management Letter Draft Other Required Reports Draft Comprehensive Annual Financial Report Policy Consideration: Should the City Council accept the 2014 Comprehensive Annual Financial Report? Background: The 2014 audit has been completed and Andrew Berg from Abdo, Eick & Meyers, LLP will be here to present the results. The report is presented in draft form as in previous years to allow for City Council input into the final report. This audit results in an unqualified (“clean”) opinion. The audit went much smoother this year. There were two findings in the audit – one for timely reconciliations and one for an unauthorized signer on the 4M investment account. The reconciliation finding stems from the process used during the year for putting entries into the new financial system. Staff was encouraged by Springbrook Software to use the test portion of the database to put in conversion entries until we could balance at the end of the year. We used the test database for entries related to the financial activity based on live activity still occurring in the old InCode system. As part of audit preparations we confirmed the activity with KDV and completed the entry into the live database, but those were not finalized until April. Finance staff members are proud of the work done to convert the financial system and believe the new software to be a significant improvement for both city staff and residents. Reconciliations are up to date as of now and will continue to be through the year. The finding for the unauthorized signer (the former City Administrator) has been corrected with an updated listing of authorized signers. Overall operating results for the governmental funds were positive with an increase in net position of $234,257. As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $7,450,130. This occurred in part because $109,113 was added to the General Fund balance in 2014 rather than the budgeted deficit of $102,848. This is a positive change in the General Fund of $211,961. This increase in General Fund balance is consistent with the information presented at the Council retreat this past winter. The enterprise fund operations were about as expected. The Water Fund had a negative year with a decrease in net position of $160,373 primarily due to much lower water sprinkling due to the excessive rain in 2014. The Sewer Fund added $7,788 to its net position. We increased net position in both the Recycling and Stormwater Management funds, $18,252 and $85,805 respectively. The rate study recommendations adopted by council will be in effect for the second half of this year, which should help Mission Statement: The City of Shorewood is committed to providing residents quality public services, a healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial management through effective, efficient, and visionary leadership. Page 1 the Sewer and Stormwater Management funds to cover their anticipated operating expenses over the long run. Financial or Budget Considerations: This report will be used as the basis for preparing the budget and capital Improvement plan for the City Council’s consideration starting in July. Options: The City Council may choose to: 1.Accept the annual financial report as presented. 2.Recommend changes to the report and accept the amended report. Recommendation / Action Requested: Finance Staff recommends that City Council accept the annual financial report. Next Steps and Timelines: We will use this information as a base for future budget and capital plans. Connection to Vision / Mission: This contributes to sound financial management. CITY OF SHOREWOOD SHOREWOOD, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014 BILL JOYNES, CITY ADMINISTRATOR REPORT PREPARED BY BRUCE DEJONG, FINANCE DIRECTOR/TREASURER MEMBER OF GOVERNMENT FINANCE OFFICERS ASSOCIATION OF THE UNITED STATES AND CANADA q'i -po BILL JOYNES, CITY ADMINISTRATOR REPORT PREPARED BY BRUCE DEJONG, FINANCE DIRECTOR/TREASURER MEMBER OF GOVERNMENT FINANCE OFFICERS ASSOCIATION OF THE UNITED STATES AND CANADA 'THIS PAGE IS LEFT BLANK INTENTIONALLY 2 F � lN CITY OF SHOREWOOD, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS FOR THE YEAR ENDED DECEMBER 31, 2014 INTRODUCTORY SECTION Elected and Appointed Officials Organization Chart Letter of Transmittal Certification of Achievement for Excellence in Financial Reporting FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements 38 Government -wide Financial Statements 41 Statement of Net Position 42 Statement of Activities 44 Fund Financial Statements 45 Governmental Funds 46 Balance Sheet 47 Reconciliation of the Balance Sheet to the Statement of Net Position 48 Statement of Revenues, Expenditures and Changes in Fund Balances 50 Reconciliation of the Statement of Revenues, Expenditures 51 and Changes in Fund Balances to the Statement of Activities 76 General Fund 77 Statement of Revenues, E.. pgntiitures aid h es in Fund Balances Budget and actual u Proprietary Funds B -2 Statement of Net Position Am �p Vim' -dX_ Net D -1 Statement of Revenues, E enses an rha Posilion Statement of Cash Flows D -2 Fiduciary Fund � _- ,"A0..� E -1 Statement of Net Position F -1 Notes to the Financial Statements Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Capital Projects Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Debt Service Funds Combining Balance Sheet Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Agency Fund Combining Schedule of Changes in Assets and Liabilities Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds -1- Exhibit Page No. 4 5 7 12 15 19 1 33 2 34 3 38 4 41 5 42 6 44 7 45 8 46 9 47 10 48 11 50 51 A -1 76 A -2 77 B -1 80 B -2 81 C -1 82 D -1 86 D -2 87 E -1 88 F -1 89 CITY OF SHOREWOOD, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT TABLE OF CONTENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2014 -2- Table Page No. STATISTICAL SECTION (UNAUDITED) Net Position by Component 1 94 Changes in Net Position 2 96 Fund Balances of Governmental Funds 3 100 Changes in Fund Balances of Governmental Funds 4 102 Tax Capacity, Market Value and Estimated Actual Value of Taxable Property 5 104 Property Tax Capacity Rates - Direct and Overlapping Governments 6 106 Principal Taxpayers 7 108 Property Tax Levies and Collections 8 109 Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 9 110 Computation of Direct and Overlapping Debt 10 111 Legal Debt Margin Information 11 112 Pledged - Revenue Coverage 12 114 Demographic and Economic Statistics 13 11.5 Principal Employers 14 116 Full -Time Equivalent City Government Employees by Function 15 117 Operating Indicators by Function 16 118 Capital Asset Statistics by Function 17 119 -2- rR NNII i -2- INTRODUCTORY SECTION CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER, 31, 2014 Wk LEI IN- F k x >. x -3- CITY OF SHORE WOOD, MINNESOTA ELECTED AND APPOINTED OFFICIALS FOR THE YEAR ENDED DECEMBER 31, 2014 ELECTED Name Title Scott Zerby Mayor Richard Woodruff Council Member Laura Hotvet Council Member Debbie Siakel Council Member Kristine Sundberg Council Member APPOINTED Name Title Bill Joynes City Administrator Bruce DeJong Finance Director /Treasurer -4- Term Expires 12/31/14 12/31/16 12/31/14 12/31/14 12/31/16 VAR! sm -4- Term Expires 12/31/14 12/31/16 12/31/14 12/31/14 12/31/16 THIS PAGE IS LEFT BLANK INTENTIONALLY rt 2 3 @ AL t t v� } June 11, 2015 CITY OF 5755 COUNTRY CLUB ROAD - Sf OREWOOD, MINNESOTA 55331-8927 - (952) 960 -7900 1 =AX (952) 474 -0128 ° www.d.shore:wood.mmus - cityhalMd.shorow,00d.mn.us Honorable Mayor and Members of the City Council, City of Shorewood, Minnesota Mayor and City Council Members: The Comprehensive Annual. Financial Report of tine City of Shorewood, Minnesota, for the fiscal year ended December 31, 2011, is hereby submitted. Tile report was prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) as established by the Governmental Accounting Standards Board and meets the ledunetnents of tile Office of State Auditor. M1, The report consists of ntrrnagirrent's tuprespnntitotus conc`etling th ( °;finances of the City. Consequently, m�'�getnetr asstt es till resplousibil�ttt for ifue conapletcr� s and reliability of the information pies it d "iii "this rell T o provide a tea tsriabl rsis for man l�these representations, management of the City has established internal controls designed to protect the City's assets front loss, theft, or misuse; and to provide sufficient information for the preparation of these financial statements in conformity with GAAP. 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 are free of any material misstatements. As management, we assert that to the best of our knowledge and belief this financial report is complete and reliable in all material respects. The City of Shorewood's financial statements have been audited by the firm of Abdo, Eick & Meyers, LLP, Certified Public Accountants. The goal of the audit was to provide reasonable assurance that the financial statements of the City for the year ended. December 31, 2014 are free of material misstatement, The independent audit involved oxamining, 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, thy; independent auditor concluded that there was reasonable basis for rendering all unqualified opinion that the City's financial statements, for the year ended December 31, 2014 are fairly presented in conformity with GAAP. The independent auditor's report is presented at the front of the financial section of this report. ff% -7- f, JO PRINTED ON RECYCLED PAPER GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD &A). The City's MD &A can be found in the financial section of this report immediately following the independent auditor's report. City Profile The City of Shorewood is a suburban community located southwest of the Twin Cities on the southern shore of Lake Minnetonka, a setting of rolling hills and picturesque lakes and creeks. Shorewood has a convenient location, a comprehensive system of highways, and is a short distance from downtown Minneapolis and St, Paul and the Minneapolis -St. Paul International Airport. The City is predominantly a residential community with limited commercial businesses and two commercial shopping rnnalls. The City is 6 square miles in area and had an estimated population of 7,524 as of 201.4. The City, which is currently 95% developed, continues to experience some growth in its residential base. The Minnetonka Country Club was closed at the end of 2014 and the ownership has signaled an intention to sell the property to a developer for housing. A specific development proposal and construction time frame has not been presented, but is anticipated at some point in 2015. Incorporated in 1956 as a village, the City of Shorewood operates under the Council- Administrator form of government, Policy making and legislative authority are vested in a governing council. consisting of the mayor and four - member council, elected on a non- partisan basis. Council members serve four -year staggered terms, with two council members elected every two years. The mayor is elected to serve ava year tcrnn ire pity Adminirator rs rotlstblfoi Being the day -to -day operations of the vernm` k, a� to wign r esp r�bility t6- ity staff' for �e efficient and effective delivery of City s Ices.I 1 r The Economic D ?pt refit 11 lrty pAj of the .)yn cated in 2 1, pursuant to Minnesota Statutes to carry out economic and industrial development and redevelopment consistent with policies established by the Council. Its board is comprised of members of the City Council. The EDA activities are blended and separate financial statements are not issued for this component unit The City provides its residents and businesses with a broad range of municipal services consisting of police and fire protection, street maintenance, recreation programs, park maintenance, community and economic development, and administrative services, including building inspections. During 2014, the City operated four enterprises: a water utility, sanitary sewer, recycling, and storm water management utilities. Economic Conditions and Outlook Governance The City Council, in its leadership role, has effectively established a focus for govermnent in Shorewood and has established overall goals and expectations for the City. The CounciI's calendar consists of three phases. The first phase is planning, It includes review of the previous year's work plan and identifies goals and priorities for the next twelve months. The second phase is capital finance planning; each year the ten -year Capital Improvement Program is reviewed and updated based upon priorities established in the first phase. Those projects are then incorporated into a financial management plan that includes both operating and capital spending plans to determine the overall feasibility of the plans and the effect of that proposed spending level on fund balances and tax levies necessary to support that level investment. 5:2 The third phase is budgeting; the annual operating budget is developed based on decisions made in the first two phases. The annual budget serves as the foundation of the City of Shorewood's financial planning and control. Departments submit budget requests to finance in July and the City Administrator presents the proposed budget to the City Council for review. Budget work- sessions are held with the City Council in July and August. The City Council adopts a preliminary budget and tax levy prior to September 30 °i of each year. After individualized property tax estimates are mailed to all properties in November, the City Council holds a Truth -in- Taxation public hearing on the proposed budget and adopts the final budget in December each year. The budget is prepared by fund and function. The City's department directors develop their budgets, with subsequent review and input from the City Administrator and Finance Director. Any changes in the overall budget must be approved by the City Council. Cooperative Public Service Delivery Shorewood is committed to working cooperatively with other Lake Minnetonka area cities to carefully consider methods to efficiently deliver public services. The City has various contractual arrangements with other governmental jurisdictions and with private entities for providing many of these services. The City is also involved in cooperative employee training, disaster preparedness and other areas of mutual concern as an active participant in the Lake Minnetonka area. The City has been a member city of the South Lake Minnetonka Police Department (SLMPD) since its inception in 1973. The other members of this joint powers organization are the cities of Excelsior, Greenwood; and f- . s z m . The City of Shongw- alb yr u true " cities of De haven, xc sior, Gr uwood, and Tonka Bay, has been a member- of the �cc I e Drst 200 The Excels u Fire District is a joint Powers organrzat Aod oinbil _polnn fine pu say building t serves the South Lake Minnetonka Area cities was completed in late 2003. The City of Shorew ood, along with the cities of Deephaven, Excelsior, Greenwood, and Tonka Bay, hold title to the Southshore Center, a community center used by senior citizens and community groups for activities, meetings, festivals. The City of Shorewood operated the Southshore Community Center for the entire year of 2014. The Center was built in the late 1990s as a joint venture by the following five Lake Minnetonka Area Cities: Shorewood, Excelsior, Tonka Bay, Deephaven, and Greenwood. Until - recently, the Center was leased to an organization that emphasized senior programming. Many of the senior- oriented programs still remain during the day, and these are a critical component, but Center renovations were made to attract new renters, including businesses, community education classes, and wedding, birthday, and graduation parties. Shorewood has committed to operate the center through December, 2015 through the renewal of an automatic three year extension. New programs have been developed to attract all ages. The Southshore Center's long range options are being evaluated by a committee of the South Shore founding communities and other interested parties. The City contracts with Hennepin County for property assessment services. The Hennepin County Assessor analyzes property sales information, sets taxable values, and handles the valuation appeal process. Debt Administration As of December 31, 2014, the City's debt outstanding totaled $10,295,000. Of this total, $2,16,000 is General Obligation Water Revenue bonds issued in 2013. The proceeds from these bonds financed -9- water system extensions and improvements and will be repaid from special assessments and water rate revenues. The remaining outstanding debt balances of $8,135,000 are FDA Lease Revenue Advance Refunding bonds issued in 2007 for the public safety buildings and EDA Lease Revenue bonds issued in 2008 for remodeling City Ball. These bonds will be repaid from lease payments from the Excelsior Fire District, South Lake Minnetonka Police Department, and the City of Shorewood. The City of Shorewood's bond rating was upgraded to Aa2 from Aa3 in July, 2008, by Moody's Investors Service. At that tine, Moody's also upgraded the Shorewood Economic Development Authority (EDA) bond rating to Aa3 from Al, based upon tlae City's pledge to make tlae lease payments subject to annual appropriation in the City's operating budget, and the fact that a city hall facility is an essential part of a municipality. Long -term Financial Planning The City has implemented various financial /budgetary policies to guide the City Council and staff when malting financial decisions to ensure the long -term stability and flexibility of City finances and operations. These policies include the following: • The original budget should be balanced with revenues equal to expenditures. • By policy, the City Council has set the fund balance level in the General Fund 55 -60% of the next year's expenditure budget including transfers. This policy ensures the long -term economic stability of the organization by providing adequate working capital given the periodic 114M, f & trfi lrh i`L lits dad by prow ding for tt�3p�o�e hta ll or emergencies. Ira accordancwrila t)i� polj, ti ity Coupr may us any General Viand reserves in excess of 60% to recce the �Ig�dt�t "levy, or nor e tnnr�rsjts, or ti, sfer to any of the city's "77 IR capital RIGS • The Lrty,.t> .rTr�rntartt. _eu gzn,pi #al t Ittovl1t plan to,FPovide for capital asset acquisition, maintenance, replacement, and retirement. The City will continue to accumulate resources for future capital equipment and improvement projects with- operathIg transfers to various capital project funds in 2015. Budgetdd transfers from the General Fund for 2014 were $1,015,950. Major Initiatives The City began a program of trail improvements in 2013 which included a segment linking Shorewood to the Three Rivers Regional Trail along County Road 19 and a trail along the south side of Smithtown Road from Eureka Road North to the western border of the city which links to the City of Victoria's trail system. Additional trail segments are planned for Galpin Lake Road, Excelsior Boulevard, Smithtown Road east of Eureka Road North, and Strawberry Lane & West 62 ',d Street. The City has also started a Citizen Advisory Board to review community goals for the Minnetonka Country Club redevelopment. This board of 20+ citizens will report back to the City Council with findings for both the country club property and the Smithtown Crossing area north of Smithtown Road and east of County Road 19. MHE Certificate of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Shorewood for its comprehensive annual financial report (CAFR) for the fiscal year ended December 31, 2013. The Certificate of AchieverueDt is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report whose contents conform to program standards. Such comprehensive annual financial report Durst satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid fora period of one year. The City of Shorewood has received a Certificate of Achievement: for the bast nineteen consecutive years. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GTOA to determine its eligibility for another certificate. Acknowledgments We would like to express our appreciation to the employees of the Administration, Finance, Planning, and Public Works departments for their contribution to the preparation of this report. We would also like to thank the�yortl Co1r�il�rrMli�bers for thee contrs1 stilt r►laraing and conducting the financial oper�ons of p C► ni a�sponsibl ud p.►ude manner: v Respectfully subzrt Aaao��,- Bruce M. DeJong Finance Director /Treasurer -II - 11,w Government Finance Officers Association Presend 4 s� `,l Xy 4S- ho►r vc d For its Comprehensive Annual Financial Report for the Fiscal. Year Ended I1• �• Executive Director /CEO -12- FINANCIAL SECTION CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 -13- THIS PAGE IS LEFT BLANK INTENTIONALLY -14- t � z -14- INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Shorewood, 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 Shorewood, Minnesota (the City), as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as Iisted 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 afr faix presentatIOW"of financial statements "that are free tom material misstatement, whether due to fraud or error. Auditor's Responsibility° Our responsibility is to express opiriio� on these"f uancial'stateirYents based tin `bur audit. We,e6nducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of 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. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2014, 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. 5201 Eden Avenue, Suite 250 Edina, MN 55436 -15- 952.835.9090 1 Fax 952.835.3261 THIS PAGE IS LEFT BLANK INTENTIONALLY Ste IS Ste Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis starting on page 19 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. -17- People, N11inbers THIS PAGE IS LEFT BLANK INTENTIONALLY 311 Al C PRI, G 311 Management's Discussion and Analysis As management of the City of Shorewood, Minnesota, (the City), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2014. Financial Highlights • The assets of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $31,679,739 (net position). Of this amount, $15,207,422 (unrestricted net position) may be used to meet the City's ongoing obligations to residents and creditors. • The City's total net position. znpeased $07 ],35_] which is die to revens „u p,.c�es o epeags in governmental activities. • As of the close of the cunt fiscal,,, ar�e Crt's governeal fmldsortd conlbid ending fund balances of N� d,a, F $7,450,130 , an increase3rf $234,2 m m*isan with,,,` per year his crease itl the result of revenues exceeding expenditures 1Approxz ately 3 4 *cent o�this total amour $3,981,475, ,unassigned and available for spending at the City's.di retio't ' • At the end of the current fiscal year, unassigned fund balance for the General fund was $3,981,475, or 72.1 percent of total 2014 expenditures. The City has a policy to maintain a General fund working capital balance of 55.0 - 60.0 percent of expenditures and transfers. • The City's total debt decreased $2,066,842, or 16.4 percent during the current fiscal year. This was the result of the payoff of G.O. Water Revenue Bonds of 2006 from refunding bonds issued in 2013 in addition to regularly scheduled principal and interest payments. -1.9- 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 comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves. Figure 1 illustrates how the required parts of this annual report are arranged and relate to one another. In addition to these required elements, we have included a section with combining and individual fund financial statements and schedules that provide details about nonmajor governmental funds, which are added together and presented in single columns in the basic financial statements. Figure 1 Required Components of the City's Annual Financial Report ............................................. ............................... Management's Basic Required Discussion and Financial Supplementary Analysis Statements Information Summary Detail -20- Figure 2 summarizes the major features of the City's financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management's discussion and analysis explains the structure and contents of each of the statements. Figure 2 Major features of the Government -wide and Fund 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. The statement of net position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenue (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, culture and recreation, and interest on long -term debt. The business -type activities of the City include water, sewer, stormwater management utility, and recycling. -21- Fund Financial Statements Government -wide Governmental Funds Proprietary Funds Statements Scope Entire City government The activities of the City that Activities the City operates (except fiduciary funds) and are not proprietary or similar to private businesses, the City's component units fiduciary, such as police, fire such as the water and sewer and parks system Required financial i Statement of Net • Balance Sheet • Statements of Net statements Position • Statement of Revenues, Position G Statement of Activities Expenditures, and • Statements of Revenues, Changes in Fund Expenses and Changes in Balances Fund Net Position • Statements of Cash Flows Accounting Basis and Accrual accounting and Modified accrual accounting Accrual accounting and measurement focus economic resources focus and current financial economic resources focus resources focus Type of asset /liability All assets and liabilities, both Only assets expected to be All assets and liabilities, both information financial and capital, and used up and liabilities that financial and capital, and short-term and long -term come due during the year or short-term and long -term soon thereafter, no capital µ a' ets inclu `c 4� Type of deferred ( All de' eed � ` ' �_y deferrer outflows of All deferred outflows /inflows of out nfl vs re rces e to be 111 outflows /inflows of resources information resource, reardl of " usectup andeferred inflo resources, regardless of yv(liash i r,cerve r pdx of rerceeat come due when cash is received or paid during the year of son thereafter; no capital assets included Type of in flow /out flow All revenues and expenses Revenues for which cash is All revenues and expenses information during year, regardless of received during or soon after during the year, regardless of when cash is received or paid the end of the year; when cash is received or paid expenditures when goods or services have been received and payment is due during the year or soon thereafter Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private- sector business. The statement of net position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenue (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, culture and recreation, and interest on long -term debt. The business -type activities of the City include water, sewer, stormwater management utility, and recycling. -21- The government -wide financial statements include not only the City itself (known as the primary government), but also a legally separate Economic Development Authority (EDA) for which the City is financially accountable. The EDA, although legally separate, functions for all practical purposes as a department of the City, and therefore has been included as an integral part of the primary government. The government -wide financial statements start on page 33 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term 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 fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 12 individual governmental funds, four of which are Debt Service funds. Information is presented separately in the governmental find balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General, Debt Service, Street Reconstruction, and Trail Construction funds, which are considered to be major funds. Data from the other five governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds rs pxovtdecl in the ,,,f of combining statements q sclies> le tiels yv) ex�., n this report. The City adopts an annual General fund to demonstra The basic governmental fin nas been provided for the Proprietary funds. The City maintains one type of proprietary fund. 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 water, sewer, stormwater management utility, and recycling. 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 each of the enterprise funds. The Water, Sewer, and Stormwater Management Utility funds are considered to be major funds of the City, while the Recycling fund is a nonmajor fund. The basic proprietary fund financial statements start on page 46 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on page 50 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements start on page 51 of this report. Other information. The combining statements referred to earlier in connection with nonmajor governmental funds are presented following the notes to the financial statements. Combining and individual fund financial statements and schedules starts on page 76 of this report. 9WA Government -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities and deferred inflows of resources by $31,679,739 at the close of the most recent fiscal year. Of the City's net position 52.0 percent reflects its investment in capital assets (e.g., land, buildings, machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Shorewood's Summary of Net Position The balance of unrestricted net position is $15,207,422. This may be used to meet the City's ongoing obligations to citizens and creditors. -23- Governmental Activities Business -type Activities Increase Increase 2014 2013 (Decrease) 2014 2013 (Decrease) Assets Cash and temporary investments $ 7,145,458 $ 6,707,144 $ 438,314 $ 7,1.32,674 $ 7,240,221 $ (107,547) Cash with fiscal agent - - - 270,101 1,422,314 (1,152,213) Receivables 7,697,438 8,553,567 (856,129) 614,843 642,785 (27,942) Prepaids 103,996 33,016 70,980 - - - Land held for resale 150,068 150,068 - - - - Capital assets 1.0,789,046 1.0,302,415 486,631 8,878,271 8,965,907 (87,636) Total assets 25,886,006 25,746,210 139,796 16,895,889 18,271,227 (1,375,338) Liabilities � n. r �; AD NE � �.w. Noncurrent liabilities 8 33 83� 024 725 (686,8 2,160, 3,540 000 (1,380,000) Other liabilities , FBI 482 .� 370,22 106,7 1 127,1 74,101 53,190 oe- T'otalliabilities 8,81.4,865 9,394,948 (580,083)� 2,287,291 3,614,101 (1,326,810) Net position Net investment in capital assets 9,754,046 9,212,415 541,631 6,718,271 6,705,907 12,364 Unrestricted 7,317,095 7,138,847 178,248 7,890,327 7,951,219 (60,892) Total net position $17,071,141 $16,351,262 $ 719,879 $14,608,598 $14,657,126 $ (48,528) The balance of unrestricted net position is $15,207,422. This may be used to meet the City's ongoing obligations to citizens and creditors. -23- Governmental activities. Governmental activities increased the City's net position by $719,879. Key elements of this increase are as follows: City of Shorewood's Changes in Net Position Increase (decrease) in net position before transfers Governmental Activities Business -type Activities 810,149 (23,528) 14,877 Increase Transfers 25,000 Increase 25,000 2014 2013 (Decrease) 2014 2013 (Decrease) Revenues (48,528) 14,877 (63,405) Net position, January 1 16,351,262 16,466,532 Program revenues 14,657,126 14,642,249 14,877 Net position, December 31 $17,071,141 $16,351,262 Charges for services $ 946,281 $ 908,458 $ 37,823 $ 1,681,045 $ 1,732,696 $ (51,651) Operating grants and contributions 48,284 144,112 (95,828) 31,279 25,830 5,449 Capital grants and contributions 81.1,522 - 811,522 115,490 53,200 62,290 General revenues Property taxes 4,854,521 4,768,989 85,532 - - - Grants and contributions not restricted to specific programs 5,848 5,818 30 - - - Unrestricted investment earnings 86,530 37,461 49,069 95,130 32,913 62,217 Gain on sale of capital assets - 76,981 (76,981) - - - Total revenues 6,752,986 5,941,819 811,167 1,922,944 1,844,639 78,305 Expenses General government 1,7, 11 #,310,296` (33,i) - - Public safety 2 (W 39 2,010 338rc 26,1 6 - - Publicworks 84,86 6 Culture and recreation 397,365 , 471,784 ,106, (74,419) - - - Interest on long -term debt 355,378 379,685 (24,307) - - - Water - - - 690,479 693,193 (2,714) Sewer - - - 873,711 847,097 26,614 Stormwater Management Utility - - - 203,825 107,935 95,890 Recycling - - - 1.78,457 181,537 (3,080) Total expenses 6,058,107 6,057,089 1,018 1,946,472 1,829,762 116,710 Increase (decrease) in net position before transfers 694,879 (1.15,270) 810,149 (23,528) 14,877 (38,405) Transfers 25,000 - 25,000 (25,000) - (25,000) Change in net position 719,879 (115,270) 835,149 (48,528) 14,877 (63,405) Net position, January 1 16,351,262 16,466,532 (115,270) 14,657,126 14,642,249 14,877 Net position, December 31 $17,071,141 $16,351,262 $ 719,879 $14,608,598 $14,657,126 $ (48,528) -24- 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 fiends is to provide information on near -term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $7,450,130, an increase of $234,257 in comparison with the prior year. Approximately 53 percent of this total amount, $3,981,475 constitutes unassigned fund balance, which is available for spending at the City's discretion. The remaining fund balance is made up of the following: 1) Nonspendable ($103,996), 2) Restricted ($25,654), and 3) Assigned ($3,339,005). The General fund is the chief operating fund of the City. At the end of the current year, the fund balance of the General fund was $4,085,471. As a measure of the General find's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures and transfers out. Unassigned fund balance represents 72.1 percent of same year fund expenditures and transfers out, whereas, total fund balance represents 74.0 percent. The fund balance of the City's General fund increased $109,113 during the current fiscal year. The Debt Service fund has a total fund balance of $25,654, all of which is restricted for the payment of debt service. The increase in fund balance of $1,204 was in line with the City's debt service financing plan. The Street Reconstruction fund has a fund balance of $1,536,672. The fund balance decreased by $606,656 during the current fiscal year due to expenditures for various capital projects. The Trail Construction fund has a fund balance of $464,287. The fund balance increased $516,724 during the current fiscal year due to MSA grant revenues received for project expenditures incurred in 2013 and 2014. . Proprietary funds. The City's pt prietaM' nds ovici e same typt of inform ion 01(me in go' rnment -wide financial statements, but in more detail U estricte &t p itionA� the entgi , hinds " the end of the dear amounted to $7,890,327. The total decrease in net position for e funds $4 52 Other factors c cermn�FtR" nances o ,fhis fund have already been p by addressed in the discussion of theity s bness�pe �tzvities Y i i �. _. l x. n General Fund Budgetary Highlights The City's General fund budget was not amended during the year. The budget called for the planned use of General fund reserves in the amount of $102,848. Revenues were over budget by $183,653, and expenditures were under budget by $311,722. The actual amounts were different from the final budget amounts because of the following: • The largest revenue variance was in licenses and permits, which were over budget by $138,071 due to building permits received in excess of expectations. The next largest revenue variance was in intergovernmental, which was over budget by $40,318 which was due to the unplanned receipt of FEMA aid related to flooding. • The largest expenditure variances were in general government and public works, which were $119,946 and $201,302 under budget, respectively. The general government department was under budget due to Mayor and City Council and Municipal Building expenditures. The public works department was under budget due to General Maintenance expenditures. -27- Capital Asset and Debt Administration Capital assets. The City's investment in capital assets for its governmental and business -type activities as of December 31, 2014, amounts to $19,667,317 (net of accumulated depreciation). This investment in capital assets includes land, structures, improvements, machinery and equipment, park facilities, and roads. Major capital asset events during the current fiscal year included the following: • Completion of the Smithtown Trail project • Completion of the finance software conversion to Springbrook • Progress made on various projects including Valleywood Street reconstruction, Galpin Lake trail, Smithtown Road East sidewalk extension, Sunnyvale Lane improvements, and the 2014 mill and overlay project • Purchase of chassis for two new dump body trucks to be completed in 2015 • Trade -in of a Toro Groundsmaster mower • Purchase of a new ballpark fence at Freeman Park Additional information on the City's capital assets can be found in Note 3B starting on page 62 of this report. City of Shorewood's Capital Assets (net of depreciation) Governmental Activities Increase 2014 2013 (Decrease) Business -type Activities Increase 2014 2013 (Decrease) Land $ 741,826 $ 741,826 $ - $ 434,113 $ 434,113 $ - Construction in progress 1,499,144 1,565,510 (66,366) - - - Buildings 1,938,885 2,015,401 (76,516) - - - Improvements other than buildings„ 252,644 � 287,368 (34P,724 - - 834 70Infrastructure 8,531,794 (87,636) Machinery and equipment ,20 , k : `d 788,294 , (40,¢3 - - - i Total $1{i,9 04� 302 415 $� a486 1 $ 8 878 �1 $ 8,965,907 $ {$7,636) Long -term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $10,295,000. Of this amount, $8,135,000 is lease revenue bonds and $2,1.60,000 is general obligation revenue bonds. While all of the City's bonds have dedicated revenue streams pledged to repayment, the general obligation revenue bonds are all backed by the full faith and credit of the City. General obligation revenue bonds Lease revenue bonds Compensated absences payable Total City of Shorewood's Outstanding Debt Governmental Activities Increase 2014 2013 . ('Decrease) Business -type Activities Increase 2014 2013 (Decrease) $ 2,160,000 $ 3,540,000 $ (1,380,000) 8,135,000 8,840,000 (705,000) - - - 202,883 1.84,725 18,158 - - - $ 8,337,883 $ 9,024,725 $ (686,842} $ 2,160,000 $ 31540,000 $ (1,380,000) Minnesota statutes limit the amount of net general obligation debt a City may issue to 3 percent of the market value of taxable property within the City. Net debt is debt payable solely from ad valorem taxes. Additional information on the City's long -term debt can be found in Note 3D starting on page 65 of this report. -28- Economic Factors and Next Year's Budgets and Rates Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Shorewood, 5755 Country Club Road, Shorewood, Minnesota 55331. TIRE ,� ti \ ff F FIF "c e � ,... ey -29- THIS PAGE IS LEFT BLANK INTENTIONALLY -2 IM, p MR r DNA g! %w IR ti g me v "A "Al -azil- "M! -30- GOVERNMENT-WIDE FINANCIAL STATEMENTS CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 ROE` 1_2 11 . . . ..... .... . . IS THIS PAGE IS LEFT BLANK INTENTIONALLY -32- ORK Lo, RR, S 1, 3 AM 111 €v"'` -32- ASSETS Cash and temporary investments Cash with fiscal agent Receivables Accrued interest Property taxes Accounts, net Special assessments Lease Due from other governments Prepaid items Land held for resale Capital assets Nondepreciable assets Depreciable capital assets, net TOTAL ASSETS LIABILITIES CITY OF SHOREWOOD, MINNESOTA STATEMENT OF NET POSITION DECEMBER 31, 2014 Exhibit 1 Governmental Business -type 112,357 Activities Activities Total $ 7,145,458 $ 7,132,674 $ 14,278,132 - 270,101 270,101 155,552 34,594 190,146 125,975 - 125,975 7,096 418,010 425,106 1,222 162,239 163,461 7,389,965 - 7,389,965 17,628 - 17,628 103,996 - 103,996 150,068 - 150,068 2,240,970 434,113 2,675,083 8,548,076 8,444,158 16,992,234 25,886,006 16,895,889 42,781,895 Accounts and contracts paydbad,:'278251= 112,357 390,608 Accrued salaries payable I J,388�" . 2,480 15,868 Due to other governments;_ :.� 5,374; 2,847 8,221 Accrued interest payable 126,142';' 9,607 135,749 Unearned revenue 53,827 �. - 53,827 Noncurrent liabilities Due within one year Due in more than one year TOTAL LIABILITIES NET POSITION Net investment in capital assets Unrestricted TOTAL NET POSITION 910,659 260,000 1,170,659 7,427,224 1,900,000 9,327,224 8,814,865 2,287,291 11,102,156 9,754,046 6,718,271 16,472,317 7,317,095 7,890,327 15,207,422 $ 17,071,141 1 $ 14,608,598 $ 31,679,739 The notes to the financial statements are an integral part of this statement. -33- Functions/Programs Governmental activities General government Public safety Public works Culture and recreation Interest on long -term debt Total governmental activities Business -type activities Water Sewer Stormwater management utility Recycling CITY OF SHOREWOOD, MINNESOTA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2014 Total business -type activities 1,946,472 Program Revenues 31,279 115,490 Total 1 ; �, Operating Capital Grants ° S ,, 79,563 Charges for Grants and and Expenses Services Contributions Contributions $ 1,277,118 $ 199,394 $ 1,800 $ - 2,036,394 642,680 - - 1,991,852 1,222 44,014 34,536 397,365 102,985 2,470 776,986 355,378 - - - 6,058,107 946,281 48,284 811,522 690,479 443,467 - 49,665 873,711 852,254 - 203,825 220,658 - 65,825 178,457 164,666 31,279 - Total business -type activities 1,946,472 1,681,045 31,279 115,490 Total 1 ; �, $ 8,'004,579 .> $ 2; 2 26° ° S ,, 79,563 $ 927,012 Total general revenues Change in net position Net position, January 1 Net position, December 31 The notes to the financial statements are an integral part of this statement. ffCjAa Exhibit 2 Net (Expense) Revenue and Changes in Net Position Governmental Business -type (21,457) Activities Activities Total $ (1,075,924) $ - $ (1,075,924) (1,393,714) - (1,393,714) (1,912,080) - (1,912,080) 485,076 - 485,076 (355,378) - (355,378) (4,252,020) - (4,252,020) (197,347) (197,347) - (21,457) (21,457) - 82,658 82,658 - 17,488 17,488 - (118,658) (118,658) (4,252,020) (118;6x8) sY ,,,J4,370 f r is r 4; 4,854,521 4,8511,521` �. 5,848 - 5,848 86,530 95,130 181,660 25,000 (25,000) - 4,971,899 70,130 5,042,029 719,879 (48,528) 671,351 16,351,262 14,657,126 31,008,388 $ 17,071,141 $ 14,608,598 $ 31,679,739 -35- THIS PAGE IS LEFT BLANK INTENTIONALLY -36- MP -36- FUND FINANCIAL STATEMENTS CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 -37- ASSETS Cash and temporary investments Receivables Accrued interest Taxes Accounts, net Special assessments Lease Due from other governments Due from other funds Prepaid items Land held for resale TOTAL ASSETS CITY OF SHOREWOOD, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2014 General $ 4,070,546 16,962 125,975 7,096 1,222 3,230 103,996 Debt Street Service Reconstruction $ 13,916 $ 1,599,599 8,199 7,100,000 - 14,398 - - 18,741 $ 4,329,027 $ 7,128,314 $ 1,626,539 TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes Unavailable revenue - assessments Unavailable revenue - lease receivables TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Nonspendable prepaid items Restricted for debt service Assigned to Street reconstruction Capital outlay Community center operations Unassigned IJC�7111:1R�L�1►1�7: ��C�� TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES 72,502 - 1,222 - - - 7,100,000 - 73,724 7,100,000 - 103,996 - - - 25,654 - 1,536,672 3,981,475 - - 4,085,471 25,654 1,536,672 $ 4,329,027 $ 7,128,314 $ 1,626,539 The notes to the financial statements are an integral part of this statement. -38- Exhibit 3 Other Total Trail Governmental Governmental Construction Funds Funds $ 538,937 $ 922,460 $ 7,145,458 3,544 4,581 33,286 - - 125,975 7,096 - 1,222 289,965 7,389,965 - 17,628 18,741 - 103,996 150,068 150,068 $ 542,481 $ 1,367,074 $ 14,993,435 - - 72,502 - 1,222 - 7,100,000 - 7,173,724 103,996 25,654 - - 1,536,672 464,287 1,294,302 1,758,589 - 43,744 43,744 - - 3,981,475 464,287 1,338,046 7,450,130 $ 542,481 $ 1,367,074 $ 1.4,993,435 -39- THIS PAGE IS LEFT BLANK INTENTIONALLY -40- R 5 t -40- CITY OF SHOREWOOD, MINNESOTA Exhibit 4 RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS DECEMBER 31, 2014 Amounts reported for the governmental activities in the statement of net position are different because Total fund balances - governmental $ 7,450,130 Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. Cost of capital assets 38,681,361 Less: accumulated depreciation (27,892,315) Long -term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long -term liabilities at year -end consist of Bonds payable (8,135,000) Compensated absences payable (202,883) Total net position - governmental activities $ 17,071,141 The notes to the financial statements are an integral part of this statement. -41- REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Interest on investments Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Public safety Public works CITY OF SHOREWOOD, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CIIANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Debt Street General Service Reconstruction $ 4,864,095 $ - $ - 270,841 - - 114,069 - - 52,731 - - 64,290 - - 45,799 - 22,741 191,034 969,650 - 5,602,859 969,650 22,741 1,1 98,70.7 1,526,786 740,824 Culture and recreation:' "29122` Capital outlay <, General government . Public safety 508,187,, Public works Culture and recreation Debt service Principal Interest and service charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 The notes to the financial statements are an integral part of this statement. -42- 2,979 1,351,418 705,000 - - 367,396 - 4,203,626 1,072,396 1,354,397 1,399,233 (102,746) (1,331,656) 25,000 103,950 725,000 (1,315,120) - - (1,290,120) 103,950 725,000 109,113 1,204 (606,656) 3,976,358 24,450 2,143,328 $ 4,085,471 $ 25,654 $ 1,536,672 Exhibit 5 Other Total Trail Governmental Governmental Construction Funds Funds $ - $ - $ 4,864,095 270,841 776,986 - 891,055 - 38,094 90,825 - - 64,290 3,544 14,446 86,530 - 24,535 1,185,219 780,530 77,075 7,452,855 - -. 1,198,707 - - 1,526,786 - - 743,803 - 80,929 " 310 051 55 87 G. 508187 - 173,607 �. 1,525,5 t° 263,806 39,010 302,816 - - 705,000 - - 367,396 263,806 349,373 7,243,598 516,724 (272,298) 209,257 486,170 1,340,120 - (1,315,120)_ - 486,170 25,000 516,724 213,872 234,257 (52,437) 1,124,174 7,215,873 $ 464,287 $ 1,338,046 $ 7,450,130 -43- CITY OF SHOREWOOD, MINNESOTA Exhibit 6 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Amounts reported for governmental activities in the statement of activities are different because Total net change in fund balances - governmental funds $ 234,257 Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. Capital outlays 1,523,848 Depreciation expense (1,029,313) A gain or loss on the disposal of capital assets, including the difference between carrying value and any related sales proceeds, is included in net position. However, only the sales proceeds are included in the change in the change in fund balance. (7,904) The issuance of long -term debt provides current financial resources to governmental funds, while the repayment of principal of long -term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are amortized in the statement of activities. Principal repayments. ; ' 705,000' Interest on long -term debt in the statement ofaetivities differs from the amotth&Ii'd rted m the governmental funds because interesfis' rec`ogmzed as an e)' penditure in the funds when it s due, and thus requires the use,c f eurrer t financial resources. ,,,,In:,;.the statement bf activities, however interest expense is recognized as the interest accrues, regardless of when it is due. 12,018 Certain revenues are recognized as soon as it is earned. Under the modified accrual basis of accounting certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Delinquent taxes (9,574) Special assessments 1,222 Leases (661,846) Grants (29,671) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences (18,158) Change in net position - governmental activities $ 719,879 The notes to the financial statements are an integral part of this statement. SEE CITY OF SHOREWOOD, MINNESOTA Exhibit 7 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2014 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Interest on investments Miscellaneous TOTAL REVENUES EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget $ 4,858,585 $ 4,858,585 $ 4,864,095 $ 5,510 1.32,770 132,770 270,841 138,071 73,751 73,751 114,069 40,318 58,700 58,700 52,731 (5,969) 57,000 57,000 64,290 7,290 35,000 35,000 45,799 10,799 203,400 203,400 191,034 (12,366) 5,419,206 5,419,206 5,602,859 183,653 1,318,653 1,318,653 1,198,707 119,946 1,516,819 1,516,819 1,526,786 (9,967) 942,126 942,126 740,824 201,302 225,716 225,716 229,122 (3,406) 512,034 512,034.: 508,187 3,847 4;515,348 4,515,348,;: 4,203,626 311,722 903,858 903,858 1,399,233 495,375 25,000 25,000 25,000 - (1,031,706) (1,031,706) (1,315,120) (283,414) (1,006,706) (1,006,706) (1,290,120) (283,414) (102,848) (102,848) 109,113 211,961 3,976,358 3,976,358 3,976,358 - $ 3,873,510 $ 3,873,510 $ 4,085,471 $ 211,961 The notes to the financial statements are an integral part of this statement. -45- ASSETS CURRENT ASSETS Cash and temporary investments Cash with fiscal agent Receivables Accrued interest Accounts Special assessments CITY OF SI-IOREWOOD, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2014 Exhibit 8 Business -type Activities - Enterprise Funds Stormwater Management Nonmajor Water Sewer Utility Recycling Totals $ 3,711,388 $ 3,232,484 $ 119,086 $ 69,716 $ 7,132,674 270,101 - - - 270,101 18,020 15,304 998 272 34,594 75,814 235,225 61,004 45,967 418,010 4,251 6,893 1,907 1,254 14,305 TOTAL CURRENT ASSETS 4,079,574 3,489,906 182,995 117,209 7,869,684 NONCURRENT ASSETS Special assessments receivable 115,765 22,270 5,502 4,397 147,934 Capital assets Land - - 434,113 - 434,113 Machinery and equipment 39,869 43,385 59,499 142,753 Infrastructure 9,944,664 9,191,567 1,494,501 20,630,732 Less accumulated depreciation {4,522,305} (7,496,429} {310,593} (12,329,327) NET CAPITAL ASSETS 5,462,228 1,738,523 1,677,520 8,878,271 TOTAL NONCURRENT ASSETS 5,577,993 1,760,793 1,683,022 4,397 9,026,205 TOTAL ASSETS ,;9657;567 ��.250,699' 1,866,017 121,606 16,895,889 ['2 LIABILITIES` CURRENT LIABILITIES Accounts and contracts payable 21,239 26,425 64,128 565 112,357 Accrued salaries payable 1,267 866 253 94 2,480 Due to other governments 329 2,518 - - 2,847 Accrued interest payable 9,607 - 9,607 Bonds payable - current 260,000 - - - 260,000_ TOTAL CURRENT LIABILITIES 292,442 29,809 64,381 659 387,291 NONCURRENT LIABILITIES Bonds payable 1,900,000 - - - 1,900,000 TOTAL LIABILITIES 2,192,442 29,809 64,381 659 2,287,291 NET POSITION Net investment in capital assets 3,302,228 1,738,523 1,677,520 - 6,718,271 Unrestricted 4,162,897 3,482,367 124,116 120,947 7,890,327 TOTAL NET POSITION $ 7,465,125 $ 5,220,890 $ 1;801,636 $ 120,947 $ 14,608,598 The notes to the financial statements are an integral part of this statement. -46- OPERATING REVENUES Charges for services OPERATING EXPENSES Personal services Supplies Repairs and maintenance Depreciation Professional services Contracted services Insurance Water purchases Utilities Disposal charges Other TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES) CITY OF SHOREWOOD, MINNESOTA Exhibit 9 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Business -type Activities - Enterprise Funds Stormwater Management Nonmajor Water Sewer Utility Recycling Totals $ 425,928 $ 852,254 $ 220,658 $ 164,666 $ 1,663,506 162,278 133,593 69,178 10,938 375,987 13,008 4,654 2,091 1,488 21,241 5,412 34,594 54,846 - 94,852 269,295 67,898 38,850 Other income 376,043 23,593 8,049 21,036 - 52,678 50,398 14,427 17,820 165,561 248,206 10,500 12,000 - - 22,500 30,217 - 47,305 41,745 30,217 73,377 11,170 INCOME (LOSS) BEFORE CONTRIBUTIONS 84,547 - 586,416 - - 586,416 32,693 910 4 470 34,077 670,771 873,711 203,825 178,457 1,926,764 (244,843) (21,457) 16,833 (13,791) (263,258) Special assessments 16,539 - 16,539 Interest on investments 49,474 41 74 „, ,, 3 X4,7 764 95,130 Intergovernmental "419,708) 31,279 31,279 Other income 1,000 1,000 Interest expense € :_ k (19,708) TOTAL NONOPERATING REVENUES (EXPENSES) 47,305 41,745 3,147 32,043 124,240 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS (197,538) 20,288 19,980 18,252 (139,018) CAPITAL CONTRIBUTIONS - CONNECTION FEES 49,665 - - - 49,665 CAPITAL CONTRIBUTIONS - FEMA AID - 65,825 65,825 TRANSFERS OUT (12,500) (12,500) - - (25,000) CHANGE IN NET POSITION (160,373) 7,788 85,805 18,252 (48,528) NET POSITION, JANUARY 1 7,625,498 5,213,102 1,715,831 102,695 14,657,126 NET POSITION, DECEMBER 31 $ 7,465,125 $ 5,220,890 $ 1,801,636 $ 120,947 $ 14,608,598 The notes to the financial statements are an integral part of this statement. -47- CITY OF SHOREWOOD, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Other receipts related to operations Payments to suppliers, contractors and other governments Payments to employees NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers out CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Connection fees received Acquisition of capital assets Bonds refunded from escrow Principal paid on revenue bonds Interest paid on revenue bonds Intergovernmental receipts Business -type Activities - Enterprise Funds Stormwater Exhibit 10 95,896 53,402 61,139 16,202 226,639 Management Nonmajor (25,000) Water Sewer Utility Recycling Totals $ 464,613 $ 845,634 $ 212,296 $ 162,790 $ 1,685,333 17,539 - - 31,279 48,818 (224,877) (658,701) (82,232) (166,954) (1,132,764) (161,379) (133,531) (68,925) (10,913) (374,748) 95,896 53,402 61,139 16,202 226,639 (12,500) (12,500) - (25,000) 49,665 49,665 - (86,483) (159,731) (246,214) (1,160,000) (1,160,000) (220,000) (220,000) (51,920) - (51,920) 65,825 65,825 NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (1,382,255) (86,483) (93,906) - (1,562,644) � CASH FLOWS FROM INVESTING AC, VITIES� F _ Interest received on investments 52,733 ` ": < >. 44,790 ,2,924 798 101,245 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 124b,126 ( ) (791) (29,843) 17,000 (1,259,760) ... .. .4:. ,., CASH AND CASII EQUIVALENTS, JANUARY 1 5,227,615 3,233,275 148,929 52,716 8,662,535 CASH AND CASH EQUIVALENTS, DECEMBER 31 $ 3,981,489 $ 3,232,484 $ 119,086 $ 69,716 $ 7,402,775 RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE STATEMENT OF NET POSITION Cash and temporary investments $ 3,711,388 $ 3,232,484 $ 119,086 $ 69,716 $ 7,132,674 Cash with fiscal agent 270,101 - 270,101 TOTAL. CASH AND CASH EQUIVALENTS $ 3,981,489 $ 3,232,484 $ 119,086 $ 69,716 $ 7,402,775 The notes to the financial statements are an integral part of this statement. -48- CITY OF SHOREWOOD, MINNESOTA Exhibit 10 STATEMENT OF CASH FLOWS - CONTINUED (13,791) PROPRIETARY FUNDS 17,539 FOR THE YEAR ENDED DECEMBER 31, 2014 - Business -type Activities - Enterprise Funds 48,818 Stormwater 67,898 Management Nonmajor Water Sewer Utility Recycling Totals RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities Other income related to operations Depreciation (Increase) decrease in assets Accounts receivable Special assessments receivable Increase (decrease) in liabilities Accounts and contracts payable Due to other governments Accrued salaries payable NET CASH PROVIDED BY OPERATING ACTIVITIES NONCASII CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased on account $ (244,843) $ (21,457) $ 16,833 $ (13,791) $ (263,258) 17,539 - - 31,279 48,818 269,295 67,898 38,850 - 376,043 26,474 (9,500) (9,650) (3,043) 4,281 12,211 2,880 1,288 1,167 17,546 14,424 13,317 13,565 565 41,871 (103) 202 - - 99 _ 899 62 253 25 1,239 $ 95,896 $ 53,402 $ 6],139 $ 16,202 $ 226,639 $ $ $ 42,193 $ $ 42,193 The notes to the financial statements are an integral part of this statement. -49- ASSETS Cash and temporary investments LIABILITIES Escrow deposits payable CITY OF SHOREWOOD, MINNESOTA Exhibit 11 STATEMENT OF NET POSITION FIDUCIARY FUND DECEMBER 31, 2014 Agency $ 128,561 $ 128,561 The notes to the financial statements are an integral part of this statement. -50- , The notes to the financial statements are an integral part of this statement. -50- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting entity The City of Shorewood, Minnesota (the City), operates under the "Optional Plan A" form of government as defined in the State of Minnesota statutes. Under this plan, the government of the City is directed by a City Council composed of an elected Mayor and four elected City Council members. The City Council exercises legislative authority and determines all matters of policy. The City Council appoints personnel responsible for the proper administration of all affairs relating to the City. The City has considered all potential units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the City to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the City. Blended component units, although legally separate entities are, in substance, part of the City's operations and so data from these units are combined with data of the City. The City has the following component unit: Blended component unit The Economic Development Authority (EDA) of the City was created pursuant to Minnesota statutes 469.090 through 469.108 to carry out economic and industrial development and redevelopment consistent within the City in accordance with policies established by the City Council. The EDA Board is comprised of the members of the City Council and has a December 31 year end. 'Because the FDA's Board is the same as the City Council, the EDA is blended and reported in the Debt Service fund. Separate financial statements are not issued for this component unit. `. t S um pl ap B. Government -waded funnanI stnents All WIN, M € �r The government wuah finance ;tatiers (u.e ,the�tet of nelositon and tstatement of activities) report information on all ohe noucia ,acts of tk Ci its �nponent umt governmental activities, which normally re sup o d b, rues an titer a rnrn lutaI rev es area re orted se a&l from business-type activities, y ph y g P p�� Y Yp which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions (including special assessments) that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as generalrevenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the found financial statements. We CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note l: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED C. Measurement focus, basis of accounting and financial statement presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the acctbasis when the excbange takes ace. On alzfie aScxyl , revenue is recorded in the year in which the res" axmearabld becom�vailable� 12 w NON Non - exchange tran§tions, rn; hic� he ity receive y witho dire -tly givm equal value in return, incuede Jgpiq property taxes, graud, entrtl� nt a� dotaons (ri an aeal ba�, revenue fromroperty taxes is recognized in the year for which the.fas >le to r titl ations..rs wcognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non - exchange transactions must also be available before it can be recognized. Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are also recorded as unearned revenue. 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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The City reports the following major governmental funds: The General fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Debt Service fund accounts for the resources accumulated and payments made for principal and interest on long -term general obligation debt of governmental funds. The Street Reconstruction fund accounts for the resources accumulated and payments made for the periodic reconstruction of City streets and roadways. The Trail Construction fund accounts for the resources accumulated and payments made for trail improvements and construction. -52- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2044 . Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City reports the following major proprietary funds: The Water fund accounts for the activities of the City's water distribution system. The Sewer fund accounts for the activities of the City's sewage collection system. The Stormwater Management Utility fund accounts for the activities of the City's stormwater collection system. Additionally, the City reports the following fund types: The fiduciary funds account for assets held by the City in a trustee capacity or as an agent on behalf of others. The agency fund is custodial in nature and does not present results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. This fund is used to account for assets that the City holds for certain residents, developers, and other parties that are involved with escrow related projects within the City. As a general rule, the effect of interfund activity has been eliminated from government -wide financial statements. Exceptions to this general rule are charges between the City's water and sewer function and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Proprietary funds d sti gur sh operat� eyenues and e� crises froth tattrtp rcttIng rte a Operating revenues and expenses generally moult frttt rov�ng s ices and o�lucing at dehverictg gods in connection with a proprietary fund's principal on ng operons.he p�Scipal opal revent� oft e water,ewer, stormwater management utility, and recyclmnterpriunc charges tosprs for aid servicN Operating expenses for enterprise aft funds include the cc of sale id swice admin }lrative pense.:and depreciation on capital assets. All revenues and expenses not meetzt -53- s and CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED D. Assets, liabilities, deferred inflows of resources, and net position /fund balance Deposits and investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short -term investments with original maturities of three months or less from the date of acquisition. The proprietary funds' portion in the government -wide cash and temporary investments pool is considered to be cash and cash equivalents for purposes of the statements of cash flows. Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of the funds. The City may invest idle funds as authorized by Minnesota statutes, as follows: 1. Direct obligations or obligations guaranteed by the United States or its agencies. 2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a final maturity of thirteen months or less. 3. General obligations of a state or local government with taxing powers rated "A" or better; revenue obligations rated �bttpr. Vas IN . 4. General ob ations I�tt�a the �nne fia Housi nce Agm' ted "A" better. 5. Obligation, a sch�dist � t w ffi orr `n I mahiity n- Dxceeding 13 tenths and (i) rated in the highest cate or ,b.. ,natic al bon tan ' ruici or (ii) en 1ted,.inthe credit enh'a cement program pursuant to statute g Y g.. O p g p section 126C.55. 6. Bankers' acceptances of United States banks eligible for purchase by the Federal, Reserve System. 7. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less. 8. Repurchase or reverse repurchase 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, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker- dealers. 9. Guaranteed Investment Contracts (GIC's) issued or guaranteed by a United States commercial bank, a domestic branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt obligations were rated in one of the top two rating categories by a nationally recognized rating agency. The City's investment policy has further restricted the City's investments to items 1, 2, 3, and 7 above. Investments for the City are reported at fair value. Earnings on investments are allocated to the individual funds based upon the average cash and investment balances. -54- CITY OF SIIOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Property taxes The City Council annually adopts a tax levy in December and certifies it to the County for collection in the following year. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January 1 and are payable by the property owners in two installments. The taxes are collected by the County Auditor and tax settlements are made to the City during January, July and December each year. Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred inflow of resources for delinquent taxes not received within 60 days after year end in the governmental fund financial statements. Accounts receivable Accounts receivable include amounts billed for services provided before year end. All trade receivables are shown net of an allowance for uncollectible accounts. The allowance for uncollectible accounts at December 31, 2014 is $27,319. Unbilled utility enterprise fund receivables are also included for services provided in 2014. The City annually certifies delinquent water and sewer accounts to the County for collection in the following year. Therefore, there has been no allowance for doubtful accounts established in the enterprise funds. Special assessments Special assessments represent the financing for public improvements paid for by benefiting property owners. These assessments are rec d # srecelvabi upon certification to the Cr}4u �Specjq1 as cSi tints are recognized as revenue when they are recei�d m ca or wt�m 6Uays after end Al overn n ntal a sessnents receivable are offset by a deferred inflow of rrurces the f�qd fi cial stat in A 11"m ,. rh 4 Lease receivable m` W -4 WI �� 1211-3111, 1 mg A� i .. , r. The City has a total of five leases receivable. Three of the leases are related to public safety buildings that the City has leased to the Excelsior Fire District and the South ;Lake Minnetonka Police Department. The other two leases were issued to the Excelsior Fire District for equipment financing assistance. As of December 31, 2014, the City has $7,389,965 of leases receivable outstanding. Interfund receivables and payables Transactions between funds that are representative of lending /borrowing arrangements outstanding at the end of the fiscal year are referred to as either "interfund receivables /payables" (i.e., the current portion of interfund loans) or "advances to /from other funds" (i.e., the non - current portion of interfund loans). 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." Prepaid items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. Prepaid items of the City are accounted for using the consumption method. -55- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Capital assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. For financial statement purposes only, a capitalization threshold is established for each capital asset category as follows: Assets Threshold Land and land improvements $ 10,000 Other improvements 25,000 Buildings 25,000 Building improvements 25,000 Machinery and equipment 5,000 Vehicles 5,000 Infrastructure 100,000 Other assets 5,000 In the case of initial eIpltal zatlon of�eneral infrastructure assets (i e, those reported by, governmental activities) the City chose to incluc items cy ng b k to ne 30; 19& The City s ab�� t esti�te t` p historical cost for the initial MOI reporting of these a is thro ba rendit (i e , es d ing the c rrentKreplacei �t cost of the infrastructure to be capitalized and usm�an appr late it eve1 rode to c ]ate the t the acq� ition year or estimated acquisition year). As the City c strues Cr acq, s ital ass s eac�l nod, eluding infias6eture assets, they are capitalized and reported at his rlcal cc SIL. I he poi te� ue_ eludes t anal lntenance au airs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets constructed. Property, plant and equipment of the City are depreciated using the straight -line method over the following estimated useful lives: Assets Land improvements Buildings and improvements System improvements /infrastructure Machinery and equipment Vehicles 5fa Useful Lives in Years 15-20 7 -40 20 -50 5 -15 5 -15 CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Compensated absences It is the City's policy to permit employees to accumulate a portion of earned but unused vacation and sick pay benefits. Accumulated vacation and sick pay are accrued when incurred in the government -wide, proprietary, and fiduciary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. In the case of an employee leaving, the General fund would be responsible for liquidation of the liability. Postemployment benefits other than pensions Under Minnesota statute 471.6 1, subdivision 2b., public employers must allow retirees and their dependents to continue coverage indefinitely in an employer - sponsored health care plan, under the following conditions: 1) Retirees must be receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in group plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees may obtain dependent coverage immediately before retirement. All premiums are funded on a pay -as- you -go basis. It was determined, in accordance with GASB Statement 45, at December 31, 2014 that the City has a zero liability. Long -term obligations In the government -wide financial statement and proprietary fund types in the fund financial statements, long -term debt and other Long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities or proprietary fund type statement of net position. The recognition of bond premiums and discounts are amortized over the 14 tj e bonds,, us n the straight -Ii e method l otld ay r s pried net of the applicable band premium or discoutrt Bond i�ancepstswe reported> an expend m thep Trod curs d. IN 1 In the fund financ�aTtatemen gor[r ntal fund peogmzonc °remmmnd discounts, as well as bond issuance costs, duri' the cutest pc*d ire face mount t debt hued is reporte rs other financing sources. Premiums receive d.€ tFdebt suanc tie rep rted s.<otherll crng' ources while �scounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Deferred inflows of resources In addition to liabilities, the statement of financial position and fund financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies as needing to be reported in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from three sources: property taxes, assessments, and lease receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts are received. SIVA CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Fund balance In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These classifications are defined as follows: Nonspendable - Amounts that cannot be spent because they are not in spendable form, such as prepaid items, land held for resale, and amounts due from other funds. Restricted - Amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of the City Council, which is the City's highest level of decision- making authority. Committed amounts cannot be used for any other purpose unless the City Council modifies or rescinds the commitment by resolution. Assigned - Amounts constrained for specific purposes that are internally imposed. In governmental funds other than the General fund, assigned fund balance represents all remaining amounts that are not classified as nonspendable and are neither restricted nor committed. In the General fund, assigned amounts represent intended uses established by the City Council itself or by an official to which the governing body delegates the authority. The City Council has adopted a fund balance policy which delegates the authority to assign amounts for specific purposes to the City Administrator. unassigned resift clas catin for the G t rat fund ZW also fte jativ esid al amounts in other funds. a Tax k'r The City considers z stricted �utp ' 1 e spent fi1rA _ both r�nef land unr stricted fund balance is available. Additionally, the Ct would first uS committed, th- n assig d, an astly unassign l amounts of unrestricted fund balance when expei AF-61"t mad6. s _ , .,- moo, .v x The City has formally adopted a fund balance policy for the General fund. The City's policy is to maintain a minimum unassigned fund balance of 55 -60 percent of operating expenditures for cash -flow timing needs. Net position Net position represents the difference between assets and liabilities. Net position is displayed in three components: a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets. b. Restricted net position - Consists of net position balances restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. c. Unrestricted net position - All other net position balances that do not meet the definition of "restricted" or "net investment in capital assets ". When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. 961Y CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary information Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the General fund. All annual appropriations lapse at fiscal year end. The City does not use encumbrance accounting. In August of each year, all departments of the City submit requests for appropriations to the City Administrator so that a budget may be prepared. Before September 30, the proposed budget is presented to the City Council for review. In early December, the City Council holds public hearings and a final budget is prepared and adopted. The appropriated budget is prepared by fund, function and department. The City's department heads, with the approval of the City Administrator, may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the City Council. The legal level of budgetary control is the department level. The City's budget was not amended during the year. Note 3: DETAILED NOTES ON ALL FUNDS A. Deposits and investments Deposits Custodial credit risk far deposits and yc �tments is the risk that mrthp,cve�,t cif a, b nkfaalure, the City's deposits and investments may nc e rei%od or Me Ci will not be W-le to recur coil to a] s ritie in the possession of an outside party. In acu3zdance v� Iv�nesq� statutes ads authonVd by�the City �uncil, the City maintains deposits at those depository 6iiks all wh '@ members thN-Vederal esery System: KAW �. a Minnesota statutesAlfdw �t a1L, 1depN ts bd�Protectedt rns nce, surety U d- or collateral. The fair value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds. Authorized collateral in lieu of a corporate surety bond includes: • United States government Treasury bills, Treasury notes, Treasury bonds; • Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; • General obligation securities of any state or local government with taxing powers which is rated "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; • General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; • Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc., or Standard & Poor's Corporation; and • Time deposits that are fully insured by any Federal agency. Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a 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 selection should be approved by the government entity. At year end, the City's carrying amount of deposits was $455,278 and the bank balance was $323,597. The entire bank balance was covered by Federal depository insurance or by collateral held by the City's agent in the City's name. ffbV1 CITY OF SHORE, WOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Investments The Minnesota Municipal Money Market fund (the 4M fund) is a customized cash management and investment program for Minnesota public funds. Sponsored and governed by the League of Minnesota Cities since 1987, the 4M fund is a unique investment alternative designed to address the daily and long -term investment needs of Minnesota cities and other municipal entities. Allowable under Minnesota statutes, the 4M fund is comprised of top quality, rated investments. The Minnesota Municipal Money Market fund and broker money market investment pools operate in accordance with appropriate State laws and regulations. The 4M fund is regulated by Minnesota statutes and the Board of Directors of the League of Minnesota Cities and is an external investment pool not registered with the Securities and Exchange Commission (SEC); however, it follows the same regulatory rules of the SEC under rule 2a7. The reported value of the pool is the same as the fair value of the pool share. Financial statements of the 4M fund can be obtained by contracting RBC Global Asset Management at 100 South Fifth Street, Suite 2300, Minneapolis, MN 55402 -1240. At year end, the City had the following investments that are insured or registered, or securities held by the City's agent in the City's name: (1) Ratings are provided by Moody's credit ratings agency where applicable to indicate associated credit risk. (2) Interest rate risk is disclosed using the segmented time distribution method. N/A Indicates not applicable or available. -60- Fair Value Credit Segmented and Quality/ Time Carrying Types of Investments Rating (1) Distribution (2) Amount Non Pooled investments �w U.S. Governmen�gencycurr s taa41.to years $ 1,479,182 w U.S. Government gency uri( s . ` 1 as tyre than 3 years 1,490,941 .. Municipal Bonds �,01 a �aa 10 S than 6 months 260,731 Municipal Bonds �� al 1� than 6 months 253,198 Municipal Bo 8'than 1 year 165,000 Municipal Bonds A2 less than 1 year 295,823 Municipal Bonds Aal 1 to 3 years 1,395,677 Municipal Bonds Aa2 1 to 3 years 1,073,193 Municipal Bonds AA 1 to 3 years 610,464 Municipal Bonds A3 1 to 3 years 1,658,542 Municipal Bonds A+ 1 to 3 years 105,835 Municipal Bonds Aaa more than 3 years 298,380 Brokered Certificates of Deposit N/A less than 6 months 181,496 Brokered Certificates of Deposit N/A 6 to 12 months 249,189 Brokered Certificates of Deposit N/A 1 to 3 years 243,386 Brokered Certificates of Deposit N/A more than 3 years 683,798 Total non pooled 10,444,835 Pooled investments Minnesota Municipal Money Market fund N/A less than 6 months 3,659,695 Broker Money Market N/A less than 6 months 116,766 Total pooled 3,776,461 Total investments $ 14,221,296 (1) Ratings are provided by Moody's credit ratings agency where applicable to indicate associated credit risk. (2) Interest rate risk is disclosed using the segmented time distribution method. N/A Indicates not applicable or available. -60- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED A reconciliation of cash and temporary investments as shown on the financial statements for the City follows: Carrying amount of deposits $ 455,278 Investments 14,221,296 Cash on hand 220 Total $ 14,676,794 As reported on the financial statements Statement of net position $ 14,278,132 Cash with fiscal agent 270,101 Fiduciary fund 128,561. Total $ 14,676,794 The investments of the City are subject to the following risks: Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota statutes and the City's investment policy limit the City's investments to the list on page 54 aft, INS r EMI gg .r Custodial edit Rise[ he sto gy credrt r C t mvestr�nts the risk%at, in the event of the failure of the �. � a�a�.mm� counterpa .; to a tran�ctio,r wernmenLvill be ab >o r' over the�lue of investment or collateral securities t aie m possibof an taide pity Incordanee witle City's investment policy, the investmet� ffrcer all strt uure a ' v tt ents,ad ostts d repurchase. — mements so that the custodial risk is categorized as either insured or registered, or securities held by the City or its agent in the City's name or uninsured and unregistered, with securities held by the counterparty's trust department or agent in the City's name. All investments are placed in safekeeping at financial institutions. • Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. In accordance with the City's investment policy, the City diversifies its investment portfolio to eliminate the risk of loss resulting from over - concentration of assets in a specific maturity, a specific issuer or a specific class of securities. As of December 31, 2014 the City had invested 5.0 percent or more of its total investment portfolio in the following issuers: Columbia County GA, 6.0 percent, and Illinois State Taxable, 5.9 percent. • Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with its investment policy and also detailed in the description of concentration of credit risk, the City manages its exposure to declines in fair values by "laddering" their investment maturities to ensure that a portion of the portfolio is maturing monthly, or as needed to meet projected expenditures. The City also permits no more than 30 percent of total investments to extend beyond five (5) years and does not directly invest in securities maturing more than 15 years from the date of purchase. -61- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED B. Capital assets Capital asset activity for the year ended December 31, 2014 was as follows: Total accumulated depreciation (26,881,448) (1,029,313) 18,446 (27,892,315) Total capital assets being depreciated, net 7,995,079 560,901 (7,904) 8,548,076 Governmental activities capital assets, net $ 10,302,415 $ 2,045,813 $ (1,559,182) $ 10,789,046 -62- Beginning Ending Balance Increases Decreases Balance Governmental activities Capital assets not being depreciated Land $ 741,826 $ - $ - $ 741,826 Construction in progress 1,565,510 1,484,912 (1,551,278) 1,499,144 Total capital assets not being depreciated 2,307,336 1,484,912 (1,551,278) 2,240,970 Capital assets being depreciated Buildings 3,066,002 - - 3,066,002 Improvements other than buildings 1,012,469 - 1,012,469 Infrastructure 27,923,348 1,441,028 - 29,364,376 Machinery and equipment 2,874,708 149,186 (26,350) 2,997,544 Total capital - z beingdepredgted 3 6,527 r ],59,214 (26,350) 36,440,391 Less accumulated cEpreciatia Mme` r Buildings �„ .... a.., .,..,(1,05))� _ �,. (76,51GE, - (1,127,117) Improvements other than buildings (725,101) (34,724) - (759,825) Infrastructure (23,019,332) (736,698) - (23,756,030) Machinery and equipment (2,086,414) (181,375) 18,446 °(2,249,343) Total accumulated depreciation (26,881,448) (1,029,313) 18,446 (27,892,315) Total capital assets being depreciated, net 7,995,079 560,901 (7,904) 8,548,076 Governmental activities capital assets, net $ 10,302,415 $ 2,045,813 $ (1,559,182) $ 10,789,046 -62- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Beginning Ending Balance Increases Decreases Balance Business -type activities Capital assets not being depreciated Land $ 434,113 $ - $ Capital assets being depreciated Infrastructure 20,401,824 288,407 Machinery and equipment 83,254 - Total capital assets being depreciated 20,485,078 288,407 Less accumulated depreciation for Infrastructure (11,870,030) (376,043) Machinery and equipment (83,254) - Total accumulated depreciation (11,953,284) (376,043) Total capital ats5 )' being deptected, nett 1,794 1 (87,63 r 'W EA — Business-type g: tivitres a ff Ay c apital assdfs Depreciation expense was charged to functions /programs of the City as follows: Governmental activities General government Public works Culture and recreation Total depreciation expense - governmental activities Business -type activities Water Sewer Stormwater management utility Total depreciation expense - business -type activities -63- $ 434,113 20,690,231 83,254 - 20,773,485 (12,246,073) (83,254) - (12,329,327) 8,444,158 $ 8,878,271 $ 73,268 898,209 57,836 $ 1,029,313 $ 269,295 67,898 38,850 $ 376,043 CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Construction commitments The City has active construction projects as of December 31, 2014. At year end, the commitment with the contractors for these projects is as follows: Project 2013 Street, Drainage & Utility Improvements 2014 Utility and Street Improvements - Sunnyvale Lane 2014 Mill and Overlay Improvement Project Total C. Interfund receivables, payables, and transfers Spent Remaining to date Commitment $ 500,723 $ 33,505 373,926 42,143 294,077 61,641 $ 1,168,726 $ 137,289 Interfund balances The Street Reconstruction fund lent $18,741 to the Equipment Replacement nonmajor governmental fund for cash flow purposes. The interfund balance is expected to be paid back in 2015. Interfund The City n street Nonmajor Fund General Debt Service Reconstruction Governmental Total Transfers out General $ - $ 103,950 $ 725,000 $ 486,170 $ 1,315,120 Water 12,500 - - - 12,500 Sewer 12,500 - - - 12,500 Total $ 25,000 $ 103,950 $ 725,000 $ 486,170 $ 1,340,120 The City annually budgets transfers for specific purposes. Annual transfers are made for administrative costs, part of capital improvement plans, as well as annual budgets. For the year ended December 31, 2014, the City made the following one -time transfer: • The General fund transferred $283,414 to the Park Capital Improvement nonmajor governmental fund for future park improvements. The cash was related to the 2013 house sale proceeds of $317,182 less costs related to the sale that were previously recorded in the General fund. -64- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED D. Long -term debt General obligation bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business -type activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues. In addition, general obligation bonds have been issued to refund special assessments related bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the City. The City has the following general obligation debt: General obligation revenue bonds The following bonds were issued to finance capital improvements in the enterprise funds. They will be repaid from future net revenues pledged from the Water fund and are backed by the taxing power of the City. Annual principal and interest payments on the bonds are expected to require less than 39 percent of the net revenues from the Water fund. Principal and interest paid for the current year and total customer net revenues for the Water fund were $168,080 and $425,928, respectively. -65- Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End G.O. Water RevditW� Bonds of 2013 $ X 60,000 r .25 - 1.45,' ' 0 03/0l/IQ 01/01/22 $ 2,160,000 Annual debt service quirerrt is to atu % for greia o atiortrvenue bonds' e as follows: . __ _ .e a u -� �,• G.O. Revenue Bonds Year Ending Business -type Activities December 31, Principal Interest Total 2015 $ 260,000 $ 18,757 $ 278,757 2016 265,000 17,640 282,640 2017 265,000 16,182 281,182 2018 . 270,000 14,375 284,375 2019 270,000 12,080 282,080 2020-2022 830,000 17,094 847,094 Total $ 2,160,000 $ 96,128 $ 2,256,128 -65- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Lease revenue bonds The City also issues bonds where the City pledges income derived from the leasing of the acquired or constructed assets to pay debt service. Revenue bonds outstanding at year end are as follows: Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End Public Safety Fire Facility, Refunding Series 2007A Public Safety Police Facility, Refunding Series 2007B Public Safety Fire Facility, Refunding Series 2007C Public Project Lease Revenue $ 4,130,000 5.30-5.40 % 01/01/07 02/01/23 $ 2,960,000 4,285,000 3.50-4.25 1,585,000 3.75 -5.00 01/01/07 02/01/23 01/01/07 02/01 /22 3,075,000 1,065,000 Bonds, Series 2008A 1,310,000 2.85 -4.80 08/19/08 12/01/28 1,035,000 Total Lease Revenue Bonds $ 8,135,000 The Public Safety Fire Facility Refunding Series 2007A, 2007B and 2007C were issued for construction of the public safety building, which there is a lease receivable from the South Lake Minnetonka Police and Excelsior Fire District. This debt is excluded from the calculation of net position invested in capital assets, net of related debt as the building is reported on the South ale�lnnet&N f' e and Excior 4 apT ast. Refer to Note 5A and B for further informations i I R t om"" Sri A x Annual debt servica gwrerrt is t attrlyt for re f tte bids ark follows: lty t Lease Revenue Bonds Year Ending Governmental Activities December 31, 2015 2016 2017 2018 2019 2020-2024 2025-2028 Total -66- Principal Interest Total $ 735,000 $ 325,081 $ 1,060,081 770,000 290,863 1,060,863 800,000 257,068 1,057,068 830,000 225,287 1,055,287 870,000 1.91,653 1,061,653 3,765,000 415,480 4,180,480 365,000 44,374 409,374 $ 8,135,000 $ 1,749,806 $ 9,884,806 CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Chances in long -term liabilities Long -term liability activity for the year ended December 31, 2014, was as follows: Business -type activities General obligation revenue bonds $ 3,540,000 $ - $ (1,380,000) $ 2,160,000 $ 260,000 Refunding bond On March 6, 2013, the City issued $2,260,000 of water revenue bonds. The bond issue was a current refunding of the G.O. Water Revenue Bonds of 2005 and a crossover refunding of the G.O. Water Revenue Bonds of 2006. The new bonds have an average coupon rate of 1.04 percent comRared to the 4.16 and 4.00 'percent coupon rates on the old bonds, respectiy I�roceed'of�t�.pew bonds�rtaimng �;te 2�on wets used to refund those bonds on r vw ,�. March 6, 201.3 The�roceeds , 0, b.' e is pertan n� o the 20 bonds were �d to refund those bonds on January 1, 2014 T1200b bo w�tdefeasedntil e crosses ile, and tlefore were not removed as a liability until that d Asalt o�he rfunding e, City r�l save $340,5 in debt service payments and 01 Al achieve an econom� O (t ie pre, lueqthe Vfferen etw the old and { new debt service) of $306,132. -67- Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental activities Lease revenue bonds $ 8,840,000 $ - $ (705,000) $ 8,135,000 $ 735,000 Compensated absences 184,725 178,096 (159,938) 202,883 175,659 Total $ 9,024,725 $ 178,096 $ (864,938) $ 8,337,883 $ 910,659 Business -type activities General obligation revenue bonds $ 3,540,000 $ - $ (1,380,000) $ 2,160,000 $ 260,000 Refunding bond On March 6, 2013, the City issued $2,260,000 of water revenue bonds. The bond issue was a current refunding of the G.O. Water Revenue Bonds of 2005 and a crossover refunding of the G.O. Water Revenue Bonds of 2006. The new bonds have an average coupon rate of 1.04 percent comRared to the 4.16 and 4.00 'percent coupon rates on the old bonds, respectiy I�roceed'of�t�.pew bonds�rtaimng �;te 2�on wets used to refund those bonds on r vw ,�. March 6, 201.3 The�roceeds , 0, b.' e is pertan n� o the 20 bonds were �d to refund those bonds on January 1, 2014 T1200b bo w�tdefeasedntil e crosses ile, and tlefore were not removed as a liability until that d Asalt o�he rfunding e, City r�l save $340,5 in debt service payments and 01 Al achieve an econom� O (t ie pre, lueqthe Vfferen etw the old and { new debt service) of $306,132. -67- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 4: DEFINED BENEFIT PENSION PLAN - STATEWIDE A. Plan description All full -time and certain part -time employees of the City are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF), which is a cost - sharing, multiple - employer retirement plan. This plan is established and administered in accordance with Minnesota statutes, chapters 353 and 356. 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. All new members must participate in the Coordinated Plan. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by Minnesota statute, and vest after five years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.20 percent of average salary for each of the first 1.0 years of service and 2.70 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.20 percent of average salary for each of the first 10 years and 1.70 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.70 percent of average salary for Basic Plan members and 1.70 percent for Coordinated Plan members for each year of service. GERF members hired prior to July 1, 1989 whose annuity is calculated using Method 1, a full annuity Is available when age plus year of service equal 0 ._g al retirement age is the age for fi unreduced Social S�rity8efits �pei 66 for Coodinated mnbersir�d onr aft UX July 1, 1989.'A reduced retirement annuity i dso ava�ble t elig� e members wkrng ear reti>ement ISBN °� �� k There are different 4� es of ai�t rtie var ble to i rribers a on rettrement. A sm* life annuity is a lifetime annuity that ceases upon the Bath o die annuls pable. There #"o various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions in the fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF. That report may be obtained on the Internet at mnpera.org, by writing to PERA, 60 Empire Drive #200, St. Paul, Minnesota, 55103 -2088 or by calling (651) 296 -7460 or (800) 652 -9026. B. Funding policy Minnesota statutes, chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the Minnesota legislature. The City makes annual contributions to the pension plans equal to the amount required by Minnesota statutes. GERF Basic PIan members and Coordinated Plan members were required to contribute 9.10 percent and 6.25 percent, respectively, of their annual covered salary in 2014. In 2014, the City was required to contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan GERF members and 7.25 percent for Coordinated Plan GERF members. The City's contributions to the GERF for the years ending December 31, 2014, 2013 and 2012 were $89,427, $86,064, and $99,677, respectively. The City's contributions were equal to the contractually required contributions for each year as set by Minnesota statute. 1rd-11 CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 5: JOINT VENTURES A. South Lake Minnetonka Police Department The City participates in a joint powers agreement with the cities of Excelsior, Greenwood and Tonka Bay, which establishes the South Lake Minnetonka Police Department (the Department) for the purpose of providing police protection within the four communities. The agreement creates a coordinating committee, comprised of the Mayors of each participating community, as the governing body, which meets quarterly. Each year, the coordinating committee adopts an operating budget, which is approved by all participating cities. The cost of the operating budget is divided between the participating cities based upon a five -year average demand for service in each City. Any budget shortfall is made up first from department reserves, with any excess shortfall assessed to each participating community according to the formula. The most recent year of audited information is December 31, 2014. Separate financial statements can be obtained by writing to the South Lake Minnetonka Police Department, 241.50 Smithtown Road, Shorewood, Minnesota 55331. The following is a summary of the Department's Statement of Net Position as of December 31, 2014 . and 2013: . SOUTH LAKE MINNETONKA POLICE DEPARTMENT SUMMARY OF STATEMENTS OF NET POSITION DECEMBER 31, 2014 AND 2013 2014 2013 Assets 40 52051,223 $ 5,214,361 4 ro Liabilities 4 S I $ �z� 3 326 740 $ 3,639,122 Net position" , 1,724,483 1,575,239 A Total liabilities and net position $ 5,051,223 $ 5,214,361 The following is a summary of the Department's statement of activities for the years ended December 31, 2014 and 2013: Revenues Expenses Net revenues General revenues Change in net position Net position, January 1 Net position, December 31 SOUTH LAKE MINNETONKA POLICE DEPARTMENT SUMMARY STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 -69- 2014 2013 $ 2,829,638 $ 2,792,683 2,692,164 2,630,842 137,474 161,841 11,770 12,596 149,244 174,437 1,575,239 1,400,802 $ 1,724,483 $ 1,575,239 CITY OF SHOREWOOD, MINNESOTA NOTES TO THE ;FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 5: JOINT 'DENTURES - CONTINUED B. Excelsior Fire District In August of 2000, the cities of Deephaven, Excelsior, Greenwood, Shorewood and Tonka Bay entered a joint powers agreement to provide fire protection and medical response service to their residents and created an entity called the Excelsior Fire District (the District). The Board of Directors is comprised of ten members and five alternate members. Each Member City appoints two representatives on the Board of Directors and one alternate. The City is billed for service based on a formula that determines its share of the total expenditures. Separate financial statements can be obtained by writing to the Excelsior Fire District, 24100 Smithtown Road, Shorewood, Minnesota 55331. The following is a summary of the ;District's Statement of Net Position as of December 31, 2014 and 2013: EXCELSIOR FIRE DISTRICT SUMMARY OF STATEMENTS OF NET POSITION DECEMBER 31, 2014 AND 2013 Assets Liabilities Net position A Total liabilities? and net position ..� Affi�. The following is a"�umYriar`y of th &'Mtfict's stat6f i*tit of 6161— Revenues Expenses Net revenues General revenues Change in net position Net position, January 1 Net position, December 31 2014 2013 $ 7,868,422 $ 8,070,939 $ 4,454,504 $ 4,956,613 u 3,413,91.8 3,114,326 M —111 WIN $ 7,868,422 $ 8,070,939 tid' of the years eii&d'December 31, 2014 and 2013: EXCELSIOR FIRE DISTRICT SUMMARY STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED DECEMBER 31, 2014 . AND 2013 2014 2013 . $ 1,585,458 $ 1,565,399 1,289,669 1,294,952 295,789 270,447 3,803 15,811 299,592 286,258 3,114,326 2,828,068 $ 3,413,918 $ 3,114,326 According to a formula in the agreement, the City's share of the District's budget is 3 8.4 8 percent. Payments to the District in 2014 totaled $603,638. The District issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to the Excelsior Fire District, 24100 Smithtown Road, Shorewood, Minnesota 55331. -70- CITY OF SHOREWOOD, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2014 Note 6: OTHER INFORMATION A. Risk management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance. The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT) which is a risk sharing pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self-sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City's coverage in any of the past three fiscal years. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. B. Legal debt margin The City's statutory debt limit is $40,556,194 computed as three percent of $1,351,873,140, which is the taxable market value of property within the City. Long -term debt issued and financed partially or entirely by special assessments, tax increments or the net revenues of enterprise fund operations is excluded from the debt limit computation. The City has no debt that is subject to the statutory debt limit. C. Southshore Community Center On July 1, 2009, th Crty yen d It an a�ement tot e over operations of he the ore Community Center. The City also contractec rth Coi�um Recreation Reso i &s (CRR)t r the operate ' management, and programming of r the Southshore Cott umty Otter f ntract wither 0yeas fo _ e period of J 1, 2009 to July 1, 2012 with an We option to renew for other t e ye ornegottqe The ptract has re- negottat m January, 2012. The City agreed to pay CRR $S,OOfl� ott li forth erlod, Jart�ary 1, 2� to� cember 31,_2_ During this time, the City paid a 15 percent commission on monthly revenues to CRR. A quarterly bonus commission of five percent was due if the quarterly program and rental income exceeded $13,500. The contract was subsequently extended on a month by month basis through March 31, 2013 when CRR ceased to provide services as the Southshore Community Center management company. -71- THIS PAGE IS LEFT BLANK INTENTIONALLY Q0 NOW R M pw a RN % IN -72- COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED v4m%� CEMBOA 31 2 IN Oil 4N ffrAll THIS PAGE IS LEFT BLANK INTENTIONALLY -74- MAN, "ffig" Mll Nor 10 1 VISA -74- NONMAJOR GOVERNMENTAL FUNDS NONMAJOR SPECIAL REVENUE FUNDS Special revenue finds are used to account for revenue derived from specific taxes or other earmarked revenue sources. They are usually required by Minnesota statute or local ordinances to finance particular functions or other activities of government. Southshore Community Center - This fund was established to account for the resources accumulated from events and activities held at the City's community center, and the payment of expenditures related to operations of the community center. The City has committed charges for services revenues for operations. -75- F 05 in g MINOR OWN R IS S s 6.., • ,• X44 ONE "S R 4 yp YE-.'S y N j'�4`� -75- CITY OF SHOREWOOD, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2014 ASSETS Cash and temporary investments Receivables Accrued interest Lease Land held for resale TOTAL ASSETS LIABILITIES Accounts and contracts payable Accrued salaries payable Due to other funds TOTAL LIABILITIES AND FUND BALANCES -76- Exhibit A -1 Special Revenue Southshore Total Community Capital Nonmajor Center Projects Funds $ 46,805 $ 875,655 $ 922,460 - 4,581 4,581 - 289,965 289,965 - 150,068 150,068 $ 46,805 $ 1,320,269 $ 1,367,074 $ 2,718 $ 7,226 $ 9,944 343 - 343 - 18,741 18,741 3,061 25,967 29,028 1,294,302 1,294,302 43,744 43,744 1,294,302 1,338,046 $ 46,805 $ 1,320,269 $ 1,367,074 REVENUES Charges for services Interest on investments Miscellaneous Park dedication fees Contributions and donations Other TOTAL REVENUES CITY OF SHOREWOOD, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2014 Special Exhibit A -2 Southshore Total Community Capital Nonmajor Center Projects Funds $ 38,094 $ - $ 38,094 - 14,446 14,446 - 20,000 20,000 2,470 - 2,470 2,065 - 2,065 42,629 34,446 77,075 OTHER FINANCING SOURCES Transfers in NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 -77- (42,481) (229,817) (272,298) 85,756 400,414 486,170 43,275 170,597 213,872 469 1,123,705 1,124,174 $ 43,744 $ 1,294,302 $ 1,338,046 THIS PAGE IS LEFT BLANK INTENTIONALLY -78- w Ar 10 oll -'a " -78- NONMAJOR CAPITAL PROJECTS FUNDS Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by enterprise funds. Park Capital Improvement - This fund accounts for park land acquisition and other capital improvements in the City parks. Equipment Replacement - This fund was established for the purpose of funding the replacement of capital equipment. MSA Construction - This fund was established to account for the accumulation of Municipal State Aid (MSA) to fund the periodic reconstruction of MSA designated roads. Community Infrastructure - This fund was established for the purpose of funding future improvements in the City. -79- ASSETS Cash and temporary investments Receivables Accrued interest Lease Land held for resale TOTAL ASSETS LIABILITIES Accounts and contracts payable Due to other funds TOTAL LIABILITIES CITY OF SHOREWOOD, MINNESOTA Exhibit B -1 NONMAJOR CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2014 Park Capital Equipment MSA Community Improvement Replacement Construction Infrastructure Total $ 534,898 $ - $ 126,387 $ 214,370 $ 875,655 2,088 - 1,000 1,493 4,581 - 289,965 - - 289,965 - - - 150,068 150,068 $ 536,986 $ 289,965 $ 127,387 $ 365,931 $ 1,320,269 $ 326 $ 6,900 $ - $ - $ 7,226 - 18,741 - - 18,741 326 25,641 - - 25,967 -80- REVENUES Interest on investments Miscellaneous Park dedication fees TOTAL REVENUES EXPENDITURES Capital outlay General government Public works Culture and recreation CITY OF SHOREWOOD, MINNESOTA Exhibit B -2 NONMAJOR CAPITAL ,PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2014 Park Capital Equipment MSA Community Improvement Replacement Construction Infrastructure Total $ 7,172 $ 5,495 $ 286 $ 1,493 $ 14,446 20,000 - - - 20,000 27,172 5,495 286 1,493 34,446 TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES 55,827 - 173,607 29,292 - 29,292 229,434 55,827 - 173,607 5,537 34,829 5,537 264,263 OVER (UNDER) EXPENDITURES x� (22120) X223,939} _ "286;' (4,044) (229,817} OTHER FINANCING SOURCES�� Transfers in ,32 414 7500 , - 400,414 NET CHANGE IN FUND BALANCES 323,294 -A (148,939) 286 (4,044) 170,597 FUND BALANCES, JANUARY 1 213,366 413,263 127,101 369,975 1,123,705 FUND BALANCES, DECEMBER 31 $ 536,660 $ 264,324 $ 127,387 $ 365,931 $ 1,294,302 -81- -82- CITY OF SHOREWOOD, MINNESOTA Exhibit C -1 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED ON THE FOLLOWING PAGES FOR THE YEAR ENDED DECEMBER 31, 2014 (With comparative actual amounts for the year ended December 31, 2013) 2014 2013 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts REVENUES Taxes General property taxes $ 4,755,059 $ 4,755,059 $ 4,752,388 $ (2,671) $ 4,660,946 Fiscal disparities 103,526 103,526 111,707 8,181 103,526 Total 4,858,585 4,858,585 4,864,095 5,510 4,764,472 Licenses and permits Business 14,320 14,320 14,932 612 19,597 Nonbusiness 118,450 118,450 255,909 137,459 185,003 Total 132,770 132,770 270,841 138,071 204,600 Intergovernmental Federal Other -3536 34,536 - State Property tax credits 44 26 Other �� ( 73,751 73,751 79,489",","" 5,738 76,518 Total 73,751 73,751 114,069 40,318 76,544 Charges for services General government 4,700 4,700 11,850 7,150 (3,544) Culture and recreation 54,000 54,000 40,881 (13,119) 54,373 Total 58,700 58,700 52,731 (5,969) 50,829 Fines and forfeitures 57,000 57,000 64,290 7,290 59.294 Interest on investments 35,000 35,000 45,799 10,799 12,911 Miscellaneous revenue Refunds and reimbursements 32,500 32,500 19,792 (12,708) 46,838 Contributions and donations 5,500 5,500 4,595 (905) 3,070 Other 165,400 165,400 166,647 1,247 144,569 Total 203,400 203,400 191,034 (12,366) 194,477 TOTAL REVENUES 5,419,206 5,419,206 5,602,859 183,653 5,363,127 -82- CITY OF SHOREWOOD, MINNESOTA Exhibit G1 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2014 (With comparative actual amounts for the year ended December 31, 2013) EXPENDITURES Current General government Mayor and City Council Personal services Supplies Other services and charges Total Administrative Personal services Supplies Other services and charges 2014 Budgeted Amounts Original Final Actual Amounts 2013 Variance with Actual Final Budget Amounts $ 16,800 $ 16,800 $ 16,794 $ 6 $ 16,794 1,200 1,200 1,014 186 2,035 140,365 140,365 54,930 85,435 90,885 158,365 158,365 72,738 85,627 109,714 250,323 250,323 242,352 7,971 240,032 19,30,0 19,300 17,852 1,448 15,650 1.47,290 147,290 148,468 (1,178) 134,401 Total 416;913 X16,9134) 872��w - , 8,241 390,083 Finance Personal services =134,758 134,758 138,4651 :: (3,707) 137,469 Supplies "': u,': .�.a9,OS0_: rxa.� �� 9 ",050 �`�'� ., 15,415'':- . (6,365) 8,225 Other services and charges 16,000 16,000 14,191 1,809 14,619 Total 159,808 159,808 168,071 (8,263) 160,313 Professional services Other services and charges 211,060 211,060 207,153 3,907 199,042 Planning and zoning Personal services 173,157 173,157 182,641 (9,484) 181,143 Supplies 250 250 302 (52) 292 Other services and charges 11,900 11,900 14,461 (2,561) 7,684 Total 185,307 185,307 197,404 (12,097) 189,119 Municipal building Supplies 21,400 21,400 56,990 (35,590) 60,118 Other services and charges 165,800 165,800 87,679 78,121 141,227 Total 187,200 187,200 144,669 42,531 201,345 Total general government 1,318,653 1,318,653 1,198,707 119,946 1,249,616 -83- CITY OF SHOREWOOD, MINNESOTA Exhibit C -1 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2014 (With comparative actual amounts for the year ended December 31, 2013) 2014 2013 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current - continued Public safety Police protection Other services and charges $ 1,045,056 $ 1,045,056 $ 1,051,134 $ (6,078) $ 1,018,680 Fire protection Other services and charges 344,940 344,940 348,789 (3,849) 345,728 Protective inspection Personal services 121,323 121,323 120,530 793 123,412 Supplies 200 200 157 43 - Other services and charges 5,300 5,300 6,176 (876) 6,813 Total 126,823 126,823 126,863 (40) 130,225 Total public safety p Y X516 $;516 819 1.52 786:` (9 967) 1,494,633 Public works° General maintenance`" Personal services 439,587 439,587 321,038 118,549 434,212 Supplies 169,700 169,700 132,205 37,495 141,763 Other services and charges 141,600 141,600 95,277 46,323 105,845 Total 750,887 750,887 548,520 202,367 681,820 Snow and ice removal Personal services 58,339 58,339 61,363 (3,024) 56,862 Supplies 45,000 45,000 34,444 10,556 44,835 Total 103,339 103,339 95,807 7,532 101,697 City engineer Personal services - - - - 460 Supplies - - 612 (612) - Other services and charges 87,900 87,900 72,181 15,719 68,690 Total 87,900 87,900 72,793 15,107 69,150 Total public works 942,126 942,126 740,824 201,302 852,667 -84- -85- CITY OF SHOREWOOD, MINNESOTA Exhibit C -1 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2014 (With comparative actual amounts for the year ended December 31, 2013) 2014 2013 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current - continued Culture and recreation Personal services $ 146,216 $ 146,216 $ 164,292 $ (18,076) $ 133,518 Supplies 26,100 26,100 21,443 4,657 23,726 Other services and charges 53,400 53,400 43,387 10,013 51,868 Total culture and recreation 225,716 225,716 229,122 (3,406) 209,112 Total current 4,003,314 4,003,314 3,695,439 307,875 3,806,028 Capital outlay General government - - - - 322 Public safety 512,034 512,034 508,187 3,847 515,419 Total capital outlay (i . 5123(ii4 1512,034 °�; °.0,187 3,847 515,741 l � TOTAL EXPENDITURES' 4,515;348 4,515,348 X4,203,626 "� 311,722 4,321,769 EXCESS OF REVENUES OVER EXPENDITURES 903,858 903,858 1,399,233 495,375 1,041,358 OTHER FINANCING SOURCES (USES) Transfers in 25,000 25,000 25,000 - - Sale of capital assets - - - - 317,182 Transfers out (1,031,706) (1,031,706) (1,315,120) (283,414) (1,006,650) TOTAL OTHER FINANCING SOURCES (USES) (1,006,706) (1,006,706) (1,290,120) (283,414) (689,468) NET CHANGE IN FUND BALANCES (102,848) (102,848) 109,113 211,961 351,890 FUND BALANCES, JANUARY 1 3,976,358 3,976,358 3,976,358 - 3,624,468 FUND BALANCES, DECEMBER 31 $ 3,873,510 $ 3,873,510 $ 4,085,471 $ 211,961 $ 3,976,358 -85- ASSETS Cash and temporary investments Due from other governments Lease receivable TOTAL ASSETS LIABILITIES Accounts payable DEFERRED INFLOWS OF RESOURCES Unavailable revenue - lease receivables CITY OF SHOREWOOD, MINNESOTA Exhibit D -1 DEBT SERVICE FUNDS 4 COMBINING BALANCE SHEET DECEMBER 31, 2014 2007A 2007B 2007C 2008 Public Safety Public Safety Public Safety Lease Revenue Building Building Building Bond Total $ 9,469 $ (769) $ 2,063 $ 3,153 $ 13,916 6,441 6,441 1,516 - 14,398 2,960,000 3,075,000 1,065,000 - 7,100,000 $ 2,975,910 $ 3,080,672 $ 1,068,579 $ 3,153 $ 7,128,314 $ 740 $ 745 $ 740 $ 435 $ 2,660 2,960,000 3,075,000 1,065,000 - 7,100,000 FUND BALANCES Restricted for debt service 15,170 4,927 2,839 2,718 25,654 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 1975,010 910 $ :3,780,672 F' $ 1,068,579 $4 3,153 $ 7,128,314 -86- `M 4 -86- CITY OF SHOREWOOD, MINNESOTA DEBT SERVICE FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2014 REVENUES Lease payments EXPENDITURES Debt service Principal Interest and service charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES nTL7RU T7TATANT(`TA'1(; CnTTR( "RC Exhibit D -2 2007A 2007E 2007C 2008 Public Safety Public Safety Public Safety Lease Revenue Building Building Building Bond Total $ 398,1.75 $ 413,1.90 $ 158,285 $ - $ 969,650 265,000 275,000 110,000 55,000 705,000 132,607 137,627 47,717 49,445 367,396 397,607 412,627 157,717 104,445 1,072,396 568 563 568 (104,445) (102,746) FUND BALANCES, DECEMB, 1-` �, 15' f 70. w? $ _ ,927. ` $ 2,839' . $ 2,718 $ 25,654 -87- CITY OF SHOREWOOD, MINNESOTA AGENCY FUND COMBINING SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED DECEMBER 31, 2014 Developer Escrow Accounts ASSETS Cash and temporary investments LIABILITIES Escrow deposits payable r Exhibit E -1 Balance Balance January 1 Additions Deductions December 31 $ 108,503 $ 245,668 $ (225,610} $ 128,561 $ 108,503 $ 245,668 $ (225,610) $ 128,561 -88- REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Interest on investments Miscellaneous TOTAL REVENUES Per Capita CITY OF SHOREWOOD, MINNESOTA SUPPLEMENTARY INFORMATION SUMMARY FINANCIAL REPORT REVENUES AND EXPENDITURES FOR GENERAL OPERATIONS GOVERNMENTAL FUNDS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Total 2014 2013 $ 4,864,095 $ 4,764,472 270,841 204,600 891,055 76,544 90,825 92,549 64,290 59,294 86,530 37,461 1,185,219 1,234,312 $ 7,452,855 $ 6,469,232 $ 991 $ 870 Exhibit F -I Percent Increase (Decrease) 2.09 % 32.38 1,064.11 (1.86) 8.43 130.99 (3.98) 15.20 13.89 % EXPENDITURES 705,000 675,000 4.44 Current 367,396 391,213 (6.09) General government $ 1,198,707 $ 1,249,616 (4.07) % Public safety 963 :1';516,'786 .E, 1,494,633 2.15 Public works 8,135,000 743;803 :� 860,071 (13.52) Culture and recreation 1,081 °310,051 �� 324,745 (4.52) Capital outlay General government �„ �F , . 55,827.,'' 322 17,237.58 Public safety 508,187 515,419 (1.40) Public works 1,525,025 605,761 151.75 Culture and recreation 302,816 1,539,328 (80.33) Debt service Principal Interest and service charges TOTAL EXPENDITURES Per Capita Total Long -term Indebtedness Per Capita General Fund Balance - December 31 $ 4,085,471 $ 3,976,358 2.74 % Per Capita $ 543 $ 535 1.57 The purpose of this report is to provide a summary of financial information concerning the City of Shorewood to interested citizens. The complete financial statements may be examined at City Hall, 5755 Country Club Road, Shorewood, Minnesota 55331. Questions about this report should be directed to Bruce DeJong, Finance Director at 952- 960 -7903. -89- 705,000 675,000 4.44 367,396 391,213 (6.09) $ 7,243,598 $ 7,656,108 (5.39) % $ 963 $ 1,029 (6.47) % $ 8,135,000 $ 8,840,000 (7.98) % $ 1,081 $ 1,188 (9.03) General Fund Balance - December 31 $ 4,085,471 $ 3,976,358 2.74 % Per Capita $ 543 $ 535 1.57 The purpose of this report is to provide a summary of financial information concerning the City of Shorewood to interested citizens. The complete financial statements may be examined at City Hall, 5755 Country Club Road, Shorewood, Minnesota 55331. Questions about this report should be directed to Bruce DeJong, Finance Director at 952- 960 -7903. -89- THIS PAGE IS LEFT BLANK tNTENTIONALLY sm .; , \ . ( \ : 9 J , : k ° / \ ®� «. y G k k Qall" � � . . w � 2 -90- STATISTICAL SECTION (UNAUDITED) CITY OF SHOREWOOD SHOREWOOD, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2014 1 Ila am, o"ma, ma IN pip g ..... g-g t- ..... THIS PAGE IS LEFT BLANK INTENTIONALLY �., `\'.`� '� !• f\\ Y"`� �r'z ,y \,.ter... F l y.,\�.\ ~\.edo -92- STATISTICAL SECTION (UNAUDITED) This part of the City of Shorewood's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Financial trends These schedules contain trend information to help the reader understand how the government 's f nancial performance and well- being have changed over time. Revenue capacity These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt capacity These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the, future. Demographic and economic information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's f nancial activities take place. Operating information These schedules contain sere antnrastriarrdata to help the reader- unsttd�atiu �frmation in the government's financial report relocates to servrd the bvernwnt provid and the a�vities it performs. n ff IN I OR ggl -93- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business -type activities Net investment in capital assets Unrestricted Total business -type activities net position Total primary government Fiscal Year 2005 2006 2007 2008 $ 11,372,213 $ 11,690,620 $ 10,960,550 $ 9,430,566 - 24,632 - - 6,316,707 5,716,027 6,1.47,185 7,400,859 $ 17,688,920 $ 17,431,279 $ 17,107,735 $ 16,831,425 $ 6,172,309 $ 5,668,683 $ 6,066,229 $ 6,631,854 8,182,612 9,829,761 10,422,397 10,186,824 $ 14,354,921 $ 15,498,444 $ 16,488,626 $ 16,818,678 -94- Table 1 Fiscal Year 2009 2010 2011 2012 2013 2014 $ 9,480,314 $ 9,525,991 $ 9,223,669 $ 8,487,162 $ 9,212,415 $ 9,754,046 7,909,106 8,252,497 7,964,703 7,979,370 7,138,847 7,317,095 $ 17,389,420 $ 17,778,488 $ 17,188,372 $ 16,466,532 $ 16,351,262 $ 17,071,141 $ 6,482,297 $ 6,494,996 $ 6,675,613 $ 6,494,076 $ 6,705,907 $ 6,718,271 9,449,210 8,666,149 8,186,835 8,148,173 7,951,219 7,890,327 $ 15,931,507 $ 15,161,1.45 $ 14,862,448 $ 14,642,249 $ 14,657,126 $ 14,608,598 e CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION - CONTINUED ON THE FOLLOWING PAGES LAST TEN FISCAL YEARS (accrual basis of accounting) Expenses Governmental activities General government Public safety Public works Culture and recreation Interest on long -term debt Total governmental activities expenses Business -type activities Water Sewer Recycling Stormwater management utility Liquor Total business -type Total expenses Program revenues Governmental activities Charges for services 'General government Public safety Public works Culture and recreation Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business -type activities Charges for services Water Sewer Recycling Stormwater management utility Liquor Operating grants and contributions Capital grants and contributions Total business -type activities program revenues Total program revenues Fiscal Year 2005 2006 2007 2008 $ 1,222,510 $ 1,357,714 $ 1,321,971 $ 1,483,913 1,690,903 1,806,915 1,819,250 1,906,890 5,019,967 2,275,402 1,971,571 2,485,752 246,381 233,881 258,906 273,054 606,189 600,723 1,000,230 1,002,423 8,785,950 6,274,635 6,371,928 7,152,032 567,854 488,513 636,506 657,776 740,174 785,638 952,107 921,238 105,823 124,354 91,157 96,945 73,885 171,190 63,888 106,143 2,006,107 2,017,217 1,885,537 16,167 3,629,195 1,798,269 1,547= $10,001,123 $ 8,950,301 $ 112,107 $ 25,340 $ 41,475 $ 32,528 1,055,758 1,060,506 896,731 793,041 1,575 1,800 1,960 605 100,910 31,730 99,800 90,493 2,404,367 395,229 132,912 674,343 3,674,717 1,514,605 1,172,878 1,591,010 649,772 1,350,041 782,549 752,338 833,939 836,175 832,956 829,117 116,517 144,886 89,934 64,629 102,649 129,708 164,413 204,618 2,040,314 1,984,344 1,788,835 - - - - 27,950 3,743,191 4,445,154 3,658,687 1,878,652 $ 7,417,908 _$_5,959 759 $ 4,831,565 $ 3,469,662 -96- 2009 Fiscal Year 2010 2011 2012 Table 2 2013 2014 $ 1,486,281 $ 1,235,098 $ 1,405,791 $ 1,331,286 $ 1,310,296 $ 1,277,118 1,904,966 1,893,413 1,960,894 834,320 1,947,868 2,010,338 2,036,394 1,941,272 2,231,473 2,031,136 164,666 2,162,123 1,884,986 1,991,852 394,110 452,437 412,257 28,488 460,879 471,784 397,365 638,768 474,082 449,773 - 428,887 379,685 355,378 115,490 6,365,397 6,286,503 6,259,851 1,888,839 6,331,043 6,057,089 6,058,107 $ 2,672,979 $ 2,836,892 $ 2,734,670 659,113 643,886 690,363 689,205 693,193 690,479 955,956 980,173 1,151,626 1,065,926 847,097 873,711 99,286 173,896 174,857 187,713 181,537 178,457 106,847 131,107 233,035 273,846 107,935 203,825 129 25 - - - - 1,821,331 1,929,d8T::' 2,249;841 2,216,690,-,, , 1;829;76 y 1946 472 t-- $ 8,186,728 $ 8,215,59,) i $ 8309,732. $ 8,547,733 $ 7 886',8°54 $ 81104,579 $ 34,064 $ 53,381 $ 108,394 $ 144,883 $ 187,628 $ 199,394 634,742 624,330 544,749 604,400 599,810 642,680 6,279 - 6,293 4,137 226 1,222 35,843 58,661 72,678 79,206 120,794 102,985 90;681 99,114 113,717 102,959 144,112 48,284 43 114,330 - - - 811,522 801,652 949,816 845,831 935,585 1,052,570 1,806,087 784,318 668,676 672,793 757,395 537,713 443,467 802,252 845,043 819,496 831,640 834,320 852,254 65,112 146,002 151,894 157,585 165,713 164,666 191,157 198,593 196,070 193,931 194,950 220,658 28,488 28,762 33,586 23,007 25,830 31,279 - - 15,000 22,400 53,200 115,490 1,871,327 1,887,076 1,888,839 1,985,958 1,811,726 1,827,814 $ 2,672,979 $ 2,836,892 $ 2,734,670 $ 2,921,543 $ 2,864,296 $ 3,633,901 -97- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN NET POSITION - CONTINUED LAST TEN FISCAL YEARS (accrual basis of accounting) Net revenues (expenses) Governmental activities Business -type activities Total primary government General Revenues and Other Changes in Net Position General Revenues Governmental activities Taxes Property taxes, levied for general purpose Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Transfers Total governmental activities general revenues Business -type activities Unrestricted investment earnings Gain on sale of capital asset: Transfers, Total business -type activities general revenues Total primary government Change in Net Position Governmental activities Business -type activities Fiscal Year 2005 2006 2007 2008 $ (5,111,233) $ (4,760,030) $ (5,199,050) $ (5,561,022) 249,348 858,242 29,492 80,383 $ (4,861,885) $ (3,901,788) _j_(5 ,169,558) $ (5,480,639) $ 3,770,702 $ 4,144,543 $ 4,360,254 $ 4,582,909 4,785 4,925 37,746 19,957 201,024 327,921 621,234 641,846 4,300 - - - (17,000) 25,000 (143,728) 40,000 3,963,811 4,502,389 4,875,506 5,284,712 434,072 289,669 382,890 - 143,728 (40,000) 207,943 285,281 960,690 249,669 $ 4,171,754 $ 4,787,670 $ 5,836,196 $ 5,534,381 $ (1,147,422) $ (257,641) $ (323,544) $ (276,310) 457,291 1,143,523 990,182 330,052 Total primary government $ (690,131) $ 885,882 $ 666,638 $ 53,742 -98- Table 2 Fiscal Year 2009 2010 2011 2012 2013 2014 $ (5,563,745) $ (5,336,687) $ (5,414,020) $ (5,395,458) $ (5,004,519) $ (4,252,020) 49,996 (42,011) (361,042) (230,732) (18,036) (118,658) $ (5,513,749) $ (5,378,698) __L(5,775,062} $ (5,626,190) $ (5,022,555) $ (4,370,678) $ 4,743,174 $ 4,744,348 4,940 4,487 333,626 132,359 - 31,130 1,040,000 813,431 $ 4,733,948 $ 4,761,213 4,751 6,019 56,705 61,584 28,500 - $ 4,768,989 $ 4,854,521 5,818 5,848 37,461 86,530 76,981 - - 25,000 (937,167) (728,351) 62,345 64,135 32,913 70,130 $ 5,184,573 $ 4,997,404 $ 4,886,249 $ 4,892,951 $ 4,922,162 $ 5,042,029 $ 557,995 $ 389,068 $ (590,116) $ (566,642) $ (115,270) $ 719,879 (887,171) (770,362) (298,697) (166,597) 14,877 (48,528) __L __(L29,1761 $ (381,294) $ (888,813) $ (733,239) $ (100,393) $ 671,351 -99- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS -100- Fiscal Year 2005 2006 2007 2008 General fund Reserved $ 48,593 $ - $ - $ 47,750 Unreserved 2,944,588 3,383,906 3,761,509 3,660,359 Nonspendable - - - - Unassigned - - - - Total general fund $ 2,993,181 $ 3,383,906 $ 3,761,509 $ 3,708,109 All other governmental funds Reserved $ 238,873 $ 262,438 $ 10,040,556 $ 10,033,342 Unreserved, reported in Special revenue funds - - - - Capital project funds 3,116,437 2,197,367 2,473,097 3,743,980 Nonspendable - - - - Restricted - - - - Assigned - - - - Unassigned - - - - Total all other governm6htal'f id $ 3,355,310 '$- 2445%S'05';' $.12,513,653 $ 13,777,322 Note: The City implemented GASB 54 mi cal }ear 2011, resulting m slniflcatit reclassificationof the components of fund balance. �, t Years prior to 2011 have not begin rostae&�. -100- Table 3 Fiscal Year 2009 2010 2011 2012 2013 2014 $ 500 $ 49,060 $ - $ - $ - $ - 3,555,224 3,477,932 - - 48,000 50,000 33,016 103,996 - - 3,440,227 3,574,468 3,943,342 3,981,475 $ 3,555,724 $ 3,526,992 $ 3,488,227 $ 3,624,468 $ 3,976,358 $ 4,085,471 $ 1,934,628 $ 96,333 $ - (17,650) 4,252,870 4,520,558 150,068 150,068 150,068 - 30,439 17,700 24,450 25,654 4,229,528 4,368,656 3,117,434 3,339,005 - (75,325) (52,437) - $ 6,187,498 `4,461,99 $ 3;39;515$ '3,�4,659 E -101- Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest on investments Miscellaneous Total revenues Expenditures General government Public safety Public works Culture and recreation Capital outlay Debt service Principal Interest and service charg Bond issuance costs Total expenditures CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS 2005 Fiscal Year 2006 2007 2008 $ 3,750,633 $ 4,141,539 $ 4,332,741 $ 4,582,602 334,720 382,408 256,472 195,419 2,432,656 365,732 224,286 753,605 50,752 45,450 50,819 50,753 90,149 79,040 77,777 53,369 6,928 895 418 - 201,024 327,921 621,234 641,846 1,134,429 1,110,860 1,077,012 1,053,916 8,001,291 6,453,845 6,640,759 7,331,510 1,169,096 1,264,509 1,253,223 1,443,549 1,124,620 1,257,998 1,263,921 1,352,254 570,080 626,048 718,350 760,287 167,519 169,411 190,931 229,259 4,307,721 2,571,204 1,123,796 2,164,366 Excess (deficiency) of revenues over(under)expenditures (333,945) (529,780) 599,412 (139,731) Other financing sources (uses) Transfers in 542,000 635,000 770,091 933,366 Sale of capital assets - - - - Proceeds from sale of bonds - - 10,000,000 1,310,000 Bonds refunded - - - - Discount on long -term debt issued - - (24,233) - Transfers out (559,000) (610,000) (913,819) (893,366) Total other financing sources (uses) (17,000) 25,000 9,832,039 1,350,000 Net change in fund balances $ (350,945) $ (504,780) $ 10,431,451 $ 1,210,269 Debt service as a percentage of Noncapital expenditures 12.7% 20.1% 26.3% 23.1% -102- 2009 2010 Fiscal Year 2011 2012 Table 4 2013 2014 $ 4,703,368 $ 4,717,204 $ 4,787,1.95 $ 4,783,939 $ 4,764,472 $ 4,864,095 127,883 154,113 174,119 175,087 204,600 270,841 66,411 173,334 72,968 76,102 76,544 891,055 41,649 100,899 102,500 121,625 92,549 90,825 52,968 55,806 52,635 66,230 59,294 64,290 - 333 - - - - 333,626 132,359 56,705 61,584 37,461 86,530 1,059,914 1,037,522 1,032,566 1,115,836 1,234,312 1,185,219 6,385,819 6,371,570 6,278,688 6,400,403 6,469,232 7,452,855 1,386,614 1,147,198 1,306,948 1,288,704 1,249,616 1,198,707 1,392,1.39 1,392,923 1,460,664 1,445,149 1,494,633 1,526,786 670,954 859,069 866,413 823,234 860,071 743,803 326,502 342,654 343,326 331,524 324,745 310,051 1,953,756 2,075,109 1,457,001 1,230,058 2,660,830 2,391,855 520,000 600,00 62 5(100 655,Of10 675,000 705,000 818,063 516,11 447 307. 439,429 `; 391;213 367,396 7,068,028 6,933,120 6,506,659 6,213,098 7,656,108 7,243,598 (682,209) (561,550) (227,971) 187,305 (1,186,876) 209,257 2,059,773 1,942,550 984,541 1,170,216 2,482,650 1,340,120 - 31,130 - - 317,182 - (8,100,000) (1,900,000) - - - - (1,019,773) (1,129,119) (984,541) (1,170,216) (2,482,650) (1,315,120) (7,060,000) (1,055,439) 317,182 25,000 $ (7,742,209) $ (1,616,989) $ (227,971) $ 187,305 $ (869,694) $ 234,257 22.4% 19.1% 18.4% 18.3% 18.5% 18.7% -103- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) TAX CAPACITY, MARKET VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY (Shown by year of tax collectability) Source: Hennepin County Assessor Note: Property in the county is reassessed annually. The county assesses property at approximately 90 percent of actual value for all types of real and personal property. 5 11ZS 2005 2006 2007 2008 Taxable market value Personal property $ 4,130,300 $ 4,361,600 $ 4,591,200 $ 4,336,600 Real estate 1,173,029,000 1,318,313,000 1,475,529,200 1,597,262,400 Total taxable market value $1,177,159,300 $1,322,674,600 $1,480,120,400 $1,601,599,000 Estimated actual value of taxable property $1,550,488,900 $1,416,341,600 $1,553,767,900 $1,645,188,300 Taxable market value as a percentage of estimated actual value 75.92% 93.39 % 95.26 % 97.35% Tax capacity Personal property $ 81,333 $ 85,635 $ 89,872 $ 84,780 Real estate 12,590,290 14,269,195 16,130,097 17,619,943 Total tax capacity 12,671,623 14,354,830 16,219,969 17,704,723 Contribution to fiscal disparities pool (213,988) (276,939) (308,590) (351,789) Receivable from fiscal disparities pool 379,072 399,944 407,687 445,780 Net tax capacity" 12,836,707 $4477,83 ` `rk 1(1;319,066 $ 17,798,714 Tax levies General 3,333,'9'6'T'- $ 3,678,592 $ 3,835,173 $ 4,056,917 Debt service , w 561,135 555,078 Total $ 3,830,656 $ 4,190,395 $ 4,396,308 $ 4,611,995 Direct tax rate General 25.971 % 25.408 % 23.501 % 22.793 % Debt service 3.870 3.535 3.439 1119 Total 29.841% 28.944 % 26.940 % 25.912 % Source: Hennepin County Assessor Note: Property in the county is reassessed annually. The county assesses property at approximately 90 percent of actual value for all types of real and personal property. 5 11ZS Table 5 2009 2010 2011 2012 2013 2014 $ 4,764,900 $ 4,629,900 $ 4,948,300 $ 5,291,700 $ 6,006,500 $ 6,068,600 1,651,054,700 1,631,938,000 1,507,900,600 1,430,712,101 1,367,209,584 1,345,804,540 $1,655,819,600 $1,636,567,900 $1,512,848,900 $1,436,003,801 $1,373,216,084 $1,351,873,140 $1,673,720,100 $1,638,118,400 $1,514,456,700 $1,453,867,700 $1,392,562,700 $1,371,752,400 98.93 % 99.91 % 99.89 % 98.77 % 98.61% 98.55 % $ 91,548 $ 88,848 $ 95,216 $ 102,084 $ 113,130 $ 114,632 18,305,114 18,087,557 16,620,629 15,761,142 15,025,751 14,770,327 18,396,662 18,176,405 16,715,845 15,863,226 15,138,881 14,884,959 (396,336). (432,995) (419,002) (389,965) (393,282) (393,620) 513,259 526,521 478,935 435,462 368,528 374,494 $ 18,513,585 $ 18;269 931', -,.. ,15,908,72 1 174,12 $ 14,865,833 f. $ 4,158,672 $ 4,160,292 Y $ 4,158,672 $� 4,18,672= $ 4,763319 $ 4,858,585 617,620 $ 4,776,292 $ 4,776,292 $ 4,763,319 $ 4,158,672 $ 4,763,319 $ 4,858,585 22.463 % 22.771 % 24.790 % 26.141 % 31.516 % 32.683 % 3.336 3.372 3.604 - - - 25.799 % 26.143 % 28.394 % 26.141 % 31.516% 32.683 % -105- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) PROPERTY TAX CAPACITY RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $1,000 OF TAX CAPACITY IN 2005 - 2014) 5[17m Overlapping Rates Year (1) Taxes School District Watershed District Payable City County No. 276 No. 277 No.3 No.4 Misc. 2005 29.841 % 44.172 % 21.989 % 16.250 % 1.276 % 1.375 % 7.382 % 2006 28.944 41.016 22.952 10.522 1.072 0.787 6.998 2007 26.940 39.110 24.793 9.911 1.121 0.743 7.310 2008 25.912 38.571 17.980 8.521 1.404 1.302 7.397 2009 25.799 40.413 17.186 8.284 1.489 1.246 7.154 2010 26.143 42.640 18.657 9.772 1.511 1.279 8.138 2011 28.394 45.840 21.274 10.900 1.606 1.352 9.172 2012 26.141 48.231 23.015 17.262 1.705 1.387 9.923 2013 31.516 49.461 24.487 18.119 1.769 1.523 10.089 2014 32.683 49.959 24.374 19.075 1.806 1.880 10.561 5[17m Table 6 Totals -107- School t 1 District School District No. 276 No. 277 Watershed Watershed Watershed District District District No.3 No.4 No.3 104.660 % 104.759 % 98.921 % 100.982 100.697 88.552 99.274 98.896 84.392 91.264 91.162 81.805 92.041 91.798 83.139 97.089 96.857 88.204 106.286 106.032 95.912 109.015 108.697 103.262 117.322 117.076 110.954 119.383 119.457 114.084 -107- t 1 -107- CITY OF SHOREWOOD, MINNESOTA Table 7 STATISTICAL SECTION (UNAUDITED) PRINCIPAL TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Source: Hennepin County Assessor -108- 2014 2005 Percent Percent Tax of Total Tax of Total Taxpayer Capacity Rank Tax Capacity Capacity Rank Tax Capacity Shorewood Village Shopping Center, Inc. (Towle Real Estate) $ 139,650 1 0.94 $ 71,790 3 0.57 % Big Box One, L.L.0 130,310 2 0.88 % 92,190 1 0.73 Two S Properties (Shurgard Storage) 104,640 3 0.70 73,610 2 0.58 Jack & Gretchen Norqual 86,264 4 0.58 South Lake Office Building LLC 66,690 5 0.45 - - - W of Shorewood LLC (Minnetonka Portable Dredging) 57,650 6 0.39 48,250 6 0.38 Beacon Bank 56,870 7 038 43,490 9 0.34 Elaine & Gary Jarrett 52,325 8 0.35 - - - Waterford Center LLP 51,630 9 0.35 45,110 8 0.36 The Mary Sue Simon Qprt 48,963 10 0.33 46,940 7 0.37 Minnetonka Country Club - - - 51,890 4 0.41 Kimberley & Prank Vennes 50,625 5 0.40 Thomas J. & Cynthia J. Redmond - - 41,875 10 0.33 Totals $ 794,992 5.35 % $ 565,770 4.47 % Source: Hennepin County Assessor -108- CITY OF SHOREWOOD, MINNESOTA Table 8 STATISTICAL SECTION (UNAUDITED) PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (1) Includes state paid property tax credits. (1) Percent Collection Percentage Collection of Total Fiscal Total of Current of Levy in subsequent Total Collections Year Levy Year's Levy Collected years Collections to Levy 2005 $ 3,830,656 $ 3,783,074 98.76 % $ 46,458 $ 3,829,532 99.97 % 2006 4,190,395 4,145,829 98.94 41,120 4,186,949 99.92 2007 4,396,308 4,320,289 98.27 75,258 4,395,547 99.98 2008 4,611,995 4,546,899 98.59 61,628 4,608,527 99.92 2009 4,776,292 4,649,904 97.35 121,741 4,771,645 99.80 2010 4,776,292 4,685,060 98.09 86,103 4,771,163 99.81 2011 4,763,319 4,706,900 98.82 52,046 4,758,946 99.80 2012 4,763,319 4,717,658 99.04 39,698 4,757,356 99.84 2013 4,763,319 4,720,748 99.11 36,288 4,757,036 99.87 2014 4,858,585 4,812,478 99.05 - 4,812,478 99.05 (1) Includes state paid property tax credits. -109- k � G -109- Fiscal Year 2005 2006 2007 2008 2009 2010 2011 .. 2012 2013 2014 CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Business - type Governmental Activities Activities General Obligation Bonds Lease General Total Revenue Capital Obligation Primary Bonds Leases Revenue Bonds Government 5.87 3,199 $ 12,010,000 $ 101,322 $ 2,745,000 $ 14,856,322 11,555,000 69,594 3,920,000 15,544,594 21,090,000 - 3,665,000 24,755,000 21,915,000 3,415,000 25,330,000 13,295,000 3,165,000 16,460,000 10,795,000 2,915,000 13,710,000 10,170,000 2,675,000 12,845,000 9,515,000 2,500,000 12,015,000 8,840,000 3,540,000 12,380,000 8,135,000 2,160,000 10,295,000 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See the Demographic and Economic Statistics table on page 115 for personal income and population data. 01011 Table 9 Percentage of Personal Per Income Capita i° i $ 1,967 4.12 2,073 6.31 3,301 5.87 3,199 4.14 l .� .. .. 1,876 ,�* ..,,:%'. 1,785 01011 Table 9 Percentage of Personal Per Income Capita 4.00 % $ 1,967 4.12 2,073 6.31 3,301 5.87 3,199 4.14 2,076 3.19 1,876 2.96 1,785 2.86 1,615 2.83 1,664 2.26 1,368 CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION {UNAUDITED} COMPUTATION OF DIRECT AND OVERLAPPING DEBT DECEMBER 31, 2014 Direct Debt City of Shorewood Overlapping Debt School District #276 School District #277 Hennepin County Henn Suburban Park District Henn Regional RR Authority Metropolitan Council Total Overlapping Debt Total Direct and Overlapping Debt Table 14 Gross Amount Bonded of Debt Used Percentage Net Debt For Net Debt Net Applicable to Applicable Calculation Debt District to District $ 8,135,000 $ 8,135,000 100.00 % $ 8,135,000 $ 108,717,548 $ 95,419,347 18.98 % $ 18,110,592 30,040,000 29,367,121 2.34 687,191 766,200,000 753,266,880 1.16 8,737,896 64,495,000 52,209,049 1.57 819,682 36,205,000 35,200,157 1.57 552,642 220,775,000 93,953,739 0.59 554,327 $ 1,226,432,548 $ 1,059,416,293 2.78 % $ 29,462,330 $ 1,234,567,548 $ 1,067,551,293 3.52 % $ 37,597,330 Sources : Market value data used to estimate applicable, ercentages` provided by The County Board of Equalization and Assessment. Debt outstandi" ng data provides byfthecounty ; Note: Overlapping governments-�are_tho'sTthat eoincide, at leasti in, part, with the,geagraphic 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 recognized that, when considering the government's ability to issue and repay long -term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. * The percentage of overlapping debt applicable is estimated using taxable market property values. Applicable percentages were estimated by determining the portion of the county's taxable market value that is within the City's boundaries and dividing it by the county's total taxable market value. -111- CITY OF SHOREWOOD, MINNESOTA STATISTICAL SECTION (UNAUDITED) LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Fiscal Year 2005 2006 2007 2008 Debt limit $ 23,543,186 $ 26,453,492 $ 29,602,408 $ 32,031,980 Total net debt applicable to limit - - - - Legal debt margin $ 23,543,186 $ 26,453,492 $ 29,602,408 $ 32,031,980 Total net debt applicable to the limit as a percentage of debt limit $ - $ - $ - $ - Note: Under state law, the City's outstanding general obligation debt should not exceed 3 percent of the market value of taxable property. The percentage was changed to 3 percent for fiscal year 2008, prior to that, the percentage was 2 percent. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for the extinguishment of those obligations. -112- Table 11 Fiscal Year 2009 2010 2011 2012 2013 2014 $ 33,116,392 $ 32,731,358 $ 45,385,467 $ 43,080,114 $ 41,196,483 $ 40,556,194 $ 33,116,392 1 $ 32,731,358 $ 45,385,467 $ 43,080,114 $ 41,196,483 $ 40,556,194 31911 CITY OF SHOREWOOD, MINNESOTA Table 1.2 STATISTICAL SECTION (UNAUDITED) PLEDGED - REVENUE COVERAGE LAST TEN FISCAL YEARS (1) Including interest and other income (2) Excluding depreciation and interest on bonds Capital Leases General Obligation Revenue Bonds Revenue from (1) Fiscal Net Debt Service Year Fiscal Gross (2) Revenue Debt Service Year Revenue Expenses Available Principal Interest Coverage 2005 $ 720,438 $ 300,858 $ 419,580 $ 950,000 $ 88,712 0.40 % 2006 1,264,892 223,243 1,041,649 275,000 79,456 2.94 2007 765,717 259,056 506,661 255,000 81,165 1.51 2008 857,890 278,164 579,726 250,000 172,050 1.37 2009 821,778 250,995 570,783 250,000 142,589 1.45 2010 700,678 238,780 461,898 250,000 125,407 1.23 2011 718,561 299,962 418,599 240,000 116,728 1.17 2012 809,746 313,620 496,126 175,000 100,668 1.80 2013 595,599 300,232 295,367 185,000 75,630 1.13 2014 . 542,606 401,476 141,130 220,000 19,708 0.59 (1) Including interest and other income (2) Excluding depreciation and interest on bonds -114- Capital Leases Revenue from Fiscal Property Debt Service Year Taxes Pn*ip i ,Interest Coverage 2005 29,842 7,702 1.00 2006 3.1544 31,728 5,816 1.00 2007 :� ' 73'406 »a: 69,594 3,812 1.00 2008 ;;° - 2009 - - - - 2010 - - - - 2011 - - - 2012 - - - 2013 - - - - 2014 - - - - Lease Revenue Bonds Revenue from Fiscal Lease Debt Service Year Payments Principal Interest Coverage 2005 $ 948,384 $ 355,000 $ 588,384 1.01 % 2006 1,040,693 455,000 589,056 1.00 2007 1,034,751 465,000 941,222 0.74 2008 1,037,241 485,000 970,065 0.71 2009 992,835 495,000 737,863 0.81 2010 982,037 555,000 457,840 0.97 2011 902,003 575,000 393,357 0.93 2012 978,744 605,000 372,230 1.00 2013 972,513 625,000 335,513 1.01 2014 969,650 650,000 335,513 0.98 -114- CITY OF SHOREWOOD, MINNESOTA Table 13 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS -115- Percent of Population Total Per Capita Which Has a Fiscal Personal Personal Median Bachelor's or Post Unemployment Year Population (1) Income (2) Income (2) Age (3) Graduate Degree (4) Rate (5) 2005 7,551 $ 371,695,434 $ 49,566 38.7 3.8 % 2006 7,499 377,246,826 49,566 38.7 3.3 2007 7,611 392,414,022 49,566 38.7 4.7 2008 7,917 431,535,825 54,425 39.0 7.3 2009 7,929 397,683,475 54,425 39.0 7.4 2010 7,307 429,651,600 58,800 39.1 5.1 2011 7,307 433,743,520 59,360 44.2 51.1 % 5.7 2012 7,312 420,264,512 57,476 44.1 49.8 4.6 2013 . 7,438 438,083,324 58,898 43.6 56.4 3.8 2014 7,524 455,961,924 60,601 44.5 61.8 3.0 -115- CITY OF SHOREWOOD, MINNESOTA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (1) 2014 Employer Employees Cub Foods 122 Minnewashta Elementary School 121 Xcel Energy 75 Beacon Bank 36 City of Shorewood 26 * Park Nicollet Clinic 20 * Total 400 Total City Employment 1,128 Table 14 2005 Percentage Percentage of Total City of Total City Rank Employment Employees Rank Employment 10.82 % N/A % 10.73 N/A 6.65 N/A 3.19 - N/A 2.30 - N/A 1.77 - N/A 35.46 % - - % Source: Minnesota Department of Employment and Economic Development * Includes part -time and temporary seasonal employees. N/A - indicates not available (1) Information for 2005 was not available. The table will be updated for future years. is -116- Function General government Public works Engineering Maintenance Culture and recreation Parks Economic developmen Water Sewer Municipal Liquor Total CITY OF SHOREWOOD, MINNESOTA FULL -TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS (1) Table 15 2006 2 2007 2 2008 2 2009 2 2010 2 2011 2 2012 2 2013 2 2014 13 1 13 1 13 1 12 1 12 1 10 1 10 9 9 9 9 6 6 6 6 6 6 6 6 6 5 5 5 5 6 6 6 6 13 5 5 5 5 5 5 5 5 3 3 3 3 2 2 2 2 Source: City of Shorewood (1) Information prior to 2006 was not maintained by the City. The table will be updated on a go- forward basis. -117- 00 N O cn N ' � O O cono vii O O H o cn o C� M o 0 00 O o 0 0 fn O N O fn 000 O N 0 O N V1 �D 1p l� M O ~ O r-i ri Vl O N � O r-i O Cl O 6 O O O \J O O O dO' O N \o O O N � � 110 00 O „t} cor) N Ely d O Q G� 0 0 Cl) C> Q Q 00 000 14:) 0 00 0 o 0 C) 0 Cd GO OO w cz 't 00 N t� O O C/) E•-1 Cif 00 N O O r P, C) t-- cn o 0 0 Q N N 000 O t a d O U Gy o Q h 0 0 0 d' M O O +-' M O O CO N O O U' U n N � O OOp "fl C O bq Y �' _cz .Y 3 � o � o O o M �O O O O bA u R3 sue, U y uo O O OA can YO cd Y 3 3 ° an as o 00 '-+ "t to t` N kn O m m kn N 00 110 O O 't t O N Ln Cl O O N m 0 \�o C1 N C1 CN O O V1 lam- N V1 O m rn V) N 00 1p O O It O N k4r) 01 O O N M O \D — O -+ m Cn O O 01 O 6\ O m kn m cn .--a vi N 00 l- O o rt O N O\ O d' N N O N 01 O -+ �t Ln r- kn 00 rt O O d- O (11 in C) N N o "D .-+ O O � O t` NLr) L m M 00 N O O 't O N O kn C, O d• N N N O M O O O .� Q N 4, O ra � NO m M +- N 00 O O d• O N O O Q U -+ tLf) r` N k !n Cl) M ,vl �a .N 00 O Cl O q" O N C a1 O d; �o O .-� •-� O W H ° C� o C4 va o o H C Q d' kn C` N Lf) r-+ V1 Cl) M .-ti V'f N 00 l-- O O It O N a V7 (01 O ct N N OO 110 C) Y , N N O 0°q H o d- Ln tn a, fn o �o o N Cl 0 U v P, s 40 m N D OA aS O c 0 O D Cd bA v p C) •�--• 0 C13 C1 ° ''� N lab cd a) ' sue-• c}tl c�C C11 C,3 x O" � �oi v w U L'o z #9B MEETING TYPE City of Shorewood Council Meeting Item Regular Meeting Title / Subject: Speed Limit Review Policy for Implementation Meeting Date: June 22, 2015 Prepared by: Paul Hornby, City Engineer Reviewed by: Larry Brown, Director of Public Works Attachments: WSB Memorandum Policy Consideration: Should the City of Shorewood approve and implement a speed limit review policy to provide a means to review, investigate, and establish proper speed limits on City roadways. Background: The City has been receiving an increase in requests from residents to review or reduce speed limits on City roadways. Staff recommends the City adopt a formal policy and process for review of speed limit concerns by residents and evaluation of existing speed postings that appear in conflict with roadway conditions. Staff recently discussed with the City Council that there are roadways within the City that do not have an enforceable speed, with the current posting. The City has also received some resident requests to post a reduced speed on specific roadways. Speed limit postings need to be determined in an appropriate manner, and should not be set artificially low or high. An artificially low speed limit becomes ignored, the posting can provide a false sense of safety for pedestrians, and is not enforceable. An artificially high presents a safety issue for the vehicle driver and pedestrians in the corridor. Establishment of a policy for review, evaluation and modification of speed limit postings need to be based upon guidelines from Minnesota Statutes, MnDOT policies, the MUTCD and engineering judgement. Included with the Speed Limit Review Policy is a Technical Memorandum entitled “ Speed Control Evaluation Process”, prepared by WSB in May of 2013, when speed issues were discussed for Country Club Road. This memorandum identifies the process and a means to evaluate several traffic calming measures for roadways meeting speed and volume criteria. Financial or Budget Considerations: Council does provide a budget each year for sign replacement. Speed zone review and recommendation from the Engineer is generally not included in the CIP, but the review of speed limits can be authorized at the discretion of the Council. Options: Staff has identified the following options for Council review of the DRAFT Policy as prepared by WSB: 1.Take no action at this time 2.Direct staff to revise the policy 3.Adopt the policy for implementation Mission Statement: The City of Shorewood is committed to providing residents quality public services, a healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial management through effective, efficient, and visionary leadership. Page 1 Recommendation / Action Requested: Staff recommends Council review the DRAFT Speed Limit Review Policy and provide direction to staff. Council direction should be made with consideration of guidelines from Minnesota Statutes, MnDOT policies, the MUTCD and engineering judgement. 4¤¢§¨¢ « -¤¬®± £´¬ To: Larry Brown Copy: Paul Hornby, PE City of Shorewood Director of Public Works From: Chuck Rickart, PE, PTOE Chad Ellos, PE Date: May 2013 File: WSB No. 01459-620 Subject: Speed Concern Evaluation Process (Council Approved 05/28/2013) The purpose of this memorandum is to provide a process to evaluate citizen requests related to speed concerns on City roadways. The primary goal is to have set guidelines and procedures in place to address these concerns. The City of Shorewood believes it is important to process requests in a timely manner. Therefore, t 1 . 1. SPEED CONCERN RECEIVED The first step in initiating the process is a speed concern received by City staff from a citizen. current practice is to deal with the request on a direct basis acitizen within a short time period. With all speed concerns, the Police department will be notified asked to provide additional speed enforcement. 2.ROADWAY ELIGIBILITY In order for a roadway to be eligible for traffic calming, it ne Classified as a local or collector Length greater than 1,000 feet Traffic volumes greater than 1,500 vehicles per day Posted speed of 30 mph or less Cannot be a cul-de-sac 3.STAFF EVALUATION If the roadway is eligible for traffic calming, a preliminary speed study will be conducted using data th collected by a speed awareness display (SAD) or road tubes. In analyzing the speed data, the 85 th percentile speed of the collected data will be calculated. The 85 percentile speed is defined as the 2 speed at or below which 85 percent of the traffic is moving. 1 Please be aware that during the winter months, it may be difficu conditions. Request received during the winter months will be p 2 Federal and State spee of motorists travel at or below. Experience has shown that the reasonable speed limit. Therefore, it can be expected that on a typical roadway, approximately may be traveling at speeds greater than the posted speed limit. St. Cloud Minneapolis St. Paul Equal Opportunity Employer wsbeng.com th f the 85 percentile speed is greater than 33 mph on a roadway posted at 30 mph, a speed concern will th be identified at that location. If the 85 Percentile speed is greater than 33 mph but less than 35 mph, the speed concern will be brought before the City Council to consider the feasibility of low cost measures as a means to calm traffic. Some low cost traffic calming measures include: Education and enforcement Lane narrowing (striping or tubular marker island) Pavement messages (30 MPH, SLOW, etc.) Additional signage th If the 85 Percentile speed is greater than 35 mph, the speed concern will be brought before Council to consider potential engineering solutions as a means to calm traffic. These solutions are typically higher in cost. Examples of possible solutions include: Lane narrowing Raised concrete or landscaped island / median o Curb extensions Mid-block chockers (concrete or planters) o Neckdowns (Bump-outs at intersections) o Chicanes o Roundabouts Full size roundabout o Mini-roundabout o Neighborhood Traffic Circle o Speed Awareness Display signs Raised intersection Roadway alignment revisions (adding curves to a straight roadway 4.FUNDING Upon the recommendation of City staff and approval by the City C be implemented by the City once funding is secured. Possible funding sources include: Special request from the City Council Assessment process 5.REVIEW PERIOD Following the installation of the traffic calming measure(s), a review period for up to nine months will be initiated to measure its effectiveness and determine if the objectives werAt the end of the review period, an evaluation will be conducted based on the following criteria: If a speed concern is still perceived, speed data will once again be collected to determine if overall traffic speeds were reduced. Fire and Police departments will be consulted to provide input a experienced. Field observations and/or discussions may also be conducted with transit, waste disposal, and other service providers to ensure that services pr significantly impacted. If the objectives are satisfied as evidenced in the evaluation, objectives are not met, City staff may prepare alternatives and seek further direction from the City Council. {¦;;7 /-;© 9ÝÒ·z t©-;2 | Page The graphic below represents the decision diagram used in the sp Speed Concern Received Posted Speed 20mph 25mph 30mph Roadway NO Low Cost Eligible for >23mph >28mph >33mph No further action Improvements Traffic Calming Engineering >25mph >30mph >35mph Solutions YES Staff Evaluation 5· -;-·z 7 ;ÝÒ·z Additional Speed Enforcement th 85 NO if perceived speed concern Percentile Review Period is still present Speed > 33 (No further action by City Council) mph YES th 85 Council to consider Council to consider NO YES Percentile low cost traffic potential engineering Speed > 35 calming measures solutions mph Feasibility, Funding, and Installation {¦;;7 /-;© 9ÝÒ·z t©-;3 | Page #9D MEETING TYPE City of Shorewood Council Meeting Item Regular Meeting Title / Subject: Excelsior Boulevard Trail Contract Modifications Meeting Date: June 22, 2015 Prepared by: Paul Hornby, City Engineer Reviewed by: Attachments: None Background: The City Council previously discussed and authorized staff to work with the MCES to modify the trail design, specifically removing the retaining wall from the contract due to discovery of unsuitable soils below the proposed retaining wall. The City approved an Agreement with Stantec (the MCES consultant) to prepare a quote package for the MCES contractor to provide a change order bid. The proposed construction modifications remove the retaining wall from the project and add an Anchor- Reinforced Vegetation System (AVRS) to stabilize the TH 7 slope above the trail. Costs to construct the ARVS have consistently been estimated by the MCES to be similar to the cost of the retaining wall as approved by the City. The Contractor has provided a quote to perform the work and the MCES has requested staff present the contract modifications proposed to the Council for their earliest consideration. Financial or Budget Considerations: The ARVS improvements include the following items and associated estimated unit costs: 1.Remove - Modular Block retaining wall from contract ($138,790.23) 2.Add - Wall design costs incurred, surveying, soil boring support, insurance costs (contract extension), de-mobilization and mobilization costs – Lump Sum $ 15,273.80 3.Add – Traffic Control (if needed) – Lump Sum $ 3,213.00 4.Add – Fine Grading Slope – Lump Sum $ 3,355.00 5.Add – ARVS – Square Foot $ 113,860.50 6.Add - Construction Contingencies $ 3,087.93 Grand Total Amount $ 0.00 Recommendation / Action Requested: Staff requests the Council authorize the Engineer to direct the MCES to make the construction modifications as indicated above to the Excelsior Boulevard Trail between Manor Road and Barrington Way. Mission Statement: The City of Shorewood is committed to providing residents quality public services, a healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial management through effective, efficient, and visionary leadership. Page 1 CITY OF SHOREWOOD  5755 Country Club Road Shorewood, Minnesota 55331 952-960-7900  Fax: 952-474-0128 www.ci.shorewood.mn.us cityhall@ci.shorewood.mn.us Re: Trail Schedule Update – Galpin Lake Road and Smithtown Road (East) Prepared by Paul Hornby and Brad Nielsen Galpin Lake Road Walkway Schedule – PROJECT IS POSTPONED TO 2016 Planning Commission recommendation to Council re trail segment for following year Council authorizes preparation of survey and Feasibility Report Survey (30 days) – May  Feasibility Report (30 days) – June  Planning Commission review of feasibility report and trail walk – July  Planning Commission recommendation to Council re Feasibility Report  Council approves Feasibility Report  Planning Commission holds Neighborhood Meeting (Open House) Council award of land acquisition services and authorizes preparation of Plans and Specifications Preparation of Plans and Specifications (90 days) 95% Complete submittal to MnDOT 7/01/14  MnDOT Review Complete 7/31/14  CC Authorization to Advertise for bids 6/23/14  Open Bids 8/19/14  CC consideration of Award 8/25/14  Land Acquisition Process (start approx. mid-way through plans and specs) Land Acquisition process not required due to design modifications o Individual temporary easements or rights of entry may be required o Reduces project schedule o 10/30/14  Neighborhood post-bid meeting N/A  City possession of easements/letter of compliance  Groundbreaking Ceremony TBD  Begin Construction TBD  Construction substantially complete – Phase 1 Construction TBD  Construction substantially complete – Phase 2 Construction TBD  Ribbon Cutting Ceremony TBD  Restoration complete TBD Page 2 Trail Schedule Update – Galpin Lake Road and Smithtown Road (East) Smithtown Road East (LRT Trail to Country Club Road) Walkway Schedule 6/03/14 Planning Commission recommendation to Council re trail segment for following year 6/23/14 Council authorizes preparation of survey and Feasibility Report /14/14 – 9/10/14  Survey (30 days) – (In Process) 7 /18/14–10/10/14  Feasibility Report (30 days) – 8 10/21/14  Planning Commission review of feasibility report and trail walk 10/21/14  Planning Commission recommendation to Council re Feasibility Report 10/27/14 Council approves Feasibility Report 10/30/14 Planning Commission holds Neighborhood Meeting (Open House) 12/08/14 Council award of land acquisition services and authorizes preparation of Plans and Specifications 12/11/14 - Preparation of Plans and Specifications (90-120 days) (95% complete) 5/31/15 2/1/15 -  Land Acquisition Process (start approx. mid-way through plans and specs) 8/31/15 Complete parcel descriptions and legal descriptions o Review proposed easements with staff/attorney o Letters to property owners regarding survey staking o Field stake proposed easements for Appraiser/RW Agent o Easement viewing – parcel owner and RW Agent on-site o Appraisal information o Appraisal review o Council considers resolution to authorize staff to make offers and eminent domain schedule o Prepare and deliver offers to parcel owners o 3/23/15 Begin eminent domain action  /03/15 Neighborhood informational meeting (Open House) 6 Council approves Plans and Specifications and authorizes ad for Bids 7/13/15  8/21/15 Receive bids for construction 8/24/15 City possession of easements/letter of compliance Council awards Construction Contract 8/24/15  8/27/15 Neighborhood preconstruction meeting Groundbreaking Ceremony 8/27/15  9/07/15 Begin Construction 6/30/16 Construction substantially complete Ribbon Cutting Ceremony 6/30/16  6/15/16 Restoration complete #11A.2. MEETING TYPE City of Shorewood Council Meeting Item Regular Meeting Title / Subject: Recap of the Spring Cleanup Event Meeting Date: June 22, 2015 Prepared by: Pat Fasching Reviewed by: Jean Panchyshyn, Larry Brown CC: Julie Moore Background: On May 16, 2015, the City of Shorewood conducted the annual Spring Cleanup Drop-off rd event at Public Works. It included the 3annual paper shredding event which was held in the City Hall parking lot. The following are tallies that have been received from our vendors:  Shred-N-Go, Inc.: 9364 pounds of paper shredded  Republic Services: 5 Loads of miscellaneous refuse or, 13.74 tons!  Certified Appliance: 66 Appliances, 7 Water Softeners, 56 Power Equipment Items, 798 lbs of Batteries, 10,392 lbs of Electronics, 668 Fluorescent bulbs, 42 Tires, 17 Propane Tank, 23 Smoke/Carbon Dioxide Detectors 134 lbs of Ballasts, 3 Thermostats  Re-Cycle of Mpls: Bicycles – 72 bicycles were rescued for a total weight of 1800 pounds, for a 7500 pound reduction in CO2 emissions for the State of MN Expenses: Shred-N-Go, Inc. Paper Shredding Truck for 3 hours $400.00 Republic Services Labor/Deliver/Hauling/Disposal 3,581.09 Certified Appliance Recycling Electronics $.31lb = $3,221.52; Water Softeners - $140.00; Power Equipment - $560.00; Fluorescent bulbs - $540.00 Total Certified Appliance: 5,692.52 Re-Cycle of Mpls No Charge to the City for Bicycle Collection and Recycling Warning Lites of MN Traffic Control and Cones for PW and City Hall 580.00 Miscellaneous Lunch/Refreshments 174.10 *Total Expenses: $10,427.71 Revenue Collected: From Residents $5,636.00 Scrap Metal ____ 110.00 Total Revenue: $5,746.00 *This does not include staffing expense Connection to Vision / Mission: This service provides our residents means to properly dispose of waste products to protect our environment. Mission Statement: The City of Shorewood is committed to providing residents quality public services, a healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial management through effective, efficient, and visionary leadership. Page 1