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06-10-2020 Council Packet
AGENDA LITTLE CANADA CITY COUNCIL WEDNESDAY, JUNE 10, 2020 CALL TO ORDER – Workshop Meeting – 6:00 p.m. Roll Call 1. Proposed Amendments to the Nuisance Code 2. Strategic Plan Update Adjourn CALL TO ORDER – Regular Meeting – 7:30 p.m. Roll Call Approval of Minutes May 27, 2020 Regular Council Meeting Announcements PRESENTATIONS 1. 2019 Comprehensive Annual Financial Report (CAFR) by Auditor CliftonLarsonAllen CONSENT AGENDA 2. Approval of the Vouchers 3. Approve Change Order No.1 and Partial Pay Request No. 2 to Custom Builders, Inc. for Little Canada Road Streetscape Imp. Project 2020-02 4. Approve Change Order No. 1 and Partial Pay Request No. 1 to New Look Contracting for County Road D & Greenbrier Street Improvement Projects 2019-01 & 2019-02 5. Approve Establishment of the Absentee Ballot Board STAFF REPORTS 6. Approval of Local Water Supply Plan 7. Replacement of HVAC Units at City Hall ADJOURN STAFF REPORT TO: Mayor Keis and Members of the City Council FROM: Brenda Malinowski, Finance Director DATE: June 4, 2020 RE: 2019 Comprehensive Annual Financial Report ACTION REQUESTED Receive and accept the 2019 Comprehensive Annual Financial Report (CAFR). BACKGROUND Michelle Hoffman and Lance Lauinger with the City’s auditing firm, CliftonLarsonAllen (CLA) will present the 2019 CAFR highlights. The auditors have provided an unmodified opinion on the financial statements, which is the highest opinion that can be given. The City is required by Minnesota law to have an external audit completed annually. The audit provides reasonable assurance to the City Council and stakeholders that the financial statements are free of material misstatement and that the financial statements are complete and reliable. The Transmittal Letter (pages 3-8) and the Management’s Discussion and Analysis (pages 19- 28) in the CAFR provide an overview of the 2019 City’s financial operations and results. Council will have the opportunity to ask questions after the presentation. STAFF RECOMMENDATION Receive and accept the 2019 Comprehensive Annual Financial Report. ATTACHMENTS • Governance Communication • Internal Control Letter • Legal Compliance Letter • 2019 Comprehensive Annual Financial Report Honorable Mayor and Members of the City Council City of Little Canada Little Canada, Minnesota We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Little Canada (the City) as of and for the year ended December 31, 2019, and have issued our report thereon dated May 26, 2020. We have previously communicated to you information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. Professional standards also require that we communicate to you the following information related to our audit. Significant audit findings Qualitative aspects of accounting practices Accounting policies Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. During the year ended December 31, 2019, the City changed accounting policies related to its accounting for fiduciary activities by adopting Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities. The statement provides guidance regarding the identification of fiduciary activities for accounting and reporting purposes and how those activities should be reported. As a result the City’s Developer Deposit Fund was reported in the General Fund in 2019. In 2018 it was reported as an agency fund. This change did not impact beginning fund balance or net position. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: Management’s estimate of the valuation of investments is based on published market values as of December 31, 2019. We evaluated the key factors and assumptions used to develop the value of investments in determining that it is reasonable in relation to the financial statements taken as a whole. Honorable Mayor and Members of the City Council City of Little Canada Page 2 Management’s estimate of the depreciation expense on capital assets is based on management’s estimated useful lives of those assets. We evaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of the City’s liability for compensated absences is based on employee wage information and the City’s policies of earning vacation and sick pay. We evaluated the key factors and assumptions used to develop the liability in determining that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of the City’s proportionate share of PERA’s GERF net pension liability as well as the related deferred inflows and outflows is based on guidance from GASB Statement No. 68, and the plan’s allocation tables. The plan’s allocation tables allocate a portion of the plan’s net pension liability based on the City’s contributions during the plan’s fiscal year as a percentage of total contributions received for the related fiscal year by the plan. We evaluated the key factors and assumptions used to develop the liability in determining that it is reasonable in relation to the financial statements taken as a whole. Financial statement disclosures Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. There were no particularly sensitive financial statement disclosures. The financial statement disclosures are neutral, consistent, and clear. Difficulties encountered in performing the audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Uncorrected misstatements Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management did not identify and we did not notify them of any uncorrected financial statement misstatements. Corrected misstatements None of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. Disagreements with management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. No such disagreements arose during our audit. Management representations We have requested certain representations from management that are included in the management representation letter dated May 26, 2020. Honorable Mayor and Members of the City Council City of Little Canada Page 3 Management consultations with other independent accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditors’ opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Significant issues discussed with management prior to engagement We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to engagement as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our engagement. Other information in documents containing audited financial statements With respect to the required supplementary information (RSI) accompanying the financial statements, we made certain inquiries of management about the methods of preparing the RSI, including whether the RSI has been measured and presented in accordance with prescribed guidelines, whether the methods of measurement and preparation have been changed from the prior period and the reasons for any such changes, and whether there were any significant assumptions or interpretations underlying the measurement or presentation of the RSI. We compared the RSI for consistency with management’s responses to the foregoing inquiries, the basic financial statements, and other knowledge obtained during the audit of the basic financial statements. Because these limited procedures do not provide sufficient evidence, we did not express an opinion or provide any assurance on the RSI. With respect to the combining and individual fund statements and schedules (collectively, the supplementary information) accompanying the financial statements, on which we were engaged to report in relation to the financial statements as a whole, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period or the reasons for such changes, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We have issued our report thereon dated May 26, 2020. The introductory and statistical sections accompanying the financial statements, which are the responsibility of management, were prepared for purposes of additional analysis and are not a required part of the financial statements. Such information was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we did not express an opinion or provide any assurance on it. Our auditors’ opinion, the audited financial statements, and the notes to financial statements should only be used in their entirety. Inclusion of the audited financial statements in a document you prepare, such as an annual report, should be done only with our prior approval and review of the document. * * * Honorable Mayor and Members of the City Council City of Little Canada Page 4 This communication is intended solely for the information and use of the City Council and management of the City of Little Canada, and is not intended to be, and should not be, used by anyone other than these specified parties. CliftonLarsonAllen LLP Minneapolis, Minnesota May 26, 2020 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of the City Council City of Little Canada Little Canada, Minnesota We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Little Canada (the City), as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated May 26, 2020. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Honorable Mayor and Members of the City Council City of Little Canada Page 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. CliftonLarsonAllen LLP Minneapolis, Minnesota May 26, 2020 INDEPENDENT AUDITORS’ REPORT ON MINNESOTA LEGAL COMPLIANCE Honorable Mayor and Members of the City Council City of Little Canada Little Canada, Minnesota We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Little Canada, Minnesota as of and for the year then ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated May 26, 2020. The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minnesota Statute § 6.65 contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our audit considered all of the listed categories. In connection with our audit, nothing came to our attention that caused us to believe that the City of Little Canada, Minnesota failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities, except as described in finding 2019-001. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City of Little Canada, Minnesota’s noncompliance with the above-referenced provisions, in so far as they relate to accounting matters. Management’s written response to the legal compliance finding identified in our audit has been included in the schedule of findings and responses. We did not audit management’s response and, accordingly, we express no opinion on it. The purpose of this report is solely to describe the scope of our testing of compliance relating to the provisions of the Minnesota Legal Compliance Audit Guide for Cities and the results of that testing, and not to provide an opinion on compliance. Accordingly, this communication is not suitable for any other purpose. CliftonLarsonAllen LLP Minneapolis, Minnesota May 26, 2020 Honorable Mayor and Members of the City Council City of Little Canada Page 2 SCHEDULE OF FINDINGS AND RESPONSES 2019-001 Type of Finding: Minnesota Legal Compliance Finding Criteria: Minnesota Statute §471.425, requires municipalities to pay each vendor obligation according to the terms of the contract, or if no contract terms apply, within the standard payment period, which is defined as within 35 days from the date of receipt for municipalities which have regularly scheduled board meetings at least once a month. Condition/Context: We noted one disbursement out of our testing sample of twenty five that was not paid within the standard payment period. This disbursement was paid 36 days after the date of the invoice. Effect: The City was not in compliance with state statutes related to payment of local government bills. Cause: An invoice received by another department was not forwarded to the finance department in time for the invoice to be processed and paid within the standard payment period, as defined by Minnesota Statutes. Recommendation: We recommend the City make efforts to ensure that invoices are routed to the City’s finance department in time to be processed and paid within the standard payment period, as defined by Minnesota Statutes. Views of Management: Management agrees with the finding and recommendation and will remind departments regularly to route invoices to the City’s finance department. CITY OF LITTLE CANADA, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2019 PREPARED BY THE FINANCE DEPARTMENT OF THE CITY OF LITTLE CANADA, MINNESOTA BRENDA MALINOWSKI DIRECTOR OF FINANCE THIS PAGE INTENTIONALLY LEFT BLANK CITY OF LITTLE CANADA, MINNESOTA TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2019 INTRODUCTORY SECTION LETTER OF TRANSMITTAL 3 OFFICIAL DIRECTORY 9 ORGANIZATIONAL CHART 10 CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING 11 FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT 15 MANAGEMENT’S DISCUSSION AND ANALYSIS 19 BASIC FINANCIAL STATEMENTS STATEMENT OF NET POSITION 31 STATEMENT OF ACTIVITIES 33 GOVERNMENTAL FUNDS BALANCE SHEET 34 RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION – GOVERNMENTAL ACTIVITIES 37 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 38 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES – GOVERNMENTAL ACTIVITIES 41 PROPRIETARY FUNDS STATEMENT OF NET POSITION 42 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 43 STATEMENT OF CASH FLOWS 44 NOTES TO BASIC FINANCIAL STATEMENTS 46 REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GENERAL FUND – BUDGET TO ACTUAL (GAAP BASIS) 80 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – ECONOMIC DEVELOPMENT FUND – BUDGET TO ACTUAL (GAAP BASIS) 82 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION 83 PERA SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY 85 PERA SCHEDULE OF CITY CONTRIBUTIONS 86 CITY OF LITTLE CANADA, MINNESOTA TABLE OF CONTENTS (CONTINUED) YEAR ENDED DECEMBER 31, 2019 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET 88 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 89 NONMAJOR SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET 92 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 93 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – PARKS AND RECREATION 94 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – CABLE TV 95 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – RECYCLING/TRASH 96 NONMAJOR DEBT SERVICE FUNDS COMBINING BALANCE SHEET 98 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 99 NONMAJOR CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET 102 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 104 STATISTICAL SECTION (UNAUDITED) NET POSITION BY COMPONENT 110 CHANGES IN NET POSITION 112 FUND BALANCES, GOVERNMENTAL FUNDS 114 CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS 115 TAX REVENUE BY SOURCE, GOVERNMENTAL FUNDS 116 TAX CAPACITY VALUE AND ESTIMATED MARKET VALUE OF TAXABLE PROPERTY 117 DIRECT AND OVERLAPPING TAX RATES 118 PRINCIPAL PROPERTY TAXPAYERS 119 PROPERTY TAX LEVIES AND COLLECTIONS 120 RATIOS OF OUTSTANDING DEBT BY TYPE 121 RATIOS OF GENERAL BONDED DEBT OUTSTANDING 122 CITY OF LITTLE CANADA, MINNESOTA TABLE OF CONTENTS (CONTINUED) YEAR ENDED DECEMBER 31, 2019 DIRECT AND OVERLAPPING DEBT 123 LEGAL DEBT MARGIN INFORMATION 124 DEMOGRAPHIC AND ECONOMIC STATISTICS 125 PRINCIPAL EMPLOYERS 126 FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION 127 OPERATING INDICATORS BY FUNCTION 128 CAPITAL ASSET STATISTICS BY FUNCTION 129 THIS PAGE INTENTIONALLY LEFT BLANK INTRODUCTORY SECTION 1 THIS PAGE INTENTIONALLY LEFT BLANK 2 515 Little Canada Road, Little Canada, MN 55117-1600 (651) 766-4029 / FAX: (651) 766-4048 www.littlecanadamn.org MAYOR John Keis COUNCIL Rick Montour Michael McGraw Tom Fischer Christian Torkelson May 26, 2020 City of Little Canada Mayor and City Council Citizens of Little Canada Little Canada, Minnesota Minnesota statutes require all cities to submit an annual audited financial statement to the Office of the State Auditor. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report for the City of Little Canada for the year ended December 31, 2019. The Comprehensive Annual Financial Report is prepared in accordance with Generally Accepted Accounting Principles (GAAP) as established by the Governmental Accounting Standards Board (GASB), and the American Institute of Certified Public Accountants, State Auditor’s Office and the state of Minnesota, as well as in accordance with the recommendations of the Government Finance Officers Association of the United States and Canada (GFOA). Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control standards that it has established for this purpose. Because the cost of an internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute assurance that the financial statements are free of any misstatements. City of Little Canada’s financial statements have been audited by CliftonLarsonAllen LLP, a firm of licensed certified public accountants appointed by the City Council. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the year ended December 31, 2019 are free from material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles and significant estimates used by management; and evaluating the overall financial statement presentation. Based upon the audit, the independent auditor concluded that there was a reasonable basis for rendering an unmodified opinion that the City’s financial statements, as of and for the year ended December 31, 2019, are presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. Management’s discussion and analysis (MD&A) immediately follows the independent auditors’ report and provides a narrative introduction, overview, and analysis of the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. 3 PROFILE OF THE CITY The City of Little Canada was originally part of New Canada Township that was created in 1858. In 1953, a portion of the township was incorporated as the Village of Little Canada. In 1974, pursuant to Minnesota Statutes, Little Canada was designated a statutory city. Little Canada is a northern suburb of St. Paul and located wholly in Ramsey County. The land within the City’s boundaries covers 4.48 square miles of which 3.89 square miles is land and .59 square miles is water. The 2010 U.S. Census population for the City was 9,773 which was a .17% decrease from the 2000 census (9,790). The City operates under the “Optional Plan A” form of government as defined in Minnesota Statutes. Under this plan, the City Council is composed of an elected mayor and four elected council members. The five- member City Council is responsible for policy-making and legislative authority. The City Council is responsible for, among other things, passing ordinances, appointing committees, and hiring the City Administrator. The City Administrator is responsible for carrying out the policies and ordinances of the City Council and for overseeing the day-to-day operations of the City government. The City Council is elected on a nonpartisan basis. The Mayor serves a two-year term and each of the Council Members is elected for a four-year term. Elections are held in the fall of even numbered years and the Mayor and City Council are elected at-large. The City provides a variety of municipal services which include: police protection, fire protection, street maintenance, parks & recreation, refuse collection & recycling, building inspection, planning and zoning, public improvements, general administrative services, public water and sewer utilities. The City’s financial planning and control foundation is the annual budget. The budget incorporates the City’s financial policies related to operations, management policy, debt management, reserves, investments, and amendments to the overall documents. All departments and agencies of the City submit requests for appropriation to the City Administrator by August of each year. The City Administrator and Finance Director use the requests as the starting point for developing a preliminary balanced budget to be presented to the City Council prior to September of each year. Before the end of September, the City Council sets the preliminary tax levy, which must take into consideration the maximum tax levy adopted at the annual meeting and must be certified prior to September 30th of each year. This preliminary tax levy can be lowered but not increased before the final budget and levy are adopted in December. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is best understood when it is considered from the broader perspective of the environment within which City of Little Canada operates. COVID -19 Pandemic The COVID-19 is an unprecedented challenge worldwide, across the United States, in the State of Minnesota and in the community of Little Canada. The City has been responding to all aspects of COVID- 19 including the financial implications on the 2020 budget. The City has designated $60,000 of the General Fund balance as of December 31, 2019 for possible revenue decreases and expenditure increases that the City may incur due to the COVID-19 Pandemic. At this time, it is not anticipated that any other significant financial resources will need to be used in 2020 to deal with the financial implications of this pandemic. 4 LOCAL ECONOMY As part of the Minneapolis/St. Paul metropolitan area, the City has experienced a strong and favorable economic environment for a number of years. The metropolitan region has a strong and diversified business base, including companies with headquarters or divisions located within City of Little Canada’s boundaries or in close proximity that include Abbott Laboratories (formerly St. Jude Medical), Slumberland, HOM Furniture, Frattalone Companies, and Q3 / Primoris Services Corporation. These businesses benefit from access to a highly educated work force; access to high technology; available capital and an excellent transportation system including major state highways and federal interstate highways which allows easy mobility in any direction. The location of Little Canada and access to transportation is a very positive factor in making the City an ideal location for commercial/industrial development and redevelopment. BIX Produce relocated to the City of Little Canada in 2019 and became our third largest employer with approximately 425 employees. BIX partners with over 30 local farmers and producers to source quality fruits, vegetables and other products and delivers a wide selection of locally grown products. BIX works closely with local purveyors to ensure that crops are picked at the peak of freshness. The City is located in a region with a varied economic base which has resulted in an unemployment rate that has consistently remained near or below national and state averages. While the national unemployment rate stood at 3.7% at the end of 2019, Minnesota’s unemployment rate was 3.2%, the City has a regional unemployment rate of 3.0% according to the Minnesota Department of Economic Security. The City is in a strong financial position. Because of its strong mixed-use tax base and conservative fiscal policies, the City continued in 2019 to have a tax capacity rate that is 6th lowest out of 19 municipal taxing jurisdictions in the county. The strength of the City’s financial condition is also reflected in its bond rating of Aa+ from Standard & Poor’s that was achieved in 2014. LONG-TERM FINANCIAL PLANNING The Metropolitan Council requires all cities in the seven-county metropolitan area to have a Comprehensive Plan. The Metropolitan Council and state statutes require cities to update their plans every 10 years. The Little Canada Comprehensive Plan serves as a guide for orderly and economic private and public improvement. The scope of the plan is intended to include almost every factor that influences investments or improvements in the City. 2008 marked the completion of the City’s most recent Comprehensive Plan. A new plan will be approved in 2020. The City has long utilized Capital Improvement Planning (CIP) for facilities, equipment, and infrastructure to enable us to plan and fund needed capital expenditures. This is a five-year program that is updated and approved annually. In 2019, the CIP process was updated in order to receive more input from the Council. Expenditures beyond the five-year period are included in the CIP to help ensure significant needs beyond the five-year period are not missed. The excess General Fund balance (balance available after complying with the General Fund Balance Policy) is annually allocated to the General Capital Improvement Fund (GCIF). 80% of Local Government Aid (LGA) received from the state of Minnesota also goes into the GCIF rather than the General Fund due to the potential volatility of this revenue source. The City also levies a substantial amount for the Infrastructure Fund in addition to pledging electric franchise fee revenues to help fund street and storm water system construction. By funding a large portion of depreciation from our Water and Sewer funds, we have also provided a stable source of revenue to address infrastructure needs in these areas. 5 DEVELOPMENT ACTIVITY Residential and commercial/industrial new construction increased during 2019 with 304 permits issued with a total valuation of $31,847,055 as compared to 260 permits with a total value $16,522,622 in 2018 (93% increase in valuation). The increase was primarily due to three significant permits for the construction of a single-story office building, the conversion of a retail facility into a production facility and the remodeling of a school. The City does not expect the significant construction activity for 2020 that was experienced in 2019. There are not any major projects on the horizon at this time and few undeveloped residential lots remaining. The City continues to review strategies regarding community development, looking at how to best utilize sites in the City that would be candidates for new development and redevelopment projects. The City is also evaluating the creation of a housing rehabilitation program to help maintain housing stock. With the increase in building activity and the continued recovery of the housing market, the City expects to see continued growth in our annual market value as indicated in the chart below. MAJOR INITIATIVES Cooperative Efforts with Other Entities/Jurisdictions: The City contracts with the Little Canada Fire Department for fire services. LCFD is an independent corporation that provides contracted service only to Little Canada. The City contracts for police protection through the Ramsey County Sheriff’s Department. We are one of seven jurisdictions in the County to participate in the relationship. Managers/Administrators of each participant jurisdiction meet monthly to review operations, set budgets, and discuss service level in a cooperative manner that helps keep police costs as low as possible while meeting the public safety needs of our communities. The City is 1 of 45 jurisdictions that contracts with Roseville for information technology (IT) services. This arrangement creates an “economy of scale” that enables us to obtain excellent services that would be far more expensive for comparable quality. $720,000,000 $770,000,000 $820,000,000 $870,000,000 $920,000,000 $970,000,000 $1,020,000,000 $1,070,000,000 $1,120,000,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Estimated Market Value 6 Water is purchased from St. Paul Regional Water Service (SPRWS). This water is treated and softened before delivery to our customers. Little Canada provides building inspection services to Falcon Heights. This arrangement allows both communities to provide a responsive and professional service at lower costs than if we each staff our own inspection program. Water and Sewer Infrastructure: The City operates and maintains both a water distribution and sanitary sewer collection system. As noted earlier, water is purchased from SPRWS. The City is responsible for maintenance of the water system and all customer relations. The City’s sanitary sewer collection system discharges into several Metropolitan Council Environmental Services (MCES) interceptor sewers for treatment by MCES at the Metro Wastewater treatment plant. The City pays MCES for sanitary sewer treatment charges on a quarterly basis, and these MCES treatment costs are included in the City’s sewer billing to residents. The City continues to strive to eliminate significant sources of inflow and infiltration of ground water into the City’s sanitary sewer system. Past efforts have included a sump pump inspection program, televising of city sewer mains and repairs of system leaks, and lining of sewer services in high water table areas. We are also starting to televise sewer service lines. Because the MCES charges are based on measured flow, any reduction of inflow and infiltration results in lower charges to the City and our customers. The City has one water tower to serve the needs of the community. The water tower also generates significant revenue through leases to telecommunications providers to meet their antenna needs. RELEVANT FINANCIAL POLICIES Financial trends in this millennium indicate the City will experience an increased reliance on service fees and property taxes as key funding sources for operations and capital improvements. In Little Canada’s case, our fully developed status means building and development related fees need to be estimated conservatively to avoid huge fluctuations in revenue. Interest income on existing fund balances will likely remain low for the foreseeable future due to national monetary policies. Through constant monitoring of operations and performance and through agile responses to changing conditions, the City has been able to maintain its financial condition despite external challenges. Conservative financial management policy has directed the City’s finances for many years and in 2007, they were formalized in written form. These policies were last updated and adopted by City Council in 2019. STATISTICAL SECTION The statistical section presents comparative statistical data for the past 10 years, and other pertinent information involving taxes, revenues, expenditures, and bonded debt. The unaudited data should be of interest to investors of City of Little Canada bonds, financial institutions, or others interested in financial statistics of municipal governments. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. 7 8 CITY OF LITTLE CANADA, MINNESOTA PRINCIPAL CITY OFFICIALS December 31, 2019 Elected Officials Term Expires Mayor: John Keis December 31, 2020 Council Members: Tom Fischer December 31, 2022 Michael McGraw December 31, 2020 Rick Montour December 31, 2020 Christian Torkelson December 31, 2022 Appointed Personnel City Administrator Chris Heineman Finance Director Brenda Malinowski City Clerk Heidi Heller Public Works Director Bill Dircks Parks & Recreation/Community Services Manager Bryce Shearen 9 City of Little CanadaOrganizational Chart December 31, 2019 LITTLE CANADA RESIDENTS City AdministratorCity Attorney Public Works EngineeringSewer & WaterHookupsWater Meter ReadingStreet LightingSnow PlowingStreet MaintenanceStorm DrainageFleet MaintenanceParks MaintenanceBuilding Maintenance P & R andComm. Services Administration Finance Community Development PublicSafety Recreation Programs Park DevelopmentFacility/Field Scheduling/ReservationsCoordination with LCRAWebsite Social Media Elections City Council AgendasHuman Resources Official RecordsCity Communications Le Petite CanadienCable Access Ch. 16 LicensesEconomic Development Organized CollectionRental Housing Accounting BudgetFinancial Reporting Long-term Financial Planning Tax Increment FinancingUtility Billing PayrollAccounts Payable Accounts ReceivableCashier/Receptionist InsuranceInvestments Information Systems PlanningEconomic DevelopmentHousing DevelopmentZoning AdministrationBuilding PermitsBuilding InspectionSite Plan ReviewCode EnforcementRental InspectionsFire Marshal Emergency ServicesFire Services(Little CanadaFire Dept.)Police Service(Ramsey County)Animal Control(Ramsey County) CITY COUNCIL Parks & Recreation CommissionPlanning Commission Economic Development Authority City Engineer 10 11 THIS PAGE INTENTIONALLY LEFT BLANK 12 FINANCIAL SECTION 13 THIS PAGE INTENTIONALLY LEFT BLANK 14 INDEPENDENT AUDITORS' REPORT Honorable Mayor and the City Council City of Little Canada, 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 Little Canada, as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the entity’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ 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 entity’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 entity’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. 15 Honorable Mayor and the City Council City of Little Canada Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Little Canada as of December 31, 2019, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Prior Year Summarized Information We have previously audited the City of Little Canada’s 2018 financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information, and we have expressed an unmodified opinion on those audited financial statements in our report dated June 11, 2019. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2018 is consistent, in all material respects, with the audited financial statements from which it has been derived. Emphasis of Matter During fiscal year 2019, the City of Little Canada implemented GASB Statement No. 84, Fiduciary Activities. As a result of the implementation of this standard the City reported the activity previously reported as a Developer Deposit Agency Fund within the City’s General Fund. Out auditors’ opinion was not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, PERA schedule of the City’s proportionate share of the net pension liability, and PERA schedule of city contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Little Canada’s basic financial statements. The introductory section, combining and individual fund statements and schedules, and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. 16 Honorable Mayor and the City Council City of Little Canada The combining and individual fund 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 statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. We also have previously audited, in accordance with auditing standards generally accepted in the United States of America, the City of Little Canada’s basic financial statements for the year ended December 31, 2018, which are not presented with the accompanying financial statements. In our report dated June 11, 2019, we expressed an unmodified opinion on the respective financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information. That audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Little Canada’s basic financial statements as a whole. The combining statements and individual nonmajor fund financial statements, for the year ended December 31, 2018, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the 2018 basic financial statements. The information has been subjected to the auditing procedures applied in the audit of those 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 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 2018 combining and individual nonmajor fund financial statements, are fairly stated in all material respects in relation to the basic financial statements from which they have been derived. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. 17 Honorable Mayor and the City Council City of Little Canada Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 26, 2020, on our consideration of the City of Little Canada's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the City of Little Canada’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Little Canada’s internal control over financial reporting and compliance. CliftonLarsonAllen LLP Minneapolis, Minnesota May 26, 2020 18 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis Year Ended December 31, 2019 As management of the City of Little Canada, Minnesota (the City), we offer readers of the City of Little Canada’s financial statement this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2019. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. FINANCIAL HIGHLIGHTS o The net position of the City’s governmental activities increased by $339,382 as a result of current year operations. Net position was $41,814,747 at year-end. o The net position of the City’s business-type activities increased by $447,925 as a result of current year operations. Net position was $10,279,488 at year-end. o The fund balance of the General Fund increased by $402,299 (or 14.8%) during the year to $3,121,470 at year-end. o At the end of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of $14,039,863. o At the end of the current fiscal year, the City of Little Canada had total long-term debt outstanding of $3,946,953. This is a decrease of $1,252,861. OVERVIEW OF THE FINANCIAL STATEMENTS The Management’s Discussion and Analysis is intended to serve as an introduction to the City’s basic financial statements, which are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other information in addition to the basic financial statements themselves. Government-Wide Financial Statements – The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances in a manner similar to private sector businesses. The statement of net position presents information on all the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between them reported as net position. Over time, increases 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 to net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. delinquent taxes and special assessments). 19 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2019 Both of the government-wide financial statements distinguish functions of the City that are principally supported by property taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities include general government, housing and economic development, public safety, public works, sanitation and recycling, and culture and recreation. The business-type activities of the City include enterprises for water operating and sewer operating. 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. The funds of the City are divided into two categories - governmental funds and proprietary funds. Governmental Funds – Governmental funds are used to account for essentially the same functions 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 the balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term, financing decisions. Both the governmental funds balance sheet and the statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities. The fund financial statements present information for each major governmental fund in separate columns. Data from the nonmajor governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for the General Fund and all Special Revenue Funds. Budget-to-actual comparisons for the General Fund and all special revenue funds are provided in this financial report. 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 and sewer. 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 which are considered to be major funds of the City. 20 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2019 Notes to Basic Financial Statements – The notes to basic financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other Information – Combining statements and schedules for nonmajor funds are presented immediately following the notes to basic financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS The following is a summary of the City’s net position: City of Little Canada Net Position Governmental Activities Business-type Activities Total Primary Government 2019 2018 2019 2018 2019 2018 Current and other assets $18,514,224 $18,702,695 $2,695,578 $2,379,601 $21,209,802 $21,082,296 Capital assets 28,865,500 29,463,793 8,218,320 8,109,979 37,083,820 37,573,772 Total assets 47,379,724 48,166,488 10,913,898 10,489,580 58,293,622 58,656,068 Deferred Outflows of Resources 44,838 94,360 31,940 77,924 76,778 172,284 Long-term liabilities outstanding 3,874,594 5,139,234 72,359 60,580 3,946,953 5,199,814 Other liabilities 1,598,657 1,498,371 496,714 553,242 2,095,371 2,051,613 Total liabilities 5,473,251 6,637,605 569,073 613,822 6,042,324 7,251,427 Deferred inflows of resources 136,564 147,878 97,277 122,119 233,841 269,997 Net position: Net investment in capital assets 24,872,181 25,481,497 8,218,320 8,109,979 33,090,501 33,591,476 Restricted 3,757,032 4,622,305 - - 3,757,032 4,622,305 Unrestricted 13,185,534 11,371,563 2,061,168 1,721,584 15,246,702 13,093,147 Total net position $41,814,747 $41,475,365 $10,279,488 $9,831,563 $52,094,235 $51,306,928 The City’s net investment in capital assets is $33,090,501 or 63.5% of the total net position, and reflects its investment in capital assets (e.g. land, buildings, infrastructure, machinery and equipment, and vehicles); less any related debt used to acquire those assets that are 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. An additional portion of the City’s net position, $3,757,032 or 7.2% represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $15,246,702 or 29.3% may be used to meet the City’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all categories of net position, both for the City as a whole, as well as for its separate governmental and business-type activities. The City has historically been financially conservative, managing revenues and expenditures/expenses to assure the operation of a balanced budget. This conservative approach and the sound financial position the City has attained, have resulted in the City’s excellent bond ratings: AA+ for all general obligation bond issues. 21 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2019 The following is a summary of the City’s change in net position: City of Little Canada’s Changes in Net Position Governmental Activities Business-Type Activities Total Primary Government 2019 2018 2019 2018 2019 2018 Revenues: Program revenues: Charges for services $1,249,688 $1,771,529 $3,087,350 $3,070,546 $4,337,038 $4,842,075 Operating grants and contributions 638,471 287,601 - 638,471 287,601 Capital grants and contributions 733,734 680,448 - 40,740 733,734 721,188 General revenues: Property taxes 3,385,222 3,265,748 - - 3,385,222 3,265,748 Other taxes 1,016,065 859,377 - - 1,016,065 859,377 Grants and contributions not restricted to specific programs 437,161 435,682 - - 437,161 435,682 Unrestricted investment earnings 530,625 299,521 55,039 21,740 585,664 321,261 Other - 14,920 2,447 9,056 2,447 23,976 Gain on sale of capital assets 20,481 - - 20,481 - Total revenues 8,011,447 7,614,826 3,144,836 3,142,082 11,156,283 10,756,908 Expenses: General government 631,388 650,567 - - 631,388 650,567 Housing & economic development 690,771 1,317,718 - - 690,771 1,317,718 Public safety 2,696,716 2,305,023 - - 2,696,716 2,305,023 Public works 2,128,271 2,495,002 2,128,271 2,495,002 Sanitation and recycling 413,046 395,599 - - 413,046 395,599 Culture and recreation 688,124 641,085 - - 688,124 641,085 Interest on long-term debt 235,062 289,276 - - 235,062 289,276 Water - - 1,566,206 1,574,293 1,566,206 1,574,293 Sewer - - 1,319,392 1,480,413 1,319,392 1,480,413 Total expenses 7,483,378 8,094,270 2,885,598 3,054,706 10,368,976 11,148,976 Increase in net position before special items and transfers 528,069 (479,444) 259,238 87,376 787,307 (392,068) Special Item - (4,506,155) - - - (4,506,155) Transfers (188,687) 300,000 188,687 (300,000) - - Total special items and transfers (188,687) (4,206,155) 188,687 (300,000) - (4,506,155) Change in net position 339,382 (4,685,599) 447,925 (212,624) 787,307 (4,898,223) Net position - January 1 41,475,365 46,160,964 9,831,563 10,044,187 51,306,928 56,205,151 - Net position - December 31 $41,814,747 $41,475,365 $10,279,488 $9,831,563 $52,094,235 $51,306,928 Overall revenues from governmental activities increased $396,621 be tween 2018 and 2019. The largest increase was in the investment earnings category ($231,104) due to a more favorable interest rate environment in 2019. Operating grants and contributions include the revenues ($137,644) related to the FEMA natural disaster declaration for flooding. The public safety category expenses increased 16.99% ($391,693). The police services contract with Ramsey County increased 4.7% ($71,784). In addition, the City incurred $84,081 in costs relating to the emergency sandbagging and pumping operations at Twin Lake. The housing and economic category contained a large decrease in expenses. 2018 contained expenses relating to both the closure of a TIF district and the development incentives to a new development. The business-type activities, primarily the City’s utility operations, showed an increase in net position of $447,925. The increase in net position was due to decreased operating expenses. 22 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2019 Governmental Activities The following graph depicts the various governmental activities and shows the expenses and program revenues directly related to those activities: The graph below shows the governmental activities and their income and clearly reflects the need for property taxes to supplement the activities of the City, since the other sources of revenue are insufficient to fund the governmental activities. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 General Government Housing and Economic Development Public Safety Public Works Sanitation and Recycling Culture and Recreation Interest and Fiscal Charges Expense Revenue Property Taxes 42% Charges for services 16% Other taxes & tax increment 13% Capital Grants & Contributions 9% Operating Grants & Contributions 8% Unrestricted investment earnings 7% Contributions Not Restricted to Specific Program 5% Other 0% Revenues by Source -Government Activities 23 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2019 Business-Type Activities Business-type activities had an overall increase in net position of $447,925. The Water Fund had a slight decrease in net position of $82,776, and the Sewer Fund had an increase in net position of $530,701. A utility rate study is in progress to identify rate increase needs in the two funds. Charges for services 98% Unrestricted investment earnings 2%Other 0% Revenues -Business type Activities $- $500,000 $1,000,000 $1,500,000 $2,000,000 Water Sewer Program Expenses and Revenues -Business-Type Activities Expenses Program revenues 24 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2019 FINANCIAL ANALYSIS OF THE GOVERNMENTAL FUNDS General Fund The General Fund is the main operating fund of the City. Its primary revenue source in 2019 was property taxes at 69.6% of the total revenue, followed by licenses and permits at 11.6% and intergovernmental revenue at 7.1%. The total fund balance increased by $402,299 during the current fiscal year 2019, resulting from an excess of revenue over expenditures of $303,621 combined with net transfers in of $98,678. The unassigned fund balance of $2,210,615 at the end of 2019 represents 57.1% of total General Fund expenditures for the year 2019. The overall fund balance of $3,121,470 represents 80.6% of 2019 General Fund expenditures (interfund loans and prepaids account for the differences between unassigned and total fund balances). Other Major Governmental Funds The Economic Development fund had a decrease in fund balance of $96,333, to arrive at an ending fund balance of ($589,698). The decrease in fund balance was due to payment to a developer. This deficit will be recovered when future loan payments are received from the developer. The TIF Bonds of 2001A fund balance was closed in 2019. The 2001A bonds that were recorded in the fund were paid in full in 2019, in accordance with the State’s TIF Statutes. The Canabury Square Condominiums HIA fund balance at the end of 2019 was ($817,650), an increase of $240,858 during the year due to receipts of special assessment payments. These payments were used to decrease the interfund loan in the fund. The deficit fund balance will be recovered when future special assessments are received from residents in the HIA. The General Capital Improvements fund experienced a decrease in fund balance of $237,617 during 2019 to arrive at an ending fund balance of $1,663,637. The decrease was due to planned capital improvement projects. The Rice/LC Road Improvements fund had a decrease in fund balance of $1,308,769 in 2019 to arrive at an ending fund balance of $529,169. This decrease was due to a transfer to the TIF Bonds of 2001A Fund, and the repayment of excess tax increment in accordance with tax increment State Statutes. The Infrastructure CIP fund had an increase in fund balance of $1,034,768 during 2019 to arrive at an ending fund balance of $3,474,818. This increase is due to the one-year pause in the City’s street reconstruction program. The pause was to allow for collaboration with Ramsey County on a large street reconstruction program to be completed in 2020. The Water and Sewer Equipment Replacement fund had a decrease in fund balance of $380,647 in 2019 to arrive at an ending fund balance of $2,033,768. The decrease was due to the planned capital outlay purchase of a sewer cleaning machine in the amount of $400,494. Proprietary Funds The City of Little Canada’s proprietary funds provide the same type of information founds in the government- wide financial statements, but in more detail. At the end of the year, total net position of the Water and Sewer funds total $10,279,488 or $447,925 more than 2018. Unrestricted net position increased $339,584, due to decreased operating expenses from changing health insurance providers. 25 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2019 BUDGETARY HIGHLIGHTS General Fund The General Fund original budget was revised to reflect the following changes: • Other revenue and the public safety expenditure budget were increased by $10,000 for additional police services provided to an establishment in the City. The establishment reimbursed the City for these services. • The intergovernmental revenue and fire department budgets were increased by $6,478 due to the State Fire Relief funds received by the City that were required by State Statute to be paid to the Fire Relief Association. • The charges for services revenue and protective inspection budgets were increased by $5,200 for private contracting services needed to help cover inspection services during the summer. The actual results were different than the final budget amounts. Large differences are as follows: • Total General Fund revenues exceeded the budget by $355,493. The biggest budget variances for revenue categories were within licenses and permits. o Three significant building permits were received in 2019 to cause the large budget variance. A portion of these funds will be utilized in 2020 to purchase building permit software, implement online permits, and to scan address files in the City. • Total General Fund Expenditures were under budget by $57,428. o $84,081 was spent in 2019 for emergency sandbagging and pumping operations at Twin Lake that was not included in the budget. These sandbagging and pumping operations were needed due to significant spring flooding. The City has completed an emergency declaration with FEMA to be reimbursed for these unbudgeted expenditures. o There were health insurance and salary savings of $78,400 that occurred in all departments. The health insurance savings were realized when the City changed health insurance providers. o There were attorney and prosecution savings of $29,827, due to less utilization of these services than was anticipated when the budget was prepared. o There were crack filling savings in the street maintenance budget of $24,765. This maintenance item was not needed to be completed in 2019, due to the condition of the streets. 26 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2019 CAPITAL ASSETS The City’s investment in capital assets (net of accumulated depreciation) for its governmental and business-type activities as of December 31, 2019 is as follows: City of Little Canada’s Capital Assets (Net of Depreciation) Governmental Activities Business-type Activities Total Primary Government 2019 2018 2019 2018 2019 2018 Land $3,620,111 $3,620,111 $ - $ - $3,620,111 $3,620,111 Easements - - 103,301 103,301 103,301 103,301 Construction in progress 2,886,861 3,203,677 6,065 10,030 2,892,926 3,213,707 Buildings and improvements 7,576,455 7,374,815 - - 7,576,455 7,374,815 Machinery and equipment 5,684,696 5,576,190 1,150,616 732,861 6,835,312 6,309,051 Other improvements 960,729 616,411 - - 960,729 616,411 Streets and infrastructure 40,585,984 40,116,983 - - 40,585,984 40,116,983 Distribution and collection system - - 18,607,232 18,527,045 18,607,232 18,527,045 Total Capital Assets 61,314,836 60,508,187 19,867,214 19,373,237 81,182,050 79,881,424 Less: Accumulated Depreciation (32,449,336) (31,044,394) (11,648,894) (11,263,258) (44,098,230) (42,307,652) Ending balance $28,865,500 $29,463,793 $8,218,320 $8,109,979 $37,083,820 $37,573,772 The largest capital asset purchases in 2019 were the purchase and installation of an inclusive playground at Spooner Park ($344,318) and the purchase of SCBA’s ($177,815). Additional details of capital asset activity for the year can be found in Note 5 of the notes to basic financial statements. LONG-TERM LIABILITIES At the end of the current fiscal year, the City had total bonded debt, notes payable, and compensated absences payable outstanding of $3,946,953. While all of the City’s bonds have revenue streams, they are all still backed by the full faith and credit of the City. In 2019, no property tax levy was used to support any debt. City of Little Canada’s Outstanding Debt 2019 2018 Governmental activities: Bonds payable, net $3,655,000 $3,925,000 Tax Increment Bonds - 965,000 Notes Payable 71,166 104,243 Compensated Absences 101,490 87,695 Bond Premium (Discount), Net 46,938 57,296 Total Governmental activities 3,874,594 5,139,234 Business-type activities: Compensated absences 72,359 60,580 Total Business-type activities 72,359 60,580 Total primary government $3,946,953 $5,199,814 Additional details of long-term debt activity for the year can be found in Note 6 of the notes to basic financial statements. 27 CITY OF LITTLE CANADA, MINNESOTA Management’s Discussion and Analysis (continued) Year Ended December 31, 2019 REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Finance Department, City of Little Canada, 515 Little Canada Road East, Little Canada, Minnesota 55117. 28 BASIC FINANCIAL STATEMENTS 29 THIS PAGE INTENTIONALLY LEFT BLANK 30 CITY OF LITTLE CANADA, MINNESOTA STATEMENT OF NET POSITION December 31, 2019 Governmental Business-Type Activities Activities 2019 Assets: Cash and investments 13,956,739$ 1,730,273$ 15,687,012$ Accrued interest receivable 32,974 - 32,974 Due from other governmental units - net 327,408 - 327,408 Accounts receivable - net 409,647 888,008 1,297,655 Prepaid items 10,807 77,297 88,104 Delinquent property taxes receivable 56,140 - 56,140 Due from county 152,843 - 152,843 Special assessments receivable 2,550,511 - 2,550,511 Notes receivable 600,000 - 600,000 Properties held for resale 417,155 - 417,155 Capital assets: Nondepreicable 6,506,972 109,366 6,616,338 Depreciable 22,358,528 8,108,954 30,467,482 Total assets 47,379,724 10,913,898 58,293,622 Deferred outflows of resources: Deferred outflows related to city pensions 44,838 31,940 76,778 Total deferred outflows of resources 44,838 31,940 76,778 Total assets and deferred outflows of resources 47,424,562$ 10,945,838$ 58,370,400$ Liabilities: Accounts payable 779,057$ 126,882$ 905,939$ Salaries payable 34,025 - 34,025 Contracts payable 151,772 - 151,772 Due to other governmental units 70,453 6,440 76,893 Deposits payable 6,682 - 6,682 Unearned revenue 4,351 - 4,351 Compensated absences payable: Due within one year 5,854 4,419 10,273 Due in more than one year 95,636 67,940 163,576 Net pension liability: Due in more than one year 510,154 363,392 873,546 Accrued interest payable 42,163 - 42,163 Bonds and notes payable: Due within one year 308,791 - 308,791 Due in more than one year 3,464,313 - 3,464,313 Total liabilities 5,473,251 569,073 6,042,324 Deferred inflows of resources: Deferred inflows related to pension 136,564 97,277 233,841 Total deferred inflows of resources 136,564 97,277 233,841 Net position: Net investment in capital assets 24,872,181 8,218,320 33,090,501 Restricted for: Fire equipment 255,445 - 255,445 Public works 156,726 - 156,726 Park acquisition 878,053 - 878,053 Capital improvements 78,000 - 78,000 Charitable gambling 63,147 - 63,147 Debt retirement 74,260 - 74,260 Tax increment purposes 2,251,401 - 2,251,401 Unrestricted 13,185,534 2,061,168 15,246,702 Total net position 41,814,747 10,279,488 52,094,235 Total liabilities, deferred inflows of resources and net position 47,424,562$ 10,945,838$ 58,370,400$ Primary Government The accompanying notes are an integral part of these financial statements. 31 THIS PAGE INTENTIONALLY LEFT BLANK 32 CITY OF LITTLE CANADA, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2019 Operating Capital Charges For Grants and Grants and Governmental Business-Type Totals Expenses Services Contributions Contributions Activities Activities 2019 Functions/Programs Primary government: Governmental activities: General government 631,388$ 604,268$ 50,216$ -$ 23,096$ -$ 23,096$ Housing and economic development 690,771 61,290 - - (629,481) - (629,481) Public safety 2,696,716 68,562 126,122 187,009 (2,315,023) - (2,315,023) Public works 2,128,271 35,302 426,261 389,880 (1,276,828) - (1,276,828) Sanitation 413,046 436,270 28,517 - 51,741 - 51,741 Culture and recreation 688,124 43,996 7,355 156,845 (479,928) - (479,928) Interest on long-term debt 235,062 - - - (235,062) - (235,062) Total governmental activities 7,483,378 1,249,688 638,471 733,734 (4,861,485) - (4,861,485) Business-type activities: Water operating 1,566,206 1,625,833 - - - 59,627 59,627 Sewer operating 1,319,392 1,461,517 - - - 142,125 142,125 Total business-type activities 2,885,598 3,087,350 - - - 201,752 201,752 Total primary government 10,368,976$ 4,337,038$ 638,471$ 733,734$(4,861,485) 201,752 (4,659,733) General revenues: Property taxes 3,385,222 - 3,385,222 Franchise taxes 477,274 - 477,274 Tax increment collections 538,791 - 538,791 Grants and contributions not restricted to specific programs 437,161 - 437,161 Unrestricted investment earnings 530,625 55,039 585,664 Other - 2,447 2,447 Gain on sale of capital assets 20,481 - 20,481 Transfers (188,687) 188,687 - Total general revenues and transfers 5,200,867 246,173 5,447,040 Change in net position 339,382 447,925 787,307 Net position - beginning 41,475,365 9,831,563 51,306,928 Net position - ending 41,814,747$ 10,279,488$ 52,094,235$ Program Revenues Net (Expense) Revenue and Changes in Net Position Primary Government The accompanying notes are an integral part of these basic financial statements. 33 CITY OF LITTLE CANADA, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2019 With Comparative Data as of December 31, 2018 Canabury Square Economic TIF Bonds Condominium General Development 2001A HIA Assets:Fund (105)(314)(362) Cash and investments 2,348,044$ 64,947$ -$ -$ Cash and investments, held by trustee - - - - Accrued interest receivable 32,974 - - - Interfund loan receivable 761,178 - - - Due from other governmental units - net 97,240 - - - Accounts receivable - net 38,834 - - - Prepaid items 10,807 - - - Delinquent property taxes receivable 52,650 - - - Due from county 86,770 - - 42,661 Special assessments receivable: Deferred - - - 743,111 Delinquent - - - 30,320 Special deferred - - - 419,307 Notes receivable - 600,000 - - Property held for resale - - - - Total assets 3,428,497$ 664,947$ -$ 1,235,399$ Liabilities: Accounts payable 102,788$ -$ -$ -$ Salaries payable 34,025 - - - Contracts payable - - - - Due to other governmental units 46,238 - - - Deposits payable 6,682 - - - Interfund loan payable - 654,645 - 860,311 Unearned revenue - - - - Total liabilities 189,733 654,645 - 860,311 Deferred inflows of resources: Unavailable revenue - property taxes 52,650 - - - Unavailable revenue - special assessments - - - 1,192,738 Unavailable revenue - intergovernmental 64,644 - - - Unavailable revenue - other - 600,000 - - Total deferred inflows of resources 117,294 600,000 - 1,192,738 Fund balances (deficit): Nonspendable: Prepaid items 10,807 - - - Advances to other funds 761,178 - - - Restricted - - - - Committed - - - - Assigned 138,870 - - - Unassigned 2,210,615 (589,698) - (817,650) Total fund balances (deficit)3,121,470 (589,698) - (817,650) Total liabilities, deferred inflows of resources, and fund balances 3,428,497$ 664,947$ -$ 1,235,399$ 34 The accompanying notes are an integral part of these financial statements. General Water/Sewer Capital Rice/LC Road Infrastructure Equipment Other Improvements Development CIP Replacement Governmental (400)(440)(450)(604)Funds 2019 2018 1,663,271$ 852,777$ 3,529,106$ 690,887$ 4,807,707$ 13,956,739$ 13,667,774$ - - - - - - 1,263 - - - - - 32,974 35,567 - - - 1,342,881 - 2,104,059 2,311,005 - - 230,168 - - 327,408 202,096 25,851 - 110,350 - 234,612 409,647 369,226 - - - - - 10,807 11,209 - - 1,726 - 1,764 56,140 69,262 - - 17,159 - 6,253 152,843 206,228 - - 1,040,602 6,500 26,691 1,816,904 2,335,517 - - 7,543 - 11,532 49,395 53,212 - 27,372 187,568 49,965 - 684,212 734,186 - - - - - 600,000 600,000 30,000 70,401 - - 316,754 417,155 417,155 1,719,122$ 950,550$ 5,124,222$ 2,090,233$ 5,405,313$ 20,618,283$ 21,013,700$ 44,044$ 394,009$ 114,908$ -$ 123,308$ 779,057$ 797,961$ - - - - - 34,025 34,405 11,441 - 140,331 - - 151,772 - - - - - 24,215 70,453 82,306 - - - - - 6,682 3,877 - - - - 589,103 2,104,059 2,311,005 - - - - 4,351 4,351 6,821 55,485 394,009 255,239 - 740,977 3,150,399 3,236,375 - - 1,726 - 1,764 56,140 69,262 - 27,372 1,235,713 56,465 38,223 2,550,511 3,122,916 - - 156,726 - - 221,370 - - - - - - 600,000 747,949 - 27,372 1,394,165 56,465 39,987 3,428,021 3,940,127 - - - - - 10,807 11,209 - - - - - 761,178 718,024 78,000 529,169 - - 2,980,939 3,588,108 4,635,460 - - - - 706,819 706,819 687,800 1,585,637 - 3,474,818 2,033,768 1,525,694 8,758,787 8,098,459 - - - - (589,103) 214,164 (313,754) 1,663,637 529,169 3,474,818 2,033,768 4,624,349 14,039,863 13,837,198 1,719,122$ 950,550$ 5,124,222$ 2,090,233$ 5,405,313$ 20,618,283$ 21,013,700$ Totals Governmental Funds 35 The accompanying notes are an integral part of these financial statements. THIS PAGE INTENTIONALLY LEFT BLANK 36 CITY OF LITTLE CANADA, MINNESOTA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL ACTIVITES For The Year Ended December 31, 2019 With Comparative Data for the Year Ended December 31, 2018 2019 2018 Total Fund Balance for Governmental Funds 14,039,863$ 13,837,198$ Total net position reported for governmental activities in the statement of net position is different because: Capital assets used in governmental funds are not financial resources and, therefore, are not reported in the funds. These assets consist of: Land 3,620,111 Construction in progress 2,886,861 Buildings and improvements 7,576,455 Machine and equipment 5,684,696 Other improvements 960,729 Streets 40,585,984 Total Capital assets 61,314,836 Depreciation expense (32,449,336)28,865,500 29,463,793 Some of the City's receivables (including property taxes, special assessments and other long-term receivables) will be collected after year-end, but are not available soon enough to pay for the current period's expenditures, and, therefore, are reported as deferred inflows of the resources in the governmental funds.3,428,021 3,940,127 Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. Accrued interest for general obligation bonds is included in the statement of net position.(42,163) (50,392) The City's net pension liability and related deferred inflows and deferred outflows are recorded only on the statement of net position. Balances at year-end are: Net pension liability (510,154) Deferred inflows of resources - pensions (136,564) Deferred outflows of resources - pensions 44,838 (601,880) (576,127) Long-term liabilities that pertain to governmental funds, including bonds payable, are not due and payable in the current period and, therefore, are not reported as fund liabilities. All liabilities - both current and long term - are reported in the statement of net position. Bonds payable (3,655,000) Notes payable (71,166) Unamortized premiums (46,938) Compensated absence payable (101,490)(3,874,594) (5,139,234) Total Net Position of Governmental Activities 41,814,747$ 41,475,365$ The accompanying notes are an integral part of these financial statements. 37 CITY OF LITTLE CANADA, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For The Year Ended December 31, 2019 With Comparative Data for the Year Ended December 31, 2018 Canabury Square Economic TIF Bonds Condominium General Development 2001A HIA Revenues:Fund (105)(314)(362) General property taxes 2,972,443$ -$ -$ -$ Franchise taxes - - - - Tax increment collections - - - - Special assessments - - - 289,434 Licenses and permits 497,295 - - - Intergovernmental 303,543 - - - Charges for services 87,855 - - - Fines and forfeits 49,408 - - - Investment earnings (loss)87,803 20,041 - - Connection charges - - - - Contributions - - - - Donations 2,855 - - - Miscellaneous 173,786 - 47,990 - Total revenues 4,174,988 20,041 47,990 289,434 Expenditures: Current: General government 507,968 - 200 360 Housing and economic development - 91,880 - - Public safety 2,492,581 - - - Public works 404,709 - - - Sanitation and recycling - - - - Parks and recreation 466,109 - - - Capital outlay: General government - - - - Public safety - - - - Public works - - - - Parks and recreation - - - - Debt service: Principal retirement - - 965,000 6,727 Interest - 24,494 47,990 41,177 Fiscal charges - -- - Miscellaneous - -6,050 312 Total expenditures 3,871,367 116,374 1,019,240 48,576 Revenues over (under) expenditures 303,621 (96,333) (971,250) 240,858 Other financing sources (uses): Transfers in 98,678 - 971,250 - Transfers out - - - - Proceeds from the sale of capital assets - - - - Total other financing sources (uses)98,678 - 971,250 - Net increase (decrease) in fund balance 402,299 (96,333) - 240,858 Fund balance - January 1 2,719,171 (493,365) - (1,058,508) Fund balance - December 31 3,121,470$ (589,698)$ -$ (817,650)$ The accompanying notes are an integral part of these basic financial statements. 38 General Water/Sewer Capital Rice/LC Road Infrastructure Equipment Other Improvements Development CIP Replacement Governmental (400)(440)(450)(604)Funds 2019 2018 114,412$ -$ 154,041$ -$ 157,448$ 3,398,344$ 3,294,816$ - - 358,146 - 119,128 477,274 480,454 - - - 538,791 538,791 467,862 - - 338,125 7,139 45,934 680,632 985,904 - - - - - 497,295 300,059 347,503 - 73,895 4,262 - 729,203 644,422 - - - - 467,625 555,480 487,175 - - - - - 49,408 48,569 51,679 55,877 88,715 82,907 143,603 530,625 299,521 - - 51,120 - - 51,120 - - - - - 43,416 43,416 - 157,845 - - - 35,600 196,300 140,461 161,409 - 298,321 - 73,678 755,184 293,261 832,848 55,877 1,362,363 94,308 1,625,223 8,503,072 7,442,504 500 370 1,855 1,800 2,560 515,613 654,084 - 427,623 - - 171,268 690,771 1,317,718 - -- - - 2,492,581 2,311,243 5,588 - 22,691 51,918 - 484,906 460,543 - - - - 413,046 413,046 395,599 5,061 - - - 101,683 572,853 562,924 10,014 - - - - 10,014 40,370 491,517 - - - 61,484 553,001 63,479 162,684 - 347,264 491,737 - 1,001,685 1,138,710 378,711 - -- - 378,711 336,934 - - - - 296,350 1,268,077 1,863,094 - - - - 130,711 244,372 318,745 - - - - 950 950 1,290 - - - - 1,965 8,327 - 1,054,075 427,993 371,810 545,455 1,180,017 8,634,907 9,464,733 (221,227) (372,116) 990,553 (451,147) 445,206 (131,835) (2,022,229) 35,495 86,385 48,309 300,000 376,628 1,916,745 1,185,418 (86,385) (1,023,038) (4,094) (229,500) (273,728) (1,616,745) (885,418) 34,500 - - - - 34,500 85,000 (16,390) (936,653) 44,215 70,500 102,900 334,500 385,000 (237,617) (1,308,769) 1,034,768 (380,647) 548,106 202,665 (1,637,229) 1,901,254 1,837,938 2,440,050 2,414,415 4,076,243 13,837,198 15,474,427 1,663,637$ 529,169$ 3,474,818$ 2,033,768$ 4,624,349$ 14,039,863$ 13,837,198$ Totals Governmental Funds The accompanying notes are an integral part of these basic financial statements. 39 - THIS PAGE INTENTIONALLY LEFT BLANK 40 CITY OF LITTLE CANADA, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended December 31, 2019 With Comparative Data for the Year Ended December 31, 2018 2019 2018 Net changes in fund balances - total governmental funds 202,665$ (1,637,229)$ Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital outlays-improvement costs 1,136,606$ Gain on disposal of capital assets 20,481 Proceeds from the sale of capital assets (34,500) Depreciation expense (1,720,880)(598,293) (5,162,966) The governmental funds report bond proceeds as financing sources, while repayment of bond principal is reported as an expenditure. In the statement of net position however, issuing debt increases long-term liabilities and does not affect the statement of activities and repayment of principal reduces the liability. Interest is recognized as an expenditure in the governmental funds when it is due. In the statement of activities, however, interest expense is recognized as it accrues, regardless of when it is due. The net effect of these differences in the treatment of general obligation bonds and related items is as follows: Amortization of bond premium 10,358 Repayment of notes payable 33,077 Repayment of bond principal 1,235,000 Change in accrued interest expense 8,229 1,286,664 1,878,789 Delinquent and certain other property taxes and special assessment receivable will be collected subsequent to year-end, but are not available soon enough to pay for the current period's expenditures and, therefore, are reported as deferred inflows of resources and excluded from revenues in the governmental funds. Deferred inflows of resources - December 31, 2019 3,428,021 Deferred inflows of resources - December 31, 2018 3,940,127 (512,106) 173,031 Pension expenditures in the governmental funds are measured by current year employee contributions. Pension expenses on the statement of activities are measured by the change in net pension liability and the related deferred inflows and outflows of resources.(25,753) 58,280 In the statement of activities, compensated absences and other postemployment benefits are measured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially, the amounts actually paid). During the current fiscal year, compensated absence payable and other post employment benefits payable changed.(13,795) 4,496 Change in net position of governmental activities 339,382$ (4,685,599)$ The accompanying notes are an integral part of these financial statements. 41 CITY OF LITTLE CANADA, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2019 With Comparative Data as of December 31, 2018 Water Sewer (601)(602)2019 2018 Assets: Current assets: Cash and investments 735,775$ 994,498$ 1,730,273$ 1,482,596$ Accounts receivable: Customers 366,988 449,728 816,716 758,757 Certified to County 29,810 29,110 58,920 57,829 Other 10,200 2,172 12,372 10,753 Prepaid items 1,391 75,906 77,297 69,666 Total current assets 1,144,164 1,551,414 2,695,578 2,379,601 Noncurrent assets: Capital assets: Permanent easements - 103,301 103,301 103,301 Construction - 6,065 6,065 10,030 Equipment 504,979 645,637 1,150,616 732,861 Mains and systems 10,876,007 7,731,225 18,607,232 18,527,045 Total capital assets 11,380,986 8,486,228 19,867,214 19,373,237 Less: Accumulated depreciation (6,908,332) (4,740,562) (11,648,894) (11,263,258) Net capital assets 4,472,654 3,745,666 8,218,320 8,109,979 Total noncurrent assets 4,472,654 3,745,666 8,218,320 8,109,979 Total assets 5,616,818 5,297,080 10,913,898 10,489,580 Deferred outflows: Deferred outflows related to pension 15,795 16,145 31,940 77,924 Total deferred outflows 15,795 16,145 31,940 77,924 Liabilities: Current liabilities: Accounts payable 78,614 48,268 126,882 116,927 Due to other governmental units 6,440 - 6,440 4,739 Compensated absences payable 2,175 2,244 4,419 5,306 Total current liabilities 87,229 50,512 137,741 126,972 Noncurrent liabilities: Compensated absences payable 33,451 34,489 67,940 55,274 Net pension liability 179,702 183,690 363,392 431,576 Total noncurrent liabilities 213,153 218,179 431,332 486,850 Total liabilities 300,382 268,691 569,073 613,822 Deferred inflows: Deferred inflows related to pension 48,105 49,172 97,277 122,119 Total deferred inflows 48,105 49,172 97,277 122,119 Net position: Net investment in capital assets 4,472,654 3,745,666 8,218,320 8,109,979 Unrestricted 811,472 1,249,696 2,061,168 1,721,584 Total net position 5,284,126$ 4,995,362$ 10,279,488$ 9,831,563$ Business-Type Activities Totals The accompanying notes are an integral part of these basic financial statements. 42 CITY OF LITTLE CANADA, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS December 31, 2019 With Comparative Data as of December 31, 2018 Water Sewer (601)(602)2019 2018 Operating revenues: Charges for services - user fees 1,540,035$ 1,461,517$ 3,001,552$ 2,991,189$ Water meter sales 6,873 - 6,873 3,481 Other 170 - 170 150 Total operating revenues 1,547,078 1,461,517 3,008,595 2,994,820 Operating expenses: Personal services 284,049 290,051 574,100 639,098 MCES - sewer service charge - 789,424 789,424 856,644 Purchased water 912,815 - 912,815 891,518 Supplies, services, and other charges 117,074 106,549 223,623 241,412 Depreciation 252,268 133,368 385,636 426,034 Total operating expenses 1,566,206 1,319,392 2,885,598 3,054,706 Operating income (loss)(19,128) 142,125 122,997 (59,886) Nonoperating revenues (expenses): Investment earnings 23,801 31,238 55,039 21,740 Rental of City Property 78,755 - 78,755 75,726 Miscellaneous revenue 1,759 688 2,447 9,056 Total nonoperating revenues (expenses)104,315 31,926 136,241 106,522 Income (loss) before contributions and transfers 85,187 174,051 259,238 46,636 Capital contributions 32,037 456,650 488,687 40,740 Transfer to Capital Project Fund (200,000) (100,000) (300,000) (300,000) Total transfers (200,000) (100,000) (300,000) (300,000) Change in net position (82,776) 530,701 447,925 (212,624) Net position - January 1 5,366,902 4,464,661 9,831,563 10,044,187 Net position - December 31 5,284,126$ 4,995,362$ 10,279,488$ 9,831,563$ Business-Type Activities Totals The accompanying notes are an integral part of these basic financial statements. 43 CITY OF LITTLE CANADA, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS December 31, 2019 With Comparative Data as of December 31, 2018 Water Sewer (601)(602)2019 2018 Cash flows from operating activities: Receipts from customers and users 1,518,894$ 1,429,032$ 2,947,926$ 3,047,545$ Payment to suppliers (1,017,487) (904,350) (1,921,837) (1,978,788) Payment to employees (301,310) (308,053) (609,363) (627,973) Miscellaneous revenue 1,759 688 2,447 - Net cash flows from operating activities 201,856 217,317 419,173 440,784 Cash flows from noncapital financing activities: Transfers out (200,000) (100,000) (300,000) (300,000) Cash flows from capital and related financing activities: Acquisition of capital assets (5,290) - (5,290) (10,961) Rent proceeds 78,755 - 78,755 75,726 Net cash flows from capital and related financing activities 73,465 - 73,465 64,765 Cash flows from investing activities: Investment earnings 23,801 31,238 55,039 21,740 Net increase (decrease) in cash and cash equivalents 99,122 148,555 247,677 227,289 Cash and cash equivalents - January 1 636,653 845,943 1,482,596 1,255,307 Cash and cash equivalents - December 31 735,775$ 994,498$ 1,730,273$ 1,482,596$ Reconciliation of operating income/(loss) to net cash from operating activities: Operating income (loss) (19,128)$ 142,125$ 122,997$ (59,886)$ Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 252,268 133,368 385,636 426,034 Miscellaneous revenue 1,759 688 2,447 9,056 Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in: Accounts receivable (28,184) (32,485) (60,669) 38,393 Prepaid items 850 (8,481) (7,631) 11,363 Deferred outflows related to pension 22,704 23,280 45,984 31,134 Increase (decrease) in: Payables 17,337 6,098 23,435 (15,555) Net pension liability (33,521) (34,663) (68,184) (12,852) Deferred inflows related to pension (12,229) (12,613) (24,842) 13,097 Total adjustments 220,984 75,192 296,176 500,670 Net cash flows from operating activities 201,856$ 217,317$ 419,173$ 440,784$ Noncash investing, capital and financing activities: Capital asset contributions from governmental activities 32,037$ 456,650$ 488,687$ 40,740$ TotalsBusiness-Type Activities The accompanying notes are an integral part of these financial statements. 44 THIS PAGE INTENTIONALLY LEFT BLANK 45 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Organization The City of Little Canada, Minnesota (the City) operates under the “Optional Plan A” form of government as defined in Minnesota Statutes. Under this plan, the City Council, composed of an elected mayor and four elected trustees or council members, exercises legislative authority and determines all matters of policy. The City Council appoints personnel responsible for the proper administration of all the affairs relating to the City. The financial statements and the accounting policies of the City conform to accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. B. Reporting Entity As required by GAAP, these financial statements include the City (the primary government) and any component units. A component unit is a legally separate entity for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component unit includes whether or not the primary government appoints the voting majority of the potential component unit’s board, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally dependent upon by the potential component unit. The Little Canada Economic Development Authority (EDA) is a legally separate entity created to provide financing for economic development within the City of Little Canada. The governing board of the EDA is appointed by the City council and is substantially the same as the City Council. There is also a financially beneficial relationship between the EDA and the City. For these reasons the EDA has been included in the financial statements as a blended component unit, with its funds reports as though they are funds of the City. The EDA does not prepare separate financial statements. There are no other organizations that, when considered, would be included in the financial statements as a component unit. 46 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Government-Wide and Fund Financial Statements The government-wide financial statements (statement of net position and statement of activities) display information about the reporting government as a whole. These statements include all of the financial activities of the City, except fiduciary funds. Since, by definition, fiduciary fund assets are held for the benefit of a third party and cannot be used for activities or obligations of the City, these funds are excluded from the government-wide financial statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on sales, fees, and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other internally directed revenues are reported as general revenues. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes and special assessments are recognized as revenues in the fiscal year for which they are levied. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. However, charges between the City’s enterprise funds and other functions are not eliminated, as that would distort the direct costs and program revenues reported in those functions. The City applies restricted resources first when an expense is incurred for which both restricted and unrestricted resources are available. Depreciation expense can be specifically identified by function (see Note 5). Interest on long-term debt is considered an indirect expense and is reported separately on the statement of activities. 47 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Fund Financial Statement Presentation Separate fund financial statements are provided for governmental and proprietary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Aggregated information for the remaining nonmajor governmental funds is reported in a single column in the fund financial statements. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized when it becomes measurable and available. “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers revenues to be available if collected within 60 days after year-end. Major revenue that is susceptible to accrual includes property taxes, intergovernmental revenue, charges for services, and interest earned on investments. 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. Revenue that is not susceptible to accrual includes licenses and permits, fees, and miscellaneous revenue. Such revenue is recorded only when received because it is not measurable until collected. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. Expenditures are generally recorded when a liability is incurred, except for principal and interest on long-term debt and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as capital outlay expenditures in the governmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources. Proprietary fund financial statements are reported using the economic resources measurement focus and accrual basis of accounting, similar to the government-wide financial statements. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds are charges to customers for sales and services. The operating expenses for the enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 48 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Fund Financial Statement Presentation (Continued) Description of Funds The City reports the following major governmental funds: General Fund – This is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Economic Development – Used to account for amounts received and spent on community development activities. TIF Bonds of 2001A – This debt service fund is used to account for amounts received and related debt service expenditures for the 2001A Tax Increment Bonds. Canabury Square Condominiums HIA Fund – This debt service fund is used to account for the debt service associated with housing improvement area project costs for the Canabury Square condominiums. General Capital Improvements – This capital project fund is used to account for major capital improvement and acquisition projects that are not recorded in another capital project fund. Rice/LC Road Development Fund – This capital project fund is used to account for project costs and the related financing for the Rice Street/Little Canada Road redevelopment project. Infrastructure CIP Fund – This capital improvement fund is used to account for accumulating reserve balances as bond issues are fully redeemed. Water/Sewer Equipment Replacement Fund – This capital improvement fund is used to account for funds set aside from the City’s water and sewer operating utilities as well as other government sources of revenue to be used for future equipment replacement and capital costs. The City reports the following major enterprise funds: Water Operating Fund – This fund is used to account for the provision of water services to the residents and businesses of the City. Sewer Operating Fund – This fund is used to account for the provision of sewer services to the residents and businesses of the City. 49 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Budgets Budgets are adopted on a basis consistent with GAAP. Annual appropriated budgets are adopted for the General and all Special Revenue Funds. Budgeted expenditure appropriations lapse at year- end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is, at present, not considered necessary to assure effective budgetary control or facilitate effective cash management. The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution on a departmental basis and can be expended by each department based upon detailed budget estimates for individual expenditure accounts. 4. The City Administrator is authorized to transfer appropriations within any department budget. Additional interdepartmental or interfund appropriations and deletions are or may be authorized by the City Council with fund (contingency) reserves or additional revenues. 5. Formal budgetary integration is employed as a management control device during the year for the General Fund and Special Revenue Funds. 6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and calculate user charges. These Debt Service and Proprietary budget amounts represent general obligation bond indenture provisions and net income for operation and capital maintenance and are not reflected in the financial statements. 7. A capital improvement program is reviewed annually by the City Council for the Capital Project Funds. However, appropriations for major improvement projects (subject to statutory purchasing requirements) are not adopted until the actual bid award of the improvement. The appropriations are not reflected in the financial statements. 8. Expenditures may not legally exceed budgeted appropriations at the total fund level. Monitoring of budgets is maintained at the expenditure category level (i.e., salaries, wages and benefits, supplies, services, capital outlay) within each activity. 9. The City Council may authorize the transfer of budgeted amounts between City funds. 50 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Cash and Investments Cash and investment balances of the primary government and component unit are pooled and invested, to the extent available, in authorized investments. Investment income is allocated to individual funds on the basis of the fund’s equity in the cash and investment pool. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund balances are eliminated on the government-wide financial statements. Investments are stated at their fair value as determined by quoted market prices, except for money market investments and participating interest-earning investment contracts that have a remaining maturity at time of purchase of one year or less which are recorded at amortized cost, provided that the fair value of those investments is not significantly affected by the impairment of the credit standing of the issuer or by other factors. Money market investments are short-term, highly liquid debt instruments including commercial paper, banker’s acceptances, and U.S. Treasury and agency obligations. Investments in external investment pools that meet the criteria of GASB Statement No. 70 are valued at amortized cost. If any external investment pool does not meet the criteria established by this Statement, that pool should apply the provisions in paragraph 16 of Statement No. 31. For purposes of the statement of cash flows, the City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the Proprietary Funds have original maturities of 90 days or less. Therefore, the entire balance in the Proprietary Funds is considered cash equivalents. G. Receivables All miscellaneous accounts receivable are shown at net of an allowance for doubtful accounts. Since the City is generally able to certify delinquent utility bills to the county for collection as special assessments, no allowance for uncollectible accounts has been provided on those receivables. Receivables not expected to be collected within one year include delinquent taxes, special assessments, and certain amounts due from other governmental units. Any such receivables that are not considered to be available to finance current expenditures are offset by a deferred inflow of resources in the governmental fund financial statements. 51 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. Property Taxes The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The county spreads levies over all taxable property in the City and is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City on that date. Real property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. Personal property taxes are due in full on May 15. The county provides tax settlements to cities and other taxing districts three times a year. Revenues are generally accrued and recognized in the year collectible. Taxes which remain unpaid at December 31 are classified as delinquent taxes receivable. The City has no ability to enforce payment of property taxes by property owners, the County possesses this authority. In the government-wide financial statements the City recognizes property tax revenue in the period for which taxes were levied. Uncollectible property taxes are not material and have not been reported. In the governmental fund financial statements, the City recognizes current and delinquent taxes received by the City in July, December, and January as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January) are classified as taxes due from the County. The portion of taxes not received by the City by January is classified as delinquent and is fully offset by deferred inflows of resources. I. Special Assessments Special assessments are levied against the benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with state statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are remitted to the City in payment of delinquent special assessments. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasons recreational land in which event the property is subject to such sale after five years. 52 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. Special Assessments (Continued) In the government-wide financial statements the City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. In the fund financial statements current and delinquent special assessments received by the City are recognized as revenue for the current year. All remaining delinquent and deferred special assessments receivable are offset by deferred inflows of resources in the governmental funds. J. Inventories The original cost of materials and supplies has been recorded as expenditures at the time of purchase. The City does not maintain material amounts of inventories of goods and supplies. K. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Prepaid items are reported using the consumption method and recorded as expenditures/expenses at the time of consumption. L. Capital Assets Capital assets, which include land, buildings, improvements, equipment, infrastructure (utility systems, roads, bridges, sidewalks, and similar items), and intangible assets such as easements are reported in the applicable governmental or business-type activities columns in the government- wide financial statements. Such assets are capitalized at historical cost, or estimated historical cost for assets where actual historical cost is not available. Donated assets are recorded as capital assets at their acquisition value at the date of donation. The City defines capital assets as those with an initial, individual cost of $5,000 with an estimated useful life in excess of one year. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. In the case of the initial capitalization of general infrastructure (those reported by governmental activities) the City chose to include all such items, regardless of their acquisition date or amount. The City was able to estimate the historical cost for the initial reporting of these assets through back-trending (i.e. estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost of the infrastructure to the acquisition year or estimated acquisition year). Capital assets are recorded in the government-wide and proprietary fund financial statements, but are not reported in the governmental fund financial statements. 53 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Capital Assets (Continued) Capital assets are depreciated using the straight-line method over their estimated useful lives. Land, permanent easements, and construction in progress are not depreciated. The estimated useful lives are as follows: Buildings 40 Years Other Improvements 5 to 25 Years Machinery and Equipment 5 to 15 Years Infrastructure – Streets 25 Years Infrastructure – Water and Sewer 50 Years M. Compensated Absences Payable It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. For the governmental activities, compensated absences are generally liquidated by the General Fund. 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. N. Long-Term Obligations In the government-wide and proprietary fund financial statements, long-term debt and other long- term obligations are reported as liabilities. Bond premiums and discounts, if material, are amortized over the life of the bonds using the straight-line method. Bond issuance costs are expensed as incurred. In the governmental fund financial statements, long-term debt and other long-term obligations are not reported as liabilities. The face amount of debt issued is reported as other financing sources. Premiums or discounts on debt issuances are reported as other financing sources or uses, respectively. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. O. Net Pension Liability For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA’s fiscal year-end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payment and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. For the governmental activities, the net pension liability will be liquidated through the General Fund. 54 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) P. Net Position/Fund Balance Net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources in the government-wide and proprietary fund financial statements. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. Portions of net position are reported as restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, or laws or regulations. In the fund financial statements, governmental funds report fund balances in the classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable – portion of fund balances related to prepaids, inventories, long-term receivables, and corpus on any permanent fund. Restricted – funds are constrained from outside parties (statute, grantors, bond agreements, etc.). Committed – funds are established and modified by a resolution approved by the City Council. Assigned – consists of internally imposed constraints. The City adopted a formal fund balance policy which gives authority to assign fund balances to the Finance Director and/or City Administrator. Unassigned – is the residual classification for the General Fund and also reflects the negative residual amounts in other funds. When both restricted and unrestricted fund balance is available for use, it is the City’s policy to use restricted first, then unrestricted fund balance. When committed, assigned, or unassigned amounts are available for use, it is the City’s policy to use committed first, then assigned, and finally unassigned amounts. Q. Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures, or expenses. Transactions that constitute reimbursements to a fund for expenditures/ expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All other interfund transactions are reported as transfers. 55 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) R. Risk Management The City is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The City participates in the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool for its general property and casualty, workers’ compensation, and other miscellaneous insurance coverages. LMCIT operates as a common risk management and insurance program for a large number of cities in Minnesota. The City pays an annual premium to LMCIT for insurance coverage. The LMCIT agreement provides that the trust will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of certain limits. Settled claims resulting from these risks have not exceeded insurance coverage in any of the past three fiscal years. There were no significant reductions in insurance coverage in 2019. S. Deferred Outflows and Inflows of Resources In addition to assets, the statements of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until that time. The City has one type of item, deferred outflows related to pensions, which qualifies for reporting in this category. See Note 7 for additional detail. In addition to liabilities, statements of financial position or balance sheets will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time. The City has two types of items which qualify for reporting in this category. The first, unavailable revenues, arises under a modified accrual basis of accounting and therefore is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenue from four sources: property taxes, special assessments, intergovernmental, and other revenues not collected within 60 days of year-end. These amounts are deferred and recognized as an inflow of resources in the period the amounts become available. The City also reports deferred inflows related to pensions on its statement of net position. See Note 7 for additional detail. T. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. U. Reclassifications Certain prior year numbers have been reclassified to conform to current year presentation. 56 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) V. Comparative Totals The basic financial statements, required supplementary information and combining and individual nonmajor fund financial statements and schedules, include certain prior-year summarized comparative information in total but not at the level of detail required for a presentation in conformity with GAAP. Accordingly, such information should be read in conjunction with the City’s financial statements. NOTE 2 DEPOSITS AND INVESTMENTS A. Components of Cash and Investments Cash and investments at year-end consisted of the following: Investments $13,001,967 Deposits 2,684,445 Cash on hand 600 $15,687,012 Cash and investments are presented in the financial statements as follows: Cash and Investments $15,687,012 B. Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council, including checking accounts and certificates of deposit. The following is considered the most significant risk associated with deposits: Custodial Credit Risk – In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may be lost. Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated “A” or better; revenue obligations rated “AA” or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. At year-end, the carrying amount of the City’s deposits was $2,684,445 while the balance on the bank records was $2,684,445. At December 31, 2019, all deposits were fully covered by federal depository insurance, surety bonds, or by collateral held by the City’s agent in the City’s name. 57 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED) C. Investments The City has the following investments at year-end: Investments Measured at Fair Value Fair Value Negotiable Certificates of Deposit with Maturities at Purchase of Greater than 1 Year $7,904,408 Municipal Bonds $852,678 Total Investments Measured at Fair Value $8,757,086 Investments Measured at Amortized Cost Amortized Cost Negotiable Certificates of Deposit with Maturities at Purchase of Less than 1 Year $1,231,800 Money Market Funds 455 Minnesota Municipal Money Market (4M Fund) $3,012,626 Total Investments Measured at Amortized Cost $4,244,881 Investments are subject to various risks, the following of which are considered the most significant: Interest Rate Risk – This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in interest rates (the longer the period for which an interest rate is fixed, the greater the risk). The City’s investment policy requires the City to diversify its investment portfolio to eliminate the risk of loss resulting from over concentration of assets in a specific maturity. The policy states the City’s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements. Custodial Credit Risk – For investments, this is the risk that in the event of a failure of the counterparty to an investment transaction (typically a broker-dealer) the City would not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City’s investment policy does not address custodial credit risk. However, investments in securities are held by the City’s broker-dealers of which $1,500,000 is insured through SIPC. The broker-dealers have provided additional protection by providing additional insurance. This insurance is subject to aggregate limits applied to all of the broker-dealer’s accounts. 58 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED) C. Investments (Continued) Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota Statutes limit the City’s investments to direct obligations or obligations guaranteed by the United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated “AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less; Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or certain Minnesota securities broker-dealers. A schedule of the maturities and ratings of the City’s investments as of December 31, 2019 is as follows: Investment Type Total Less Than 1 Year 1 to 5 Years 5 to 10 Years Rating Negotiable Certificates of Deposit $ 9,136,209 $2,713,292 $6,422,917 $ - Not Rated Municipal Bonds 852,678 - 852,678 - S&P AA Money Market Funds 455 455 - - Not Rated Minnesota Municipal Money Market (4M Fund) 3,012,625 3,012,625 - - Not Rated Total Investments $13,001,967 $5,726,372 $7,275,595 $ - Concentration Risk – This is the risk associated with investing a significant portion of the City’s investment (considered 5% or more) in the securities of a single issuer. The City places no limit on the amount the City may invest in any one issuer. At December 31, 2019, the City had the following investments which individually comprise more than 5% of the City’s total investments: Percentage of Amount Investments Minnesota Municipal Money Market (4M Fund) $3,012,625 23.10% 59 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED) C. Investments (Continued) Fair Value Measurements The City uses fair value measurements to record fair value adjustments to certain asset and liabilities and to determine fair value disclosures. The City follows an accounting standard which defines fair value, establishes framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and requires expanded disclosures about fair value measurements. In accordance with this standard, the City has categorized its investments, based on the priority of inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quotes and prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities recorded on the combined statements of financial position are categorized based on the inputs to the valuation techniques as follows: Level 1 – Financial assets and liabilities are valued using inputs that are unadjusted quoted prices in active markets accessible at the measurement date of identical financial assets and liabilities. Level 2 – Financial assets and liabilities are valued based on quoted prices for similar assets or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 3 – Financial assets and liabilities are valued using pricing inputs which are unobservable for the asset, inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset. Investment Type Level 1 Level 2 Level 3 Total Negotiable Certificates of Deposit with Maturities at Purchase of Greater Than 1 Year $ - $7,904,409 $ - $ 7,904,409 Municipal Bonds - 852,678 - 852,678 Total Investments Measured at Fair Value $ - $8,757,087 $ - $ 8,757,087 Investments Measured at Amortized Cost 4,244,880 Total Investments $13,001,967 60 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 3 RECEIVABLES Significant receivable balances not expected to be collected within one year of December 31, 2019 are as follows: Fund Property Tax/Tax Increment Receivable Special Assessment Receivable Advances to Other Funds Loan Receivable Total General Fund $52,650 $ - $ 761,178 $ - $ 813,828 Economic Development - - - 600,000 600,000 Canabury Square Condo. - 1,192,738 - - 1,192,738 Rice/LC Road Development - 27,372 - - 27,372 Infrastructure CIP 1,726 1,235,713 - - 1,237,439 Water/Sewer Equip. Replace. - 56,465 1,342,881 - 1,399,346 Nonmajor Funds 1,764 38,223 - - 39,987 Total $56,140 $2,550,511 $2,104,059 $600,000 $5,310,710 NOTE 4 UNAVAILABLE REVENUE Governmental funds report deferred inflows of resources in connection with receivables for revenues that are considered not available to liquidate liabilities for the current period. At the end of the current fiscal year, the various components of unavailable revenue reported in the governmental funds were as follows: Fund Property Taxes Special Assessments Other Total General Fund $52,650 $ - $ 64,644 $ 117,294 Economic Development - - 600,000 600,000 Canabury Square Condo. - 1,192,738 - 1,192,738 Rice/LC Road Development - 27,372 - 27,372 Infrastructure CIP 1,726 1,235,713 156,726 1,394,165 Water/Sewer Equip. Replace. - 56,465 - 56,465 Nonmajor Funds 1,764 38,223 - 39,987 Total $56,140 $2,550,511 $821,370 $3,428,021 61 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 5 CAPITAL ASSETS A.Changes in Capital Assets Used in Governmental Activities Capital asset activity for the year ended December 31, 2019 was as follows: Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital assets, not being depreciated: Land $ 3,620,111 $ - $ - $ 3,620,111 Construction in progress 3,203,677 153,524 (470,340) 2,886,861 Total capital assets, not being depreciated 6,823,788 153,524 (470,340) 6,506,972 Capital assets, being depreciated: Buildings and improvements 7,374,815 201,640 - 7,576,455 Machinery and equipment 5,576,190 438,463 (329,957) 5,684,696 Other improvements 616,411 344,318 - 960,729 Streets 40,116,983 469,001 - 40,585,984 Total capital assets being depreciated 53,684,399 1,453,422 (329,957) 54,807,864 Less accumulated depreciation for: Buildings and improvements (2,344,681) (184,370) - (2,529,051) Machinery and equipment (3,005,907) (272,184) 315,938 (2,962,153) Other improvements (185,916) (27,328) - (213,244) Streets (25,507,890) (1,236,998) - (26,744,888) Total accumulated depreciation (31,044,394) (1,720,880) 315,938 (32,449,336) Total capital assets, being depreciated, net 22,640,005 (267,458) (14,019) 22,358,528 Governmental activities capital assets, net $29,463,793 $ (113,934) $ (484,359) $ 28,865,500 B.Changes in Capital Assets Used in Business-Type Activities Capital asset activity for the year ended December 31, 2019 was as follows: Beginning Ending Balance Increases Decreases Balance Business-Type Activities: Capital assets, not being depreciated: Permanent easements $ 103,301 $ - $ - $103,301 Construction in progress 10,030 - (3,965) 6,065 Total capital assets, not being depreciated 113,331 - (3,965) 109,366 Capital assets, being depreciated: Machinery and equipment 732,861 417,755 - 1,150,616 Distribution and collection system 18,527,045 80,187 - 18,607,232 Total capital assets being depreciated 19,259,906 497,942 - 19,757,848 Less accumulated depreciation for: Machinery and equipment (381,473) (24,162) - (405,635) Distribution and collection system (10,881,785) (361,474) - (11,243,259) Total accumulated depreciation (11,263,258) (385,636) - (11,648,894) Total capital assets, being depreciated, net 7,996,648 112,306 - 8,108,954 Business-type activities capital assets, net $8,109,979 $112,306 $ (3,965) $ 8,218,320 62 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 5 CAPITAL ASSETS (CONTINUED) C. Depreciation Expense by Function Depreciation expense was charged to the functions/programs of the primary government as follows: Governmental activities: General government $ 91,635 Public safety 100,490 Public works 1,453,084 Culture and recreation 75,671 Total depreciation expense governmental activities $1,720,880 Business-type activities: Water $252,268 Sewer 133,368 Total depreciation expense business-type activities $385,636 NOTE 6 LONG-TERM LIABILITIES A. Components of Long-Term Debt The City had the following long-term liabilities outstanding at December 31, 2019: Final Interest Issue Maturity Original Payable Rate Date Date Issue 12/31/2019 Governmental Activities: General Obligation Bonds: GO Bonds of 2014A 2.98% 03/11/2014 02/01/2034 $3,400,000 $2,690,000 GO Refunding Bonds of 2015A 2.00% 06/23/2015 02/01/2026 1,335,000 965,000 Total General Obligation Bonds 4,735,000 3,655,000 Notes from Direct Borrowings: Canabury Condos Note 2.00% 02/17/2010 02/01/2025 170,900 24,998 Canabury Square Condos Note 2.00% 05/14/2010 02/01/2025 99,100 38,802 Fleur Royale Note 2.00% 02/17/2010 02/01/2020 130,000 7,366 Total Notes from Direct Borrowings 400,000 71,166 Unamortized bond premium 46,938 Compensated absences payable 101,490 Total Government Activities $5,135,000 $3,874,594 Business-Type Activities: Compensated absences payable $72,359 Total Business-Type Activities $72,359 63 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 6 LONG-TERM LIABILITIES (CONTINUED) B. Changes in Long-Term Debt Long-term liability activity for the year ended December 31, 2019 was as follows: Beginning Balance Additions Reductions Ending Balance Due Within One Year Governmental activities: General Obligation Bonds $3,925,000 $ - $ (270,000) $3,655,000 $275,000 Tax Increment Bonds 965,000 - (965,000) - - Plus: unamortized bond premium 57,296 - (10,358) 46,938 - Total bonds payable 4,947,296 - (1,245,358) 3,701,938 275,000 Notes from Direct Borrowings 104,243 - (33,077) 71,166 33,791 Compensated absences payable 87,695 95,140 (81,345) 101,490 5,854 Total Governmental activities 5,139,234 95,140 (1,359,780) 3,874,594 314,645 Business-Type activities: Compensated absences payable 60,580 63,275 (51,496) 72,359 4,419 Total Debt $5,199,814 $158,415 $ (1,411,276) $3,946,953 $319,064 Compensated absences are generally liquidated in the General Fund for governmental activities and for business-type activities they are liquidated in the fund they are accrued (water and sewer). The 2001A Tax Increment Bonds were called and retired in 2019. These bonds were retired since there were sufficient funds in the TIF District to pay these bonds in full and to comply with State TIF requirements. C. Future Minimum Debt Payments Annual debt service requirements to maturity for long-term debt are as follows: Year Ending General Obligation Bonds Notes from Direct Borrowings December 31 Principal Interest Principal Interest 2020 $275,000 $99,328 $33,791 $1,258 2021 280,000 93,778 12,173 787 2022 285,000 87,753 7,212 468 2023 295,000 81,178 7,358 323 2024 305,000 74,378 7,506 176 2025 310,000 67,307 3,126 31 2026 315,000 59,468 - - 2027 175,000 52,625 - - 2028 185,000 47,225 - - 2029 185,000 41,675 - - 2030 190,000 36,050 - - 2031 200,000 29,700 - - 2032 210,000 22,000 - - 2033 220,000 13,400 - - 2034 225,000 4,500 - - Total $3,655,000 $810,365 $71,166 $3,043 64 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 6 LONG-TERM LIABILITIES (CONTINUED) D. Revenues Pledged (Continued) Canabury Condos Note – The City has pledged future housing improvement assessment revenue to repay the note payable to Ramsey County issued in 2010. Proceeds from the note provided financing for the 2009 Housing Improvement Area Project – Canabury Condos. Housing improvement assessments were projected to produce 100% of the debt service requirements over the life of the note. Total principal and interest remaining on the note is $25,489, payable through 2025. For the current year, principal and interest paid and total housing improvement assessment revenues were $13,244 and $14,046, respectively. Canabury Square Condos Note – The City has pledged future housing improvement assessment revenue to repay the note payable to Ramsey County issued in 2010. Proceeds from the note provided financing for the 2010 Housing Improvement Area Project – Canabury Square Condos. Housing improvement assessments were projected to produce 100% of the debt service requirements over the life of the note. Total principal and interest remaining on the note is $41,555, payable through 2025. For the current year, principal and interest paid and total housing improvement assessment revenues were $7,679 and $289,434, respectively. Fleur Royale Note – The City has pledged future housing improvement assessment revenue to repay the note payable to Ramsey County issued in 2010. Proceeds from the note provided financing for the 2010 Housing Improvement Area Project – Fleur Royale. Housing improvement assessments were projected to produce 100% of the debt service requirements over the life of the note. Total principal and interest remaining on the note is $7,165, payable through 2020. For the current year, principal and interest paid and total housing improvement assessment revenues were $14,408 and $31,888, respectively. The City’s outstanding notes from direct borrowings related to governmental activities contain provisions that in an event default, the County may declare the balance of the principal and interest outstanding under the notes to be immediately due and payable in full. 65 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 7 DEFINED BENEFIT PENSION PLANS – STATE-WIDE A. Plan Description The City of Little Canada participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA’s defined-benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA’s defined-benefit pension plans are tax- qualified plans under Section 401(a) of the Internal Revenue Code. 1. General Employees Retirement Fund All full-time and certain part-time employees of the City are covered by the General Employees Plan. General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. B. Benefits Provided PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature. Vested, terminated employees who are entitled to benefits, but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. 1. General Employees Plan Benefits General Employees Plan benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated Plan members. Members hired prior to July 1, 1989, receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2 percent of average salary for each of the first 10 years of service and 1.7 percent of average salary for each additional year. Under Method 2, the accrual rate for Coordinated members is 1.7 percent of average salary for all years of service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. Annuities, disability benefits, and survivor benefits are increased effective every January 1. Beginning January 1, 2019, the postretirement increase will be equal to 50 percent of the cost- of-living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1 percent and a maximum of 1.5 percent. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the effective date of the increase will receive the full increase. For recipients receiving the annuity or benefit for at least one month but less than a full year as of the June 30 before the effective date of the increase will receive a reduced prorated increase. For members retiring on January 1, 2024, or later, the increase will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from the delay to normal retirement. 66 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 7 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) C. Contributions Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. 1. General Employees Fund Contributions Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2019 and the City was required to contribute 7.50 percent for Coordinated Plan members. The City’s contributions to the General Employees Fund for the year ended December 31, 2019, were $85,748. The City’s contributions were equal to the required contributions as set by state statute. D. Pension Costs 1. General Employees Fund Pension Costs At December 31, 2019, the City reported a liability of $873,546 for its proportionate share of the General Employees Fund’s net pension liability. The City’s net pension liability reflected a reduction due to the State of Minnesota’s contribution of $16 million to the fund in 2019. The State of Minnesota is considered a non-employer contributing entity and the state’s contribution meets the definition of a special funding situation. The State of Minnesota’s proportionate share of the net pension liability associated with the City totaled $27,165. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportionate share of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2018 through June 30, 2019, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2019, the City’s proportionate share was .0158% percent which was a decrease of .0014% percent from its proportionate share measured as of June 30, 2018. City’s proportionate share of the net pension liability $873,546 State of Minnesota’s proportionate share of the net pension liability associated with the City $27,165 Total $900,711 67 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 7 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) D. Pension Costs (Continued) 1. General Employees Fund Pensions Costs (Continued) For the year ended December 31, 2019, the City recognized pension expense of $63,961 for its proportionate share of the General Employees Plan’s pension expense. In addition, the City recognized an additional $2,034 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s contribution of $16 million to the General Employees Fund. At December 31, 2019, the City reported its proportionate share of the General Employees Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Description Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual economic experience $ 24,209 $ - Changes in actuarial assumption - 68,661 Net differences between projected and actual earnings on pension plan investments - 88,544 Changes in proportion and differences between city contributions and proportionate share of contributions 9,185 76,636 City contributions subsequent to the measurement date 43,384 - Total $ 76,778 $ 233,841 The $43,384 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended December 31, Pension Expenses Amount 2020 $ (75,085) 2021 (87,503) 2022 (39,268) 2023 1,409 E. Actuarial Assumptions The total pension liability in the June 30, 2019, actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Active member payroll growth 3.25% per year Investment rate of return 7.50% Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors, and disabilitants were based on RP-2014 tables for males or females, as appropriate, with slight adjustments to fit PERA’s experience. Cost of living benefit increases for retirees are assumed to be 1.25% per year for the General Employees Plan. 68 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 7 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) E. Actuarial Assumptions (Continued) Actuarial assumptions used in the June 30, 2019, valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the General Employees Plan was completed in 2019. The following changes in actuarial assumptions occurred in 2019: Changes in Actuarial Assumptions: • The morality projection scale was changed from MP-2017 to MP-2018. Changes in Plan Provisions: • The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The State’s special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis using a building- block method in which best-estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized below: Asset Class Target Allocation Long-Term Expected Real Rate of Return Domestic Equity 35.5% 5.10% Private Markets 25.0% 5.90% Fixed Income 20.0% .75% International Equity 17.5% 5.90% Cash Equivalents 2.0% 0.00% Totals 100% F. Discount Rate The discount rate used to measure the total pension liability in 2019 was 7.50 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Fund was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 69 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 7 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) G. Pension Liability Sensitivity The following presents the City’s proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate one percentage point lower or one percentage point higher than the current discount rate: Description 1% Decrease in Discount Rate (6.50%) Current Discount Rate 1% Increase in Discount Rate (8.50%) City’s Proportionate Share of the GERF Net $1,436,064 $873,546 $409,077 Pension Liability H. Pension Plan Fiduciary Net Position Detailed information about each pension plan’s fiduciary net position is available in a separately- issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org. NOTE 8 DEFINED CONTRIBUTION PENSION PLANS A. Public Employees Defined Contribution Plan Three council members of the City are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple-employer deferred compensation plan administered by the Public Employees Retirement Association of Minnesota (PERA). Funding Policy Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5% of the salary which is matched by the elected official’s employer. For ambulance services personnel, employer contributions are determined by the employer, and for salaried employees must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2% of employer contributions and twenty-five hundredths of the 1% of the assets in each member’s account annually. Total contributions made by the City and plan members in 2019, 2018, and 2017 were $1,213, $1,180, and $1,180, respectively. 70 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 9 OTHER POSTEMPLOYMENT BENEFITS The City does not provide postemployment benefits other than permitting retired employees to continue in the City’s group health insurance plan, as required by Minnesota Statutes. The retiree is required to pay 100% of the premium. The premium charged is a single common premium for both active and retired employees. This practice has the potential to create an OPEB liability based on the theory that retirees have higher utilization of health care benefits than active employees (implicit rate subsidy). The City has determined the liability resulting from an implicit rate subsidy is not material and, therefore, not included in these financial statements. NOTE 10 INTERFUND RECEIVABLES/PAYABLES, LOANS AND TRANSFERS The City had the following interfund transfers: Transfers In Transfers Out General Fund TIF Bonds 2001A General Capital Improvement Rice/LC Road Development Infrastructure CIP Water/Sewer Equipment Replacement Other Governmental Funds Total General Capital Improvement $ - $ - $ - $86,385 $ - $ - $ - $86,385 Rice/LC Road Development 3,479 971,250 - - 48,309 - - 1,023,038 Infrastructure CIP - - 4,094 - - - - 4,094 Water/Sewer Equip. Replace. - - - - - - $229,500 229,500 Other Governmental Funds 95,199 - 31,401 - - - 147,128 273,728 Water Proprietary Fund - - - - - 200,000 - 200,000 Sewer Proprietary Fund - - - - - 100,000 - 100,000 Total $98,678 $971,250 $35,495 $86,385 $48,309 $300,000 $376,628 $1,916,745 71 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 10 INTERFUND RECEIVABLES/PAYABLES, LOANS AND TRANSFERS (CONTINUED) Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by another fund. All of the 2019 transfers are considered routine and consistent with previous practice and policies. Four interfund loans were approved by the City to provide cash flow for certain improvements within TIF District 6-1, TIF District 7-1, TIF District 7-2, Canabury Square Condominiums HIA, and Economic Development. Amounts due to/from other funds cover deficit cash balances. A summary at December 31, 2019 is as follows: Fund Interfund Loan Receivable Interfund Loan Payable General Fund $761,178 $ - Economic Development - 654,645 Canabury Square Condo. HIA - 860,311 Water/Sewer Equip. Replace. 1,342,881 - Nonmajor Funds - 589,103 Total $2,104,059 $2,104,059 NOTE 11 TAX ABATEMENTS The City of Little Canada has established a tax abatement program pursuant to Minnesota Statutes, Sections 469.1812 through 469.1815. As part of the City’s program the City enters into agreements through the use of tax increment financing districts under Minnesota Statutes 469.174 to 469.179 (the Tax Increment Act). Under these statutes the City annually abates taxes collected above the district’s base tax capacity which is established during adoption of the tax increment district. These agreements are established to foster economic development and redevelopment through creating jobs, removing blight, and providing affordable housing. For fiscal year ended December 31, 2019, the City has one agreement established under Minnesota Statutes Section 469.174 to 469.179 in the form of a pay-as-you-go note with an apartment complex. This agreement resulted in property taxes totaling $156,790 being abated in 2019. 72 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 12 COMMITMENTS AND CONTINGENT LIABILITIES A. Litigation The City has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City, remotely recoverable by plaintiffs. B. Federal and State Funds The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2019. C. Tax Increment Districts The City’s tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. NOTE 13 DEFERRED AD VALOREM TAX LEVIES – BONDED DEBT General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefitting properties. When a bond is issued, that will be partially or completely financed by ad valorem tax levies, the specific annual amounts of such tax levies are stated in the bond resolution. The County Auditor is notified to levy these tax levies over the appropriate years. The future tax levies are subject to cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy any additional taxes found necessary for the full payment of principal and interest. These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2019. At December 31, 2019, future scheduled tax levies for all bonds outstanding totaled $2,760,581. The City is currently working to eliminate the debt levies over time. 73 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 14 FUND BALANCES A. Classifications A summary of the governmental fund balance classifications at December 31, 2019 is as follows: Nonspendable Restricted Committed Assigned Unassigned Total General Fund: $ - $ - $ - $ - $ 2,210,615 $ 2,210,615 Prepaid items 10,807 - - - - 10,807 Advances to other funds 761,178 - - - - 761,178 Strategic plan initiatives - - - 78,870 - 78,870 COVID-19 - - - 60,000 - 60,000 Total General Fund 771,985 - - 138,870 2,210,615 3,121,470 Economic Development - - - - (589,698) (589,698) Canabury Square Condo. HIA - - - - (817,650) (817,650) General Capital Improvement: Capital improvements - 78,000 - 1,585,637 - 1,663,637 Rice/LC Road Road Development: Tax increment - 529,169 - - - 529,169 Infrastructure CIP: Capital improvements - - - 3,474,818 - 3,474,818 Water/Sewer Equip. Replacement: Advances to other funds - - - 1,342,881 - 1,342,881 Capital improvements - - - 690,887 - 690,887 Total Other Major Funds - 607,169 - 7,094,223 (1,407,348) 6,294,044 Nonmajor Governmental Funds: Charitable gambling - 63,147 - - - 63,147 Park acquisition - 878,053 - - - 878,053 Debt retirement - 89,434 - - - 89,434 Fire equipment - 255,445 - - - 255,445 Tax increment purposes - 1,694,860 - - - 1,694,860 Parks and recreation - - 42,265 - - 42,265 Cable - - 476,402 - - 476,402 Recycling - - 188,152 - - 188,152 Park acquisition - - - 343,867 - 343,867 Fire equipment - - - 840,283 - 840,283 Redevelopment - - - 341,544 - 341,544 Deficit Fund Balance - - - - (589,103) (589,103) Total Nonmajor Funds - 2,980,939 706,819 1,525,694 (589,103) 4,624,349 Total Fund Balances Governmental Funds $ 771,985 $ 3,588,108 $ 706,819 $ 8,758,787 $ 214,164 $ 14,039,863 B. Fund Balance Policy The City Council has formally adopted a policy regarding the minimum unassigned fund balance for the General Fund. The most significant revenue source of the General Fund is property taxes. This revenue source is received in two installments during the year – June and December. As such, it is the City’s goal to begin each fiscal year with sufficient working capital to fund operations between each semi-annual receipt of property taxes. The policy establishes a year-end targeted unassigned fund balance amount for cash-flow timing needs in the range of 42.5-65% of the subsequent year’s budgeted expenditures. At December 31, 2019, the unassigned fund balance of the General Fund was 53.46% of the subsequent year’s budgeted expenditures. A large portion of the fund balance is in the form of nonspendable advances to other funds. 74 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 15 STEWARDSHIP AND ACCOUNTABILITY At December 31, 2019, individual funds with deficit fund balances/net position are as follows: Fund Amounts The deficit fund balances will be resolved through: Major Governmental Funds: Economic Development $(589,698) Future loan payments from developer Canabury Square Condo. HIA (817,650) Future special assessment payments Nonmajor Governmental Funds: TIF 6-1 (556,055) Future TIF Revenue TIF 7-1 (31,083) Future TIF Revenue TIF 7-2 (1,965) Future TIF Revenue NOTE 16 CONDUIT DEBT OBLIGATIONS The City has issued Industrial Revenue Bonds to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities which are deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issue. The City is not obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2019, there were eighteen bond issues outstanding. Project Type Number of Issues Housing 8 Industrial 4 Educational 3 Healthcare 2 Community Service 1 Total 18 The aggregate principal amount payable for the bonds could not be determined; however, their original issue amounts totaled $87,528,947. 75 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 17 COMMITMENTS During 2002, the City issued the Tax Increment Revenue Note of 2002 in the principal sum of $1,050,000. This note is not reflected in the financial statements of the City because the note is not a General Obligation of the City and is payable solely from available tax increments. The note reads in part as follows: The payment amounts due hereon shall be payable solely from tax increments (the Tax Increments) from the City’s Tax Increment Financing District No. 3-3 (the Tax Increment District) within its Municipal Development District No. 3 which are paid to the City and which the City is entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.179, as the same may be amended or supplemented from time-to-time (the Tax Increment Act). This note is not a general obligation of the City, and neither the full faith and credit nor the taxing powers of the City are pledged to the payment of the principal of or interest of this note and property or other asset of the City, save and except the above-referenced Tax Increments, is or shall be a source of payment of the City’s obligations hereunder. During 2012, the City issued the Tax Increment Revenue Note of 2012 in the principal sum of $530,237. This note is not reflected in the financial statements of the City because the note is not a General Obligation of the City and is payable solely from available tax increments. The note reads in part as follows: The payment amounts due hereon shall be payable solely from tax increments (the Tax Increments) from the City’s Tax Increment Financing District No. 5-1 (the Tax Increment District) within its Municipal Development District No. 5 which are paid to the City and which the City is entitled to retain pursuant to the provisions of Minnesota Statutes, Sections 469.174 through 469.179, as the same may be amended or supplemented from time-to-time (the Tax Increment Act), which are remitted or remaining after (a) the principal of an interest on the bonds have been paid in full, (b) the City has fully reimbursed itself from tax increments for any City Phase III shortfall amount, and (c) payment of the guaranty note in full (the Available Tax Increments). This note is not a general obligation of the City, and neither the full faith and credit nor the taxing powers of the City are pledged to the payment of the principal of or interest of this note and no property or other asset of the City, save and except the above-referenced Tax Increments, is or shall be a source of payment of the City’s obligations hereunder. 76 CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 18 ANTENNA LEASES The City receives revenue from agreements for the lease of space above its water tower to two communications companies. The space is used for antennas and other equipment (of the lessee) necessary to provide radio communications. For accounting purposes, the leases are considered operating leases. Lease revenue for the year ended December 31, 2019 totaled $112,218. Future Lease Receipts Amounts 2020 $81,905 2021 85,181 2022 88,589 2023 61,749 2024 58,142 NOTE 19 SUBSEQUENT EVENT Subsequent to year end, the World Health Organization declared the spread of Coronavirus Disease (COVID-19) a worldwide pandemic. The COVID-19 pandemic is having significant effects on global markets, supply chains, businesses, and communities. Specific to the City of Little Canada, COVID- 19 may impact various parts of its 2020 operations and financial results including, but not limited to, costs for emergency preparedness and shortages of personnel. Management believes the City of Little Canada is taking appropriate actions to mitigate the negative impact. However, the full impact of COVID-19 is unknown and cannot be reasonably estimated as these events occurred subsequent to year end and are still developing. The City has assigned $60,000 in the General Fund for possible COVID- 19 budget impacts. 77 THIS PAGE INTENTIONALLY LEFT BLANK 78 REQUIRED SUPPLEMENTARY INFORMATION 79 CITY OF LITTLE CANADA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GENERAL FUND - BUDGET TO ACTUAL (GAAP BASIS) For The Year Ended December 31, 2019 With Comparative Data for the Year Ended December 31, 2018 Variance with 2019 Final Budget - 2018 Actual Positive Actual Original Final Amounts (Negative)Amounts Revenue: General property taxes: Current and delinquent 2,935,824$ 2,935,824$ 2,960,424$ 24,600$ 2,954,253$ Mobile home and other 10,000 10,000 12,019 2,019 11,548 Total property taxes 2,945,824 2,945,824 2,972,443 26,619 2,965,801 Licenses and permits 259,345 264,545 497,295 232,750 300,059 Intergovernmental revenue: State: Local government aid 86,901 86,901 86,876 (25) 86,901 PERA aid 2,782 2,782 2,782 - 2,782 Fire relief aid - public safety 55,000 61,478 61,478 - 60,554 MSA - public works 112,000 112,000 123,590 11,590 124,045 Other - general government 1,395 1,395 300 (1,095) - County: Waste recycling grant 28,517 28,517 28,517 - 24,141 Total intergovernmental 286,595 293,073 303,543 10,470 298,423 Charges for services: Administration charges - general government 7,600 7,600 1,175 (6,425) 1,268 Other - general government 5,239 5,239 6,478 1,239 5,564 Other - community development 52,500 52,500 74,001 21,501 66,054 Other - culture and recreation 9,450 9,450 6,201 (3,249) 8,910 Total charges for services 74,789 74,789 87,855 13,066 81,796 Fines and forfeits - public safety 39,000 39,000 49,408 10,408 48,569 Investment earnings (loss)79,000 79,000 87,803 8,803 62,775 Donations: Donations - culture and recreation - - 2,855 2,855 120 Total donations - - 2,855 2,855 120 Miscellaneous: Other - general government 100 100 6,683 6,583 10,509 Other - public safety 113,164 123,164 167,103 43,939 24,675 Total miscellaneous 113,264 123,264 173,786 50,522 35,184 Total revenues 3,797,817 3,819,495 4,174,988 355,493 3,792,727 Budgeted Amounts 80 CITY OF LITTLE CANADA, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GENERAL FUND - BUDGET TO ACTUAL (GAAP BASIS) For The Year Ended December 31, 2019 With Comparative Data for the Year Ended December 31, 2018 Variance with 2019 Final Budget - 2018 Actual Positive Actual Original Final Amounts (Negative)Amounts Expenditures: General Government: Mayor and city council 85,500$ 85,500$ 81,709$ 3,791$ 78,721$ Elections 4,000 4,000 3,921 79 15,281 Administration 152,565 152,565 130,861 21,704 142,502 Attorney 105,595 105,595 75,768 29,827 82,292 Planning and zoning 160,360 160,360 158,256 2,104 153,354 Insurance 33,250 33,250 28,697 4,553 30,608 City hall 33,920 33,920 28,756 5,164 30,626 Total General Government 575,190 575,190 507,968 67,222 533,384 Public Safety: Police protection 1,688,766 1,698,766 1,698,457 309 1,611,979 Fire: Pension plan -City and State 86,000 92,478 92,478 - 91,554 Other current 372,020 372,020 370,908 1,112 372,846 Fire marshal 29,700 29,700 19,968 9,732 22,000 Protective inspection 214,180 219,380 219,360 20 209,445 Civil defense 2,810 2,810 86,224 (83,414) 1,637 Animal control 2,500 2,500 5,186 (2,686) 1,782 Total Public Safety 2,395,976 2,417,654 2,492,581 (74,927) 2,311,243 Public Works: Street maintenance 262,851 262,851 248,964 13,887 249,041 Engineering 20,535 20,535 19,452 1,083 25,831 Storm sewers 9,100 9,100 17,181 (8,081) 5,683 Street lighting 62,000 62,000 58,215 3,785 64,525 Recycling/sanitation 22,900 22,900 19,098 3,802 20,431 City garage 33,650 33,650 38,747 (5,097) 31,576 Tree trimming 6,000 6,000 3,052 2,948 10,550 Total Public Works 417,036 417,036 404,709 12,327 407,637 Community Service: Parks and recreation 490,035 490,035 437,688 52,347 423,252 Community partnerships 20,990 20,990 20,593 397 20,265 Old fire station 7,890 7,890 7,828 62 6,561 Total Community Service 518,915 518,915 466,109 52,806 450,078 Total expenditures 3,907,117 3,928,795 3,871,367 57,428 3,702,342 Revenues over (under) expenditures (109,300) (109,300) 303,621 412,921 90,385 Other financing sources (uses): Transfer from Special Revenue Fund 86,000 86,000 80,535 (5,465) 75,970 Transfer from Capital Project Fund 27,800 27,800 18,143 (9,657) 24,313 Transfer to Special Revenue Fund (4,500) (4,500) - 4,500 (4,500) Total other financing sources (uses):109,300 109,300 98,678 (10,622) 95,783 Net increase (decrease) in fund balance -$ -$ 402,299 402,299$ 186,168 Fund balance - January 1 2,719,171 2,533,003 Fund balance - December 31 3,121,470$ 2,719,171$ Budgeted Amounts 81 CITY OF LITTLE CANADA, MINNESOTA SPECIAL REVENUE FUND - ECONOMIC DEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2019 With Comparative Data for the Year Ended December 31, 2018 Variance with 2019 Final Budget-2018 Actual Positive Actual Original Final Amounts (Negative)Amounts Revenues: Investment earnings (loss)-$ -$ 20,041$ 20,041 10,775$ Miscellaneous - - - - 29,925 Total revenues - - 20,041 20,041 40,700 Expenditures: Economic development: Current: Contractual services - - 91,880 (91,880) 556,960 Interest - - 24,494 (24,494) 10,736 Total expenditures - - 116,374 (116,374) 567,696 Revenues over (under) expenditures -$ -$ (96,333) (96,333)$ (526,996) Fund balance - January 1 (493,365) 33,631 Fund balance - December 31 (589,698)$ (493,365)$ Budgeted Amounts 82 CITY OF LITTLE CANADA, MINNESOTA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For The Year Ended December 31, 2019 Actual in Final Excess of Budget Actual Budget General Fund: Public Safety: Civil Defense 2,810$ 86,224$ 83,414$ Aninal Control 2,500 5,186 2,686 Public Works: Storm Sewers 9,100 17,181 8,081 City Garage 33,650 38,747 5,097 The General Fund Budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the department level for both budgets. The following is a listing of expenditures that exceeded budget appropriations. 83 CITY OF LITTLE CANADA, MINNESOTA PERA SCHEDULE OF THE CITY'S PROPORIONATE SHARE OF NET PENSION LIABILITY YEAR ENDED DECEMBER 31, 2019 GERF Schedule of the City's Proportionate Share of the Net Pension Liability. * 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 City's Proportion of the net pension liability 0.0158%0.0172%0.0169%0.1777%0.1890%0.0209% City's proportionate share of the net pension liability 873,546$ 954,185$ 1,078,886$ 1,437,152$ 979,496$ 981,777$ State's proportionate share of the net pension associated with the City 27,165 31,362 13,538 - - - Total 900,711$ 985,547$ 1,092,424$ 1,437,152$ 979,496$ 981,777$ City's covered payroll 1,118,348$ 1,160,624$ 1,086,457$ 1,109,852$ 1,117,363$ 1,099,159$ City's proportionate share of the net pension liability as a percentage of its covered payroll 78.11%82.21%99.30%129.49%87.66%89.32% Plan fiduciary net position as a percentage of the total net pension liability 80.23%79.53%75.90%68.90%78.20%78.70% *The amounts presented for each fiscal year were determined as of 06/30. Ten years of data is not available but years will be added going forward until ten years are presented. Measurement Date 84 CITY OF LITTLE CANADA, MINNESOTA PERA SCHEDULE OF THE CITY'S PROPORIONATE SHARE OF NET PENSION LIABILITY (CONTINUED) YEAR ENDED DECEMBER 31, 2019 NOTES TO SCHEDULE OF CHANGES IN NET PENSON LIABILITIES AND RELATED RATIOS 2019 Changes Changes in Actuarial Assumptions The morality projection scale was changed from MP-2017 to MP-2018. Changes in Plan Provisions The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The State’s special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. 2018 Changes Changes in Actuarial Assumptions The morality projection scale was changed from MP-2015 to MP-2017. The assumed benefit increase was changed from 1.00 percent per year through 2044 and 2.50 percent per year thereafter to 1.25 percent per year. Changes in Plan Provisions The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024. Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018. Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. Contribution stabilizer provisions were repealed. Postretirement benefit increases were changed from 1.00 percent per year with a provision to increase to 2.50 percent upon attainment of 90.00 percent funding ratio to 50.00 percent of the Social Security Cost of Living Adjustment, not less than 1.00 percent and not more than 1.50 percent, beginning January 1, 2019. For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. 2017 Changes Changes in Actuarial Assumptions The combined service annuity (CSA) loads were changed from 0.80 percent for active members and 60.00 percent for vested and non-vested deferred members. The revised CSA load are now 0.00 percent for active member liability, 15.00 percent for vested deferred member liability, and 3.00 percent for non-vested deferred member liability. The assumed postretirement benefit increase rate was changed for 1.00 percent per year for all years to 1.00 percent per year through 2044 and 2.50 percent per year thereafter. Changes in Plan Provisions The State’s contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018, and $6,000,000 thereafter. The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The state’s contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031. 2016 Changes Changes in Actuarial Assumptions The assumed postretirement benefit increase rate was changed from 1.00 percent per year through 2035 and 2.50 percent per year thereafter to 1.00 percent per year for all years. The assumed investment return was changed from 7.90 percent to 7.50 percent. The single discount rate changed from 7.90 percent to 7.50 percent. Other assumptions were changed pursuant to the experience study June 30, 2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. Changes in Plan Provisions There have been no changes since the prior valuation. 2015 Changes The assumed postretirement benefit increase rate was changed from 1.00 percent per year through 2030 and 2.50 percent per year thereafter to 1.00 percent per year through 2035 and 2.50 percent per year thereafter. On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which increased the total pension liability by $1.1 billion and increase the fiduciary plan net position by $892 million. Upon consolidation, state and employer contributions were revised; the State’s contribution of $6.0 million, which meets the special funding situation definition, was due September 2015.85 CITY OF LITTLE CANADA, MINNESOTA PERA SCHEDULE OF THE CITY'S CONTRIBUTIONS YEAR ENDED DECEMBER 31, 2019 GERF Schedule of the City's Contributions * 2019 2018 2017 2016 2015 2014 Statutorily required contribution 85,748$ 86,397$ 84,726$ 80,064$ 84,688$ 81,379$ Contributions in relation to the statutorily required (85,748)$ (86,397)$ (84,726)$ (80,064)$ (84,688)$ (81,379)$ contribution Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ City's covered payroll 1,143,307$ 1,151,960$ 1,129,680$ 1,067,520$ 1,129,173$ 1,122,463$ Contributions as a percentage of covered payroll 7.50%7.50%7.50%7.50%7.50%7.25% *Ten years of data is not available but years will be added going forward until ten years are presented. Contributions are as of 12/31 each year. Measurement Date 86 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 87 CITY OF LITTLE CANADA, MINNESOTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2019 With Comparative Totals as of December 31, 2018 Special Debt Capital Revenue Service Project 2019 2018 Assets: Cash and investments 568,523$ 89,045$ 4,150,139$ 4,807,707$ 6,185,432$ Cash and investments, held by trustee - - - - 1,263 Accounts receivable - net 207,181 - 27,431 234,612 257,779 Prepaid items - - - - 2,440 Delinquent property taxes receivable - - 1,764 1,764 10,411 Due from county - 389 5,864 6,253 2,509 Special assessments receivable: Deferred - 26,691 - 26,691 66,800 Delinquent - 298 11,234 11,532 10,670 Special deferred - - - - 3,400 Property held for resale - - 316,754 316,754 346,754 Total assets 775,704$ 116,423$ 4,513,186$ 5,405,313$ 6,887,458$ Liabilities: Accounts payable 40,319$ -$ 82,989$ 123,308$ 156,580$ Due to other governmental units 24,215 - - 24,215 23,211 Interfund loan payable - - 589,103 589,103 642,623 Unearned revenue 4,351 - - 4,351 4,351 Total liabilities 68,885 - 672,092 740,977 826,765 Deferred inflows of resources: Unavailable revenue - property taxes - - 1,764 1,764 2,326 Unavailable revenue - special assessments - 26,989 11,234 38,223 80,870 Total deferred inflows of resources - 26,989 12,998 39,987 83,196 Fund balance: Nonspendable: Prepaid items - - - - 2,440 Restricted for: Charitable gambling - - 63,147 63,147 38,295 Park acquisition - - 878,053 878,053 876,459 Debt retirement - 89,434 - 89,434 90,026 Fire equipment - - 255,445 255,445 281,329 Tax increment purposes - - 1,694,860 1,694,860 1,511,413 Committed 706,819 - - 706,819 687,800 Assigned - - 1,525,694 1,525,694 3,243,994 Unassigned - - (589,103) (589,103) (754,259) Total fund balance 706,819 89,434 3,828,096 4,624,349 5,977,497 Total liabilities, deferred inflows of resources, and fund balance 775,704$ 116,423$ 4,513,186$ 5,405,313$ 6,887,458$ Totals Nonmajor Governmental Funds 88 CITY OF LITTLE CANADA, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 Special Debt Capital Revenues:Revenue Service Project 2019 2018 General property taxes -$ -$ 157,448$ 157,448$ 172,690$ Franchise taxes 119,128 - - 119,128 123,529 Tax increment collections - - 538,791 538,791 487,619 Special assessments - 14,046 31,888 45,934 38,181 Intergovernmental - - - - 345,482 Charges for services 454,325 - 13,300 467,625 444,334 Investment earnings (loss)19,590 145 123,868 143,603 85,589 Contributions - - 43,416 43,416 100,415 Donations - - 35,600 35,600 40,046 Miscellaneous 19,740 - 53,938 73,678 160,117 Total revenues 612,783 14,191 998,249 1,625,223 1,998,002 Expenditures: Current: General government - 600 1,960 2,560 450,155 Housing and economic development - - 171,268 171,268 - Public works - - - - 9,488 Sanitation 413,046 - - 413,046 402,294 Parks and recreation 95,183 - 6,500 101,683 105,422 Capital outlay: General government - - - - 40,370 Economic development - - - - - Public safety - - 61,484 61,484 26,520 Public works - - - - 111,189 Parks and recreation - - - - 336,934 Debt service: Principal retirement - 282,434 13,916 296,350 511,433 Interest - 105,588 25,123 130,711 225,756 Fiscal charges - 950 - 950 1,290 Miscellaneous - 1,839 126 1,965 477 Total expenditures 508,229 391,411 280,377 1,180,017 2,221,328 Revenues over (under) expenditures 104,554 (377,220) 717,872 445,206 (223,326) Other financing sources (uses): Transfers in - 376,628 - 376,628 785,135 Transfers out (85,535) - (188,193) (273,728) (347,525) Proceeds from the sale of capital assets - - - - 85,000 Total other financing sources (uses)(85,535) 376,628 (188,193) 102,900 522,610 Net increase (decrease) in fund balance 19,019 (592) 529,679 548,106 299,284 Fund balance - January 1 687,800 90,026 3,298,417 4,076,243 5,678,213 Fund balance - December 31 706,819$ 89,434$ 3,828,096$ 4,624,349$ 5,977,497$ Totals Nonmajor Governmental Funds 89 THIS PAGE INTENTIONALLY LEFT BLANK 90 NONMAJOR SPECIAL REVENUE FUNDS Nonmajor special revenue funds are used to account for revenue derived from specific revenue sources that are legally restricted or committed to expenditures for specific purposes. Parks and Recreation – Used to account for amounts received and related expenditures for the City’s parks and recreation activity. Cable TV Fund – Used to account for amounts received and related expenditures for the City’s membership in a regional cable commission. Recycling/Trash Fund – Used to account for amounts received and related expenditures for the City’s recycling program. 91 CITY OF LITTLE CANADA, MINNESOTA COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS December 31, 2019 With Comparative Totals as of December 31, 2018 Parks and Recycling/ Recreation Cable TV Trash (201)(202)(203)2019 2018 Assets: Cash and investments 47,293$ 453,109$ 68,121$ 568,523$ 546,281$ Accounts receivable - net - 31,257 175,924 207,181 202,487 Total assets 47,293$ 484,366$ 244,045$ 775,704$ 748,768$ Liabilities: Accounts payable 677$ 7,964$ 31,678$ 40,319$ 33,406$ Due to other governmental units - - 24,215 24,215 23,211 Unearned revenue 4,351 - - 4,351 4,351 Total liabilities 5,028 7,964 55,893 68,885 60,968 Fund balance: Committed for: Parks and recreation 42,265 - - 42,265 41,216 Cable - 476,402 - 476,402 449,533 Recycling - -188,152 188,152 197,051 Total fund balance 42,265 476,402 188,152 706,819 687,800 Total liabilities, and fund balance 47,293$ 484,366$ 244,045$ 775,704$ 748,768$ Totals Nonmajor Special Revenue Funds 92 CITY OF LITTLE CANADA, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 Parks and Recycling/ Recreation Cable TV Trash (201)(202)(203)2019 2018 Revenues: Franchise fees -$ 119,128$ -$ 119,128$ 123,529$ Charges for services 18,187 - 436,138 454,325 444,334 Investment earnings (loss)1,791 14,922 2,877 19,590 8,498 Miscellaneous 19,608 - 132 19,740 15,732 Total revenues 39,586 134,050 439,147 612,783 592,093 Expenditures: Current: Sanitation - - 413,046 413,046 395,599 Parks and recreation 23,002 72,181 - 95,183 102,983 Capital outlay: Parks and recreation - - - - 17,378 Total expenditures 23,002 72,181 413,046 508,229 515,960 Revenues over (under) expenditures 16,584 61,869 26,101 104,554 76,133 Other financing sources (uses): Transfer to General Fund (15,535) (35,000) (35,000) (85,535) (80,970) Total other financing sources (uses)(15,535) (35,000) (35,000) (85,535) (80,970) Net increase (decrease) in fund balance 1,049 26,869 (8,899) 19,019 (4,837) Fund balance - January 1 41,216 449,533 197,051 687,800 692,637 Fund balance - December 31 42,265$ 476,402$ 188,152$ 706,819$ 687,800$ Totals Nonmajor Special Revenue Funds 93 CITY OF LITTLE CANADA, MINNESOTA SPECIAL REVENUE FUND - PARKS AND RECREATION SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2019 With Comparative Data for the Year Ended December 31, 2018 Variance with 2019 Final Budget-2018 Actual Positive Actual Original Final Amounts (Negative)Amounts Revenues: Charges for services 27,300$ 27,300$ 18,187$ (9,113)$ 26,154$ Investment earnings (loss)500 500 1,791 1,291 799 Miscellaneous - community services - - 19,608 19,608 15,434 Total revenues 27,800 27,800 39,586 11,786 42,387 Expenditures: Parks and recreation: Current: Personal services - - 1,023 (1,023) 1,682 Commodities - - 62 (62) 242 Contractual services 26,845 26,845 21,917 4,928 24,580 Total expenditures 26,845 26,845 23,002 3,843 26,504 Revenues over (under) expenditures 955 955 16,584 15,629 15,883 Other financing sources (uses): Transfer to General Fund (16,000) (16,000) (15,535) (465) (15,970) Net increase (decrease) in fund balance (15,045)$ (15,045)$ 1,049 15,164$ (87) Fund balance - January 1 41,216 41,303 Fund balance - December 31 42,265$ 41,216$ Budgeted Amounts 94 CITY OF LITTLE CANADA, MINNESOTA SPECIAL REVENUE FUND - CABLE TV SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2019 With Comparative Data for the Year Ended December 31, 2018 Variance with 2019 Final Budget-2018 Actual Positive Actual Original Final Amounts (Negative)Amounts Revenues: Intergovernmental: Local: Franchise fees 125,500$ 125,500$ 119,128$ (6,372)$ 123,529$ Investment earnings (loss)3,054 3,054 14,922 11,868 6,271 Total revenues 128,554 128,554 134,050 5,496 129,800 Expenditures: Parks and recreation: Current: Personal services 35,170 35,170 9,094 26,076 24,799 Commodities 1,300 1,300 612 688 94 Contractual services 59,330 59,330 62,475 (3,145) 51,585 Capital outlay - - - - 17,378 Total expenditures 95,800 95,800 72,181 23,619 93,856 Revenues over (under) expenditures 32,754 32,754 61,869 29,115 35,944 Other financing sources (uses): Transfer to General Fund (35,000) (35,000) (35,000) - (35,000) Net increase (decrease) in fund balance (2,246)$ (2,246)$ 26,869 29,115$ 944 Fund balance - January 1 449,533 448,589 Fund balance - December 31 476,402$ 449,533$ Budgeted Amounts 95 CITY OF LITTLE CANADA, MINNESOTA SPECIAL REVENUE FUND - RECYCLING & TRASH SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended December 31, 2019 With Comparative Data for the Year Ended December 31, 2018 Variance with 2019 Final Budget-2018 Actual Positive Actual Original Final Amounts (Negative)Amounts Revenues: Charges for services 414,800$ 414,800$ 436,138$ 21,338$ 418,180$ Investment earnings (loss)940 940 2,877 1,937 1,428 Miscellaneous - sanitation - - 132 132 298 Total revenues 415,740 415,740 439,147 23,407 419,906 Expenditures: Sanitation: Current: Contractual services 398,500 398,500 413,046 (14,546) 395,599 Total expenditures 398,500 398,500 413,046 (14,546) 395,599 Revenues over (under) expenditures 17,240 17,240 26,101 8,861 24,307 Other financing sources (uses): Transfer to General Fund (35,000) (35,000) (35,000) - (30,000) Net increase (decrease) in fund balance (17,760)$ (17,760)$ (8,899) 8,861$ (5,693) Fund balance - January 1 197,051 202,744 Fund balance - December 31 188,152$ 197,051$ Budgeted Amounts 96 NONMAJOR DEBT SERVICE FUNDS Nonmajor debt service funds are used to account for the accumulation of resources used for the payment of principal, interest, and fiscal charges on various City bond issues. Canabury Condos Notes – Used to account for amounts received and related debt service expenditures of the Canabury Condos Notes. $900,000 Improvement G.O. Bonds 2008A – Used to account for amounts received and related debt service expenditures of the 2008A G.O. Improvement Bonds. $3,400,000 G.O. Bonds 2014A – Used to account for amounts received and related debt service expenditures of the 2014A G.O. Bonds. $1,335,000 G.O. Refunding Bonds 2015A – Used to account for amounts received and related debt service expenditures of the 2015A G.O. Refunding Bonds. 97 CITY OF LITTLE CANADA, MINNESOTA COMBINING BALANCE SHEET NONMAJOR DEBT SERVICE FUNDS December 31, 2019 With Comparative Totals as of December 31, 2018 Canabury GO TIF Bonds GO Bonds GO Bonds Condo Notes 2008A 2014A 2015A (375)(309)(310)(320)2019 2018 Assets: Cash and investments 6,114$ -$ 82,931$ -$ 89,045$ 95,202$ Cash and investments, Held by Trustee - - - - - 1,263 Due from county 389 - - - 389 183 Special assessments receivable: Deferred 26,691 - - - 26,691 40,192 Delinquent 298 - - - 298 - Total assets 33,492$ -$ 82,931$ -$ 116,423$ 136,840$ Liabilities: Accounts payable -$ -$ -$ -$ -$ 6,622$ Total liabilities - - - - - 6,622 Deferred inflows of resources: Unavailable revenue - special assessments 26,989 - - - 26,989 40,192 Total deferred inflows of resources 26,989 - - - 26,989 40,192 Fund balance: Restricted for: Debt retirement 6,503 - 82,931 - 89,434 90,026 Total fund balance 6,503 - 82,931 - 89,434 90,026 Total liabilities, deferred inflows of resources, Total fund balance 33,492$ -$ 82,931$ -$ 116,423$ 136,840$ General Obligation Totals Nonmajor Debt Service Funds 98 CITY OF LITTLE CANADA, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR DEBT SERVICE FUNDS For The Year Ended December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 Canabury GO TIF Bonds GO Bonds GO Bonds Condo Notes 2008A 2014A 2015A (375)(309)(310)(320)2019 2018 Revenues: Special assessments: Current 6,863$ -$ -$ -$ 6,863$ 9,914$ Delinquent 146 - - - 146 - Prepayments on deferred 6,994 - - - 6,994 - Penalties 43 - - - 43 - Investment earnings (loss)145 - - - 145 84 Total revenues 14,191 - - - 14,191 9,998 Expenditures: Current: General government: Contractual services 200 - 200 200 600 - Debt service: Principal retirement 12,434 - 145,000 125,000 282,434 472,312 Interest 810 - 83,575 21,203 105,588 197,395 Fiscal charges - - 475 475 950 1,290 Miscellaneous 76 1,263 250 250 1,839 477 Total expenditures 13,520 1,263 229,500 147,128 391,411 671,474 Revenues over (under) expenditures 671 (1,263) (229,500) (147,128) (377,220) (661,476) Other financing sources (uses): Transfers in (out)- - 229,500 147,128 376,628 657,948 Total other financing sources (uses)- - 229,500 147,128 376,628 657,948 Net increase (decrease) in fund balance 671 (1,263) - - (592) (3,528) Fund balance - January 1 5,832 1,263 82,931 - 90,026 93,554 Fund balance - December 31 6,503$ -$ 82,931$ -$ 89,434$ 90,026$ General Obligation Totals Nonmajor Debt Service Funds 99 THIS PAGE INTENTIONALLY LEFT BLANK 100 NONMAJOR CAPITAL PROJECTS FUNDS Nonmajor capital project funds are used to account for the financial resources to be used for the acquisition or construction of major capital facilities. Ten Percent Charitable Gambling – Used to account for amounts received and related to the City’s charitable gambling contributions used for community service projects. Park Acquisition – Used to account for amounts received and related to park acquisition fees. Fire Equipment Replacement – Used to account for amounts received and related to fire department equipment. Fleur Royal Condos HIA– Used to account for amounts received and related expenditures of the Fleur Royale Condos. Owasso/Woodlyn Redevelopment Area – Used to account for amounts received and related expenditures of the Owasso/Woodlyn Redevelopment Area. TIF #2-1 Kandice Heights – Used to account for amounts received and related project expenditures of TIF District #2-1 – Kandice Heights. TIF #3-3 The Lodge – Used to account for amounts received and related project expenditures of TIF District #3-3 – The Lodge. TIF #5-1 St. Jude – Used to account for project costs associated with St. Jude expansion and other redevelopment along Rice Street and Highway 36 funded by tax increment financing. TIF #6-1 – Used to account for amounts received and related project expenditures of TIF #6-1. TIF #7-1 Suite Living - Used to account for amounts received and related project expenditures of TIF #7-1 – Suite Living. TIF #7-2 Bix Produce - Used to account for amounts received and related project expenditures of TIF #7-2 – Bix Produce. 101 CITY OF LITTLE CANADA, MINNESOTA COMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS December 31, 2019 With Comparative Totals as of December 31, 2018 Ten Percent Owasso/ Charitable Park Fire Equipment Fleur Royale Woodlyn Gambling Acquisition Replacement Condos HIA Redevelopment (408)(456)(457)(463)Area (474) Assets: Cash and investments 60,798$ 1,221,920$ 1,091,211$ 33,523$ 286,554$ Accounts receivable - net 2,349 - - - 24,714 Delinquent property taxes receivable - - 1,764 - - Due from county - - 4,517 1,347 - Special assessments receivable: Deferred - - - - - Delinquent - - - 11,234 - Special deferred - - - - - Property held for resale - - - - - Total assets 63,147$ 1,221,920$ 1,097,492$ 46,104$ 311,268$ Liabilities: Accounts payable -$ -$ -$ -$ 4,594$ Interfund loan payable - - - - - Total liabilities -- --4,594 Deferred inflows of resources: Unavailable revenue - property taxes - - 1,764 - - Unavailable revenue - special assessments - - - 11,234 - Total deferred inflows of resources - - 1,764 11,234 - Fund balance: Restricted for: Charitable gambling 63,147 - - - - Park acquisition - 878,053 - - - Fire equipment - - 255,445 - - Tax increment - - - - - Assigned for: Park acquisition - 343,867 - - - Fire equipment - -840,283 - - Redevelopment - -- 34,870 306,674 Unassigned - -- - - Total fund balance 63,147 1,221,920 1,095,728 34,870 306,674 Total liabilities, deferred inflows of resources, and fund balance 63,147$ 1,221,920$ 1,097,492$ 46,104$ 311,268$ 102 TIF 2-1 Kandice TIF 3-3 TIF 5-1 TIF 6-1 TIF 7-1 TIF 7-2 Heights The Lodge St Jude Suite Living Bix Produce (464)(441)(460)(470)(471)(472)2019 2018 766,853$ 553,960$ 135,320$ -$ -$ -$ 4,150,139$ 5,543,949$ - 368 - - - - 27,431 55,292 - - - - - - - 2,440 - - - - - - 1,764 2,326 - - - - - - 5,864 10,411 - - - - - - - 26,608 - - - - - - 11,234 10,670 - - - - - - - 3,400 316,754 - - - - - 316,754 346,754 1,083,607$ 554,328$ 135,320$ -$ -$ -$ 4,513,186$ 6,001,850$ -$ 78,395$ -$ -$ -$ -$ 82,989$ 116,552$ - - - 556,055 31,083 1,965 589,103 642,623 - 78,395 - 556,055 31,083 1,965 672,092 759,175 - - - - - - 1,764 2,326 - - - - - - 11,234 40,678 - - - - - - 12,998 43,004 - - - - - - - 2,440 - - - - - - 63,147 38,295 - - - - - - 878,053 876,459 - - - - - - 255,445 281,329 1,083,607 475,933 135,320 - - - 1,694,860 1,511,413 - - - - - - - 1,898,814 - - - - - - 343,867 303,951 - - - - - - 840,283 651,407 - - - - - - 341,544 389,822 - - - (556,055) (31,083) (1,965) (589,103) (754,259) 1,083,607 475,933 135,320 (556,055) (31,083) (1,965) 3,828,096 5,199,671 1,083,607$ 554,328$ 135,320$ -$ -$ -$ 4,513,186$ 6,001,850$ Totals Nonmajor Capital Project Funds 103 CITY OF LITTLE CANADA, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS For The Year Ended December 31, 2019 With Comparative Totals for the Year Ended December 31, 2018 Ten Percent Owasso/ Charitable Park Fire Equipment Fleur Royale Woodlyn Gambling Acquisition Replacement Condos HIA Redevelopment (408)(456)(457)(463)Area (474) Revenues: General property taxes -$ -$ 157,448$ -$ -$ Tax increment collections - - - - - Special assessments: Current - - - 27,613 - Delinquent - - - 476 - Prepayments on deferred - - - 2,333 - Penalties - - - 1,466 - Intergovernmental - - - - - Charges for services - - - - - Investment earnings (loss)2,362 38,370 31,428 529 9,333 Contributions 39,916 3,500 - - - Donations - - 35,600 - - Miscellaneous 20,475 - - - 33,463 Total revenues 62,753 41,870 224,476 32,417 42,796 Expenditures: Current: General government - 360 - 200 200 Housing and economic development - - - - 3,411 Public works - - - - - Parks and recreation 6,500 - - - - Capital outlay: General government - - - - - Economic development - - - - - Public safety - - 61,484 - - Public works - - - - - Culture and recreation - - - - - Debt service: Principal retirement - - - 13,916 - Interest - - - 492 - Miscellaneous - - - 126 - Total expenditures 6,500 360 61,484 14,734 3,611 Revenues over (under) expenditures 56,253 41,510 162,992 17,683 39,185 Other financing sources (uses): Transfer from Capital Project Fund - - - - - Transfer to General Fund - - - - - Transfer to Debt Service Fund - - - - - Transfer to Capital Project Fund (31,401) - - - - Proceeds from the sale of capital assets - - - - - Total other financing sources (uses)(31,401) - - - - Net increase (decrease) in fund balance 24,852 41,510 162,992 17,683 39,185 Fund balance - January 1 38,295 1,180,410 932,736 17,187 267,489 Fund balance - December 31 63,147$ 1,221,920$ 1,095,728$ 34,870$ 306,674$ 104 TIF 2-1 Kandice TIF 3-3 TIF 5-1 TIF 6-1 TIF 7-1 TIF 7-2 Heights The Lodge St Jude Suite Living Bix Produce (464)(441)(460)(470)(471)(472)2019 2018 -$ -$ -$ -$ -$ -$ 157,448$ 172,690$ - 245,734 209,213 83,844 - - 538,791 487,619 - - - - - - 27,613 28,267 - - - - - - 476 - - - - - - - 2,333 - - - - - - - 1,466 - - - - - - - - 345,482 - - - - - 13,300 13,300 - 24,153 13,957 3,736 - - - 123,868 77,007 - - - - - - 43,416 100,415 - - - - - - 35,600 40,046 - - - - - - 53,938 144,385 24,153 259,691 212,949 83,844 - 13,300 998,249 1,395,911 200 300 300 200 200 - 1,960 450,155 466 157,729 1,096 1,482 1,042 6,042 171,268 - - - - - - - - 9,488 - - - - - - 6,500 9,134 - - - - - - - 40,370 - - - - - - - - - - - - - - 61,484 63,479 - - - - - - - 74,230 - - - - - - - 319,566 - - - - - - 13,916 39,121 - - - 23,518 1,103 10 25,123 28,361 - - - - - - 126 - 666 158,029 1,396 25,200 2,345 6,052 280,377 1,033,904 23,487 101,662 211,553 58,644 (2,345) 7,248 717,872 362,007 - - - - - - - 127,187 (1,282) (3,862) - (1,531) (1,093) (913) (8,681) - - - (148,111) - - - (148,111) (266,555) - - - - - - (31,401) - - - - - - - - 85,000 (1,282) (3,862) (148,111) (1,531) (1,093) (913) (188,193) (54,368) 22,205 97,800 63,442 57,113 (3,438) 6,335 529,679 307,639 1,061,402 378,133 71,878 (613,168) (27,645) (8,300) 3,298,417 4,892,022 1,083,607$ 475,933$ 135,320$ (556,055)$ (31,083)$ (1,965)$ 3,828,096$ 5,199,661$ Totals Nonmajor Capital Project Funds 105 THIS PAGE INTENTIONALLY LEFT BLANK 106 STATISTICAL SECTION 107 THIS PAGE INTENTIONALLY LEFT BLANK 108 This part of Little Canada, Minnesota’s Comprehensive Annual Financial Report presents detailed information as a context for understanding what information in the financial statements, note disclosures, and required supplementary information says about City’s overall financial health. Contents Financial Trends These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax. Debt Capacity These schedules contain information to help the reader assess the affordability of the City’s current level of outstanding debt and the City’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 the City which the City’s financial activities take place. Operating Information These schedules contain service and infrastructure data to help the ready understand how the information in the City’s financial report relates to services the City provides and activities it performs. Source: Unless otherwise noted, the information in these schedules is derived from the CAFR for the relevant year. 109 CITY OF LITTLE CANADA, MINNESOTA NET POSITION BY COMPONENT Last Ten Fiscal Years (accrual basis of accounting) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Governmental activities Net investment in capital assets 23,630,170$ 22,944,302$ 23,408,876$ 24,608,426$ 18,307,783$ 22,521,602$ 27,235,568$ 29,029,105$ 25,481,497$ 24,872,181$ Restricted 3,535,605 1,410,563 11,232,234 1,873,860 5,167,835 4,098,590 6,817,513 5,247,575 4,622,305 3,757,032 Unrestricted 7,208,435 9,870,232 9,557,697 9,956,070 13,173,072 10,712,592 8,613,516 11,634,405 11,371,563 13,185,534 Total governmental activities net position 34,374,210$ 34,225,097$ 44,198,807$ 36,438,356$ 36,648,690$ 37,332,784$ 42,666,597$ 45,911,085$ 41,475,365$ 41,814,747$ Business-type activities Net investment in capital assets 8,718,731$ 8,920,826$ 9,170,340$ 9,330,564$ 9,261,283$ 8,966,437$ 8,600,858$ 8,484,312$ 8,109,979$ 8,218,320$ Unrestricted 1,282,820 1,343,157 1,457,763 1,458,574 1,524,741 1,368,591 1,478,043 1,559,875 1,721,584 2,061,168 Total business-type activities net position 10,001,551$ 10,263,983$ 10,628,103$ 10,789,138$ 10,786,024$ 10,335,028$ 10,078,901$ 10,044,187$ 9,831,563$ 10,279,488$ Primary Government Net investment in capital assets 32,348,901$ 31,865,128$ 32,579,216$ 33,938,990$ 27,569,066$ 31,488,039$ 35,836,426$ 37,513,417$ 33,591,476$ 33,090,501$ Restricted 3,535,605 1,410,563 11,232,234 1,873,860 5,167,835 4,098,590 6,817,513 5,247,575 4,622,305 3,757,032 Unrestricted 8,491,255 11,213,389 11,015,460 11,414,644 14,697,813 12,081,183 10,091,559 13,194,280 13,093,147 15,246,702 Total primary government net position 44,375,761$ 44,489,080$ 54,826,910$ 47,227,494$ 47,434,714$ 47,667,812$ 52,745,498$ 55,955,272$ 51,306,928$ 52,094,235$ Fiscal Year 110 THIS PAGE INTENTIONALLY LEFT BLANK 111 CITY OF LITTLE CANADA, MINNESOTA CHANGES IN NET POSITION Last Ten Fiscal Years (accrual basis of accounting) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Expenses Governmental activities: General government 721,455$ 596,329$ 580,636$ 1,232,438$ 1,249,420$ 731,727$ 863,508$ 989,667$ 1,868,590$ 631,388$ Housing and economic development - - - - - - - - - 690,771 (1) Public safety 1,840,111 1,892,711 1,880,189 1,918,113 1,855,021 2,052,997 2,164,959 2,257,152 2,241,544 2,696,716 Public works 2,001,579 2,510,796 1,987,029 2,290,440 2,109,119 1,921,717 2,078,129 2,406,904 2,420,772 2,128,271 Sanitation and recycling - - - - - - - - - 413,046 (2) Culture and recreation 5,203,571 1,272,828 1,191,065 1,065,886 1,183,221 951,271 1,054,644 1,128,254 1,274,088 688,124 Interest and fiscal charges 450,282 583,009 462,333 409,478 414,322 463,871 381,324 325,328 289,276 235,062 Total governmental activities expenses 10,216,998 6,855,673 6,101,252 6,916,355 6,811,103 6,121,583 6,542,564 7,107,305 8,094,270 7,483,378 Business-type activities: Water 1,310,768 1,414,254 1,505,735 1,578,265 1,647,546 1,434,649 1,575,608 1,631,920 1,574,293 1,566,206 Sewer 1,195,010 1,289,788 1,407,955 1,427,872 1,176,551 1,260,916 1,327,205 1,434,384 1,480,413 1,319,392 Total business-type activities 2,505,778 2,704,042 2,913,690 3,006,137 2,824,097 2,695,565 2,902,813 3,066,304 3,054,706 2,885,598 Total primary government expenses 12,722,776$ 9,559,715$ 9,014,942$ 9,922,492$ 9,635,200$ 8,817,148$ 9,445,377$ 10,173,609$ 11,148,976$ 10,368,976$ Program Revenues Governmental activities: Charges for services: General government:181,772$ 275,974$ 178,487$ 123,724$ 134,941$ 162,726$ 168,944$ 202,180$ 253,121$ 604,268$ Housing and economic development - - - - - - - - - 61,290 (1) Public safety 294,470 338,867 247,385 266,566 273,458 416,622 590,694 329,752 348,628 68,562 Public works 203,131 285,053 364,826 178,742 20,310 479,325 976,979 2,419,648 14,040 35,302 Sanitation and recycling 690,661 744,583 - - - - - - - 436,270 (2) Culture and recreation 690,661 744,583 1,018,559 992,462 919,138 957,752 1,137,228 979,920 1,636,194 43,996 Operating grants and contributions 225,985 167,490 374,573 919,636 259,590 283,767 279,581 268,981 287,601 638,471 Capital grants and contributions 2,363,069 633,754 278,098 2,422,795 740,823 285,557 3,133,441 1,224,118 680,448 733,734 Total governmental activities program revenues 4,649,749$ 3,190,304$ 2,461,928$ 4,903,925$ 2,348,260$ 2,585,749$ 6,286,867$ 5,424,599$ 3,220,032$ 2,621,893$ 112 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Program Revenues (continued) Business-type activities: Charges for services: Water 1,261,646$ 1,384,428$ 1,517,083$ 1,538,520$ 1,512,217$ 1,518,762$ 1,559,185$ 1,604,792$ 1,641,723$ 1,625,833$ Sewer 1,161,317 1,249,912 1,382,853 1,365,920 1,239,136 1,270,560 1,316,749 1,408,157 1,428,823 1,461,517 Capital grants and contributions 196,509 - - - - - 38,700 284,231 40,740 - Total business-type activities program revenues 2,619,472 2,634,340 2,899,936 2,904,440 2,751,353 2,789,322 2,914,634 3,297,180 3,111,286 3,087,350 Total primary government program revenues 7,269,221$ 5,824,644$ 5,361,864$ 7,808,365$ 5,099,613$ 5,375,071$ 9,201,501$ 8,721,779$ 6,331,318$ 5,709,243$ Net (Expense)/Revenue Governmental activities (5,567,249)$ (3,665,369)$ (3,639,324)$ (2,012,430)$ (4,462,843)$ (3,535,834)$ (255,697)$ (1,682,706)$ (4,874,238)$ (4,861,485)$ Business-type activities 113,694 (69,702) (13,754) (101,697) (72,744) 93,757 11,821 230,876 56,580 201,752 Total primary government net expense (5,453,555)$ (3,735,071)$ (3,653,078)$ (2,114,127)$ (4,535,587)$ (3,442,077)$ (243,876)$ (1,451,830)$ (4,817,658)$ (4,659,733)$ General Revenues and Other Changes in Net Position Governmental activities: Property taxes 2,460,542$ 2,537,389$ 2,629,617$ 2,718,580$ 2,832,040$ 2,892,772$ 2,907,828$ 3,037,308$ 3,265,748$ 3,385,222$ Tax increment collections 1,010,917 983,279 1,161,766 1,005,500 1,015,993 962,001 1,173,985 898,922 378,923 538,791 Franchise taxes - - - - - - - - - 477,274 Unrestricted grants and contributions 210,849 214,121 208,873 200,237 349,079 382,816 391,125 395,398 435,682 437,161 Other general revenue 283,195 352,787 72,148 14,052 23,145 54,272 21,202 14,663 14,920 - Investment earnings (loss)444,303 474,220 329,020 128,565 476,640 287,683 286,814 316,795 299,521 530,625 Gain on sale of capital assets - - - - 1,000 5,000 508,556 (35,892) - 20,481 Transfers 67,382 (300,957) (346,087) (257,258) (24,720) 198,571 300,000 300,000 300,000 (188,687) Special item - - - - - - - - (4,506,155) Total governmental activities 4,477,188 4,260,839 4,055,337 3,809,676 4,673,177 4,783,115 5,589,510 4,927,194 188,639 5,200,867 Business-type activities: Other general revenue 3,502 6,893 10,611 3,080 4,852 6,187 7,815 6,863 9,056 2,447 Investment earnings (loss)24,376 24,284 21,176 2,394 40,058 25,414 24,237 27,547 21,740 55,039 Transfers (67,382) 300,957 346,087 257,258 24,720 (198,571) (300,000) (300,000) (300,000) 188,687 Total business-type activities (39,504) 332,134 377,874 262,732 69,630 (166,970) (267,948) (265,590) (269,204) 246,173 Total primary government 4,437,684$ 4,592,973$ 4,433,211$ 4,072,408$ 4,742,807$ 4,616,145$ 5,321,562$ 4,661,604$ (80,565)$ 5,447,040$ Change in Net Position Governmental activities (1,090,061)$ 595,470$ 416,013$ 1,797,246$ 210,334$ 1,247,281$ 5,333,813$ 3,244,488$ (4,685,599)$ 339,382$ Business-type activities 74,190 262,432 364,120 161,035 (3,114) (73,213) (256,127) (34,714) (212,624) 447,925 Total primary government (1,015,871)$ 857,902$ 780,133$ 1,958,281$ 207,220$ 1,174,068$ 5,077,686$ 3,209,774$ (4,898,223)$ 787,307$ (2) Sanitation & Recycling is in Public Works prior to 2019 Notes: (1) Housing & Economic Development is in General Government prior to 2019113 CITY OF LITTLE CANADA, MINNESOTA FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (modified accrual basis of accounting) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 General Fund Reserved 4,866$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved 2,399,720 - - - - - - - - - Nonspendable: Prepaid items - 4,920 5,133 8,844 4,855 3,590 7,148 8,389 8,769 10,807 Interfund loan - - - - - 1,309,429 1,244,911 1,090,034 718,024 761,178 Assigned - - - - - - - - - 138,870 Unassigned - 2,779,608 2,642,522 2,191,138 2,399,847 1,183,140 1,580,457 1,434,580 1,992,378 2,210,615 Total General Fund 2,404,586$ 2,784,528$ 2,647,655$ 2,199,982$ 2,404,702$ 2,496,159$ 2,832,516$ 2,533,003$ 2,719,171$ 3,121,470$ All other Governmental Funds Reserved 1,516,743$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved reported in: Special Revenue Funds 803,143 - - - - - - - - - Capital Projects Funds 6,584,128 - - - - - - - - - Nonspendable: Prepaid items - 19,696 17,169 14,640 41,235 9,800 7,320 4,880 2,440 - Long-term interfund loan receivable - - - - - - 288,998 - - - Inventory - - - - - - - - - - Restricted - 1,398,505 1,655,427 1,799,622 5,141,330 5,337,152 4,851,410 5,240,271 4,635,460 3,588,108 Committed - 1,084,081 1,205,829 909,090 985,743 615,306 659,829 726,268 687,800 706,819 Assigned - 7,852,358 7,095,434 8,280,277 6,642,969 7,360,977 5,721,705 7,402,374 8,098,459 8,619,917 Unassigned - (770,144) (635,956) (1,158,849) (1,162,575) (1,040,759) (875,228) (682,248) (2,306,132) (1,996,451) Total all other governmental funds 8,904,014$ 9,584,496$ 9,337,903$ 9,844,780$ 11,648,702$ 12,282,476$ 10,654,034$ 12,691,545$ 11,118,027$ 10,918,393$ Total all funds 11,308,600$ 12,369,024$ 11,985,558$ 12,044,762$ 14,053,404$ 14,778,635$ 13,486,550$ 15,224,548$ 13,837,198$ 14,039,863$ Source: City's financial records. Notes: The implementation of Governmental Accounting Standards Board Statement No. 54 in 2011 resulted in a significant change in the City's fund balance classifications. Fiscal Year 114 CITY OF LITTLE CANADA, MINNESOTA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (modified accrual basis of accounting) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenues Property taxes 2,473,215$ 2,538,940$ 2,630,396$ 2,730,953$ 2,846,061$ 2,904,266$ 3,009,596$ 3,030,586$ 3,294,816$ 3,398,344$ Franchise taxes 272,464 337,787 335,798 336,567 125,594 127,865 133,804 135,557 480,454 477,274 Tax increment collections 977,941 1,103,051 1,133,565 1,006,339 1,016,898 913,126 1,217,988 932,165 467,862 538,791 Special assessments 1,416,871 1,092,087 904,966 1,047,045 1,380,810 1,092,822 1,302,179 1,022,706 985,904 680,632 Licenses and permits 249,930 306,885 202,081 219,861 562,968 716,247 904,927 643,841 300,059 497,295 Intergovernmental 1,430,111 370,739 366,560 702,837 537,770 580,382 2,289,007 591,857 644,422 729,203 Charges for services 671,491 762,629 658,254 640,900 467,915 509,380 519,062 474,145 487,175 555,480 Fines and forfeits 44,652 37,697 45,304 46,705 46,571 40,325 42,311 44,707 48,569 49,408 Investment earnings 444,303 474,220 329,020 128,565 490,497 302,870 286,814 316,795 299,521 530,625 Connection charges - - - - - - - - - 51,120 (1) Contributions & donations 42,710 38,010 25,770 150,929 102,235 136,826 294,559 102,107 140,461 239,716 Miscellaneous 240,945 750,902 316,972 1,753,297 193,005 810,513 1,180,067 2,824,153 293,261 755,184 Total revenues 8,264,633 7,812,947 6,948,686 8,763,998 7,770,324 8,134,622 11,180,314 10,118,619 7,442,504 8,503,072 Expenditures Current: General government 686,643 568,468 549,247 1,199,753 610,946 532,783 725,713 964,130 1,414,365 515,613 Housing & economic development - - - - - - - - - 690,771 Public safety 1,745,868 1,796,670 1,771,291 1,821,496 1,914,846 1,976,340 2,029,462 2,185,949 2,311,243 2,492,581 Public works 2,238,550 2,172,169 1,215,013 1,597,274 348,496 465,709 424,927 533,914 460,543 484,906 Sanitation and recycling - - - - - - - - - 413,046 Culture and recreation 5,140,376 1,208,269 1,019,037 995,854 908,230 919,326 925,496 899,477 1,515,483 572,853 Capital outlay 419,455 114,163 478,224 2,447,618 4,773,436 3,944,063 6,469,797 3,186,475 1,579,493 1,943,411 Debt Service: Principal retirement 960,647 590,357 2,058,742 528,406 525,100 690,792 876,470 622,069 1,863,094 1,268,077 Interest 459,071 549,892 488,365 411,671 369,763 475,330 428,465 362,261 318,745 244,372 Fiscal charges - 2,535 2,233 2,722 22,020 21,615 625 447 1,290 950 Miscellaneous - - - - 72,776 45,280 - - 477 8,327 Total expenditures 11,650,610 7,002,523 7,582,152 9,004,794 9,545,613 9,071,238 11,880,955 8,754,722 9,464,733 8,634,907 Revenues over (under) expenditures (3,385,977) 810,424 (633,466) (240,796) (1,775,289) (936,616) (700,641) 1,363,897 (2,022,229) (131,835) Other Financing Sources (Uses) Transfers in 2,033,213 1,989,981 2,918,140 2,270,044 1,025,322 1,956,117 1,801,318 1,713,060 1,185,418 1,916,745 Transfers out (1,778,634) (1,739,981) (2,668,140) (1,970,044) (725,322) (1,656,117) (1,501,318) (1,413,060) (885,418) (1,616,745) Bonds issued - - - - 3,400,000 1,335,000 - - - - Notes issued 400,000 - - - - - - - - - Premium on debt issued - - - - 82,931 21,847 - - - - Payment to refunded bond escrow - - - - - - (1,400,000) - - - Proceeds from sale of capital assets - - - - 1,000 5,000 508,556 74,101 85,000 34,500 Total other financing sources (uses)654,579 250,000 250,000 300,000 3,783,931 1,661,847 (591,444) 374,101 385,000 334,500 Net change in fund balances (2,731,398)$ 1,060,424$ (383,466)$ 59,204$ 2,008,642$ 725,231$ (1,292,085)$ 1,737,998$ (1,637,229)$ 202,665$ Debt service as a percentage of noncapital expenditures 14.7%20.2%38.1%16.1%15.6%21.9%23.3%16.3%26.5%20.3% Note: (1) Connection charges in charges for services prior to 2019115 CITY OF LITTLE CANADA, MINNESOTA TAX REVENUE BY SOURCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years (ACCRUAL BASIS OF ACCOUNTING) Fiscal Property Tax Year Tax Increment Total 2010 2,460,542$ 1,010,917$ 3,471,459$ 2011 2,537,389 983,279 3,520,668 2012 2,629,617 1,161,766 3,791,383 2013 2,718,580 1,005,500 3,724,080 2014 2,832,040 1,015,993 3,848,033 2015 2,892,772 962,002 3,854,774 2016 2,907,828 1,173,985 4,081,813 2017 3,037,308 898,922 3,936,230 2018 3,265,748 378,923 3,644,671 2019 3,285,222 538,791 3,824,013 116 CITY OF LITTLE CANADA, MINNESOTA TAX CAPACITY VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Assessed All Total Less: Fiscal Disparity Adjusted Estimated Value as a Payable Real Other Tax Contribution (Net)Tax Total Direct Market Percentage of Year Property Property Capacity and TIF Capacity Tax Rate Value Taxable Value 2010 12,324,513$ 124,607$ 12,449,120$ (1,358,498)$ 11,090,622$ 23.389 964,151,900$ 1.29 2011 11,528,070 130,756 11,658,826 (1,441,790) 10,217,036 26.533 903,783,300 1.29 2012 10,871,142 135,695 11,006,837 (1,447,842) 9,558,995 28.062 842,506,600 1.31 2013 10,220,221 151,775 10,371,996 (1,485,006) 8,886,990 30.935 794,711,000 1.31 2014 10,107,563 154,770 10,262,333 (1,345,914) 8,916,419 31.407 790,339,600 1.30 2015 10,443,362 165,951 10,609,313 (1,262,817) 9,346,496 30.696 827,861,800 1.28 2016 10,844,959 172,523 11,017,482 (1,319,451) 9,698,031 30.331 861,567,300 1.28 2017 11,460,787 183,565 11,644,352 (1,225,805) 10,418,547 28.903 908,971,000 1.28 2018 12,596,568 193,397 12,789,965 (760,936) 12,029,029 26.664 991,123,400 1.29 2019 13,501,993 187,849 13,689,842 (943,403) 12,746,439 26.131 1,062,909,400 1.29 Source: Ramsey County Assessing Department Notes: (1) The tax capacity (assessed taxable value) of the property is calculated by applying a statutory formula to the estimated market value of the property.117 CITY OF LITTLE CANADA, MINNESOTA PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS Last Ten Fiscal Years (rate per $1,000 of assessed value) Fiscal Year Operating Debt Service Total City Direct Rate School District (1) Ramsey County Special Districts Total Overlapping Total Direct and Overlapping Tax Rate 2010 23.389 - 23.389 13.065 50.478 8.817 72.360 95.749 2011 26.533 - 26.533 14.566 54.678 9.279 78.523 105.056 2012 28.062 - 28.062 17.065 61.316 10.650 89.031 117.093 2013 30.935 - 30.935 15.464 65.240 11.520 92.224 123.159 2014 31.407 0.916 32.323 16.251 63.735 11.978 91.964 124.287 2015 30.696 - 30.696 17.180 58.922 11.233 87.335 118.031 2016 30.331 - 30.331 20.958 58.885 11.158 91.001 121.332 2017 28.903 - 28.903 18.894 55.850 10.385 85.129 114.032 2018 26.664 - 26.664 34.396 53.962 10.169 98.527 125.191 2019 26.131 - 26.131 31.687 52.880 9.794 94.361 120.492 Source: Ramsey County Assessing Department (2) Independent School District 623 (4) Includes Metropolitan Council, Regional Rail, and Metro Watershed City of Little Canada Overlapping Rates 118 CITY OF LITTLE CANADA, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS Current year and nine years ago 2019 2010 Percentage Percentage of Total of Total City City Net Tax Tax Net Tax Tax Capacity Capacity Capacity Capacity Taxpayer Value Rank Value Value Rank Value St Jude Medical, Inc (Abbott Laboratories)925,144$ 1 6.76%529,070$ 1 4.25% Montreal Courts Apartments LLC 425,574 2 3.11%299,375 2 2.40% Bigos Cedars Lakeside LLC 279,730 3 2.04%140,000 7 Little Canada Senior Properties LLC 266,705 4 1.95%- GPE LLC 262,500 5 1.92%- Northern States Power Company (Xcel)225,341 6 1.65%155,508 6 1.25% FAE CRW Little Canada LLC 197,844 7 1.45%132,050 9 1.06% Bix Real Estate Holdings LLC 187,780 8 1.37%- Two S Properties Inc 183,852 9 1.34%137,134 8 1.10% Market Place Center LLC 145,250 10 1.07%159,250 5 1.28% Larson Enterprises - - 275,970 3 2.22% Bellaire Properties, Inc - - 164,156 4 1.32% Individual - - 131,515 10 1.06% Total 3,099,720$ 22.64%2,124,028$ 17.06% Source: Ramsey County119 CITY OF LITTLE CANADA, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years Collected within the Fiscal Year of Levy Total Collections to Date Total Tax Percentage Collections Percentage Fiscal Levy for of in Subsequent of Year Fiscal Year Amount Levy Years Amount Levy 2010 2,559,623$ 2,496,601$ 97.54%59,688$ 2,556,289$ 99.87% 2011 2,660,453 2,604,098 97.88%54,688 2,658,786 99.94% 2012 2,660,453 2,599,986 97.73%50,492 2,650,478 99.63% 2013 2,712,864 2,672,767 98.52%39,787 2,712,554 99.99% 2014 2,794,384 2,762,314 98.85%9,461 2,771,775 99.19% 2015 2,878,351 2,841,267 98.71%24,276 2,865,543 99.56% 2016 2,946,318 2,930,802 99.47%6,403 2,937,205 99.69% 2017 3,031,116 2,983,945 98.44%41,553 3,025,498 99.81% 2018 3,241,895 3,196,816 98.61%7,284 3,204,100 98.83% 2019 3,339,258 3,298,056 98.77%- 3,298,056 98.77%120 CITY OF LITTLE CANADA, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years General Taxable General General Total Percentage Fiscal Obligation Obligation Tax Notes Revenue Obligation Primary of Personal Per Year Bonds Increment Bonds Payable Bonds Bonds Government Income (1)Capita(1) 2010 4,800,000$ 4,140,000$ 449,353$ -$ -$ 9,389,353$ 2.10%961$ 2011 4,425,000 4,005,000 368,597 - - 8,798,597 1.90%894 2012 2,655,000 3,770,000 314,855 - - 6,739,855 1.39%675 2013 2,456,458 3,505,000 261,449 - - 6,222,907 1.39%641 2014 5,716,436 3,225,000 231,349 - - 9,172,785 1.99%925 2015 6,697,743 2,930,000 220,338 - - 9,848,081 2.11%991 2016 6,016,344 1,355,000 168,863 - - 7,540,207 1.54%746 2017 5,597,654 1,165,000 137,318 - - 6,899,972 1.37%682 2018 3,982,296 965,000 104,243 - - 5,051,539 0.93%486 2019 3,701,938 - 71,166 - - 3,773,104 0.65%357 Notes: Information on education level was only available in 2010 census data. Data sources: (1) See the Demographic and Economic Statistics schedule for personal income and population data. Governmental Activities Business-Type Activities 121 CITY OF LITTLE CANADA, MINNESOTA RATIOS OF GENERAL BONDED DEBT OUTSTANDING Last Ten Fiscal Years Percentage of General Less: Amounts Estimated Actual Fiscal Obligation Available in Debt Taxable Value Per Year Bonds Service Funds Total of Property (1)Capita (2) 2010 8,940,000$ 3,151$ 8,936,849$ 0.93%914$ 2011 8,430,000 18,109 8,411,891 0.93%855 2012 6,425,000 13,568 6,411,432 0.76%642 2013 5,961,458 18,056 5,943,402 0.75%612 2014 8,941,436 99,547 8,841,889 1.12%892 2015 9,627,743 1,412,903 8,214,840 0.99%826 2016 7,371,344 85,231 7,286,113 0.85%721 2017 6,762,654 93,554 6,669,100 0.73%659 2018 4,890,000 90,026 4,799,974 0.48%462 2019 3,655,000 89,434 3,565,566 0.34%337 (1) See the Schedule of Assessed Value and Estimated Actual Value of taxable Property for property value data. (2) See the Demographic and Economic Statistics schedule for population data.122 CITY OF LITTLE CANADA, MINNESOTA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT As of December 31, 2019 City of Little Canada % of Debt Share of Net Debt Applicable Overlapping Outstanding to City Debt City of Little Canada Direct Debt 3,773,104$ 100.00%3,773,104$ Overlapping: Ramsey County 175,477,000$ 2.0310%3,563,929$ School Districts ISD No. 623 (Roseville)175,710,000 15.3001%26,883,808 ISD No. 624 (White Bear Lake)77,560,000 1.3178%1,022,084 Metro Council 182,657,000 0.2945%537,868 Total Overlapping 32,007,689 Total Direct and Overlapping Debt:611,404,000$ 35,780,793$ The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the county’s taxable assessed value that is within the government’s boundaries and dividing it by the county’s total taxable assessed value. Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the 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. 123 CITY OF LITTLE CANADA, MINNESOTA LEGAL DEBT MARGIN INFORMATION Last Ten Fiscal Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Debt limit 28,924,557$ 27,113,499$ 25,275,198$ 23,841,330$ 23,710,188$ 24,835,854$ 25,847,019$ 27,269,130$ 29,733,702$ 31,887,282$ Total net debt applicable to limit 820,000 740,000 660,000 575,000 3,060,000 1,447,097 2,274,769 2,167,769 2,059,974 1,950,566 Legal debt margin 28,104,557$ 26,373,499$ 24,615,198$ 23,266,330$ 20,650,188$ 23,388,757$ 23,572,250$ 25,101,361$ 27,673,728$ 29,936,716$ Total net debt applicable to the limit as a percentage of debt limit 2.83%2.73%2.61%2.41%12.91%5.83%8.80%7.95%6.93%6.12% Legal Debt Margin Calculation for Fiscal Year 2019:Taxable Market Value 1,062,909,400$ Debt limit (3% of market value) (1)31,887,282 Debt Applicable to Limit: General Obligation Bonds 2,040,000 Less amount set aside for repayment of General Obligation Debt 89,434 Total Debt applicable to limit 1,950,566 Legal debt margin 29,936,716$ (1) Minnesota State Statutes, Section 475 prescribes the statutory debt limit that outstanding principal of debt cannot exceed 3% of taxable market value. General obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds. Fiscal Year 124 CITY OF LITTLE CANADA, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Fiscal Years Per Capita School School Fiscal Personal Personal Enrollment Enrollment Unemployment Year Population(1)Income (2)Income (2)District #623 (3)District #624 (3)Rate (4) 2010 9,773 446,401,321$ 45,677$ 6,562 8,258 7.5% 2011 9,839 462,511,712 47,008 6,652 8,250 6.6% 2012 9,987 485,937,459 48,657 6,848 8,174 5.7% 2013 9,704 447,587,296 46,124 6,998 8,147 4.9% 2014 9,912 461,195,448 46,529 7,123 8,179 3.9% 2015 9,941 467,415,879 47,019 7,530 8,220 3.6% 2016 10,101 489,464,157 48,457 7,547 8,761 3.6% 2017 10,120 503,824,200 49,785 7,548 9,068 3.3% 2018 10,386 543,094,326 52,291 7,655 8,860 2.7% 2019 10,580 581,201,720 54,934 7,684 8,889 3.0% Sources: (1) Metropolitan Council Estimate in non census year. 2010 based on census data. (2) Ramsey County data from Bureau of Economic Analysis. (3) Minnesota Department of Education, as reported by ISD No. 623 and No. 624. (4) Minnesota Department of Employment and Economic Development; 125 CITY OF LITTLE CANADA, MINNESOTA PRINCIPAL EMPLOYERS Current year and nine years ago 2019 2010 Percentage Percentage of Total of Total Taxpayer Employees Rank Employment Employees Rank Employment Q3 (Primoris Service Corporation)2,250 *1 37% Abbott Laboratories 1,191 2 20%575 1 9% Bix Produce 425 3 7% Slumberland, Inc.400 4 7%429 2 7% Ouicksilver Express Courier 300 5 5%200 3 3% Frattalone Excavating 246 6 4%150 4 2% Independent School District No. 623 207 7 3%150 5 2% The House (Active Sports)150 8 2%110 7 2% Real Estate Masters 118 9 2% Joe's Sporting Goods 100 10 2%75 9 1% Kath Fuel Oil Service 0%85 8 1% Culver's US Recordings, Inc.135 6 2% McKesson Drug 70 10 1% Total 5,387 90%1,979 31% Sources: City of Little Canada Annual Municipal Disclosure Reporting and Little Canada Community Development Department. Note: (1)Q3 Corporate HQ is in Little Canada. This is the company-wide workforce and not all employees work in the City.126 CITY OF LITTLE CANADA, MINNESOTA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Last Ten Fiscal Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 General Government 6.30 6.30 6.30 5.80 5.80 5.60 5.50 5.50 5.63 5.63 Public Safety 1.80 1.50 1.50 1.50 1.50 1.50 2.00 2.00 1.52 1.52 Public Works Administration 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Maintenance 5.00 5.00 5.00 5.40 5.40 5.00 5.10 4.50 4.50 4.50 Culture and Recreation Administration 2.00 2.00 2.00 2.00 2.00 1.50 1.00 1.20 1.48 1.48 Cable production services - - - - - - - - 0.62 0.62 Maintenance 3.50 3.50 3.50 3.70 3.70 3.20 3.20 3.50 1.50 1.50 Seasonal - - - - - - - - 2.81 2.81 Total 19.60 19.30 19.30 19.40 19.40 17.80 17.80 17.70 19.06 19.06 Source: City of Little Canada Finance Office Budgeted Full-time Equivalent Employees as of December 31 127 CITY OF LITTLE CANADA, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Years Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Public Safety Police (contract with Ramsey County) Calls for Service 4,841 4,340 4,813 4,740 6,458 7,626 7,011 7,289 6,776 7,086 Building/Zoning: Building Permits Issued 280 269 281 229 259 594 302 262 260 304 Land Use Applications 33 18 17 8 20 17 17 16 15 9 Water Connections 2,496 2,517 2,665 2,530 2,538 2,550 2,562 2,567 2,571 2,573 Water Pumped (in 1,000's of gallons)352,338 358,145 375,278 373,346 353,219 344,782 347,800 351,866 262,060 336,005 Wastewater Connections 2,399 2,410 2,409 2,411 2,419 2,431 2,442 2,447 2,450 2,452 Sewer Flow (in 1,000's of gallons 447,800 554,900 330,300 349,800 393,100 358,200 343,300 345,400 349,600 346,300 Sources: Various City Departments Fiscal Year 128 CITY OF LITTLE CANADA, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Years Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Public Safety Fire Stations 1 1 1 1 1 1 1 1 1 1 Public Works Streets (miles)74 74 74 74 74 74 74 74 74 74 Streetlights 368 368 368 368 368 368 368 368 368 368 Parks (acreage) Parks (acreage)88 88 88 88 88 90 90 90 90 90 Parks 8 8 8 8 8 9 9 9 9 9 Water Water mains (miles)39 39 39 39 39 39 39 39 39 39 Booster stations 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Water tower 1 1 1 1 1 1 1 1 1 1 Maximum daily capacity (1,000's of gallons)2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 Sanitary Sewer Sanitary sewers (miles)35 35 35 35 35 35 35 35 35 35 Pumping stations 8 8 8 8 8 9 9 9 9 9 Sources: Various City Departments Note: No capital asset indicators are available for the general government functions. Fiscal Year 129 WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor ©2019 CliftonLarsonAllen LLPCity of Little Canada December 31, 2019 Auditor Communications Michelle Hoffman, Principal John Lorenzini, Manager Lance Lauinger, Senior ©2019 CliftonLarsonAllen LLPCreate Opportunities Agenda 2 Required Communications Audit Results Financial Results Other Items ©2019 CliftonLarsonAllen LLPCreate Opportunities Required Communications Audit provides reasonable, but not absolute assurance Accounting policies –GASB 84 adopted in 2019 Significant accounting estimates include: •Useful lives of capital assets •Fair value of investments •Compensated absences liability •Net pension liability and related deferred outflows and inflows Received full cooperation from management 3 ©2019 CliftonLarsonAllen LLPCreate Opportunities Audit Results 4 Unmodified (i.e. “clean”) opinion on the financial statements Internal Controls –no exceptions noted MN Legal Compliance –one exception noted regarding prompt payment of local government bills GFOA Certificate of Achievement for Excellence in Financial Reporting ©2019 CliftonLarsonAllen LLPCreate Opportunities Financial Results 5 34.8% 46.9% 40.6% 53.8% 57.1% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 2015 2016 2017 2018 2019 Unassigned Fund Balance -General Fund Unassigned % of Annual Expenditures ©2019 CliftonLarsonAllen LLPCreate Opportunities Financial Results (Continued) 6 2015 2016 2017 2018 2019 Transfers In 100,399 88,340 102,008 100,283 98,678 Other 159,707 183,773 190,875 88,299 176,641 Investment Earnings 81,058 83,270 79,121 62,775 87,803 Fines and Forfeitures 40,325 42,311 44,707 48,569 49,408 Charges for Service 29,233 23,446 27,225 28,801 87,855 Intergovernmental 348,754 345,999 347,664 298,423 303,543 Licenses and Permits 376,297 548,383 285,045 300,059 497,295 Property Taxes $2,563,053 $2,667,068 $2,668,685 $2,965,801 $2,972,443 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 General Fund Revenues ©2019 CliftonLarsonAllen LLPCreate Opportunities Financial Results (Continued) 7 2015 2016 2017 2018 2019 Community Development 293,121 317,271 364,462 362,799 377,616 Parks and Recreation 445,541 438,514 413,119 450,078 466,109 Transfers Out 206,153 245,947 513,788 4,500 - Public Works 475,277 430,391 412,710 407,637 404,709 Public Safety 1,792,735 1,842,350 1,965,456 2,101,798 2,273,221 General Government $394,542 $371,760 $375,308 $380,030 $349,712 11%10%9%10%9% 50%51%49%57%59% 13%12%10%11%10%6%6% 13%1%1%12%12% 10% 12%12% 8%9% 9% 10% 10% $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 General Fund Expenditures ©2019 CliftonLarsonAllen LLPCreate Opportunities Financial Results (Continued) 8 -$200,000 -$150,000 -$100,000 -$50,000 $0 $50,000 $100,000 $150,000 $200,000 2015 2016 2017 2018 2019 Fiscal Year Enterprise Funds -Operating Income (Loss) Water Fund Sewer Fund ©2019 CliftonLarsonAllen LLPCreate Opportunities Financial Results (Continued) 9 *City currently does not have a debt levy –debt payments are supported by utility funds revenue rather than taxpayers $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 2019 actual 2020 projected 2021 projected 2022 projected 2023 projected 2024 projected Future Debt Service ©2019 CliftonLarsonAllen LLPCreate Opportunities Governmental Funds Revenue Per Capita Comparison 10 2017 2018 2019 Population 2,500-10,000 10,000-20,000 20,000-100,000 10,120 10,386 10,580 Property Taxes 495$ 472$ 493$ 299$ 317$ 321$ Franchise and Other Taxes 41 48 50 13 12 45 Tax Increments 28 27 43 92 45 51 Special Assessments 53 40 57 101 95 64 Licenses and Permits 38 35 47 64 63 47 Intergovernmental Revenue 303 271 157 58 62 69 Charges for Services 130 102 112 65 47 53 Other Revenues 97 78 49 306 75 154 1,185$ 1,073$ 1,008$ 1,000$ 717$ 804$ December 31, 2018 City of Little CanadaState-Wide ©2019 CliftonLarsonAllen LLPCreate Opportunities Governmental Funds Expenditures Per Capita Comparison 11 2017 2018 2019 Population 2,500-10,000 10,000-20,000 20,000-100,000 10,120 10,386 10,580 Current General Government 150$ 121$ 104$ 58$ 63$ 49$ Public Safety 286 272 294 216 223 236 Public Works 135 125 106 89 76 85 Culture and Recreation 96 115 104 52 54 54 Housing/Economic Development 57 56 60 13 129 65 Other 19 18 18 - - - Total Current Expenditures 743 707 686 428 545 489 Capital Outlay 417 351 307 315 158 184 Debt Service Principal 178 153 109 61 179 120 Interest and Fiscal Charges 41 39 29 36 28 24 Total Debt Service 219 192 138 97 208 144 Total Expenditures 1,379$ 1,250$ 1,131$ 840$ 911$ 816$ State-Wide City of Little Canada December 31, 2018 ©2019 CliftonLarsonAllen LLPCreate Opportunities Financial Results (Continued) 12 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% Little Canada Arden Hills North St. Paul White Bear Lake Maplewood Roseville Vadnais Heights Tax Rate Comparison (Per League of Minnesota Cities Tax Data) 2019 Property Tax Rate ©2019 CliftonLarsonAllen LLPCreate Opportunities Other Items •Effective December 31, 2022: –Governmental Accounting Standards Board Statement No. 87 ◊Leases (majority of leases will now be treated as capital leases) 13 ©2019 CliftonLarsonAllen LLPCLAconnect.com Thank you! Michelle Hoffman, Principal 612-397-3269 Michelle.Hoffman@CLAconnect.com John Lorenzini, Manager 612-397-3268 John.Lorenzini@CLAconnect.com Lance Lauinger, Senior Associate 612-376-4519 Lance.Lauinger@CLAconnect.com STAFF REPORT TO:Mayor Keis and Members of City Council FROM:Heidi Heller, City Clerk DATE:June 10, 2020 RE:Establishment of Absentee Ballot Board ACTION TO BE CONSIDERED Approve the individuals listed below to serve on the 2020 Absentee Ballot Board to process and count absentee ballots. BACKGROUND State Law requires that cities establish an Absentee Ballot Board for the processing and counting of absentee ballots. Attached is a resolution which accomplishes this requirement. The names of individuals below are recommended to serve on the City’s Absentee Ballot Board: ABSENTEE BALLOT BOARD 1.Bryce Shearen 515 Little Canada Road E.IND 2.Lisa Krieger 515 Little Canada Road E.DFL 3.Bonnie Keran 515 Little Canada Road E.REP RECOMMENDATION Approve the Resolution establishing an Absentee Ballot Board for the 2020 Primary and General Elections. CITY OF LITTLE CANADA RESOLUTION TO ESTABLISH AN ABSENTEE BALLOT BOARD WHEREAS, Minnesota Statute 203B.121, Subd. 1 requires the governing body of each city that administers absentee voting to establish an absentee ballot board for the purpose of processing and counting absentee ballots; and, WHEREAS, the members of the absentee ballot board must be election judges who have been trained in the processing of absentee ballots; NOW, THEREFORE BE IT RESOLVED, that the City of Little Canada hereby establishes and absentee ballot board for the processing and counting of absentee ballots for the City of Little Canada; BE IT FURTHER RESOLVED, that the City Council authorized the City Clerk to make appointments of election judges, including City elections staff who have been trained as election judges, to the absentee ballot board in accordance with the requirements of State Law and to take any other action necessary to ensure the proper administration of the absentee ballot board. Adopted this 10th day of June, 2020 ____________________________________ John T. Keis, Mayor Attest: __________________________________ Christopher Heineman, City Administrator STAFF REPORT TO: Mayor Keis and Members of the City Council FROM: Mark D. Kasma, P.E., City Engineer DATE: June 10, 2020 RE: Little Canada Road Streetscape Improvements ACTION TO BE CONSIDERED: Motion to approve Change Order No. 1 and Partial Pay Estimate No. 2 to Custom Builders, Inc. in the amount of $221,959.68. BACKGROUND: The total amount earned by the Contractor to date is $410,150.97. The City has paid $167,683.74 to date. Withholding a 5% retainage, the amount due is $221,959.68. Along with Partial Pay Estimate No. 2 is Change Order No.1 in the amount of $5,478.67 for the installation of steel conduit crossings for future lighting of the trees within the planting areas. SOURCE OF FUNDS: The improvements will be funded through TIF District 3-2 ($500,000) and the Infrastructure Capital Improvement Fund, as per the City’s approved CIP. STAFF RECOMMENDATIONS: Staff recommends that the City Council approve Change Order No. 1 and Partial Pay Request No. 2 in the amount of $221,959.68. Mark D. Kasma, P.E., City Engineer6/2/2020 STAFF REPORT TO: Mayor Keis and Members of the City Council FROM: Mark D. Kasma, P.E., City Engineer DATE: June 10, 2020 RE: County Road D & Greenbrier Street Improvements ACTION TO BE CONSIDERED: Motion to approve Change Order No. 1 and Partial Pay Estimate No. 1 to New Look Contracting in the amount of $37,204.37. BACKGROUND: The total amount earned by the Contractor on this partial pay request is $39,162.5. Withholding a 5% retainage, the amount due is $37,204.37. Along with Partial Pay Estimate No.1 is Change Order No.1 in the amount of $3,500 for the installation of dynamic signs one week prior to detour signage implementation. Ramsey County has agreed to reimburse 100% of the cost. SOURCE OF FUNDS: The improvements will be funded through assessments, Municipal State Aid Funds and Infrastructure Capital Improvement Funds. STAFF RECOMMENDATIONS: Staff recommends that the City Council approve change order number 1 and partial payment number 1 in the amount of $37,204.37. STAFF REPORT TO: Mayor Keis and Members of the City Council FROM: Bill Dircks, Public Works Director DATE: June 10, 2020 RE: Approval of Local Water Supply Plan ACTION TO BE CONSIDERED: Motion to approve the Local Water Supply Plan. BACKGROUND: The Minnesota Department of Natural Resources (DNR) requires cities to submit a local water supply plan every five years. The plan addresses where drinking water originates, how it is treated, how it is distributed, the trend for annual water consumption in the City, and measures in place for conservation. The plan is scaled back for Little Canada since the City purchases its water already treated from St. Paul Regional Water Services. Therefore, the City does not have any wells or treatment processes. There is information regarding usage and demand for the different categories of users in the City such as residential and industrial. The plan discusses the measures the City has taken to promote water conservation which include seasonal water rates and the daytime sprinkling ban. Historically, the City has had pretty stable usage from year-to-year with small annual decreases and increases caused mainly by changes in precipitation. The DNR approved the plan as submitted and it will be inserted as a chapter of the 2040 Comprehensive Plan. STAFF RECOMMENDATIONS: Staff recommends approval of the Local Water Supply Plan. ATTACHMENTS: Local Water Supply Plan Water Supply 0BWater Supply Plan Part 1. Description and Evaluation ................................... 8-1 Analysis of Water Demand ........................... ...........................................................................8-1 Treatment and Storage Capacity ................. ...........................................................................8-3 Water Sources ............................................. ...........................................................................8-4 Future Demand Projections – Key Metropolitan Council Benchmark ........................................8-4 Resource Sustainability ................................ ...........................................................................8-5 Capital Improvement Plan (CIP) ................... ...........................................................................8-9 Part 2. Emergency Preparedness Procedures ................ 8-11 Federal Emergency Response Plan ............. ......................................................................... 8-11 Operational Contingency Plan ...................... ......................................................................... 8-11 Emergency Response Procedures ............... ......................................................................... 8-11 Part 3. Water Conservation Plan ..................................... 8-14 Progress since 2006 .................................... ......................................................................... 8-15 Triggers for Allocation and Demand Reduction Actions .......................................................... 8-15 Conservation Objectives and Strategies ...... ......................................................................... 8-16 Regulation .................................................... ......................................................................... 8-23 Retrofitting Programs ................................... ......................................................................... 8-24 Education and Information Programs ........... ......................................................................... 8-25 Part 4. Items for Metropolitan Area Communities .......... 8-28 Water Demand Projections through 2040..... ......................................................................... 8-28 Potential Water Supply Issues ..................... ......................................................................... 8-28 Proposed Alternative Approaches to Meet Extended Water Demand Projections .................. 8-28 Appendices in the Plan Submitted to the DNR ............... 8-29 City of Little Canada 8-1 Water Supply Plan PART 1. SYSTEM DESCRIPTION AND EVALUATION 1BAnalysis of Water Demand 2BTable 8-1. Historic water demand (see definitions in the glossary after Part 4 of this template) Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Avg. 2010- 2015 Pop. Served 9,490 9,500 9,520 9,550 9,610 9,620 9,640 9,640 9,650 9,700 9,700 9,658 Total Connections 2,162 2,194 2,323 2,463 2,492 2,496 2,517 2,517 2,530 2,538 2,550 2,525 Residential Water Delivered (MG) 259.7 270.6 293.2 270 277.2 238.6 264.1 285.1 268 237.3 231.3 254.1 C/I/I Water Delivered (MG) 103.4 97.8 87.8 85 82.8 87.6 88.1 85.6 96 113.3 109.9 96.75 Water used for Non- essential 28.5 28.8 33 28.9 24.9 26 28.4 Wholesale Deliveries (MG) 0 0 0 0 0 0 0 0 0 0 0 0 Total Water Delivered (MG) 363.1 368.4 381 355 360 326.4 352.3 370.6 364.2 350.6 341.1 350.9 Total Water Pumped (MG) 362.4 394.3 405.4 396.1 391.3 352.3 358.1 375.2 373.3 353.2 344.8 359.5 Water Supplier Services 0.7 1.3 1.4 2.1 3 2.4 1 0.8 1.3 2.4 1.1 1.5 Percent Unmetered/ Unaccounted -0.2 6.6 6.1 10.4 8 7.4 1.7 1.3 2.5 1 1 2.5 Average Daily Demand (MGD) 0.995 0.9947 1.044 0.973 0.986 0.894 0.965 1.015 0.998 0.961 1.07 0.984 Max. Daily Demand (MGD) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Date of Max. Demand N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Residential Per Capita Demand (GPCD) 74.9 78 84.3 77.4 79 67.9 75 81 76 67 65.3 72 Total per capita Demand (GPCD) 104.8 106.2 109.6 101.8 102.6 92.9 100.1 105.3 103.3 99 96.3 99.5 City of Little Canada 8-2 Water Supply Plan 3BInsert the new map titled 4BWater Supply System City of Little Canada 8-3 Water Supply Plan Table 8-2. Large volume users Customer Use Category (Residential, Industrial, Commercial, Institutional, Wholesale) Amount Used (Gallons per Year) Percent of Total Annual Water Delivered Implementing Water Conservation Measures? (Yes/No/Unknown) 1 208O RICE ST. INDUSTRIAL 34,000,000 9.69 UNKNOWN 2 3001 COUNTRY DR. RESIDENTIAL 15,200,000 4.33 UNKNOWN 3 120-132 DEMONT AVE. RESIDENTIAL 9,800,000 2.79 UNKNOWN 4 177 COUNTY RD. B E INDUSTRIAL 8,600,000 2.45 UNKNOWN 5 215-235 CTY. RD. B2 RESIDENTIAL 8,300,000 2.37 UNKNOWN 6 2900 RICE ST. COMMERCIAL 4,950,000 1.41 UNKNOWN 7 179 LITTLE CANADA RD RESIDENTIAL 4,200,000 1.20 UNKNOWN 8 401 LABORE RD RESIDENTIAL 3,800,000 1.08 UNKNOWN 9 376 LABORE RD RESIDENTIAL 3,700,000 1.05 UNKNOWN 10 2485 CANABURY DR RESIDENTIAL 3,600,000 1.03 UNKNOWN 5BTreatment and Storage Capacity 6BTable 8-34. Water treatment capacity and treatment processes Treatment Site ID (Plant Name or Well ID) Year Constructed Treatment Capacity (GPD) Treatment Method Treatment Type Annual Amount of Residuals Disposal Process for Residuals Do You Reclaim Filter Backwash Water? NA NA NA NA NA NA NA NA Total NA NA NA NA 7BTable 8-45. Storage capacity, as of the end of the last calendar year Structure Name Type of Storage Structure Year Constructed Primary Material Storage Capacity (Gallons) 1 Water Tower Elevated storage 1977 Steel 1,500,000 2 Ground storage 3 Other - Total NA NA NA 8BTreatment and storage capacity versus demand Discuss the difference between current storage and treatment capacity versus the water supplier’s projected average water demand over the next 10 years (see Table 7 for projected water demand): The City does not anticipate average daily water demand will exceed out available storage of 1.5 million gallons over the next ten years. The City is pretty much built out so there should not be much water added in the next ten years. We currently have more than 500,000 gallons of storage over and above the average daily demand, which is 984,000 gallons over the past five years. City of Little Canada 8-4 Water Supply Plan 9BWater Sources 10BTable 8-5. Water sources and status Resource Type (Groundwater, Surface water, Interconnection) Resource Name MN Unique Well # or Intake ID Year Installed Capacity (Gallons per Minute) Well Depth (Feet) Status of Normal and Emergency Operations (active, inactive, emergency only, retail/wholesale interconnection)) Does this Source have a Dedicated Emergency Power Source? (Yes or No) Interconnection St. Paul Regional Water Services NA 1970 100,000 NA Wholesale Interconnection Yes Interconnection Roseville NA 1977 100,000 NA Emergency Connection Yes 11BLimits on Emergency Interconnections None 12BFuture Demand Projections – Key Metropolitan Council Benchmark 13BWater Use Trends Use the data in Table 2 to describe trends in 1) population served; 2) total per capita water demand; 3) average daily demand; 4) maximum daily demand. Then explain the causes for upward or downward trends. For example, over the ten years has the average daily demand trended up or down? Why is this occurring? The City’s population is staying pretty much the same. The City is almost entirely built out so there isn’t much more room to grow. The total per capita water demand is also staying pretty much the same. Weather plays a role in the usage as dry seasons lead to more irrigation. Average daily demand is also hovering around one million gallons per day and showing no real trend either way. Maximum daily demand is not available based on the way we pump water. Overall, there is no real trend up or down. If anything, it is trending down a bit and that is likely due to more awareness by residents and businesses regarding water conservation. City of Little Canada 8-5 Water Supply Plan 14BTable 8-6. Projected annual water demand Year Projected Total Population Projected Population Served Projected Total Per Capita Water Demand (GPCD) Projected Average Daily Demand (MGD) Projected Maximum Daily Demand (MGD) 2016 9900 9740 95.5 0.976 1.55 2017 9900 9740 97.0 0.985 1.56 2018 9900 9740 98.2 0.977 1.55 2019 9900 9740 98.5 0.995 1.56 2020 9900 9740 100.2 0.998 1.55 2021 10,000 9840 99.3 0.992 1.59 2022 10,050 9890 98.4 0.987 1.59 2023 10,070 9910 102.6 1.050 1.60 2024 10,090 9930 99.7 0.999 1.60 2025 10,100 9940 98.3 0.974 1.61 2030 10,300 10,140 99.8 1.050 1.61 2040 10,300 10,140 100.2 1.090 1.72 GPCD – Gallons per Capita per Day MGD – Million Gallons per Day 15BProjection Method Describe the method used to project water demand, including assumptions for population and business growth and how water conservation and efficiency programs affect projected water demand: Water demand was projected by factoring in a small increase in population over the next 34 years, which should lead to a slight increase in water usage. Water conservation efforts should help keep the usage similar to where it has been for the past ten or more years. So, overall, the numbers will likely continue to fluctuate a bit but stay around 100 GPCPD. City of Little Canada 8-6 Water Supply Plan 16BResource Sustainability 17BMonitoring – Key DNR Benchmark 18BTable 8-7. Information about source water quality and quantity monitoring MN Unique Well # or Surface Water ID Type of monitoring point Monitoring program Frequency of monitoring Monitoring Method NA ☐ production well ☐ observation well ☐ source water intake ☐ source water reservoir ☐ routine MDH sampling ☐ routine water utility sampling ☐ other ☐ continuous ☐ hourly ☐ daily ☐ monthly ☐ quarterly ☐ annually ☐ SCADA ☐ grab sampling ☐ steel tape ☐ stream gauge ☐ production well ☐ observation well ☐ source water intake ☐ source water reservoir ☐ routine MDH sampling ☐ routine water utility sampling ☐ other ☐ continuous ☐ hourly ☐ daily ☐ monthly ☐ quarterly ☐ annually ☐ SCADA ☐ grab sampling ☐ steel tape ☐ stream gauge ☐ production well ☐ observation well ☐ source water intake ☐ source water reservoir ☐ routine MDH sampling ☐ routine water utility sampling ☐ other ☐ continuous ☐ hourly ☐ daily ☐ monthly ☐ quarterly ☐ annually ☐ SCADA ☐ grab sampling ☐ steel tape ☐ stream gauge ☐ production well ☐ observation well ☐ source water intake ☐ source water reservoir ☐ routine MDH sampling ☐ routine water utility sampling ☐ other ☐ continuous ☐ hourly ☐ daily ☐ monthly ☐ quarterly ☐ annually ☐ SCADA ☐ grab sampling ☐ steel tape ☐ stream gauge ☐ production well ☐ observation well ☐ source water intake ☐ source water reservoir ☐ routine MDH sampling ☐ routine water utility sampling ☐ other ☐ continuous ☐ hourly ☐ daily ☐ monthly ☐ quarterly ☐ annually ☐ SCADA ☐ grab sampling ☐ steel tape ☐ stream gauge 19BWater Level Data 20BTable 8-8. Water level data Unique Well Number or Well ID Aquifer Name Seasonal Variation (Feet) Long-term Trend in water level data Water level measured during well/pumping maintenance Not Applicable to Little Canada ☐ Falling ☐ Stable ☐ Rising MM/DD/YY:____ MM/DD/YY:____ MM/DD/YY:____ City of Little Canada 8-7 Water Supply Plan 21BPotential Water Supply Issues & Natural Resource Impacts – Key DNR & Metropolitan Council Benchmark 22BTable 8-9: Natural resource impacts Resource Type Resourc e Name Risk Risk Assessed Through Describe Resource Protection Threshold * Mitigation Measure or Management Plan Describe How Changes to Thresholds are Monitored ☐ River or stream ☐ Flow/water level decline ☐ Degrading water quality trends and/or MCLs exceeded ☐ Impacts on endangered, threatened, or special concern species habitat or other natural resource impacts ☐ Other: _____ ☐ GIS analysis ☐ Modeling ☐ Mapping ☐ Monitoring ☐ Aquifer testing ☐ Other: ___ ☐ Revise permit ☐ Change groundwater pumping ☐ Increase conservation ☐ Other ☐ Calcare ous fen ☐ Flow/water level decline ☐ Degrading water quality trends and/or MCLs exceeded ☐ Impacts on endangered, threatened, or special concern species habitat or other natural resource impacts ☐ Other: _____ ☐ GIS analysis ☐ Modeling ☐ Mapping ☐ Monitoring ☐ Aquifer testing ☐ Other: ___ ☐ Revise permit ☐ Change groundwater pumping ☐ Increase conservation ☐ Other ☐ Lake ☐ Flow/water level decline ☐ Degrading water quality trends and/or MCLs exceeded ☐ Impacts on endangered, threatened, or special concern species habitat or other natural resource impacts ☐ Other: _____ ☐ GIS analysis ☐ Modeling ☐ Mapping ☐ Monitoring ☐ Aquifer testing ☐ Other: ___ ☐ Revise permit ☐ Change groundwater pumping ☐ Increase conservation ☐ Other ☐ Wetland ☐ Flow/water level decline ☐ Degrading water quality trends and/or MCLs exceeded ☐ GIS analysis ☐ Modeling ☐ Mapping ☐ Monitoring ☐ Revise permit ☐ Change groundwater pumping City of Little Canada 8-8 Water Supply Plan Resource Type Resourc e Name Risk Risk Assessed Through Describe Resource Protection Threshold * Mitigation Measure or Management Plan Describe How Changes to Thresholds are Monitored ☐ Impacts on endangered, threatened, or special concern species habitat or other natural resource impacts ☐ Other: _____ ☐ Aquifer testing ☐ Other: ___ ☐ Increase conservation ☐ Other ☐ Trout stream ☐ Flow/water level decline ☐ Degrading water quality trends and/or MCLs exceeded ☐ Impacts on endangered, threatened, or special concern species habitat or other natural resource impacts ☐ Other: _____ ☐ GIS analysis ☐ Modeling ☐ Mapping ☐ Monitoring ☐ Aquifer testing ☐ Other: ___ ☐ Revise permit ☐ Change groundwater pumping ☐ Increase conservation ☐ Other ☐ Aquifer ☐ Flow/water level decline ☐ Degrading water quality trends and/or MCLs exceeded ☐ Impacts on endangered, threatened, or special concern species habitat or other natural resource impacts ☐ Other: _____ ☐ GIS analysis ☐ Modeling ☐ Mapping ☐ Monitoring ☐ Aquifer testing ☐ Other: ___ ☐ Revise permit ☐ Change groundwater pumping ☐ Increase conservation ☐ Other ☐ Endangere d, threatened, or special concern species habitat, other natural resource impacts ☐ Flow/water level decline ☐ Degrading water quality trends and/or MCLs exceeded ☐ Impacts on endangered, threatened, or special concern species habitat or other natural resource impacts ☐ Other: _____ ☐ GIS analysis ☐ Modeling ☐ Mapping ☐ Monitoring ☐ Aquifer testing ☐ Other: ___ ☐ Revise permit ☐ Change groundwater pumping ☐ Increase conservation ☐ Other * Examples of thresholds: a lower limit on acceptable flow in a river or stream; water quality outside of an accepted range; a lower limit on acceptable aquifer level decline at one or more City of Little Canada 8-9 Water Supply Plan monitoring wells; withdrawals that exceed some percent of the total amount available from a source; or a lower limit on acceptable changes to a protected habitat. City of Little Canada 8-10 Water Supply Plan 23BWellhead Protection (WHP) and Surface Water Protection (SWP) Plans 24BTable 8-10. Status of Wellhead Protection and Surface Water Protection Plans Plan Type Status Date Adopted Date for Update WHP ☐ In Process ☐ Completed ☒ Not Applicable SWP ☐ In Process ☐ Completed ☒ Not Applicable 25BCapital Improvement Plan (CIP) Please note that any wells that received approval under a ten-year permit, but that were not built, are now expired and must submit a water appropriations permit. 26BAdequacy of Water Supply System 27BTable 8-11. Adequacy of Water Supply System System Component Planned action Anticipated Construction Year Notes Wells/Intakes ☒ No action planned - adequate ☐ Repair/replacement ☐ Expansion/addition Water Storage Facilities ☐ No action planned - adequate ☒ Repair/replacement ☐ Expansion/addition 2034 Water Tower Rehab Water Treatment Facilities ☒ No action planned - adequate ☐ Repair/replacement ☐ Expansion/addition Distribution Systems (pipes, valves, etc.) ☒ No action planned - adequate ☐ Repair/replacement ☐ Expansion/addition No plans to upgrade any pipe or appurtenances. Only repair parts that leak or otherwise need repairing Pressure Zones ☒ No action planned - adequate ☐ Repair/replacement ☐ Expansion/addition Other: ☐ No action planned - adequate ☐ Repair/replacement ☐ Expansion/addition City of Little Canada 8-11 Water Supply Plan 28BProposed Future Water Sources 29BTable 8-12: Proposed future installations/sources Source Installation Location (approximate) Resource Name Proposed Pumping Capacity (gpm) Planned Installation Year Planned Partnerships Groundwater Not Applicable Surface Water Not Applicable Interconnection to another supplier Not Applicable 30BWater Source Alternatives - Key Metropolitan Council Benchmark Do you anticipate the need for alternative water sources in the next 10 years? Yes ☐ No ☒ For metro communities, will you need alternative water sources by the year 2040? Yes ☐ No ☒ If you answered yes for either question, then complete table 14. If no, insert NA. 31BTable 8-13: Alternative water sources Alternative Source Considered Source and/or Installation Location (approximate) Estimated Amount of Future Demand (%) Timeframe to Implement (YYYY) Potential Partners Benefits Challenges Groundwater NA Surface Water NA Reclaimed stormwater Reclaimed wastewater NA Interconnection to another supplier NA City of Little Canada 8-12 Water Supply Plan Part 2. Emergency Preparedness Procedures 32BFederal Emergency Response Plan Section 1433(b) of the Safe Drinking Water Act, (Public Law 108-188, Title IV- Drinking Water Security and Safety) requires community water suppliers serving over 3,300 people to prepare an Emergency Response Plan. TDo you have a federal emergency response plan? TYes ☒ No ☐ TIf yes, what was the date it was certified? 4 / 25 / 2005 33BTable 8-14. Emergency Preparedness Plan contact information Emergency Response Plan Role Contact Person Contact Phone Number Contact Email Emergency Response Lead BILL DIRCKS 651-766-4049 BILL.DIRCKS@CI.LITTLE- CANADA.MN.US Alternate Emergency Response Lead JOE STEELE 651-766-4055 JOE.STEELE.CI.LITTLE- CANADA.MN.US 34BOperational Contingency Plan TDo you have a written operational contingency plan? TYes ☒ No ☐ 35BEmergency Response Procedures 36BCurrent Water Sources and Service Area TDo records and maps exist? TYes ☒ No ☐ TCan staff access records and maps from a central secured location in the event of an emergency? Yes ☒ No ☐ TDoes the appropriate staff know where the materials are located? Yes ☒ No ☐ 37BProcedure for Augmenting Water Supplies 38BTable 8-15: Interconnections with other water supply systems to supply water in an emergency Other Water Supply System Owner Capacity (GPM & MGD) Note Any Limitations On Use List of services, equipment, supplies available to respond CITY OF ROSEVILLE 100,000 GPM & 144 MGD NONE GPM – Gallons per minute MGD – million gallons per day City of Little Canada 8-13 Water Supply Plan 39BTable 8-16: Utilizing surface water as an alternative source Surface Water Source Name Capacity (GPM) Capacity (MGD) Treatment Needs Note Any Limitations On Use Roseville is also a wholesale customer of St. Paul Regional Water Services so if there was a problem with SPRWS then water would not be available to either city and our interconnection would not work. At that point we would have to look at bottled water and potentially tying into Vadnais Heights. They are on well water so there would be some complications but if it were a long-term issue it may be necessary. Little Canada has a dead end valve located less than 20 feet from a dead end Vadnais Heights valve. 40BAllocation and Demand Reduction Procedures 41BTable 8-17: Water use priorities Customer Category Allocation Priority Average Daily Demand (GDP) Short-Term Emergency Demand Reduction Potential (GPD) Residential 1 611,000 220,000 Institutional 2 22,000 7,000 Commercial 4 205,000 100,000 Industrial 3 25,000 15,000 Irrigation 5 71,000 71,000 Wholesale NA NA NA Non-Essential 6 10,000 10,000 TOTAL NA NA 423,000 GPD – Gallons per Day 42BTable 8-18: Emergency demand reduction conditions, triggers and actions Emergency Triggers Short-term Actions Long-term Actions ☒ Contamination ☐ Loss of production ☒ Infrastructure failure ☒ Executive order by Governor ☐ Other: _____________ ☒ Supply augmentation through Emergency interconnection with Roseville ☒ Adopt (if not already) and enforce a critical water deficiency ordinance to penalize lawn watering, vehicle washing, golf course and park irrigation & other nonessential uses. ☐ Water allocation through____ ☒ Meet with large water users to discuss their contingency plan. ☒ Supply augmentation through Interconnection with Roseville ☒ Adopt (if not already) and enforce a critical water deficiency ordinance to penalize lawn watering, vehicle washing, golf course and park irrigation & other nonessential uses. ☐ Water allocation through____ ☒ Meet with large water users to discuss their contingency plan. City of Little Canada 8-14 Water Supply Plan 43BNotification Procedures 44BTable 8-19: Plan to inform customers regarding conservation requests, water use restrictions, and suspensions Notification Trigger(s) Methods (select all that apply) Update Frequency Partners ☒ Short-term demand reduction declared (< 1 year) ☒ Website ☐ Email list serve ☐ Social media (e.g. Twitter, Facebook) ☒ Direct customer mailing, ☒ Press release (TV, radio, newspaper), ☒ Meeting with large water users (> 10% of total city use) ☐ Other: ________ ☐ Daily ☒ Weekly ☒ Monthly ☐ Annually Roseville Little Canada Review Newspaper St. Paul Pioneer Press WCCO Radio Local Television News ☒ Long-term Ongoing demand reduction declared ☒ Website ☐ Email list serve ☐ Social media (e.g. Twitter, Facebook) ☒ Direct customer mailing, ☒ Press release (TV, radio, newspaper), ☒ Meeting with large water users (> 10% of total city use) ☐ Other: ________ ☐ Daily ☒ Weekly ☒ Monthly ☒ Annually Roseville Little Canada Review Newspaper St. Paul Pioneer Press WCCO Radio Local Television News ☒ Governor’s critical water deficiency declared ☒ Website ☐ Email list serve ☐ Social media (e.g. Twitter, Facebook) ☒ Direct customer mailing, ☒ Press release (TV, radio, newspaper), ☒ Meeting with large water users (> 10% of total city use) ☐ Other: ________ ☒ Daily ☒ Weekly ☐ Monthly ☐ Annually Roseville Little Canada Review Newspaper St. Paul Pioneer Press WCCO Radio Local Television News 45BEnforcement TDoes the city have a critical water deficiency restriction/official control in place that includes provisions to restrict water use and enforce the restrictions? (This restriction may be an ordinance, rule, regulation, policy under a council directive, or other official control) T Yes ☐ No ☒ If no, the municipality must adopt such an official control within 6 months of submitting this WSP and submit it to the DNR as an amendment to this WSP. TIrrespective of whether a critical water deficiency control is in place, does the public water supply utility, city manager, mayor, or emergency manager have standing authority to implement water restrictions? TYes ☒ No ☐ TIf yes, cite the regulatory authority reference: City of Little Canada Ordinance 1601.280. City of Little Canada 8-15 Water Supply Plan PART 3. WATER CONSERVATION PLAN Minnesotans have historically benefited from the state’s abundant water supplies, reducing the need for conservation. There are however, limits to the available supplies of water and increasing threats to the quality of our drinking water. Causes of water supply limitation may include: population increases, economic trends, uneven statewide availability of groundwater, climatic changes, and degraded water quality. Examples of threats to drinking water quality include: the presence of contaminant plumes from past land use activities, exceedances of water quality standards from natural and human sources, contaminants of emerging concern, and increasing pollutant trends from non-point sources. There are many incentives for conserving water; conservation: • reduces the potential for pumping-induced transfer of contaminants into the deeper aquifers, which can add treatment costs • reduces the need for capital projects to expand system capacity • reduces the likelihood of water use conflicts, like well interference, aquatic habitat loss, and declining lake levels • conserves energy, because less energy is needed to extract, treat and distribute water (and less energy production also conserves water since water is use to produce energy) • maintains water supplies that can then be available during times of drought It is therefore imperative that water suppliers implement water conservation plans. The first step in water conservation is identifying opportunities for behavioral or engineering changes that could be made to reduce water use by conducting a thorough analysis of: • Water use by customer • Extraction, treatment, distribution and irrigation system efficiencies • Industrial processing system efficiencies • Regulatory and barriers to conservation • Cultural barriers to conservation • Water reuse opportunities Once accurate data is compiled, water suppliers can set achievable goals for reducing water use. A successful water conservation plan follows a logical sequence of events. The plan should address both conservation on the supply side (leak detection and repairs, metering), as well as on the demand side (reductions in usage). Implementation should be conducted in phases, starting with the most obvious and lowest-cost options. In some cases one of the early steps will be reviewing regulatory constraints to water conservation, such as lawn irrigation requirements. Outside funding and grants may be available for implementation of projects. Engage water system operators and maintenance staff and customers in brainstorming opportunities to reduce water use. Ask the question: “How can I help save water?” Priority 1: Significant water reduction; low cost Priority 2: Slight water reduction, low costs (low hanging fruit) Priority 2: Significant water reduction; significant costs Priority 3: Slight water reduction, significant costs (do only if necessary) City of Little Canada 8-16 Water Supply Plan 46BProgress since 2006 TIs this your community’s first Water Supply Plan? TYes ☐ No ☒ If no, complete Table 21 to summarize conservation actions taken since the adoption of the 2006 water supply plan. 47BTable 8-20: Implementation of previous ten-year Conservation Plan 2006 Plan Commitments Action Taken? Change water rates structure to provide conservation pricing ☐ Yes ☐ No Water supply system improvements (e.g. leak repairs, valve replacements, etc.) ☒ Yes ☐ No Educational efforts ☒ Yes ☐ No New water conservation ordinances ☐ Yes ☐ No Rebate or retrofitting Program (e.g. for toilet, faucets, appliances, showerheads, dish washers, washing machines, irrigation systems, rain barrels, water softeners, etc. ☐ Yes ☐ No Enforcement ☐ Yes ☐ No Describe other ☐ Yes ☐ No 48BWhat are the results you have seen from the actions in Table 21 and how were results measured? Our overall usage has not changed much over the past ten years. We did upgrade our water meters in the City to an automated reading system so we have the ability to detect leaks and call or send letters to properties that have a leak so that it can be repaired before it leaks too long. The meters also provide more accurate readings as some of the older meters were no longer in the acceptable accuracy range. We have also repaired some leaks in our system and have the system checked for leaks every other year. Weather has played the biggest role in conservation. The last two summers have had much more precipitation, which has led to a decrease in irrigation water used. We have published articles in the City newsletter discussing water leaks and how to test for them in your home. We also have an automated metering system, which allows us to notify customers of potential leaks. City of Little Canada 8-17 Water Supply Plan 49BTriggers for Allocation and Demand Reduction Actions Complete table 22 by checking each trigger below, as appropriate, and the actions to be taken at various levels or stages of severity. Add in additional rows to the table as needed. 50BTable 8-21: Short and long-term demand reduction conditions, triggers and actions Objective Triggers Actions Protect surface water flows ☐ Low stream flow conditions ☐ Reports of declining wetland and lake levels ☐ Other: ______________ ☐ Increase promotion of conservation measures ☐ Other: ____________ Short-term demand reduction (less than 1 year ☒ Extremely high seasonal water demand (more than double winter demand) ☐ Loss of treatment capacity ☐ Lack of water in storage ☒ State drought plan ☐ Well interference ☐ Other: _____________ ☒ Adopt (if not already) and enforce the critical water deficiency ordinance to restrict or prohibit lawn watering, vehicle washing, golf course and park irrigation & other nonessential uses. ☐ Supply augmentation through ____ ☐ Water allocation through____ ☒ Meet with large water users to discuss user’s contingency plan. Long-term demand reduction (>1 year) ☒ Per capita demand increasing ☐ Total demand increase (higher population or more industry)Water level in well(s) below elevation of _____ ☐ Other: _____________ ☒ Develop a critical water deficiency ordinance that is or can be quickly adopted to penalize lawn watering, vehicle washing, golf course and park irrigation & other nonessential uses. ☒ Enact a water waste ordinance that targets over-watering (causing water to flow off the landscape into streets, parking lots, or similar), watering impervious surfaces (streets, driveways or other hardscape areas), and negligence of known leaks, breaks, or malfunctions. ☒ Meet with large water users to discuss user’s contingency plan. ☒ Enhanced monitoring and reporting: audits, meters, billing, etc. Governor’s “Critical Water Deficiency Order” declared ☐ Describe ☐ Describe City of Little Canada 8-18 Water Supply Plan 51BConservation Objectives and Strategies – Key benchmark for DNR This section establishes water conservation objectives and strategies for eight major areas of water use. 52BObjective 1: Reduce Unaccounted (Non-Revenue) Water loss to Less than 10% The Minnesota Rural Waters Association, the Metropolitan Council and the Department of Natural Resources recommend that all water uses be metered. Metering can help identify high use locations and times, along with leaks within buildings that have multiple meters. It is difficult to quantify specific un-metered water use such as that associated with firefighting and system flushing or system leaks. Typically, water suppliers subtract metered water use from total water pumped to calculate unaccounted or non-revenue water loss. TIs your five-year average (2005-2014) unaccounted Water Use in Table 2 higher than 10%? Yes ☐ No ☒ 53BWhat is your leak detection monitoring schedule? (e.g. monitor 1/3rd of the city lines per year) We have our entire system checked for leaks every 2 or 3 yearTs. TWhat is the date of your most recent water audit? __2-2016_____ TFrequency of water audits: T☒T yearly T☐T other (specify frequency) ________ TLeak detection and survey: T☐T every year T☒T every other year T☐T periodic as needed TYear last leak detection survey completed: __2015_______ Complete Table 23 by adding the requested information regarding the number, types, testing and maintenance of customer meters. 54BTable 8-22: Information about customer meters Customer Category Number of Customers Number of Metered Connections Number of Automated Meter Readers Meter testing intervals (years) Average age/meter replacement schedule (years Residential 2111 2111 2101 20 __5_ / __20- 30_ Irrigation meters 89 89 89 10 __5_ / __10- 20_ Institutional 7 7 7 5 __5_ / _10- 20__ Commercial 409 409 409 5-20 __5_ / _10- 20__ Industrial 5 5 5 5 __5_ / __10- 20_ Public facilities 6 6 6 5-20 __5_ / _10- 20__ Other ___ / ___ TOTALS 2627 2627 2617 NA NA City of Little Canada 8-19 Water Supply Plan City of Little Canada 8-20 Water Supply Plan 55BTable 8-23: Water source meters Number of Meters Meter testing schedule (years) Number of Automated Meter Readers Average age/meter replacement schedule (years Water source (wells/intakes) 0 ___ / ___ Treatment plant 0 ___ / ___ 56BObjective 2: Achieve Less than 75 Residential Gallons per Capita Demand (GPCD) The 2002 average residential per capita demand in the Twin Cities Metropolitan area was 75 gallons per capita per day. Is your average 2010-2015 residential per capita water demand in Table 2 more than 75? Yes ☐ No ☒ What was your 2010 – 2015 five-year average residential per capita water demand? 72.0 g/person/day Describe the water use trend over that timeframe: It was 75 gpd in 2010 and went up to 81 in 2011. Since then it has dropped each year, including all the way down to 65.3 in 2015. The increase in summer precipitation has probably helped along with our new meter reading system that can detect leaks. I also think people are purchasing low flow fixtures and taking other measures on their own based on what they read and see on television. There are good education programs these days. 57BTable 8-24: Strategies and timeframe to reduce residential per capita demand Strategy to reduce residential per capita demand Timeframe for completing work ☐ Revise city ordinances/codes to encourage or require water efficient landscaping. ☐ Revise city ordinance/codes to permit water reuse options, especially for non-potable purposes like irrigation, groundwater recharge, and industrial use. Check with plumbing authority to see if internal buildings reuse is permitted ☐ Revise ordinances to limit irrigation. Describe the restricted irrigation plan: ☐ Revise outdoor irrigation installations codes to require high efficiency systems (e.g. those with soil moisture sensors or programmable watering areas) in new installations or system replacements. ☐ Make water system infrastructure improvements ☐ Offer free or reduced cost water use audits) for residential customers. ☐ Implement a notification system to inform customers when water availability conditions change. City of Little Canada 8-21 Water Supply Plan Strategy to reduce residential per capita demand Timeframe for completing work ☐ Provide rebates or incentives for installing water efficient appliances and/or fixtures indoors (e.g., low flow toilets, high efficiency dish washers and washing machines, showerhead and faucet aerators, water softeners, etc.) ☐ Provide rebates or incentives to reduce outdoor water use (e.g., turf replacement/reduction, rain gardens, rain barrels, smart irrigation, outdoor water use meters, etc.) ☐ Identify supplemental Water Resources ☒ Conduct audience-appropriate water conservation education and outreach. Continual over the next ten years ☐ Describe other plans 58BObjective 3: Achieve at least a 1.5% per year water reduction for Institutional, Industrial, Commercial, and Agricultural GPCD over the next 10 years or a 15% reduction in ten years. 59BTable 8-25: Strategies and timeframe to reduce institutional, commercial industrial, and agricultural and non-revenue use demand Strategy to reduce total business, industry, agricultural demand Timeframe for completing work ☐ Conduct a facility water use audit for both indoor and outdoor use, including system components ☒ Install enhanced meters capable of automated readings to detect spikes in consumption Completed in 2012 ☐ Compare facility water use to related industry benchmarks, if available (e.g., meat processing, dairy, fruit and vegetable, beverage, textiles, paper/pulp, metals, technology, petroleum refining etc.) ☐ Install water conservation fixtures and appliances or change processes to conserve water ☐ Repair leaking system components (e.g., pipes, valves) ☐ Investigate the reuse of reclaimed water (e.g., stormwater, wastewater effluent, process wastewater, etc.) ☐ Reduce outdoor water use (e.g., turf replacement/reduction, rain gardens, rain barrels, smart irrigation, outdoor water use meters, etc.) ☐ Train employees how to conserve water ☐ Implement a notification system to inform non-residential customers when water availability conditions change. ☐ Rainwater catchment systems intended to supply uses such as water closets, urinals, trap primers for floor drains and floor sinks, industrial processes, water features, vehicle washing facilities, cooling tower City of Little Canada 8-22 Water Supply Plan Strategy to reduce total business, industry, agricultural demand Timeframe for completing work makeup, and similar uses shall be approved by the commissioner. Proposed plumbing code 4714.1702.1 http://www.dli.mn.gov/PDF/docket/4714rule.pdf ☐ Describe other plans: 60BObjective 4: Achieve a Decreasing Trend in Total Per Capita Demand The residential category is showing a slight upward trend but there is much variation in the past data. I believe it mostly goes with precipitation. The commercial category is trending upward slightly as well. Commercial properties that were vacant are being filled, which is contributing to the increase in usage. The industrial category is trending slightly upward as well and that can also be attributed to the addition of new industrial businesses. Institutional usage is remaining pretty stagnant, likely due to no change in institutional accounts in the past 10-15 years. That should continue into the future as well. Precipitation does not seem to affect the commercial, industrial, and institutional categories as much. Probably because they tend to irrigate regardless of the amount of precipitation that has fallen over the summer. The key factor for residential usage is irrigation. Dry summers bring higher usage. C/I/I is affected by new businesses opening and old businesses closing. 61BObjective 5: Reduce Peak Day Demand so that the Ratio of Average Maximum day to the Average Day is less than 2.6 Is the ratio of average 2005-2014 maximum day demand to average 2005-2014 average day demand reported in Table 2 more than 2.6? Yes ☐ No ☒ Calculate a ten year average (2005 – 2014) of the ratio of maximum day demand to average day demand: U1.5U 62BObjective 6: Implement a Conservation Water Rate Structure and/or a Uniform Rate Structure with a Water Conservation Program 88BWater Conservation Program 89BCurrent Water Rates Include a copy of the actual rate structure in Appendix 9 or list current water rates including base/service fees and volume charges below. Volume included in base rate or service charge: _____ gallons or ____ cubic feet ___ other Frequency of billing: ☐ Monthly ☐ Bimonthly ☒ Quarterly ☐ Other: _________________ Water Rate Evaluation Frequency: ☒ every year ☐ every ___ years ☐ no schedule Date of last rate change: _4/2016__________ City of Little Canada 8-23 Water Supply Plan 63BTable 8-26: Rate structures for each customer category Customer Category Conservation Billing Strategies in Use * Conservation Neutral Billing Strategies in Use ** Non-Conserving Billing Strategies in Use *** Residential ☐ Monthly billing ☐ Increasing block rates (volume tiered rates) ☒ Seasonal rates ☐ Time of use rates ☒ Water bills reported in gallons ☐ Individualized goal rates ☐ Excess use rates ☐ Drought surcharge ☐ Use water bill to provide comparisons ☒ Service charge not based on water volume ☐ Other (describe) ☐ Uniform ☐ Odd/even day watering ☐ Service charge based on water volume ☐ Declining block ☐ Flat ☐ Other (describe) Commercial/ Industrial/ Institutional ☐ Monthly billing ☐ Increasing block rates (volume tiered rates) ☒ Seasonal rates ☐ Time of use rates ☒ Water bills reported in gallons ☐ Individualized goal rates ☐ Excess use rates ☐ Drought surcharge ☐ Use water bill to provide comparisons ☒ Service charge not based on water volume ☐ Other (describe) ☐ Uniform ☐ Service charge based on water volume ☐ Declining block ☐ Flat ☐ Other (describe) ☐ Other * Rate Structures components that may promote water conservation: • Monthly billing: is encouraged to help people see their water usage so they can consider changing behavior. • Increasing block rates (also known as a tiered residential rate structure): Typically, these have at least three tiers: should have at least three tiers. o The first tier is for the winter average water use. o The second tier is the year-round average use, which is lower than typical summer use. This rate should be set to cover the full cost of service. o The third tier should be above the average annual use and should be priced high enough to encourage conservation, as should any higher tiers. For this to be effective, the difference in block rates should be significant. • Seasonal rate: higher rates in summer to reduce peak demands • Time of Use rates: lower rates for off peak water use • Bill water use in gallons: this allows customers to compare their use to average rates City of Little Canada 8-24 Water Supply Plan • Individualized goal rates: typically used for industry, business or other large water users to promote water conservation if they keep within agreed upon goals. Excess Use rates: if water use goes above an agreed upon amount this higher rate is charged • Drought surcharge: an extra fee is charged for guaranteed water use during drought • Use water bill to provide comparisons: simple graphics comparing individual use over time or compare individual use to others. • Service charge or base fee that does not include a water volume – a base charge or fee to cover universal city expenses that are not customer dependent and/or to provide minimal water at a lower rate (e.g., an amount less than the average residential per capita demand for the water supplier for the last 5 years) • Emergency rates -A community may have a separate conservation rate that only goes into effect when the community or governor declares a drought emergency. These higher rates can help to protect the city budgets during times of significantly less water usage. **Conservation Neutral** • Uniform rate: rate per unit used is the same regardless of the volume used • Odd/even day watering –This approach reduces peak demand on a daily basis for system operation, but it does not reduce overall water use. *** Non-Conserving *** • Service charge or base fee with water volume: an amount of water larger than the average residential per capita demand for the water supplier for the last 5 years • Declining block rate: the rate per unit used decreases as water use increases. • Flat rate: one fee regardless of how much water is used (usually un-metered). 64BObjective 7: Additional strategies to Reduce Water Use and Support Wellhead Protection Planning Development and redevelopment projects can provide additional water conservation opportunities, such as the actions listed below. If a Uniform Rate Structure is in place, the water supplier must provide a Water Conservation Program that includes at Uleast twoU of the actions listed below. Check those actions that you intent to implement within the next 10 years. 65BTable 8-27: Additional strategies to Reduce Water Use & Support Wellhead Protection ☐ Participate in the GreenStep Cities Program, including implementation of at least one of the 20 “Best Practices” for water ☐ Prepare a master plan for smart growth (compact urban growth that avoids sprawl) ☐ Prepare a comprehensive open space plan (areas for parks, green spaces, natural areas) ☒ Adopt a water use restriction ordinance (lawn irrigation, car washing, pools, etc.) ☒ Adopt an outdoor lawn irrigation ordinance ☐ Adopt a private well ordinance (private wells in a city must comply with water restrictions) ☐ Implement a stormwater management program ☐ Adopt non-zoning wetlands ordinance (can further protect wetlands beyond state/federal laws-for vernal pools, buffer areas, restrictions on filling or alterations) ☐ Adopt a water offset program (primarily for new development or expansion) City of Little Canada 8-25 Water Supply Plan ☐ Implement a water conservation outreach program ☐ Hire a water conservation coordinator (part-time) ☐ Implement a rebate program for water efficient appliances, fixtures, or outdoor water management 66BObjective 8: Tracking Success: How will you track or measure success through the next ten years? We will keep an eye on our per capita usage in all categories while also monitoring our overall usage, including unaccounted-for water. Hopefully, usage continues to stay pretty flat or even decreases. Precipitation will have a big impact and that is an unknown so we’ll have to wait and see. 67BRegulation 68BTable 8-28: Regulations for short-term reductions in demand and long-term improvements in water efficiencies Regulations Utilized When is it applied (in effect)? ☐ Rainfall sensors required on landscape irrigation systems ☐ Ongoing ☐ Seasonal ☐ Only during declared Emergencies ☐ Water efficient plumbing fixtures required ☐ New development ☐ Replacement ☐ Rebate Programs ☐ Critical/Emergency Water Deficiency ordinance ☐ Only during declared Emergencies ☒ Watering restriction requirements (time of day, allowable days, etc.) ☐ Odd/even ☐ 2 days/week ☒ Only during declared Emergencies ☐ Water waste prohibited (for example, having a fine for irrigators spraying on the street) ☐ Ongoing ☐ Seasonal ☐ Only during declared Emergencies ☐ Limitations on turf areas (requiring lots to have 10% - 25% of the space in natural areas) ☐ New development ☐ Shoreland/zoning ☐ Other ☒ Soil preparation requirement s (after construction, requiring topsoil to be applied to promote good root growth) ☒ New Development ☒ Construction Projects ☐ Other ☐ Tree ratios (requiring a certain number of trees per square foot of lawn) ☐ New development ☐ Shoreland/zoning ☐ Other ☐ Permit to fill swimming pool and/or requiring pools to be covered (to prevent evaporation) ☐ Ongoing ☐ Seasonal ☐ Only during declared Emergencies City of Little Canada 8-26 Water Supply Plan Regulations Utilized When is it applied (in effect)? ☐ Ordinances that permit stormwater irrigation, reuse of water, or other alternative water use (Note: be sure to check current plumbing codes for updates) ☐ Describe 69BRetrofitting Programs Education and incentive programs aimed at replacing inefficient plumbing fixtures and appliances can help reduce per capita water use, as well as energy costs. It is recommended that municipal water suppliers develop a long-term plan to retrofit public buildings with water efficient plumbing fixtures and appliances. Some water suppliers have developed partnerships with organizations having similar conservation goals, such as electric or gas suppliers, to develop cooperative rebate and retrofit programs. A study by the AWWA Research Foundation (Residential End Uses of Water, 1999) found that the average indoor water use for a non-conserving home is 69.3 gallons per capita per day (gpcd). The average indoor water use in a conserving home is 45.2 gpcd and most of the decrease in water use is related to water efficient plumbing fixtures and appliances that can reduce water, sewer and energy costs. In Minnesota, certain electric and gas providers are required (Minnesota Statute 216B.241) to fund programs that will conserve energy resources and some utilities have distributed water efficient showerheads to customers to help reduce energy demands required to supply hot water. 70BTable 8-29: Retrofitting programs (Select all that apply) Water Use Targets Outreach Methods Partners ☐ Low flush toilets, ☒ Toilet leak tablets, ☐ Low flow showerheads, ☐ Faucet aerators; ☒ Education about ☐ Free distribution of ☐ Rebate for ☐ Other ☐ Gas company ☐ Electric company ☐ Watershed organization ☐ Water conserving washing machines, ☐ Dish washers, ☐ Water softeners; ☐ Education about ☐ Free distribution of ☐ Rebate for ☐ Other ☐ Gas company ☐ Electric company ☐ Watershed organization ☒ Rain gardens, ☒ Rain barrels, ☒ Native/drought tolerant landscaping, etc. ☒ Education about ☐ Free distribution of ☐ Rebate for ☒ Other ☐ Gas company ☐ Electric company ☒ Watershed organization Briefly discuss measures of success from the above table (e.g. number of items distributed, dollar value of rebates, gallons of water conserved, etc.): There are cost-sharing programs available through the Ramsey Washington Metro Watershed District. The City cannot provide any statistics so it is unknown how much the program has helped with water conservation. The City has also advertised toilet leak tablets but has no way of knowing if anyone has used them to locate a leak and conserve water. City of Little Canada 8-27 Water Supply Plan 71BEducation and Information Programs Customer education should take place in three different circumstances. First, customers should be provided information on how to conserve water and improve water use efficiencies. Second, information should be provided at appropriate times to address peak demands. Third, emergency notices and educational materials about how to reduce water use should be available for quick distribution during an emergency. 72BProposed Education Programs Complete Table 31 by selecting which methods are used to provide water conservation and information, including the frequency of program components. Select all that apply and add additional lines as needed. 73BTable 8-30: Current and Proposed Education Programs Education Methods General summary of topics #/Year Frequency Billing inserts or tips printed on the actual bill Quick items regarding leak detection, irrigation usage, etc. 1-4 ☒ Ongoing ☐ Seasonal ☐ Only during declared emergencies Consumer Confidence Reports Report completed every year. 1 ☒ Ongoing ☐ Seasonal ☐ Only during declared emergencies Press releases to traditional local news outlets (e.g., newspapers, radio and TV) ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Social media distribution (e.g., emails, Facebook, Twitter) ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Paid advertisements (e.g., billboards, print media, TV, radio, web sites, etc.) ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Presentations to community groups ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Staff training ☐ Ongoing ☐ Seasonal City of Little Canada 8-28 Water Supply Plan Education Methods General summary of topics #/Year Frequency ☐ Only during declared emergencies Facility tours ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Displays and exhibits ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Marketing rebate programs (e.g., indoor fixtures & appliances and outdoor practices) ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Community news letters Articles discussing water leaks, irrigation practices, low-flow shower heads, toilets, etc. 1-3 ☒ Ongoing ☐ Seasonal ☐ Only during declared emergencies Direct mailings (water audit/retrofit kits, showerheads, brochures) ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Information kiosk at utility and public buildings ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Public service announcements ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Cable TV Programs ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Demonstration projects (landscaping or plumbing) ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies K-12 education programs (Project Wet, Drinking Water Institute, presentations) ☐ Ongoing City of Little Canada 8-29 Water Supply Plan Education Methods General summary of topics #/Year Frequency ☐ Seasonal ☐ Only during declared emergencies Community events (children’s water festivals, environmental fairs) ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Community education classes ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Water week promotions ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Website (include address: www.ci.little- canada.mn.us) ) Information on website regarding water leak detection, low-flow shower heads, toilets, and other water conservation ideas. ☒ Ongoing ☐ Seasonal ☐ Only during declared emergencies Targeted efforts (large volume users, users with large increases) ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Notices of ordinances ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Emergency conservation notices Watering bans As Neede d ☐ Ongoing ☐ Seasonal ☒ Only during declared emergencies Other: ☐ Ongoing ☐ Seasonal ☐ Only during declared emergencies Briefly discuss what future education and information activities your community is considering in the future: City of Little Canada 8-30 Water Supply Plan The City plans to enter into the social media arena within the next year or so and will use that tool to talk about water conservation. The rest of the items discussed above will continue and, ideally, increase in number. City of Little Canada 8-31 Water Supply Plan Part 4. ITEMS FOR METROPOLITAN AREA COMMUNITIES Minnesota Statute 473.859 requires WSPs to be completed for all local units of government in the seven-county Metropolitan Area as part of the local comprehensive planning process. Much of the information in Parts 1-3 addresses water demand for the next 10 years. However, additional information is needed to address water demand through 2040, which will make the WSP consistent with the Metropolitan Land Use Planning Act, upon which the local comprehensive plans are based. This Part 4 provides guidance to complete the WSP in a way that addresses plans for water supply through 2040. 74BWater Demand Projections through 2040 Complete Table 7 in Part 1D by filling in information about long-term water demand projections through 2040. Total Community Population projections should be consistent with the community’s system statement, which can be found on the Metropolitan Council’s website and which was sent to the community in September 2015. Projected Average Day, Maximum Day, and Annual Water Demands may either be calculated using the method outlined in Appendix 2 of the 2015 Master Water Supply Plan or by a method developed by the individual water supplier. 75BPotential Water Supply Issues Complete Table 10 in Part 1E by providing information about the potential water supply issues in your community, including those that might occur due to 2040 projected water use. The Master Water Supply Plan provides information about potential issues for your community in Appendix 1 (Water Supply Profiles). This resource may be useful in completing Table 10. You may document results of local work done to evaluate impact of planned uses by attaching a feasibility assessment or providing a citation and link to where the plan is available electronically. 76BProposed Alternative Approaches to Meet Extended Water Demand Projections Complete Table 12 in Part 1F with information about potential water supply infrastructure impacts (such as replacements, expansions or additions to wells/intakes, water storage and treatment capacity, distribution systems, and emergency interconnections) of extended plans for development and redevelopment, in 10-year increments through 2040. It may be useful to refer to information in the community’s local Land Use Plan, if available. Complete Table 14 in Part 1F by checking each approach your community is considering to meet future demand. For each approach your community is considering, provide information about the amount of future water demand to be met using that approach, the timeframe to implement the approach, potential partners, and current understanding of the key benefits and challenges of the approach. City of Little Canada 8-32 Water Supply Plan Appendices that May Be Found in the City of Little Canada Water Supply Plan that Was Submitted to the Minnesota Department of Natural Resources 77BAppendix 1: Well records and maintenance summaries – see Part 1C 78BAppendix 2: Water level monitoring plan – see Part 1E 79BAppendix 3: Water level graphs for each water supply well - see Part 1E 80BAppendix 4: Capital Improvement Plan - see Part 1E 81BAppendix 5: Emergency Telephone List – see Part 2C 82BAppendix 6: Cooperative Agreements for Emergency Services – see Part 2C 83BAppendix 7: Municipal Critical Water Deficiency Ordinance – see Part 2C 84BAppendix 8: Graph showing annual per capita water demand for each customer category during the last ten-years – see Part 3 Objective 4 85BAppendix 9: Water Rate Structure – see Part 3 Objective 6 86BAppendix 10: Adopted or proposed regulations to reduce demand or improve water efficiency – see Part 3 Objective 7 87BAppendix 11: Implementation Checklist – summary of all the actions that a community is doing, or proposes to do, including estimated implementation dates – see www.mndnr.gov/watersupplyplans STAFF REPORT TO: Mayor Keis and Members of the City Council FROM: Bill Dircks, Public Works Director DATE: June 10, 2020 RE: Replacement of Four HVAC Units at City Hall ACTION TO BE CONSIDERED: Motion to approve the replacement of four HVAC units at City Hall and the Historical Society by Lewis Heating and Air at a cost of $31,500. Additional duct work may be necessary and could add to the final cost. BACKGROUND: The three HVAC units (furnace and AC condenser) that serve the main office and the staff offices on the west side of the building are 25 years old and have reached the end of their useful life. The HVAC unit serving the Historical Society is 22 years old and has also reached the end of its life. Funds were budgeted to replace all four units in 2020. Quotes to perform the work were obtained from two contractors and are listed below. Krinkie Heating and Air: $44,964 (did not include Historical Society) Lewis Heating and Air: $31,500 (all four units included) Lewis Heating and Air has done some repair work on City HVAC equipment and did quality work. As part of the replacement, staff will have the contractor ensure that all areas served by the units are receiving adequate air flow and ventilation. The front lobby area may need to be altered along with the employee bathrooms. If work is required, pricing will be obtained and additional quotes if necessary. SOURCE OF FUNDS: The HVAC work is included in the 2020 Capital Improvement Plan. $55,000 was budgeted for City Center efficiency upgrades. STAFF RECOMMENDATIONS: Staff recommends awarding the HVAC replacement work to Lewis Heating and Air at a price of $31,500 with additional duct work possibly increasing the price.