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Home My WebLink About11-13-2018 Council Meeting Packet EXPANDED AGENDA CITY COUNCIL AGENDA Tuesday, November 13, 2018 *********** City Council Meeting 6:30 p.m. (Broadcast live: http://northmetrotv.com/local- meetings/lino-lakes/) City Council: Mayor Reinert, Councilmembers Maher, Manthey, Rafferty and Stoesz City Administrator: Jeff Karlson CITY COUNCIL MEETING, 6:30 P.M.  Roll Call - Council Members Stoesz, Manthey, Maher, and Mayor Reinert present; Council Member Rafferty absent  Pledge of Allegiance  Open Mike / Public Comment - Bernadine Skoglund, 7481 Lake Dr, reported that there is a timber wolf appearing regularly on her property  Setting the Agenda: Addition or deletion of agenda items The agenda was approved as presented 1. CONSENT AGENDA A) Consideration of Expenditures: i) November 13, 2018 (Check No. 109142 through 109244) ($349,547.37) B) Consider approval of October 22, 2018 Council Work Session Minutes C) Consider approval of October 22, 2018 Council Meeting Minutes D) Consider Resolution 18-153 Denial of Therapeutic Massage Business License and Resolution No. 18-154 Individual Therapeutic Massage License Action Taken: Motion by Maher, seconded by Manthey, to approve Consent Agenda Items 1A through 1D as presented, was adopted 2. FINANCE DEPARTMENT A) Consider Resolution No. 18-157, Awarding the Sale of $7,169,000 General Obligation Bonds, Series 2018A, Sarah Cotton Action Taken: Motion by Manthey, seconded by Stoesz, to approve Resolution No. 18-157 as presented, was adopted B) Consider Resolution No. 18-158, Calling for a Public Hearing on Consenting to the Issuance of Senior Housing Facility Revenue Notes to Finance a Senior Housing Project, Sarah Cotton Action Taken: Motion by Manthey, seconded by Stoesz, to approve Resolution No. 18-158 as presented, was adopted Council Agenda -2- November 13, 2018 C) Consider 1st Reading of Ordinance No. 18-18, Establishing the 2019 City Fee Schedule, Sarah Cotton Action Taken: Motion by Maher, seconded by Manthey, to approve the 1st Reading of Ordinance No. 18-18 as presented, was adopted 3. ADMINISTRATION DEPARTMENT A) Consider 1st Reading of Ordinance No. 17-18, Adjusting the Salaries of the Mayor and Councilmembers, Jeff Karlson Action Taken: Motion by Manthey, seconded by Stoesz, to approve the 1st reading of Ordinance No. 17-18 as presented, was adopted B) Consider 1st Reading of Ordinance No 08-18, Amending Chapter 203 of Lino Lakes City Code, Jeff Karlson Action Taken: Motion by Maher, seconded by Stoesz, to approve the 1st reading of Ordinance No. 08-18 as presented, was adopted C) Consider Approval of Labor Agreement Between City of Lino Lakes and LELS Local 299, Jeff Karlson Action Taken: Motion by Manthey, seconded by Stoesz, to approve the labor agreement as presented, was adopted D) Consider Resolution Nos. 18-151 and 18-152, Establishing 2018 and 2019 Compensation Plans for Non-Union Employees, Jeff Karlson Action Taken: Motion by Maher, seconded by Manthey, to approve Resolution No. 18-151 as presented, was adopted; Motion by Manthey, seconded by Stoesz, to approve Resolution No. 18-152 as presented was adopted E) Consider Appointment of Utilities Supervisor, Karissa Bartholomew Action Taken: Motion by Maher, seconded by Manthey, to approve hiring of Justin Williams as recommended, was adopted F) Consider Appointment of Utilities Maintenance Worker, Karissa Bartholomew Action Taken: Motion by Stoesz, seconded by Maher, to approve hiring of Layne Chapman as recommended, was adopted G) Consider Appointment of Paid On-Call Firefighter, Karissa Bartholomew Action Taken: Motion by Manthey, seconded by Stoesz, to approve hiring of Lucas Evans as recommended, was adopted H) Consider Appointment of Community Development Intern, Karissa Bartholomew Action Taken: Motion by Maher, seconded by Stoesz, to approve hiring of Monika Mann as recommended, was adopted Council Agenda -3- November 13, 2018 4. PUBLIC SAFETY DEPARTMENT A) Consider request for approval to enter into a JPA for the investigation of financial crimes, John Swenson Action Taken: Motion by Maher, seconded by Stoesz, to approve City participation in the Joint Powers Agreement as recommended, was adopted B) Consider Lease Agreement with North Memorial Ambulance Service, John Swenson Action Taken: Motion by Maher, seconded by Stoesz, to authorize execution of a lease agreement as recommended, was adopted 5. PUBLIC SERVICES DEPARTMENT None 6. COMMUNITY DEVELOPMENT DEPARTMENT A) Public Hearing: Consider Ordinance No. 16-18, Vacating Right of Way along Sandpiper Dr and drainage and utility easements Lakes Addition No. 1, Diane Hankee Action Taken: Motion by Manthey, seconded by Stoesz, to approve the 1st Reading of Ordinance No. 16-18 as presented, was adopted B) Watermark, Katie Larsen i. Consider Resolution No. 18-143 Approving PUD Final Plan/Final Plat ii. Consider Resolution No. 18-144 Approving Master Development Agreement iii. Consider Resolution No. 18-145 Approving 1st Addition Development Agrmt Action Taken: Motion by Stoesz, seconded by Manthey, to table the matter to November 26, was adopted C) Consider Resolution No. 18-156, Approving Comprehensive Plan Amendment for I-35E Corridor, Michael Grochala Action Taken: Motion by Manthey, seconded by Stoesz, to approve Resolution No. 18-156 as presented, was adopted D) Consider Resolution No. 18-155, Approving Payment No. 4 and Final, 2017 Trail Improvement Project, Diane Hankee Action Taken: Motion by Maher, seconded by Stoesz, to approve Resolution No. 18-155 as presented, was adopted E) Consider Resolution 18-159, Authorizing Acquisition of Permanent Easement, 49 & J Trunk Utility Improvements, Diane Hankee Action Taken: Motion by Maher, seconded by Stoesz, to approve Resolution No. 18-159 as presented, was adopted F) Consider Resolution 18-160, Approving Quotes Trunk Watermain Connection, Birch Street and Black Duck Drive, Diane Hankee Council Agenda -4- November 13, 2018 Action Taken: Motion by Manthey, seconded by Stoesz, to approve Resolution No. 18-160 as presented, was adopted 7. UNFINISHED BUSINESS None 8. NEW BUSINESS None Adjournment Action Taken: Motion by Maher, seconded by , to adjourn at 8:20 p.m. Community Calendar – A Look Ahead November 13, 2018 through November 26, 2018 CITY HALL CLOSED NOVEMBER 22 & 23 - THANKSGIVING HOLIDAY Wednesday, November 14 6:30 pm, Council Chambers Planning & Zoning Board Monday, November 26 6:00 pm, Community Room Council Work Session Monday, November 26 6:30 pm, Council Chambers City Council Meeting Updated 11/9/2018 CITY COUNCIL AGENDA Tuesday, November 13, 2018 *********** City Council Meeting 6:30 p.m. (Broadcast live: http://northmetrotv.com/local- meetings/lino-lakes/) City Council: Mayor Reinert, Councilmembers Maher, Manthey, Rafferty and Stoesz City Administrator: Jeff Karlson CITY COUNCIL MEETING, 6:30 P.M.  Call to Order and Roll Call  Pledge of Allegiance  Open Mike / Public Comment  Setting the Agenda: Addition or deletion of agenda items 1. CONSENT AGENDA A) Consideration of Expenditures: i) November 13, 2018 (Check No. 109142 through 109244) in the amount of $349,547.37. B) Consider approval of October 22, 2018 Council Work Session Minutes C) Consider approval of October 22, 2018 Council Meeting Minutes D) Consider Resolution 18-153 Denial of Therapeutic Massage Business License and Resolution No. 18-154 Individual Therapeutic Massage License 2. FINANCE DEPARTMENT A) Consider Resolution No. 18-157, Awarding the Sale of $7,169,000 General Obligation Bonds, Series 2018A, Sarah Cotton B) Consider Resolution No. 18-158, Calling for a Public Hearing on Consenting to the Issuance of Senior Housing Facility Revenue Notes to Finance a Senior Housing Project, Sarah Cotton C) Consider 1st Reading of Ordinance No. 18-18, Establishing the 2019 City Fee Schedule, Sarah Cotton 3. ADMINISTRATION DEPARTMENT A) Consider 1st Reading of Ordinance No. 17-18, Adjusting the Salaries of the Mayor and Councilmembers, Jeff Karlson B) Consider 1st Reading of Ordinance No 08-18, Amending Chapter 203 of Lino Lakes City Code, Jeff Karlson Council Agenda -2- November 13, 2018 C) Consider Approval of Labor Agreement Between City of Lino Lakes and LELS Local 299, Jeff Karlson D) Consider Resolution Nos. 18-151 and 18-152, Establishing 2018 and 2019 Compensation Plans for Non-Union Employees, Jeff Karlson E) Consider Appointment of Utilities Supervisor, Karissa Bartholomew F) Consider Appointment of Utilities Maintenance Worker, Karissa Bartholomew G) Consider Appointment of Paid On-Call Firefighter, Karissa Bartholomew H) Consider Appointment of Community Development Intern, Karissa Bartholomew 4. PUBLIC SAFETY DEPARTMENT A) Consider request for approval to enter into a JPA for the investigation of financial crimes, John Swenson B) Consider the Lease Agreement with North Memorial Ambulance Service, John Swenson 5. PUBLIC SERVICES DEPARTMENT None 6. COMMUNITY DEVELOPMENT DEPARTMENT A) Public Hearing: Consider Ordinance No. 16-18, Vacating Right of Way along Sandpiper Drive and drainage and utility easements Lakes Addition No. 1, Diane Hankee B) Watermark, Katie Larsen i. Consider Resolution No. 18-143 Approving PUD Final Plan/Final Plat ii. Consider Resolution No. 18-144 Approving Master Development Agreement iii. Consider Resolution No. 18-145 Approving 1st Addition Development Agreement C) Consider Resolution No. 18-156, Approving Comprehensive Plan Amendment for I-35E Corridor, Michael Grochala D) Consider Resolution No. 18-155, Approving Payment No. 4 and Final, 2017 Trail Improvement Project, Diane Hankee E) Consider Resolution 18-159, Authorizing Acquisition of Permanent Easement, 49 & J Trunk Utility Improvements, Diane Hankee F) Consider Resolution 18-160, Approving Quotes Trunk Watermain Connection, Birch Street and Black Duck Drive, Diane Hankee 7. UNFINISHED BUSINESS None 8. NEW BUSINESS None Council Agenda -3- November 13, 2018 Adjournment Community Calendar – A Look Ahead November 13, 2018 through November 26, 2018 CITY HALL CLOSED NOVEMBER 22 & 23 - THANKSGIVING HOLIDAY Wednesday, November 14 6:30 pm, Council Chambers Planning & Zoning Board Monday, November 26 6:00 pm, Community Room Council Work Session Monday, November 26 6:30 pm, Council Chambers City Council Meeting CITY COUNCIL WORK SESSION October 22, 2018 DRAFT 1 CITY OF LINO LAKES 1 MINUTES 2 3 DATE : October 22, 2018 4 TIME STARTED : 6:00 p.m. 5 TIME ENDED : 6:28 p.m. 6 MEMBERS PRESENT : Council Member Rafferty, Maher, 7 Manthey, Stoesz and Mayor Reinert 8 ABSENT : None 9 10 Staff members present: City Administrator Jeff Karlson; Public Safety Director John 11 Swenson; Community Development Director Michael Grochala; City Engineer Diane 12 Hankee; City Clerk Julie Bartell 13 14 1. Q3 Public Safety Update - Public Safety Director Swenson reviewed a 15 PowerPoint presentation including 3rd Quarter 2018 data on: 16 - Case Numbers Generated; 17 - Average response times, quarterly and year to date; emergency and non-18 emergency; 19 - Medical Calls for Service; 20 - Fire Services Data; 21 - Mutual Aid report; 22 - Criminal Offenses – Part One and Part Two; 23 - Arrest Data for Part One and Part Tow; 24 - Felony Case File Submissions; 25 - 3rd Quarter Notable Events; 26 - 2018 Areas of Focus; 27 28 2. Review Regular Agenda of October 22, 2018 – The council reviewed the agenda 29 and several items were reviewed by staff. 30 31 The meeting was adjourned at 6:28 p.m. 32 33 These minutes were considered, corrected and approved at the regular Council meeting held on 34 November 13, 2018. 35 36 37 38 Julianne Bartell, City Clerk Jeff Reinert, Mayor 39 40 COUNCIL MINUTES October 22, 2018 DRAFT 1 CITY OF LINO LAKES 1 MINUTES 2 3 4 DATE : October 22, 2018 5 TIME STARTED : 6:30 p.m. 6 TIME ENDED : 7:35 p.m. 7 MEMBERS PRESENT : Council Member Rafferty, Maher, 8 Manthey, Stoesz and Mayor Reinert 9 MEMBERS ABSENT : 10 11 Staff members present: City Administrator Jeff Karlson; Community Development Director Michael 12 Grochala; City Engineer Diane Hankee; City Planner Katie Larsen; Director of Public Safety John 13 Swenson; and City Clerk Julie Bartell 14 15 PUBLIC COMMENT 16 17 Aaron and Shannon Kne, 111 Robinson Drive, informed the council of an issue with the driveway at 18 their home. They have been cited for having driveway that is too large. The driveway is already 19 installed; feel they are being punished for the contractor’s error without a good reason. The variance 20 process is expensive and wouldn’t fully solve the problem. They are asking the council for advice on 21 solving their problem. 22 23 Mayor Reinert noted his familiarity with the situation (has seen pictures). He recalled a council 24 discussion during the past year on what is an appropriate driveway size (considering the popularity of 25 larger garages). He believes that staff would not support a request for variance but, knowing about 26 the specifics in this case, Mayor Reinert said he would. 27 28 The council discussed in general how non-compliance in driveway width is handled. 29 30 SETTING THE AGENDA 31 32 The agenda was approved as presented. 33 34 CONSENT AGENDA 35 36 Council Member Maher moved to approve the Consent Agenda, Items 1A through 1G, as presented. 37 Council Member Rafferty seconded the motion. Motion carried on a unanimous voice vote. 38 39 ITEM ACTION 40 41 Consideration of Expenditures: 42 43 October 22, 2018 (Check No. 109054 – 44 109141, $618,124.90) Approved 45 COUNCIL MINUTES October 22, 2018 DRAFT 2 46 October 1, 2018 Council Work Session Minutes Approved 47 48 October 8, 2018 City Council Meeting Minutes Approved 49 50 Consider Resolution No. 18-142, Election Judge 51 Approval Approved 52 53 Consider Resolution 18-150, Approving a Peddler/Solicitor 54 License for James Hardy Building Products Approved 55 56 Consider Resolution 18-147, Approving Extension of 57 Time for Recording of Final Plat, SS Properties Addn Approved 58 59 Consider Resolution 18-66 Approving a Special Event 60 for Permit for Target Superstore Approved 61 62 Consider Resolution 18-148, Approving the Certification 63 of Delinquent Water and Utility Charges for Collection 64 with 2018 Property Taxes Payable in 2019 Approved 65 66 Consider Approving Application for Exempt Permit for 67 Lawful Gambling to be conducted by Knights of Columbus 68 at St. Joseph’s Church Approved 69 70 FINANCE DEPARTMENT REPORT 71 72 There was no report from the Finance Department. 73 74 ADMINISTRATION DEPARTMENT REPORT 75 76 There was no report from the Administration Department 77 78 PUBLIC SAFETY DEPARTMENT REPORT 79 80 4A) Consider acceptance of monetary donation to the Lino Lakes Public Safety Canine Unit 81 – Administration Karlson reported that the City has received a donation of $10,000 from this 82 foundation. They stipulate that the donation must be commited to the Public Safety canine program. 83 The funding comes at a good time for that purpose since the current canine is aging. 84 85 Mayor Reinert offered thanks for the generous donation. He also said he is supportive of the canine 86 program. 87 Council Member Maher moved to approve the acceptance as recommended. Council Member 88 Rafferty seconded the motion. Motion carried on a voice vote. 89 COUNCIL MINUTES October 22, 2018 DRAFT 3 90 PUBLIC SERVICES DEPARTMENT REPORT 91 92 There was no report from the Public Services Department. 93 94 COMMUNITY DEVELOPMENT DEPARTMENT REPORT 95 6A) Public Hearing, Consider Resolution 18-141, Adopting Assessments Weed Abatement – 96 Community Development Director Grochala reviewed his written report. He noted the one property 97 on the list. He reviewed the process that precedes assessment of the cleanup charges. 98 99 Council Member Stoesz asked if the charge is an appropriate amount for the services provided. 100 Director Grochala explained that the charges are appropriate but also staff will be requesting that the 101 charge be raised in the fee schedule. 102 103 Mayor Reinert opened the public hearing. There being no one present wishing to speak, the public 104 hearing was closed. 105 Council Member Rafferty moved to approve Resolution No. 18-141 as presented. Council Member 106 Maher seconded the motion. Motion carried on a voice vote. 107 6B) Consider Resolution No. 18-146, Approving Grading and Trunk Utility Agreement 108 Amendment for Watermark Development – City Engineer Hankee reviewed the request to approve 109 an amendment to the original agreement approved in 2016. While grading has been occurring on the 110 site, the builders proceed with their development agreement plans. She reviewed the Watermark project 111 schedule going forward. 112 113 Mayor Reinert asked if there if anything unique about this agreement and Ms. Hankee no. 114 115 Council Member Maher moved to approve Resolution No. 18-146 as presented. Council Member 116 Manthey seconded the motion. Motion carried on a voice vote. 117 6C) Consider Resolution No. 18-139, Authorizing Preparation of Plans and Specifications, 118 North East Drainage Outlet to Peltier Lake – City Engineer Hankee reviewed the written staff report 119 requesting authorization to proceed with plans and specifications for the North East Drainage Outlet 120 project. She reviewed the project area utilizing a map. The reviewed elements of the project, including 121 an open channel, phasing, a culvert crossing under the highway, the need for watershed and MnDOT 122 approval. The overall project cost was noted. She also noted that WSB representative Pete 123 Willenbring was present to answer questions. 124 125 Mayor Reinert remarked that $3 million is costly but the City will fund this and anticipates 126 reimbursement by developers. 127 128 Council Member Stoesz asked how the City of Hugo is paying a fair share. Community Development 129 Director Grochala said there isn’t really a fair amoun.. This City cannot block their drainage so we 130 must accommodate the existing flow from Hugo. 131 COUNCIL MINUTES October 22, 2018 DRAFT 4 132 Council Member Stoesz asked if there is any risk involved in boring under the highway and Ms. Hankee 133 suggested that the liability generally falls upon the contractor and having insurance is a required part of 134 the contracting process. 135 Council Member Manthey moved to approve Resolution No. 18-139 as presented. Council Member 136 Stoesz seconded the motion. Motion carried on a voice vote; Council Member Rafferty abstained from 137 voting. 138 6D) Consider Resolution 18-134, Adopting Assessments, 2018 Individual Properties Which 139 Requested Connection to City Utilities- City Engineer Hankee noted those properties that would be 140 included in this connectio n project as well as the proposed costs that would be fully assessed to the 141 properties requesting the work. 142 Council Member Manthey moved to approve Resolution No. 18-134 as presented. Council Member 143 Stoesz seconded the motion. Motion carried on a voice vote. 144 6E) Consider Resolution No. 18-135, Adopting Assessments, Century Farm North 7th 145 Addition – City Engineer Hankee reviewed the request for the council to approve assessments for 146 certain fees related to this project. 147 Council Member Manthey moved to approve Resolution No. 18-135 as presented. Council Member 148 Stoesz seconded the motion. Motion carried on a voice vote. 149 6F) Consider Resolution No. 18-136, Adopting Assessments, Northpointe 7th Addition – City 150 Engineer Hankee explained that the resolution provides for adoption of assessments related to this 151 project and pursuant to the development agreement terms. She noted the amount of the assessment. 152 Council Member Manthey moved to approve Resolution No. 18-136 as presented. Council Member 153 Stoesz seconded the motion. Motion carried on a voice vote. 154 6G) Consider Resolution No. 18-138, Authorizing Preparation of Plans and Specifications, 155 2019 Water Tower No. 3 – City Engineer Hankee asked for council consideration for preparation 156 work on this project. T he City has identified the need for the addition of a water tower and a site has 157 been recommended. She noted that Greg Johnson of WSB & Associates was present to answer specific 158 questions. 159 160 Mayor Reinert noted the cost of $4.5 million and that it would be paid through the City’s Trunk Utility 161 Fund so there would be no direct tax impact. He has spoken with the City Administrator about the City 162 land where this will be located (and where there is additional land) and the goal to put together some 163 facilities for recreation there. He is anxious to get a master plan in place for that element and that 164 should be considered in conjunction with the construction of the water tower. 165 166 Council Member Manthey remarked that the council has been discussing this project and its elements 167 for a long time; this action is considered after much discussion and review. 168 169 COUNCIL MINUTES October 22, 2018 DRAFT 5 Council Member Stoesz asked if there is any advantage to having a water tower that is fully sized to the 170 ground. Mr. Johnson of WSB remarked that type is normally provides water for a smaller area than 171 would be needed for Lino Lakes. 172 Council Member Manthey moved to approve Resolution No. 18-138 as presented. Council Member 173 Maher seconded the motion. Motion carried on a voice vote. 174 6H) 6499 Lakota Trail (Love to Grow On): i. Consider 2nd Reading of Ordinance No. 15-18, 175 Vacating Drainage and Utility Easement; ii. Consider Resolution 18-137, Approving Summary 176 Publication of Ordinance No. 15-18 – City Engineer Hanke requested that the council consider 177 approval of the second reading of an ordinance vacating a drainage and utility easement for the future 178 Love to Grow On facility. The council approved the first reading of the ordinance at the last council 179 meeting. 180 181 Council Member Rafferty moved to waive the full reading of Ordinance No. 15-18 as presented. 182 Council Member Maher seconded the motion. Motion carried on a voice vote. 183 Council Member Maher moved to approve the 2nd Reading and adoption of Ordinance No. 15-18 as 184 presented. Council Member Manthey seconded the motion. Motion carried; Yeas, 5; Nays none. 185 Council Member Manthey moved to approve Resolution No. 18-137 as presented. Council Member 186 Stoesz seconded the motion. Motion carried on a voice vote. 187 6I) Consider Resolution No. 18-140, Accepting Quotes and Awarding a Construction Contract, 188 2018 Surface Water Maintenance Project – City Engineer Hankee requested that the council accept 189 certain quotes and award a contract for this year’s Surface Water Maintenance Project. She reviewed 190 the locations included in the project and the results of the bid/quote process. 191 192 Council Member Rafferty moved to approve Resolution No. 18-140 as presented. Council Member 193 Maher seconded the motion. Motion carried on a voice vote. 194 6J) Consider Resolution No. 18-149, Approving Memorandum Of Understanding, Anoka 195 County Regional Economic Development Initiative, - Community Development Director Grochala 196 asked the council to consider approval of a resolution establishing a five-year Memorandum of 197 Understanding for this initiative. This is basically a work plan to have a work partnership. Initially 198 work proposed is a website, logo, marketing materials, etc. This agreement will establish how the 199 group will function. The group works under the direction of an executive committee. He supports the 200 effort as it provides additional resources to the City. 201 202 Mayor Reinert asked how the City could drop out of the arrangement if that becomes appropriate. Mr. 203 Grochala said each year the City will consider the budget for the effort and could elect to not approve 204 and essentially that would end the relationship. Staff reviewed the upcoming schedule for the initiative. 205 206 Council Member Manthey moved to approve Resolution No. 18-149 as presented. Council Member 207 Stoesz seconded the motion. Motion carried on a voice vote. 208 COUNCIL MINUTES October 22, 2018 DRAFT 6 209 UNFINISHED BUSINESS 210 211 There was no Unfinished Business. 212 213 NEW BUSINESS 214 215 There was no New Business. 216 217 COMMUNITY EVENTS 218 219 LITTLE GOBLINS COSTUME PARTY will be held on Friday, October 26 from 6:30 p.m. to 8:00 220 p.m. at Wargo Nature Center. Pre-registration is required. Contact Parks & Rec. at 651-982-2440 to 221 register. 222 223 CENTENNIAL BAND BOOSTERS HOLIDAY BAZAAR, Saturday, October 27, 2018 from 9:00 224 a.m. to 3:00 p.m. at Centennial Middle School, 399 Elm Street. The Boosters support the band 225 program with over 900 students in grades 6-12. 226 227 GOBBLER GAMES will be held Saturday, November 3, 2018 from 10:00 a.m. to 12:00 p.m. Free, 228 fun-filled family event. Contact Parks & Rec. at 651-982-2440 to register. 229 230 ABSENTEE VOTING You may vote early at City Hall Monday through Friday through November 231 5. 232 233 WALDOCH FARM PUMPKIN PATCH AND CORN MAZE will be open daily through October 31 234 from 10:00 a.m. to 7:00 p.m. 235 236 COMMUNITY CALENDAR 237 238 Community Calendar – A Look Ahead 239 October 22, 2018 through November 13, 2018 240 Thursday, November 1 8:00 am, Community Room EDAC 241 Monday, November 5 6:00 pm, Community Room Council Work Session 242 Tuesday, November 6 7:00 am to 8:00 pm Election Day 243 Tuesday, November 13 6:00 pm, Community Room Council Work Session 244 Tuesday, November 13 6:30 pm, Council Chambers City Council Meeting 245 246 ADJOURN 247 248 There being no further business, Council Member Rafferty moved to adjourn at 7:35 p.m. Council 249 Member Maher seconded the motion. Motion carried. 250 251 These minutes were considered and approved at the regular Council Meeting, November 13, 2018. 252 253 254 COUNCIL MINUTES October 22, 2018 DRAFT 7 255 256 Julianne Bartell, City Clerk Jeff Reinert, Mayor 257 258 CITY COUNCIL AGENDA ITEM 1D STAFF ORIGINATOR: Julie Bartell, City Clerk MEETING DATE: November 13, 2018 TOPIC: Consider: i. Resolution No. 18-153, Denying an Application for Therapeutic Massage Business License; ii. Resolution No. 18-154, Denying an Application for an Individual Therapeutic Massage License VOTE REQUIRED: 3/5 INTRODUCTION City Code, Chapter 616, regulates therapeutic massage enterprises and practicing individuals. The City has received the following applications: - Therapeutic Massage Enterprise License application by Yijing Tan who has applied to do business as New Royalty LLC at 560 Lilac Street; and - Individual Therapeutic Massage License by Hong Liu, who has applied to be an employee at New Royalty LLC at 560 Lilac Street. BACKGROUND The license applications were reviewed by administrative staff in regard to information required for issuance and other City requirements. A background investigation on the applicants was conducted by the public safety department. The Council has been provided with the background investigation memorandum by email. RECOMMENDATION Based on the findings of the review and the background investigation, staff is recommending that the City Council consider approval of: i) Resolution No. 18-153, Denying an Application for Therapeutic Massage Business License; ii) Resolution No. 18-154, Denying an Application for an Individual Therapeutic Massage License. ATTACHMENTS Resolution No. 18-153 Resolution No. 18-154 Lino Lakes City Code, Section 616.05 CITY OF LINO LAKES RESOLUTION NO. 18-153 RESOLUTION DENYING AN APPLICATION FOR A THERAPEUTIC MASSAGE ENTERPRISE LICENSE WHEREAS, the City received an application for a Therapeutic Massage Enterprise License for New Royalty LLC (applicant Yijing Tan), at 560 Lilac Street; and WHEREAS, the Lino Lakes Public Safety Department has conducted a background check on the applicant; and WHEREAS, the City Clerk has completed a review of the application; Based on the record before it, the City Council of the City of Lino Lakes hereby makes the following: FINDINGS Lino Lakes City Code, Section 616.05, Subd. 3, states that an applicant must provide information reasonably necessary for the issuance of the license. Applicant has not provided required information on: tax identification number; workers compensation coverage. Lino Lakes City Code, Section 616.05, Subd. 3, states that an applicant may not falsely answer a question or request for information on the application form. The Public Safety Department’s report, dated September 11, 2018, on the background investigation for the applicant includes information indicating that the applicant has falsely answered questions. BASED ON THESE FINDINGS, the City Council hereby denies the application of Yijing Tan d/b/a New Royalty LLC to operate a therapeutic massage business at 560 Lilac Street. Adopted by the Council of the City of Lino Lakes this 13rd day of November, 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member_______________ and was duly seconded by Council Member ______________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: ______________________________ Jeff Reinert, Mayor ________________________ ATTEST: Julianne Bartell, City Clerk CITY OF LINO LAKES RESOLUTION NO. 18-154 RESOLUTION DENYING AN APPLICATION FOR A INDIVIDUAL THERAPEUTIC MASSAGE LICENSE WHEREAS, the City received an application for an Individual Therapeutic Massage License for applicant Hong Liu; and WHEREAS, applicant Hong Liu has indicated on her application that her employer is New Royalty LLC; and WHEREAS, the Lino Lakes Public Safety Department has conducted a background check on the applicant; and WHEREAS, the City Clerk has completed a review of the application; Based on the record before it, the City Council of the City of Lino Lakes hereby makes the following: FINDINGS Lino Lakes City Code, Section 616.05, Subd. 3, states that an applicant must provide information reasonably necessary for the issuance of the license. Applicant has not provided required information on: citizenship. Lino Lakes City Code, Section 616.05, Subd. 3, states that an applicant may not falsely answer a question or request for information on the application form. The Public Safety Department’s report, dated September 11, 2018, on the background investigation for the applicant includes information indicating that the applicant has falsely answered questions. BASED ON THESE FINDINGS, the City Council hereby denies the application of Hong Liu for an Individual Therapeutic Massage License. Adopted by the Council of the City of Lino Lakes this ___ day of _______, 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _______________and was duly seconded by Council Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: _______________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk CITY COUNCIL AGENDA ITEM 2A STAFF ORIGINATOR: Sarah Cotton, Finance Director MEETING DATE: November 13, 2018 TOPIC: Consider Resolution No. 18-157, Awarding the Sale of $7,169,000 General Obligation Bonds, Series 2018A VOTE REQUIRED: 3/5 INTRODUCTION The City of Lino Lakes has awarded bids and will be undertaking 1) various street reconstruction projects (LaMotte Area and West Shadow Lake Drive Area), and 2) various water and sewer utility projects. As previously discussed, the construction cost of these projects will be financed through the issuance of bonded debt. BACKGROUND At the September 10, 2018, City Council Meeting, the City Council accepted bids and awarded a construction contract for the 2018 LaMotte Area Street and Utility Improvement project. The project includes street reconstruction, drainage and sanitary sewer improvements. The bonds will be repaid over a 15-year period through a general debt service tax levy. At the October 8, 2018, City Council Meeting, the City Council accepted bids and awarded a construction contract for the 2018 West Shadow Lake Drive Area Street and Utility Improvement Project. The project includes street reconstruction, drainage improvements, and sanitary sewer and watermain extension. The Street Reconstruction portion of the bonds will be repaid over a 15- year period through a general debt service tax levy. The utility portion of the bonds will be repaid over a 15-year period through special assessments in the principal amount of $943,343 and by utilizing revenues from the City’s Area and Unit Trunk fund. Finally, at the September 24, 2018, City Council Meeting, the City Council accepted bids and awarded a construction contract related to Trunk Watermain improvements along Lake Drive. The project provides improved water quality supply and adequate pressure for fire demand. The project includes installation of trunk watermain from Marshan Lane to Park Court and from an existing line from Well No. 6 to Well No. 3. The bonds will be repaid over a 10-year period utilizing revenues from the City’s Area and Unit Trunk fund. On October 8, the City Council approved Resolution No. 18-130, providing for the issuance of approximately $7,169,000 G.O. Bonds, Series 2018A to finance the improvements noted above. The City has since issued its Official Statement and advertised for bids for this issue. Bids were received earlier today by the City’s financial advisors, Springsted, Inc. Terri Heaton of Springsted, Inc. will be in attendance to present the results of the bidding process. Approval of Resolution 18-157 awards sale of General Obligation Bonds, Series 2018A, in the proposed aggregate principal amount of $7,169,000. RECOMMENDATION Staff is recommending approval of Resolution No. 18-157. ATTACHMENTS Preliminary Official Statement Resolution No. 18-157 _________________________ * Preliminary; subject to change. The information contained in this Preliminary Official Statement is deemed by the City to be final as of the date hereof; however, the pricing and underwriting information is subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 23, 2018 NEW ISSUE S&P Rating: Requested BANK QUALIFIED In the opinion of Kennedy & Graven, Chartered, Bond Counsel to the City, based on present federal and Minnesota laws, regulat ions, rulings and decisions, and assuming compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes and, to the same extent, from taxable net income of individuals, estates and trusts for Minnesota income purposes, and is not a preference item for pu rposes of computing the federal alternative minimum tax (although interest is included in adjusted current earnings in calculating corporate alternative minimum taxable inc ome for taxable years that began prior to January 1, 2018) or the Minnesota alternative minimum tax imposed on individuals, trusts, and estates. Such interest is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income. No opinion will be expressed by Bond Counsel regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Bonds or arising with respect to ownership of the Bonds. The City will designate the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code relating to the ability of financial institution s to deduct from income for federal income tax purposes interest that is allocable to carrying and acquiring tax-exempt obligations. See “TAX EXEMPTION” and “RELATED TAX CONSIDERATIONS” herein. $7,169,000* City of Lino Lakes, Minnesota General Obligation Bonds, Series 2018A (the “Bonds”) (Book Entry Only) Dated Date: Date of Delivery Interest Due: Each February 1 and August 1, commencing August 1, 2019 The Bonds will mature as shown on the inside front cover of this Official Statement. Proposals for the Bonds may contain a maturity schedule which provides for term bonds for the February 1, 2022 through February 1, 2034 maturities. Any term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth on the following page. The Bonds are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge net revenues of the City’s water and sewer utilities for repayment of a portion of the Bonds. The proceeds of the Bonds will be used to finance (i) various street reconstruction projects; (ii) various water and sewer utility projects related to West Shadow Lake Drive; and (iii) various water utility projects on Lake Drive, all as described in the City’s 2017-2021 Five-Year Street Reconstruction Plan adopted by the City on June 12, 2017. Proposals shall be for not less than $7,169,000 (Par) plus accrued interest, if any, on the total principal amount of the Bonds. Proposals shall specify rates in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for each maturity as stated on the proposal must be 98.0% or greater. Following receipt of proposals, a good faith deposit will be required to be delivered to the City by the lowest bidder as described in the “Terms of Proposal” herein. Award of the Bonds will be made on the basis of True Interest Cost (TIC). The Bonds will be issued as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). DTC will act as securities depository for the Bonds. Individual purchases of the Bonds maturing on February 1, 2021 may be made in the principal amount of $1,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Individual purchases of the Bonds maturing on February 1, 2020 and February 1, 2022 through February 1, 2034 may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Investors will not receive physical certificates representing their interest in the Bonds purchased. (See “Book Entry System” herein.) U.S. Bank National Association, Saint Paul, Minnesota will serve as registrar (the “Registrar”) for the Bonds. The Bonds will be available for delivery at DTC on or about December 19, 2018. PROPOSALS RECEIVED: Tuesday, November 13, 2018 until 11:00 A.M., Central Time CONSIDERATION OF AWARD: City Council meeting commencing at 6:30 P.M., Central Time on Tuesday, November 13, 2018 Further information may be obtained from SPRINGSTED Incorporated, Municipal Advisor to the City, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101-2887 (651) 223-3000. City of Lino Lakes, Minnesota $7,169,000* General Obligation Bonds, Series 2018A The Bonds will bear interest on February 1 and August 1 of each year, commencing August 1, 2019, and will mature February 1 in the years and amounts* as follows: 2020 $110,000 2021 $419,000 2022 $435,000 2023 $445,000 2024 $460,000 2025 $470,000 2026 $490,000 2027 $505,000 2028 $520,000 2029 $535,000 2030 $520,000 2031 $535,000 2032 $555,000 2033 $575,000 2034 $595,000 The City may elect on February 1, 2028, and on any day thereafter, to redeem Bonds due on or after February 1, 2029 at a price of par plus accrued interest. * The City reserves the right, after proposals are opened and prior to award, to (i) increase or reduce the principal amount of the February 1, 2021 maturity in multiples of $1,000; and (ii) increase or reduce the principal amount of the February 1, 2020 and February 1, 2022 thro ugh February 1, 2034 maturities in multiples of $5,000. In the event the amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same gross spread per $1,000 of Bonds as that of the original proposal. Gross spre ad for this purpose is the differential between the price paid to the City for the new issue and the prices at which the proposal indicates the securities will be initially offered to the investing public. CITY OF LINO LAKES, MINNESOTA CITY COUNCIL Jeff Reinert Mayor Melissa Maher Council Member Michael Manthey Council Member Rob Rafferty Council Member Dale Stoesz Council Member CITY ADMINISTRATOR Jeffrey Karlson FINANCE DIRECTOR Sarah Cotton MUNICIPAL ADVISOR Springsted Incorporated Saint Paul, Minnesota BOND COUNSEL Kennedy & Graven, Chartered Minneapolis, Minnesota For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the City from time to time, may be treated as a Preliminary Official Statement with respect to the Bonds described herein that is deemed final as of the date hereof (or of any such supplement or correction) by the City. By awarding the Bonds to any underwriter or underwriting syndicate submitting a Proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded copies of the Final Official Statement in the amount specified in the Terms of Proposal. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Bonds, other than as contained in the Preliminary Official Statement or the Final Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the City. Certain information contained in the Preliminary Official Statement or the Final Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness or accuracy. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE PRELIMINARY OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE PRELIMINARY OFFICIAL STATEMENT NOR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE RESPECTIVE DATE THEREOF. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Preliminary Official Statement or the Final Official Statement, they will be furnished upon request. Any CUSIP numbers for the Bonds included in the Final Official Statement are provided for convenience of the owners and prospective investors. The CUSIP numbers for the Bonds are assigned by an organization unaffiliated with the City. The City is not responsible for the selection of the CUSIP numbers and makes no representation as to the accuracy thereof as printed on the Bonds or as set forth in the Final Official Statement. No assurance can be given by the City that the CUSIP numbers for the Bonds will remain the same after the delivery of the Final Official Statement or the date of issuance and delivery of the Bonds. TABLE OF CONTENTS Page(s) Terms of Proposal .............................................................................................................................. i-v Introductory Statement ....................................................................................................................... 1 Continuing Disclosure ....................................................................................................................... 1 The Bonds .......................................................................................................................................... 2 Authority and Purpose ....................................................................................................................... 4 Sources and Uses of Funds ................................................................................................................ 4 Security and Financing ...................................................................................................................... 5 Future Financing ................................................................................................................................ 5 Litigation ............................................................................................................................................ 5 Legality .............................................................................................................................................. 6 Tax Exemption ................................................................................................................................... 6 Related Tax Considerations ............................................................................................................... 6 Bank-Qualified Tax-Exempt Obligations .......................................................................................... 8 Rating ................................................................................................................................................. 8 Municipal Advisor ............................................................................................................................. 8 Certification ....................................................................................................................................... 9 City Property Values .......................................................................................................................... 10 City Indebtedness ............................................................................................................................... 11 City Tax Rates, Levies and Collections ............................................................................................. 16 Funds on Hand ................................................................................................................................... 17 Investments ........................................................................................................................................ 17 General Information Concerning the City ......................................................................................... 18 Governmental Organization and Services .......................................................................................... 22 Proposed Form of Legal Opinion............................................................................................. Appendix I Continuing Disclosure Certificate ............................................................................................ Appendix II Summary of Tax Levies, Payment Provisions, and Minnesota Real Property Valuation ..................................................................................... Appendix III Excerpt of 2017 Comprehensive Annual Financial Report .................................................... Appendix IV * Preliminary; subject to change. - i - THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $7,169,000* CITY OF LINO LAKES, MINNESOTA GENERAL OBLIGATION BONDS, SERIES 2018A (BOOK ENTRY ONLY) Proposals for the above-referenced obligations (the “Bonds”) will be received by the City of Lino Lakes, Minnesota (the “City”) on Tuesday, November 13, 2018 (the “Sale Date”) until 11:00 A.M., Central Time at the offices of Springsted Incorporated (“Springsted”), 380 Jackson Street, Suite 300, Saint Paul, Minnesota, 55101, after which time proposals will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at its meeting commencing at 6:30 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Springsted will assume no liability for the inability of a bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds regardless of the manner in which the proposal is submitted. (a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223-3046 to Springsted. Signed proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final proposal price and coupons, by telephone (651) 223-3000 or fax (651) 223-3046 for inclusion in the submitted proposal. OR (b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via PARITY®. For purposes of the electronic bidding process, the time as maintained by PARITY® shall constitute the official time with respect to all proposals submitted to PARITY®. Each bidder shall be solely responsible for making necessary arrangements to access PARITY® for purposes of submitting its electronic proposal in a timely manner and in compliance with the requirements of the Terms of Proposal. Neither the City, its agents, nor PARITY® shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the City, its agents, nor PARITY® shall be responsible for a bidder’s failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or interruptions of or any damages caused by the services of PARITY®. The City is using the services of PARITY® solely as a communication mechanism to conduct the electronic bidding for the Bonds, and PARITY® is not an agent of the City. If any provisions of this Terms of Proposal conflict with information provided by PARITY®, this Terms of Proposal shall control. Further information about PARITY®, including any fee charged, may be obtained from: PARITY®, 1359 Broadway, 2nd Floor, New York, New York 10018 Customer Support: (212) 849-5000 - ii - DETAILS OF THE BONDS The Bonds will be dated as of the date of delivery and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 2019. Interest will be computed on the ba sis of a 360-day year of twelve 30-day months. The Bonds will mature February 1 in the years and amounts* as follows: 2020 $110,000 2021 $419,000 2022 $435,000 2023 $445,000 2024 $460,000 2025 $470,000 2026 $490,000 2027 $505,000 2028 $520,000 2029 $535,000 2030 $520,000 2031 $535,000 2032 $555,000 2033 $575,000 2034 $595,000 * The City reserves the right, after proposals are opened and prior to award, to (i) increase or reduce the principal amount of the February 1, 2021 maturity in multiples of $1,000; and (ii) increase or reduce the principal amount of the February 1, 2020 and February 1, 2022 through February 1, 2034 maturi ties in multiples of $5,000. In the event the amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same gross spread per $1,000 of Bonds as that of the original proposal. Gross spread for this purpose is the differential between the price paid to the City for the new issue and the prices at which the proposal indicates the securities will be initially offered to the investing public. Proposals for the Bonds may contain a maturity schedule which provides for term bonds for the February 1, 2022 through February 1, 2034 maturities. Any term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth above. In order to designate term bonds, the proposal must specify “Years of Term Maturities” in the spaces provided on the proposal form. BOOK ENTRY SYSTEM The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company (“DTC”), New York, New York, which will act as securities depository for the Bonds. Individual purchases of the Bonds maturing on February 1, 2021 may be made in the principal amount of $1,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Individual purchases of the Bonds maturing on February 1, 2020 and February 1, 2022 through February 1, 2034 may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The lowest bidder (the “Purchaser”), as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable regulations of the Securities and Exchange Commission. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The City may elect on February 1, 2028, and on any day thereafter, to redeem Bonds due on or after February 1, 2029. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be redeemed. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All redemptions shall be at a price of par plus accrued interest. - iii - SECURITY AND PURPOSE The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge net revenues of the City’s water and sewer utilities for repayment of a portion of the Bonds. The proceeds of the Bonds will be used to finance (i) various street reconstruction projects; (ii) various water and sewer utility projects related to West Shadow Lake Drive; and (iii) various water utility projects on Lake Drive, as described in the City’s 2017-2021 Five-Year Street Reconstruction Plan adopted by the City on June 12, 2017. BIDDING PARAMETERS Proposals shall be for not less than $7,169,000 (Par) plus accrued interest, if any, on the total principal amount of the Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals on the Sale Date unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for each maturity as stated on the proposal must be 98.0% or greater. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will be accepted. ESTABLISHMENT OF ISSUE PRICE In order to provide the City with information necessary for compliance with Section 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (col lectively, the “Code”), the Purchaser will be required to assist the City in establishing the issue price of the Bonds and shall complete, execute, and deliver to the City prior to the closing date, a written certification in a form acceptable to the Purchaser, the City, and Bond Counsel (the “Issue Price Certificate”) containing the following for each maturity of the Bonds (and, if different interest rates apply within a maturity, to each separate CUSIP number within that maturity): (i) the interest rate; (ii) the reasonably expected initial offering price to the “public” (as said term is defined in Treasury Regulation Section 1.148 -1(f) (the “Regulation”)) or the sale price; and (iii) pricing wires or equivalent communications supporting such offering or sale price. Any action to be taken or documentation to be received by the City pursuant hereto may be taken or received on behalf of the City by Springsted. The City intends that the sale of the Bonds pursuant to this Terms of Proposal shall constitute a “competitive sale” as defined in the Regulation based on the following: (i) the City shall cause this Terms of Proposal to be disseminated to potential bidders in a manner that is reasonably designed to reach potential bidders; (ii) all bidders shall have an equal opportunity to submit a bid; (iii) the City reasonably expects that it will receive bids from at least three bidders that have established industry reputations for underwriting municipal bonds such as the Bonds; and (iv) the City anticipates awarding the sale of the Bonds to the bidder who provides a proposal with the lowest true interest cost, as set forth in this Terms of Proposal (See “AWARD” herein). Any bid submitted pursuant to this Terms of Proposal shall be considered a firm offer for the purchase of the Bonds, as specified in the proposal. The Purchaser shall constitute an “underwriter” as said term is defined in the Regulation. By submitting its proposal, the Purchaser confirms that it shall require any agreement among underwriters, a selling group agreement, or other agreement to which it is a party relating to the initial sale of the Bonds, to include provisions requiring compliance with the provisions of the Code and the Regulation regarding the initial sale of the Bonds. If all of the requirements of a “competitive sale” are not satisfied, the City shall advise the Purchaser of such fact prior to the time of award of the sale of the Bonds to the Purchaser. In such event, any proposal submitted will not be subject to cancellation or withdrawal. Within twenty-four (24) hours of the notice of award of the sale of the Bonds, the Purchaser shall advise the City and Springsted if 10% of any maturity - iv - of the Bonds (and, if different interest rates apply within a maturity, to each separate CUSIP number within that maturity) has been sold to the public and the price at which it was sold. The City will treat such sale price as the “issue price” for such maturity, applied on a maturity-by-maturity basis. The City will not require the Purchaser to comply with that portion of the Regulation commonly described as the “hold -the- offering-price” requirement for the remaining maturities, but the Purchaser may elect such option. If the Purchaser exercises such option, the City will apply the initial offering price to the public provided in the proposal as the issue price for such maturities. If the Purchaser does not exercise that option, it shall thereafter promptly provide the City and Springsted the prices at which 10% of such maturities are sold to the public; provided such determination shall be made and the City and Springsted notified of such prices whether or not the closing date has occurred, until the 10% test has been satisfied as to each maturity of the Bonds or until all of the Bonds of a maturity have been sold. GOOD FAITH DEPOSIT To have its proposal considered for award, the Purchaser is required to submit a good faith deposit to the City in the amount of $71,690 (the “Deposit”) no later than 2:00 P.M., Central Time on the Sale Date. The Deposit may be delivered as described herein in the form of either (i) a certified or cashier’s check payable to the City; or (ii) a wire transfer. The Purchaser shall be solely responsible for the timely delivery of its Deposit whether by check or wire transfer. Neither the City nor Springsted have any liability for delays in the receipt of the Deposit. If the Deposit is not received by the specified time, the City may, at its sole discretion, reject the proposal of the lowest bidder, direct the second lowest bidder to submit a Deposit, and thereafter award the sale to such bidder. Certified or Cashier’s Check. A Deposit made by certified or cashier’s check will be considered timely delivered to the City if it is made payable to the City and delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101 by the time specified above. Wire Transfer. A Deposit made by wire will be considered timely delivered to the City upon submission of a federal wire reference number by the specified time. Wire transfer instructions will be available from Springsted following the receipt and tabulation of proposals. The successful bidder must send an e-mail including the following information: (i) the federal reference number and time released; (ii) the amount of the wire transfer; and (iii) the issue to which it applies. Once an award has been made, the Deposit received from the Purchaser will be retained by the City and no interest will accrue to the Purchaser. The amount of the Deposit will be deducted at settlement from the purchase price. In the event the Purchaser fails to comply with the accepted proposal, said amount will be retained by the City. AWARD The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis calculated on the proposal prior to any adjustment made by the City. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the City determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION The City has not applied for or pre-approved a commitment for any policy of municipal bond insurance with respect to the Bonds. If the Bonds qualify for municipal bond insurance and a bidder desires to purchase a policy, such indication, the maturities to be insured, and the name of the desired insurer must be set forth on the bidder’s proposal. The City specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the City. All costs associated with the issuance and administration of such policy and associated ratings and expenses (other - v - than any independent rating requested by the City) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Bonds shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Bonds. CUSIP NUMBERS If the Bonds qualify for the assignment of CUSIP numbers such numbers will be printed on the Bonds; however, neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the Purchaser to accept delivery of the Bonds. Springsted will apply for CUSIP numbers pursuant to Rule G-34 implemented by the Municipal Securities Rulemaking Board. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the Purchaser. SETTLEMENT On or about December 19, 2018, the Bonds will be delivered without cost to the Purchaser through DTC in New York, New York. Delivery will be subject to receipt by the Purchaser of an approving legal opinion of Kennedy & Graven, Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation certificate. On the date of settlement, payment for the Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Bonds has been made impossible by action of the City, or its agents, the Purchaser shall be liable to the City for any loss suffered by the City by reason of the Purchaser's non-compliance with said terms for payment. CONTINUING DISCLOSURE In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution awarding sale of the Bonds, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Official Statement. The Purchaser's obligation to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Bonds. OFFICIAL STATEMENT The City has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Bonds, and said Preliminary Official Statement has been deemed final by the City as of the date thereof within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Preliminary Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Municipal Advisor to the City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000. A Final Official Statement (as that term is defined in Rule 15c2-12) will be prepared, specifying the maturity dates, principal amounts, and interest rates of the Bonds, together with any other information required by law. By awarding the Bonds to the Purchaser, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the Purchaser up to 25 copies of the Final Official Statement. The City designates the Purchaser as its agent for purposes of distributing copies of the Final Official Statement to each syndicate member, if applicable. The Purchaser agrees that if its proposal is accepted by the City, (i) it shall accept designation and (ii) it shall enter into a contractual relationship with its syndicate members for purposes of assuring the receipt of the Final Official Statement by each such syndicate member. Dated October 8, 2018 BY ORDER OF THE CITY COUNCIL /s/ Julie Bartell City Clerk ____________________________ * Preliminary; subject to change. - 1 - OFFICIAL STATEMENT $7,169,000* CITY OF LINO LAKES, MINNESOTA GENERAL OBLIGATION BONDS, SERIES 2018A (BOOK ENTRY ONLY) INTRODUCTORY STATEMENT This Official Statement contains certain information relating to the City of Lino Lakes, Minnesota (the “City”) and its issuance of $7,169,000* General Obligation Bonds, Series 2018A (the “Bonds”). The Bonds are general obligations of the City for which it pledges its full faith and credit and power to levy direct general ad valorem taxes. Additional sources of security for the Bonds are discussed herein. Inquiries may be directed to Ms. Sarah Cotton, Finance Director, City of Lino Lakes, 600 Town Center Parkway Lino Lakes, Minnesota 55014, by telephoning (651) 982-2410, or by emailing sarah.cotton@ci.lino-lakes.mn.us. Inquiries may also be made to Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101-2887, by telephoning (651) 223-3000, or by emailing bond_services@springsted.com. CONTINUING DISCLOSURE In order to assist the Underwriter in complying with SEC Rule 15c2-12 promulgated by the Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934, as the same may be amended from time to time, and official interpretations thereof (the “Rule”), pursuant to the resolution awarding the sale of the Bonds (the “Resolution”), the City has entered into an undertaking (the “Undertaking”) for the benefit of holders including beneficial owners of the Bonds to provide certain financial information and operating data relating to the City to the Electronic Municipal Market Access system (“EMMA”) annually, and to provide notices of the occurrence of certain events enumerated in the Rule to EMMA or the Municipal Securities Rulemaking Board (the “MSRB”). The specific nature of the Undertaking, as well as the information to be contained in the annual report or the notices of material events, is set forth in the Undertaking to be executed and delivered at the time the Bonds are delivered in substantially the form attached hereto as Appendix II. The City believes it has complied for the past five years in accordance with the terms of its previous continuing disclosure undertakings entered into pursuant to the Rule, except to the extent the following are deemed to be material. In reviewing its past disclosure practices, the City notes the following: • Prior continuing disclosure undertakings entered into by the City included language stating that the City’s audited financial statements would be filed “as soon as available.” Although not always filed “as soon as available,” the audited financial statements were filed within the required twelve (12) month timeframe as required in each undertaking. A failure by the City to comply with the Undertaking will not constitute an event of default on the Bonds or under any provisions of the Resolution (although holders will have any other available remedy at law or in equity subject to certain limitations). Nevertheless, such a failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. - 2 - THE BONDS General Description The Bonds are dated as of the date of delivery and will mature annually on February 1 as set forth on the front cover of this Official Statement. The Bonds are issued in book entry form. Interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2019. Interest will be payable to the holder (initially Cede & Co.) registered on the books of the Registrar as of the fifteenth day of the calendar month next preceding such interest payment date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Principal of and interest on the Bonds will be paid as described in the section herein entitled “Book Entry System.” U.S. Bank National Association, Saint Paul, Minnesota will serve as Registrar for the Bonds, and the City will pay for registrar services. Redemption Provisions Thirty days’ written notice of redemption shall be given to the registered owner(s) of the Bonds. Failure to give such written notice to any registered owner of the Bonds or any defect therein shall not affect the validity of any proceedings for the redemption of the Bonds. All Bonds or portions thereof called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment. Optional Redemption The City may elect on February 1, 2028, and on any day thereafter, to redeem Bonds due on or after February 1, 2029. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all the Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be redeemed. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All redemptions shall be at a price of par plus accrued interest. Book Entry System The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and - 3 - non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or its agent on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or its agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. - 4 - DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to City or its agent. Under such circumstances, in the event that a successor depository is not obtained, certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. AUTHORITY AND PURPOSE The Bonds are being issued pursuant to Minnesota Statutes, Chapters 444 and 475, including Section 475.58, subdivision 3b, and the City’s 2017-2021 Five-Year Street Reconstruction Plan adopted by the City on June 12, 2017 (the “Five-Year Street Reconstruction Plan”). The proceeds of the Bonds will be used to finance (i) various street reconstruction projects (the “Street Reconstruction Portion”); (ii) various water and sewer utility projects related to West Shadow Lake Drive (the “Water and Sewer Utility Portion”); and (iii) various water utility projects on Lake Drive (the “Water Utility Portion”) within the City. SOURCES AND USES OF FUNDS The composition of the Bonds is estimated to be as follows: Street Water and Water Reconstruction Sewer Utility Utility Portion Portion Portion Total Sources of Funds: Principal Amount $5,124,000 $1,730,000 $315,000 $7,169,000 Estimated Reoffering Premium 89,021 29,614 8,835 127,470 Total Sources of Funds $5,213,021 $1,759,614 $323,835 $7296,470 Uses of Funds: Deposit to Project Fund $5,125,177 $1,726,760 $317,956 $7,169,893 Costs of Issuance 46,852 19,014 3,359 69,225 Underwriter’s Compensation 40,992 13,840 2,520 57,352 Total Uses of Funds $5,213,021 $1,759,614 $323,835 $7,296,470 - 5 - SECURITY AND FINANCING The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. Additional sources of security for the Bonds are described below. Street Reconstruction Portion The City will levy taxes for repayment of the Street Reconstruction Portion of the Bonds. The City made its first levy in 2018 in the amount of $200,000 for collection in 2019, which is anticipated to be sufficient to make the February 1, 2020 interest payment due on Street Reconstruction Portion of the Bonds. Thereafter, each year’s collection of taxes, if collected in full, will be sufficient to pay 105% of the interest payment due August 1 of the collection year and the principal and interest payment due February 1 of the following year. Water and Sewer Utility Portion Pursuant to Minnesota Statutes, Chapter 444 and the Resolution, the City will covenant to impose and collect charges for the service, use, availability and connection to the water and sewer utilities to produce net revenues in amounts sufficient to support the operation of the water and sewer utilities and to pay 105% of debt service on obligations to which it has pledged its water and sewer utility revenues, including the Water and Sewer Utility Portion of the Bonds. The City is required to annually review the budget of the water and sewer utilities to determine whether current rates and charges are sufficient and to adjust such rates and charges as necessary. The City does not anticipate the need to levy taxes for repayment of the Water and Sewer Utility Portion of the Bonds; however the City intends to offset a portion of the debt service on the Water and Sewer Utility Portion of the Bonds with available special assessments. Water Utility Portion Pursuant to Minnesota Statutes, Chapter 444 and the Resolution, the City will covenant to impose and collect charges for the service, use, availability and connection to the water utility to produce net revenues in amounts sufficient to support the operation of the water utility and to pay 105% of debt service on obligations to which it has pledged its water utility revenues, including the Water Utility Portion of the Bonds. The City is required to annually review the budget of the water utility to determine whether current rates and charges are sufficient and to adjust such rates and charges as necessary. The City does not anticipate the need to levy taxes for repayment of the Water Utility Portion of the Bonds. FUTURE FINANCING The City does not anticipate issuing any additional long-term general obligation debt within the next 90 days. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. - 6 - LEGALITY The Bonds are subject to approval as to certain matters by Kennedy & Graven, Chartered, of Minneapolis, Minnesota, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify, any of the financial or statistical statements, or data contained in this Official Statement and will express no opinion with respect thereto. A legal opinion in substantially the form set out in Appendix I herein will be delivered at closing. TAX EXEMPTION In the opinion of Kennedy & Graven, Chartered, Bond Counsel, under federal and Minnesota laws, regulations, rulings and decisions in effect on the date of issuance of the Bonds, interest on the Bonds is excludable from gross income for federal income tax purposes, and, to the same extent, from taxable net income of individuals, estates and trusts for Minnesota income tax purposes. Interest on the Bonds is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax. Certain provisions of the Internal Revenue Code of 1986, as amended (the “Code”), however, impose continuing requirements that must be met after the issuance of the Bonds in order for interest thereon to be and remain excludable from federal gross income and, to the same extent, from Minnesota taxable net income. Noncompliance with such requirements by the City may cause the interest on the Bonds to be includable in gross income for purposes of federal income taxation and, to the same extent, includable in taxable net income for purposes of Minnesota income taxation, retroactive to the date of issuance of the Bonds, irrespective in some cases of the date on which such noncompliance is ascertained. No provision has been made for redemption of Bonds or for an increase in the interest rate on the Bonds in the event that interest on the Bonds becomes includable in federal gross income or Minnesota taxable income. RELATED TAX CONSIDERATIONS Interest on the Bonds is not an item of tax preference includable in alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum tax applicable to individuals, estates and trusts, but is includable in adjusted current earnings in determining the federal alternative minimum taxable income of corporations for purposes of the federal alternative minimum tax for taxable years that began prior to January 1, 2018. Interest on the Bonds may be includable in the income of a foreign corporation for purposes of the branch profits tax imposed by Section 884 of the Code and is includable in the net investment income of foreign insurance companies for purposes of Section 842(b) of the Code. In the case of an insurance company subject to the tax imposed by Section 831 of the Code, the amount which otherwise would be taken into account as losses incurred under Section 832(b)(5) of the Code must be reduced by an amount equal to the applicable percentage of the interest on the Bonds that is received or accrued during the taxable year. For purposes hereof, the applicable percentage is 5.25% divided by the highest rate in effect under Section 11(b) of the Code. Section 86 of the Code requires recipients of certain Social Security and railroad retirement benefits to take into account, in determining the taxability of such benefits, receipts or accruals of interest on the Bonds. Passive investment income, including interest on the Bonds, may be subject to federal income taxation under Section 1375 of the Code for a Subchapter S corporation that has Subchapter C earnings and profits at the close of the taxable year if greater than twenty-five percent of the gross receipts of such Subchapter S corporation is passive investment income. Section 265 of the Code denies a deduction for interest on - 7 - indebtedness incurred or continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of the holder’s interest expense allocated to interest on the Bonds, except with respect to certain financial institutions (within the meaning of Section 265(b) of the Code). The above is not a comprehensive list of all federal tax consequences that may arise from the receipt of interest on the Bonds. The receipt of interest on the Bonds may otherwise affect the federal or State of Minnesota income tax liability of the recipient based on the particular taxes to which the recipient is subject and the particular tax status of other items or deductions. Bond Counsel expresses no opinion regarding any such consequences. All prospective purchasers of the Bonds are advised to consult their own tax advisors as the tax consequences of, or tax considerations for, purchasing or holding the Bonds. Original Issue Premium Certain maturities of the Bonds (collectively, the “Premium Bonds”) may be sold to the public at an amount in excess of the stated redemption price at maturity. Such excess of the purchase price of such Premium Bonds over the stated redemption price at maturity constitutes original issue premium with respect to such Premium Bonds. A purchaser of a Premium Bond must amortize any original issue premium over the term of such Premium Bond using constant yield principles, based on the purchaser’s yield to maturity. As original issue premium is amortized, the purchaser’s basis in such Premium Bond is reduced by a corresponding amount, resulting in an increase in the gain (or a decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity. Even though the purchaser’s basis is reduced, no federal income tax deduction is allowed. Purchasers of any Premium Bonds at a premium, whether at the time of initial issuance or subsequent thereto, should consult with their own tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to state and local tax consequences of owning such Premium Bonds. Holders of Premium Bonds should consult their tax advisors with respect to the state and local tax consequences of owning Premium Bonds. Original Issue Discount Certain maturities of the Bonds (collectively, the “Discount Bonds”) may be sold at a discount from the principal amount payable on such Discount Bonds at maturity. Under Section 1288 of the Code, original issue discount on tax-exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to an owner of a Discount Bond during any accrual period generally equals (i) the issue price of such Discount Bond plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity of such Discount Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), less (iii) any interest payable on such Discount Bond during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will not be includable in gross income for federal income tax purposes or in taxable net income of individuals, estates or trusts for Minnesota income tax purposes, and will increase the owner’s tax basis in such Discount Bond. Any gain realized by an owner from a sale, exchange, payment or redemption of a Discount Bond will be treated as gain from the sale or exchange of such Discount Bond. Holders of Discount Bonds should consult with their tax advisors with respect to computation and accrual of original issue discount and with respect to state and local consequences of owning Discount Bonds. Legislative Proposals Bond Counsel’s opinion is given as of its date and Bond Counsel assumes no obligation to update, revise, or supplement such opinion to reflect any changes in facts or circumstances or any changes in law that may hereafter occur. Proposals are regularly introduced in both the United States House of Representatives and the United States Senate that, if enacted, could alter or affect the tax-exempt status on municipal bonds. - 8 - For example, legislation has been proposed that effectively would impose a partial tax on otherwise tax- exempt interest for certain higher income taxpayers. The likelihood of adoption of this or any other such legislative proposal relating to tax-exempt bonds cannot be reliably predicted. If enacted into law, current or future proposals may have a prospective or retroactive effect and could affect the value or marketability of tax-exempt bonds (including the Bonds). Prospective purchasers of the Bonds should consult their own tax advisors regarding the impact of any such change in law. The above is not a comprehensive list of all federal tax consequences which may arise from the receipt of interest on the Bonds. The receipt of interest on the Bonds may otherwise affect the federal or state income tax liability of the recipient based on the particular taxes to which the recipient is subject and the particular tax status of other items or deductions. Bond Counsel expresses no opinion regarding any such consequences. All prospective purchasers of the Bonds are encouraged to consult with their personal tax advisors as to the tax consequences of, or tax considerations for, purchasing or holding the Bonds. BANK-QUALIFIED TAX-EXEMPT OBLIGATIONS The City will designate the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code, relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. RATING Application for a rating of the Bonds has been made to S&P Global Ratings (“S&P”), 55 Water Street, New York, New York. If a rating is assigned, it will reflect only the opinion of S&P. Any explanation of the significance of the rating may be obtained only from S&P. There is no assurance that a rating, if assigned, will continue for any given period of time, or that such rating will not be revised, suspended or withdrawn, if, in the judgment of S&P, circumstances so warrant. A revision, suspension or withdrawal of a rating may have an adverse effect on the market price of the Bonds. MUNICIPAL ADVISOR The City has retained Springsted Incorporated, Public Sector Advisors, of Saint Paul, Minnesota (“Springsted”), as municipal advisor in connection with certain aspects of the issuance of the Bonds. In preparing this Official Statement, Springsted has relied upon governmental officials, and other sources, who have access to relevant data to provide accurate information for this Official Statement, and Springsted has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. Springsted is not a public accounting firm and has not been engaged by the City to compile, review, examine or audit any information in this Official Statement in accordance with accounting standards. Springsted is an independent advisory firm, registered as a municipal advisor, and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. Springsted is under common ownership with Springsted Investment Advisors, Inc. (“SIA”), an investment adviser registered in the states where services are provided. SIA may provide investment advisory services to the City from time to time in connection with the investment of proceeds from the Bonds as well as advice with respect to portfolio management and investment policies for the City. SIA pays Springsted, as municipal advisor, a referral fee from the fees paid to SIA by the City. - 9 - CERTIFICATION The City has authorized the distribution of the Preliminary Official Statement for use in connection with the initial sale of the Bonds and a Final Official Statement following award of the Bonds. The Purchaser will be furnished with a certificate signed by the appropriate officers of the City stating that the City examined each document and that, as of the respective date of each and the date of such certificate, each document did not and does not contain any untrue statement of material fact or omit to state a material fact necessary, in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (The Balance of This Page Has Been Intentionally Left Blank) - 10 - CITY PROPERTY VALUES Trend of Values(a) Assessment/ Assessor’s Market Value Adjusted Collection Estimated Sales Economic Homestead Taxable Taxable Net Year Market Value Ratio(b) Market Value(c) Exclusion Market Value Tax Capacity 2017/18 $2,062,069,400 94.0% $2,193,275,173 $74,831,995 $1,959,826,108 $22,666,480 2016/17 1,912,116,700 93.2 2,050,592,347 81,545,887 1,808,417,118 20,973,767 2015/16 1,807,065,400 92.1 1,961,793,323 85,498,525 1,699,288,883 19,819,213 2014/15 1,798,481,600 95.8 1,875,798,422 84,278,943 1,694,366,064 19,669,590 2013/14 1,625,143,100 91.9 1,766,853,912 97,474,237 1,509,921,169 17,766,193 (a) For a description of the Minnesota property tax system, see Appendix III. (b) Sales Ratio Study for the year of assessment as posted by the Minnesota Department of Revenue, http://www.revenue.state.mn.us/propertytax/Pages/statistics-emv.aspx. (c) Economic market values for the year of assessment as posted by the Minnesota Department of Revenue, http://www.revenue.state.mn.us/propertytax/Pages/statistics-emv.aspx. Source: Anoka County, Minnesota, October 2018, except as otherwise noted. 2017/18 Adjusted Taxable Net Tax Capacity: $22,666,480* Real Estate: Residential Homestead $16,130,574 75.8% Commercial/Industrial and Public Utility 2,966,548 13.9 Residential Non-Homestead 1,391,235 6.5 Agricultural 305,539 1.4 Seasonal Recreational 52,531 0.3 Personal Property 442,867 2.1 2017/18 Net Tax Capacity $21,289,294 100.0% Less: Captured Tax Increment (421,495) Contribution to Fiscal Disparities (1,215,584) Plus: Distribution from Fiscal Disparities 3,014,265 2017/18 Adjusted Taxable Net Tax Capacity $22,666,480 * Excludes mobile home valuation of $14,003. - 11 - Ten of the Largest Taxpayers in the City 2017/18 Net Taxpayer Type of Property Tax Capacity Xcel Energy Utility $ 215,921 AX Lino Lakes LP Commercial 214,854 Target Corporation Retail 213,550 Biynah Industrial Partners LLC Industrial 197,948 Minnegasco Inc. Utility 122,120 Molin Concrete Products Co. Concrete Products 113,220 Gargaro Properties Inc. Industrial 112,006 Taylor Corporation Promotional/Printing Products 95,302 Kohls Department Store Retail 89,494 Marmon/Keystone Corp. Industrial 77,612 Total $1,452,027* * Represents 6.4% of the City's 2017/18 adjusted taxable net tax capacity. CITY INDEBTEDNESS Legal Debt Limit and Debt Margin* Legal Debt Limit (3% of 2017/18 Estimated Market Value) $ 61,862,082 Less: Outstanding Debt Subject to Limit (13,930,375) Legal Debt Margin as of December 19, 2018 $ 47,931,375 * The legal debt margin is referred to statutorily as the “Net Debt Limit” and may be increased by debt service funds and current revenues which are applicable to the payment of debt in the current fiscal year. NOTE: Certain types of debt are not subject to the legal debt limit. See Appendix III – Debt Limitations. General Obligation Debt Supported Solely by Taxes* Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 12-19-18 11-15-12 $1,580,000 Improvements 2-1-2024 $ 965,000 2-1-15 198,250 Equipment Certificates 12-31-2018 66,250 5-28-15 2,635,000 Street Reconstruction 2-1-2031 2,340,000 8-25-15 963,000 Equipment Certificates 12-31-2020 593,000 1-16-16 294,525 Capital Equipment 2-1-2026 202,125 2-1-16 469,000 Equipment Certificates 12-31-2019 314,000 3-1-17 311,000 Equipment Certificates 12-31-2020 311,000 12-19-18 5,124,000 Street Reconstruction (the Street Reconstruction Portion of the Bonds) 2-1-2034 5,124,000 Total $9,915,375 * These issues are subject to the legal debt limit. - 12 - General Obligation Special Assessment Debt Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 12-19-18 6-1-10 $ 465,000 Improvement Refunding 2-1-2020 $ 100,000 11-15-12 435,000 Improvement Refunding 2-1-2019 75,000 7-15-13 615,000 Taxable Improvements 2-1-2024 375,000 11-20-14 1,510,000 Improvements 2-1-2026 990,000 11-23-16 1,975,000 Taxable Improvements Refunding 2-1-2021 1,495,000 Total $3,035,000 General Obligation Tax Increment Debt Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 12-19-18 7-15-07 $4,215,000 Tax Increment 2-1-2024 $1,435,000 General Obligation Tax Abatement Debt Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 12-19-18 5-28-15 $460,000 Tax Abatement 2-1-2026 $ 370,000 11-23-16 1,600,000 Tax Abatement Refunding 2-1-2023 1,375,000 Total $1,745,000 General Obligation Utility Revenue Debt Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 12-19-18 6-1-10 $535,000 Water Revenue Refunding 2-1-2020 $ 120,000 11-20-14 1,135,000 Water Revenue 2-1-2025 810,000 11-23-16 1,420,000 Water Utility Revenue 2-1-2027 1,290,000 12-19-18 1,730,000 Water and Sewer Utility Revenue (the Water and Sewer Utility Portion of the Bonds) 2-1-2034 1,730,000 12-19-18 315,000 Water Utility Revenue (the Water Utility Portion of the Bonds) 2-1-2029 315,000 Total $4,265,000 - 13 - Lease Obligations* Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 12-19-18 6-18-15 $4,350,000 Fire Station 4-1-2036 $4,015,000 * These bonds were issued by the Lino Lakes Economic Development Authority, Minnesota (the “Authority”) and are payable from annual appropriation lease payments made by the City to the Authority pursuant to a lease agreement. This issue is subject to the legal debt limit. Estimated Calendar Year Debt Service Payments Including the Bonds G.O. Debt Supported G.O. Special Solely by Taxes Assessment Debt Principal Principal Year Principal & Interest(a) Principal & Interest 2018 (at 12-19) $ 521,250 $ 533,300 (Paid) (Paid) 2019 801,175 982,374 $ 945,000 $ 990,018 2020 652,000 886,457 875,000 907,325 2021 647,000 867,232 845,000 863,614 2022 645,790 851,139 100,000 109,851 2023 665,790 855,774 100,000 106,604 2024 685,790 859,718 100,000 103,286 2025 530,790 689,541 35,000 36,208 2026 540,790 685,207 35,000 35,403 2027 585,000 712,378 2028 555,000 663,015 2029 575,000 665,013 2030 595,000 667,365 2031 610,000 663,389 2032 420,000 456,803 2033 435,000 457,586 2034 450,000 457,650 Total $9,915,375(b) $11,953,941 $3,035,000 $3,152,309 (a) Includes the Street Reconstruction Portion of the Bonds at an assumed average annual interest rate of 3.32%. (b) 63.3% of this debt will be retired within ten years. - 14 - Estimated Calendar Year Debt Service Payments Including the Bonds (continued) G.O. Tax G.O. Tax Increment Debt Abatement Debt Principal Principal Year Principal & Interest Principal & Interest 2018 (at 12-19) (Paid) (Paid) (Paid) (Paid) 2019 $ 200,000 $ 254,326 $ 290,000 $ 313,753 2020 215,000 261,026 305,000 324,945 2021 230,000 267,126 320,000 335,698 2022 245,000 272,504 335,000 345,980 2023 265,000 282,016 350,000 355,763 2024 280,000 285,775 45,000 47,575 2025 50,000 51,625 2026 50,000 50,563 Total $1,435,000 $1,622,773 $1,745,000 $1,825,902 G.O. Utility Revenue Debt Lease Obligations Principal Principal Year Principal & Interest(a) Principal & Interest 2018 (at 12-19) (Paid) (Paid) (Paid) (Paid) 2019 $ 300,000 $ 381,743 $ 175,000 $ 302,438 2020 425,000 524,810 175,000 298,938 2021 380,000 470,931 180,000 299,488 2022 385,000 467,409 185,000 299,013 2023 390,000 463,531 190,000 298,388 2024 400,000 464,245 200,000 302,538 2025 405,000 459,568 205,000 301,463 2026 295,000 340,980 210,000 300,238 2027 300,000 337,805 215,000 298,863 2028 155,000 185,205 220,000 297,338 2029 155,000 179,703 230,000 300,588 2030 125,000 145,300 235,000 298,613 2031 130,000 146,188 245,000 301,106 2032 135,000 146,848 250,000 298,063 2033 140,000 147,275 260,000 298,800 2034 145,000 147,465 270,000 298,200 2035 280,000 297,200 2036 290,000 295,800 Total $4,265,000(b) $5,009,006 $4,015,000(c) $5,387,075 (a) Includes the Water and Sewer Utility Portion of the Bonds and the Water Utility Portion of the Bonds at assumed average annual interest rates of 3.33% and 3.18%, respectively. (b) 80.5% of this debt will be retired within ten years. (c) 48.7% of this debt will be retired within ten years. - 15 - Overlapping Debt 2017/18 Debt Applicable to Adjusted Taxable Est. G.O. Debt Tax Capacity in City Taxing Unit(a) Net Tax Capacity As of 12-19-18(b) Percent Amount Anoka County $ 366,666,711 $ 85,780,000(c) 6.2% $ 5,318,360 Anoka County Library 349,986,344 170,000 6.5 11,050 ISD No. 12 (Centennial) 35,862,266 85,122,065 44.2 37,623,953 ISD No. 624 (White Bear Lake) 84,528,102 85,805,000 3.2 2,745,760 ISD No. 831 (Forest Lake) 57,830,971 161,790,000 7.2 11,648,880 Metropolitan Council 3,972,802,150 8,360,000(d) 0.6 50,160 Metropolitan Transit 3,180,525,605 182,390,000 0.7 1,276,730 Total $58,674,893 (a) Only those units with outstanding general obligation debt are shown here. (b) Excludes general obligation tax and aid anticipation certificates and revenue-supported debt. (c) Includes certificates of participation. (d) Excludes general obligation debt supported by wastewater revenues and housing rental payments. Includes certificates of participation. Debt Ratios* G.O. G.O. Direct & Direct Debt Overlapping Debt To 2017/18 Estimated Market Value ($2,062,069,400) 0.98% 3.82% Per Capita (21,407 - 2017 US Census Estimate) $941 $3,682 * Excludes general obligation utility revenue debt. (The Balance of This Page Has Been Intentionally Left Blank) - 16 - CITY TAX RATES, LEVIES AND COLLECTIONS Tax Capacity Rates for a City Resident in Independent School District No. 12 (Centennial) 2017/18 For 2013/14 2014/15 2015/16 2016/17 Total Debt Only Anoka County(a) 43.613% 38.443% 39.398% 37.273% 35.850% 4.283% City of Lino Lakes 46.683 43.770 46.019 45.140 42.826 6.658 ISD No. 12 (Centennial)(b) 46.186 36.562 36.426 29.097 34.970 20.273 Special Districts(c) 6.338 5.701 5.901 5.378 5.172 2.038 Total 142.820% 124.476% 127.744% 116.888% 118.788% 33.252% (a) Includes Anoka County Library and County/City Radio. (b) Independent School District No. 12 (Centennial) also has a 2017/18 tax rate of 0.15137% spread on the market value of property in support of an excess operating levy. (c) Special districts include Metropolitan Council, Metropolitan Transit District, Metropolitan Mosquito Control, Rice Creek Watershed, and Anoka County Railroad Authority. NOTE: This table includes only net tax capacity based rates. Certain other tax rates are based on market value. See Appendix III. Tax Levies and Collections Collected During Collected and/or Abated Net Collection Year As of 6-12-18 Levy/Collect Levy* Amount Percent Amount Percent 2017/18 $9,771,791 (In Process of Collection) 2016/17 9,486,823 $9,447,023 99.6% $9,468,116 99.8% 2015/16 9,053,413 9,012,162 99.5 9,047,616 99.9 2014/15 8,680,907 8,626,115 99.4 8,677,745 99.9 2013/14 8,292,159 8,225,357 99.2 8,288,146 99.9 * The net levy excludes state aid for property tax relief and fiscal disparities, if applicable. The net levy is the basis for computing tax capacity rates. See Appendix III. - 17 - FUNDS ON HAND As of August 31, 2018 General Fund $ 6,034,069 Special Revenue Funds 453,833 Capital Project Funds 11,646,898 Enterprise Fund 14,637,913 Debt Service Funds 5,002,743 Agency Funds 1,737,323 Total Cash and Investments $39,512,779 INVESTMENTS As of August 31, 2018, the City had total investments of $39,512,779, invested in the following manner: Percent of Portfolio Checking/CDs/money market $27,832,569 70.5% U.S. treasuries and agencies 1,473,426 3.7 Bonds 10,206,784 25.8 Total $39,512,779 100.0% In October 1997, the City adopted an investment policy that is in accordance with Minnesota Statutes 118A. Some highlights of the City’s investment policy are as follows: 1. The primary objective is the safety of the principal. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risks and interest rate risk. a. Investments will be limited to those investments specified in Minnesota Statutes 118A. b. Annually appointing the financial institutions, brokers/dealers, intermediaries and advisors. c. Diversifying the investment portfolio so that potential losses on individual securities will be minimized. d. Investing funds in primarily shorter-term securities. 2. The secondary objective is to have the portfolio remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. 3. The third objective is to attain a market rate of return through budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. - 18 - 4. The Director of Finance and his/her appointed employees in case of unavailability are authorized to manage the investment program. A system of internal controls shall be followed and shall be designed to prevent losses from theft or misuse to provide reasonable assurance that the objectives are met. 5. The Director of Finance will prepare an investment report monthly for the City Administrator. 6. All City Funds must be invested with financial institutions authorized to provide investment services per statute 118A.06, with representatives who are licensed and with institutions which have a minimum capital requirement of $5 million and at least five years of operation. GENERAL INFORMATION CONCERNING THE CITY The City is located in southeast Anoka County, approximately 20 miles north of the City of St. Paul. The City is part of the Minneapolis/St. Paul metropolitan area and covers an area of approximately 33 square miles (21,120 acres). Population The City’s population trend is shown below. Percent Population Change 2017 U.S. Census Estimate 21,407 5.9% 2010 U.S. Census 20,216 20.4 2000 U.S. Census 16,791 90.7 1990 U.S. Census 8,807 77.3 1980 U.S. Census 4,966 -- Sources: United States Census Bureau, http://www.census.gov/. The City’s estimated population by age group for the past five years is as follows: Data Year/ Report Year 0-17 18-34 35-64 65 and Over 2017/18 5,049 5,071 9,709 1,942 2016/17 5,113 4,957 9,805 1,772 2015/16 5,233 4,843 9,940 1,613 2014/15 5,320 4,676 9,981 1,451 2013/14 5,373 4,461 9,881 1,327 Sources: Environics Analytics, Claritas, Inc., and The Nielsen Company. Transportation Interstate 35E, Interstate 35W, and Minnesota Highway 49 traverse the community. - 19 - Major Employers Approximate Number Employer Product/Service of Employees Independent School District No. 12 (Centennial) Public education 931* State of Minnesota Correctional Facility Medium security prison 478 Target Corporation Retail 273 Molin Concrete Products Co. Concrete products 240 Curtis 1000 Promotional/printing products 200 Kohls Retail 120 YMCA Health/fitness 120 Distribution Alternatives Warehousing/distribution 117 Rehbein Transit Inc. Bus transportation 100 Anoka County Juvenile Center Juvenile detention center 86 Custom Manufacturing Industrial Mold Manufacturing 80 Nol-Tec Systems, Inc. Pneumatic conveyors 75 City of Lino Lakes Government 69* * Includes full- and part-time employees. Sources: This does not purport to be a comprehensive list and is based on a October 2018 best efforts telephone survey of individual employers and the City’s 2017 Comprehensive Annual Financial Report. Some employers do not respond to inquiries. Labor Force Data Annual Average August 2014 2015 2016 2017 2018 Labor Force: Anoka County 188,288 188,288 190,604 194,595 198,164 Minneapolis/Saint Paul MSA 1,909,660 1,916,011 1,938,642 1,979,780 2,022,959 State of Minnesota 2,973,073 2,998,352 3,036,278 3,063,604 3,087,727 Unemployment Rate: Anoka County 4.2% 3.6% 3.8% 3.5% 2.5% Minneapolis/Saint Paul MSA 4.0 3.5 3.6 3.3 2.5 State of Minnesota 4.2 3.7 3.9 3.5 2.5 Source: Minnesota Department of Employment and Economic Development, https://apps.deed.state.mn.us/lmi/laus. 2018 data are preliminary. Retail Sales and Effective Buying Income (EBI) City of Lino Lakes Data Year/ Total Retail Total Median Report Year Sales ($000) EBI ($000) Household EBI 2017/18 $257,154 $669,361 $84,273 2016/17 142,434 643,078 83,989 2015/16 151,324 600,358 80,238 2014/15 153,754 592,415 77,538 2013/14 171,931 506,632 69,507 - 20 - Anoka County Data Year/ Total Retail Total Median Report Year Sales ($000) EBI ($000) Household EBI 2017/18 $5,068,800 $9,874,841 $64,857 2016/17 4,857,435 9,421,969 62,169 2015/16 4,428,876 8,946,250 60,388 2014/15 4,175,734 8,685,587 58,438 2013/14 4,005,487 7,741,875 53,659 The 2017/18 Median Household EBI for the State of Minnesota was $56,669. The 2017/18 Median Household EBI for the United States was $50,620. Sources: Environics Analytics, Claritas, Inc., and The Nielsen Company. Permits Issued by the City New Single New Total Value* Family Residential Commercial/Industrial (All Permits) Year Number Value Number Value 2018 (to 8-31) 125 $29,057,508 1 $ 285,860 $39,451,363 2017 133 32,003,018 1 844,771 55,799,312 2016 100 26,157,239 2 13,241,334 54,291,475 2015 47 12,807,908 2 6,196,000 27,324,068 2014 33 9,046,060 2 1,111,000 13,812,706 2013 30 7,666,210 5 4,505,422 18,337,053 2012 26 6,366,995 0 0 10,751,626 2011 34 8,511,974 0 0 11,192,264 2010 31 7,461,225 0 0 11,295,493 2009 28 6,000,984 0 0 9,586,160 * In addition to building permits, the total value includes all other permits issued by the City (i.e. heating, lighting, plumbing, roof replacement, etc.). Source: City of Lino Lakes. Recent Development Economic Development Development activities have continued to increase over the past four years. Residential permits were the highest since 2007 and commercial development showed signs of recovery as new construction activities and development planning emerged. United Properties recently completed construction of a 402,000 square-foot building providing warehousing and fulfillment services in the new Clearwater Creek Business Park. DR Horton, Inc. is nearing completion of a 112-unit residential development in the City’s Town Center, while Lennar homes is currently breaking ground on the first phase of a n 876-unit residential development along the Interstate 35E corridor. - 21 - Residential Development The following table shows projected lot development in existing subdivisions for single-family homes: As of September 2018 Subdivision Total Lots Lots Remaining Century Farm North 6th Addition 29 2 Golden Acres 4 3 Foxborough 57 3 Northpointe 2nd Addition 40 5 Northpointe 5th Addition `39 15 Saddle Club 28 8 Saddle Club 2nd Addition 17 6 Saddle Club 3rd Addition 8 5 St. Claire Estates 35 10 Woods Edge 60 5 Woods Edge 2nd Addition 52 14 Financial Institutions* City residents are served by First Resource Bank, which had total deposits of $151,322,000 as of June 30, 2018. In addition, branch offices of Farmers & Merchants Savings Bank; Wells Fargo Bank, National Association; and U.S. Bank National Association are located throughout the City. * This does not purport to be a comprehensive list. Source: Federal Deposit Insurance Corporation, https://www.fdic.gov/. Health Care Services The following is a summary of health care facilities located near the City: Facility Location No. of Beds Mercy Hospital City of Coon Rapids 546 hospital beds 27 infant bassinets Park River Estates Care Center City of Coon Rapids 99 nursing home beds Birchwood Health Care Center City of Forest Lake 110 nursing home beds St. John’s Hospital – Health East Care System City of Maplewood 184 hospital beds 44 infant bassinets Ramsey County Care Center City of Maplewood 164 nursing home beds Maplewood Care Center City of Maplewood 130 nursing home beds Good Samaritan Society City of Maplewood 71 nursing home beds Fairview Lakes Medical Center City of Wyoming 61 hospital beds 12 infant bassinets Source: Minnesota Department of Health, http://www.health.state.mn.us/. - 22 - Education Public Education The following districts serve the residents of the City: 2017/18* District Grades Enrollment ISD No. 12 (Centennial) PK-12 6,707 ISD No. 624 (White Bear Lake) PK-12 8,744 ISD No. 831 (Forest Lake) PK-12 6,261 * 2018/19 enrollment figures are not yet available. Source: Minnesota Department of Education, www.education.state.mn.us. Non-Public Education City residents are also served by the following private schools: 2017/18* School Grades Enrollment Frassati Catholic Academy K-8 239 Liberty Classical Academy K-5 222 St. Peter K-6 206 Gentry Academy 5-12 109 Magnuson Christian K-8 79 White Bear Montessori K-3 35 * 2018/19 enrollment figures are not yet available. Source: Minnesota Department of Education, www.education.state.mn.us. GOVERNMENTAL ORGANIZATION AND SERVICES Organization The City was incorporated as a village in 1955, became a statutory city on January 1, 1974, and is governed by a Home Rule Charter as adopted on January 12, 1982. The City is governed by a Mayor and four Council members. The Mayor is elected to a two-year term of office and Council members are elected to overlapping four-year terms. The following individuals comprise the current City Council: Expiration of Term Jeff Reinert Mayor December 31, 2019 Melissa Maher Council Member December 31, 2019 Michael Manthey Council Member December 31, 2019 Rob Rafferty Council Member December 31, 2021 Dale Stoesz Council Member December 31, 2021 - 23 - The City Administrator, Mr. Jeffrey Karlson, is the Chief Executive Officer of the City. Mr. Karlson has been with the City since August 2010. The City's Finance Director is Ms. Sarah Cotton, who has been with the City since August 2015. The City’s Community Development Director is Mr. Michael Grochala, who has been with the City since June 2001. The City has 66 regular full-time and 3 regular part-time employees. Services Police protection is provided by 27 sworn police officers. Effective January 2016, fire protection is provided by the Lino Lakes Public Safety Fire Division, which is comprised of a Deputy Director of Fire Operations, 23 cross-trained police officers, and approximately 20 paid-on-call firefighters. The City has a class 5 insurance rating. The City has established a Comprehensive Plan to direct all areas of growth within the City. The plan was approved by the Metropolitan Council in 1981, and was amended in 1987, 1990, 1991, 1992, 2001, 2006, and 2011. Eighteen parks and playgrounds are maintained by the City and include ball fields, hockey and skating rinks, playground and picnic facilities, and 30 miles of trails. Anoka County also owns a 5,500-acre park and an 18-hole golf course within the City. The City currently provides municipal sewer and water through the operation of six wells, two water towers, and 13 lift stations. The City currently has 4,976 users of its sewer system and 4,738 users of its water system. The City has established a policy that provides that municipal water services will be extended only to sewered areas. Labor Contracts The status of labor contracts in the City is as follows: No. of Expiration Date Bargaining Unit Employees of Current Contract LELS -- Patrol 19 December 31, 2019 LELS -- Sargent 5 December 31, 2019 49ers – Public Works 16 December 31, 2019 AFSCME 19 December 31, 2019 Subtotal 59 Non-unionized employees 10 Total employees 69 - 24 - Employee Pensions All full-time and certain part-time employees of the City are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing multiple-employer retirement plans. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. All police officers, fire fighters and peace officers who qualify for membership by statute are covered by the PEPFF. The City’s contributions to GERF and PEPFF are equal to the contractually required contributions for each year as set by State Statute, and are as follows for the past five years: GERF PEPFF 2017 $192,510 $416,665 2016 193,684 424,970 2015 182,102 393,560 2014 162,934 314,426 2013 160,392 290,737 Lino Lakes Fire Division Volunteer firefighters of the City’s Public Safety Department – Fire Division are eligible for pension benefits through membership in the Statewide Volunteer Firefighter Retirement Plan (SFV), an agent multiple-employer, lump-sum defined benefit pension plan administered by PERA. The plan is established and administer in accordance with Minnesota Statutes, Chapter 353G. A member who has completed five or more years of service in the fire department shall at age 50 be entitled to a lump-sum benefit. Plan provisions include a pro-rated vesting schedule that increase from 5 years at 40% through 20 years at 100%. State aids, investment earnings and City contributions fund the plan. The City’s contributions to the SFV for the past two years are as follows*: City’s Contributions 2017 $58,800 2016 44,394 * The City created its fire department in 2016, therefore information prior to 2016 is unavailable . For more information regarding the liability of the City with respect to its employees, please reference “Note 8, Defined Benefit Pension Plans - PERA” and “Note 9, Defined Benefit Pension Plans - Fire Division” of the City’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2017, an excerpt of which is included as Appendix IV of this Official Statement. Sources: City’s Comprehensive Annual Financial Reports. GASB 68 The Government Accounting Standards Board (GASB) has issued Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68) and related GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date-an amendment to GASB 68, which revised existing standards for measuring and reporting pension liabilities for pension plans provided to City employees and require recognition of a liability equal to the City’s proportionate share of net pension liability, which is measured as the total pension liability less the amount of the pension plan's fiduciary net position. - 25 - The City’s proportionate shares of the pension costs and the City’s net pension liability for GERF and PEPFF for the past three years are as follows: GERF PEPFF Proportionate Net Proportionate Net Share of Pension Share of Pension Pension Costs Liability Pension Costs Liability 2017 0.0414% $ 2,642,949 0.2570% $ 3,469,806 2016 0.0387 3,142,248 0.2590 10,394,121 2015 0.0410 2,124,883 0.2490 2,829,223 For more information regarding GASB 68 with respect to the City, please reference “Note 8, Defined Benefit Pension Plans - PERA” of the City’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2017, an excerpt of which is included as Appendix IV of this Official Statement. Additional and detailed information about GERF’s net position is available in a separately-issued PERA financial report, which may be obtained at www.mnpera.org; by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088; or by calling 1-800-652-9026. 2018 Omnibus Retirement Bill On Thursday, May 31, 2018, Minnesota Governor Mark Dayton signed into law the 2018 Omnibus Retirement Bill, which includes sustainability measures for all four of the State’s public pension systems, including PERA. The City anticipates this legislation will have some level of positive impact on the proportionate share of pension costs and net pension liability for GERF for the fiscal year ending December 31, 2018 and thereafter. Other Post-Employment Benefits The Government Accounting Standards Board (GASB) has issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (GASB 75), establishing new accounting and financial reporting requirements related to post-employment healthcare and other non-pension benefits (referred to as Other Post-Employment Benefits or “OPEB”). The implementation of GASB 75 required the restatement of the City’s beginning net position for the fiscal year ended December 31, 2016. Please see “Note 20, Change in Accounting Principle” of the City’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2017, an excerpt of which is included as Appendix IV of this Official Statement. The City provides benefits to eligible employees through the City’s health insurance plan. Active employees who retire from the City when over age 50 and with 20 years of service may continue coverage for both themselves and their eligible dependent(s) under the City’s health benefits program until age 65. Benefits and eligibility provisions are established by the City through its personnel manual and coll ective bargaining agreements with employee groups. The employee is required to pay 100% of their premium cost for the City-sponsored group health insurance plan in which they participate. As of January 1, 2017, participants of the plan consisted of: Active employees 46 Inactive employees/beneficiaries currently receiving benefits 6 Total 52 - 26 - The City’s net OPEB liability was measured as of December 31, 2017, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of January 1, 2017. The discount rate used to measure the total OPEB liability was 2.85%. Components of the City’s OPEB liability and related ratios for the fiscal year ended December 31, 2017 are as follows: Total fiduciary net position – beginning of year $789,627 Service cost 16,990 Interest 22,542 Changes of benefit terms 0 Differences between expected and actual experience (51,083) Benefit payments (31,536) Net changes $ (43,087) Total fiduciary net position – end of year $746,540 Covered Employee Payroll $3,499,836 Total OBEB Liability as a Percentage of Covered Employee Payroll 21.3% For more information regarding the City’s OPEB plan with respect to its employees, please reference “Note 10, Postemployment Benefits Other than Pensions” of the City’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2017, an excerpt of which is included as Appendix IV of this Official Statement. Sources: City’s Comprehensive Annual Financial Reports. - 27 - General Fund Budget Summary 2017 Budget 2017 Actual 2018 Budget Revenues: Taxes $ 7,388,431 $ 7,338,876 $ 8,205,859 Licenses and Permits 1,379,753 1,447,571 687,047 Intergovernmental 684,409 667,520 645,367 Special Assessments 4,500 4,293 9,000 Charges for Services 306,800 302,038 298,271 Fines and Forfeits 145,600 147,977 134,132 Investment Earnings 30,000 40,913 30,000 Refunds and Reimbursements 40,000 29,052 50,000 Miscellaneous 259,200 266,387 161,355 Total Revenues $10,238,693 $10,244,627 $10,221,031 Expenditures: General Government $ 2,048,432 $ 2,032,795 $ 2,002,677 Public Safety 4,630,158 4,413,695 4,719,642 Public Services 2,207,037 2,178,725 2,210,974 Conservation of Natural Resources 230,752 191,639 210,107 Community Development 438,620 426,653 484,731 Contingency 0 0 100,000 Total Expenditures $ 9,554,999 $ 9,243,507 $ 9,728,131 Revenues Over (Under) Expenditures $ 683,694 $ 1,001,120 $ 492,900 Other Financing Sources (Uses): Transfers In $ 439,373 $ 439,373 $ 0 Transfers Out (879,152) (879,759) (1,217,900) Total Other Financing Sources (Uses) $ (439,779) $ (440,386) $ (1,217,900) Net Increase (Decrease) in Fund Balance $ 243,915 $ 560,734 $ (725,000) Fund Balance – Beginning of Year $ 6,256,191 $ 6,256,191 $ 6,816,925 Fund Balance – December 31 $ 6,500,106 $ 6,816,925 $ 6,091,925 Source: The City. Major General Fund Revenue Sources Revenue 2013 2014 2015 2016 2017 Taxes $7,187,801 $7,147,977 $7,489,040 $7,037,596 $7,338,876 Licenses and Permits 431,654 407,681 551,202 895,581 1,447,571 Intergovernmental 500,963 512,064 649,611 654,447 667,520 Charges for Services 269,185 313,826 277,423 342,690 302,038 Miscellaneous 114,390 131,485 168,952 221,034 266,387 Fines and Forfeits 119,079 119,715 127,803 220,905 147,977 Sources: City’s Comprehensive Annual Financial Reports. APPENDIX I I-1 PROPOSED FORM OF LEGAL OPINION $__________ City of Lino Lakes, Minnesota General Obligation Bonds Series 2018A We have acted as bond counsel to the City of Lino Lakes, Minnesota (the “Issuer”) in connection with the issuance by the Issuer of its General Obligation Bonds, Series 2018A (the “Bonds”), originally dated November 19, 2018, and issued in the original aggregate principal amount of $________. In such capacity and for the purpose of rendering this opinion we have examined certified copies of certain proceedings, certifications and other documents, and applicable laws as we have deemed necessary. Regarding questions of fact material to this opinion, we have relied on certified proceedings and other certifications of public officials and other documents furnished to us without undertaking to verify the same by independent investigation. Under existing laws, regulations, rulings and decisions in effect on the date hereof, and based on the foregoing we are of the opinion that: 1. The Bonds have been duly authorized and executed, and are valid and binding general obligations of the Issuer, enforceable in accordance with their terms. 2. The principal of and interest on the Bonds are payable in part from ad valorem taxes levied by the Issuer and in part from net revenues of the water and sanitary sewer systems of the Issuer, but if necessary for the payment thereof additional ad valorem taxes are required by law to be levied on all taxable property of the Issuer, which taxes are not subject to any limitation as to rate or amount. 3. Interest on the Bonds is excludable from gross income of the recipient for federal income tax purposes and, to the same extent, is excludable from taxable net income of individuals, trusts, and estates for Minnesota income tax purposes, and is not a preference item for purposes of the computation of the federal alternative minimum tax (although interest on the Bonds is included in adjusted current earnings in calculating corporate alternative minimum taxable income for taxable years that began prior to January 1, 2018), or the computation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates. However, such interest is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income. The opinion set forth in this paragraph is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continu e to be, excludable from gross income for federal income tax purposes and from taxable net income for Minnesota income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes and taxable net income for Minnesota income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. I-2 4. The rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditor’s rights generally and by equitable principles, whether considered at law or in equity. We have not been asked and have not undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, and accordingly we express no opinion with respect thereto. This opinion is given as of the date hereof and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Dated December ___, 2018 at Minneapolis, Minnesota. APPENDIX II II-1 CONTINUING DISCLOSURE CERTIFICATE $_______ Lino Lakes, Minnesota General Obligation Bonds Series 2018A December ___, 2018 This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the City of Lino Lakes, Minnesota (the “Issuer”) in connection with the issuance of its General Obligation Bonds, Series 2018A (the “Bonds”), in the original aggregate principal amount of $_________. The Bonds are being issued pursuant to resolutions adopted by the City Council of the Issuer (the “Resolutions”). The Bonds are being delivered to _________________ (the “Purchaser”) on the date hereof. Pursuant to the Resolutions, the Issuer has covenanted and agreed to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events. The Issuer hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders (as defined herein) of the Bonds in order to provide for the public availability of such information and assist the Participating Underwriter(s) (as defined herein) in complying with the Rule (as defined herein). This Disclosure Certificate, together with the Resolutions, constitutes the written agreement or contract for the benefit of the Holders of the Bonds that is required by the Rule. Section 2. Definitions. In addition to the defined terms set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: “Annual Report” means any annual report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Audited Financial Statements” means annual financial statements of the Issuer, prepared in accordance with GAAP as prescribed by GASB. “Bonds” means the General Obligation Bonds, Series 2018A, issued by the Issuer in the original aggregate principal amount of $__________. “Disclosure Certificate” means this Continuing Disclosure Certificate. “EMMA” means the Electronic Municipal Market Access system operated by the MSRB and designated as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. “Final Official Statement” means the deemed Final Official Statement, dated _________, 2018, which constitutes the final official statement delivered in connection with the Bonds, which is available from the MSRB. “Fiscal Year” means the fiscal year of the Issuer. II-2 “GAAP” means generally accepted accounting principles for governmental units as prescribed by GASB. “GASB” means the Governmental Accounting Standards Board. “Holder” means the person in whose name a Bond is registered or a beneficial owner of such a Bond. “Issuer” means the City of Lino Lakes, Minnesota, which is the obligated person with respect to the Bonds. “Material Event” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board located at 1300 I Street NW, Suite 1000, Washington, DC 20005. “Participating Underwriter” means any of the original underwriter(s) of the Bonds (including the Purchaser) required to comply with the Rule in connection with the offering of the Bonds. “Purchaser” means __________________. “Repository” means EMMA, or any successor thereto designated by the SEC. “Rule” means SEC Rule 15c2-12(b)(5) promulgated by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time, and including written interpretations thereof by the SEC. “SEC” means Securities and Exchange Commission, and any successor thereto. Section 3. Provision of Annual Financial Information and Audited Financial Statements. (a) The Issuer shall provide to the Repository not later than twelve (12) months after the end of the Fiscal Year commencing with the year that ends December 31, 2018, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the Audited Financial Statements of the Issuer may be submitted separately from the balance of the Annual Report. (b) If the Issuer is unable or fails to provide to the Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice of that fact to the Repository and the MSRB. (c) The Issuer shall determine each year prior to the date for providing the Annual Report the name and address of each Repository. Section 4. Content of Annual Reports. The Issuer’s Annual Report shall contain or incorporate by reference the following sections of the Final Official Statement: 1. City Property Values 2. City Indebtedness 3. City Tax Rates, Levies and Collections In addition to the items listed above, the Annual Report shall include Audited Financial Statements submitted in accordance with Section 3 of this Disclosure Certificate. II-3 Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to the Repository or the SEC. If the document incorporated by reference is a final official statement, it must also be available from the MSRB. The Issuer shall clearly identify each such other document so incorporated by reference. Section 5. Reporting of Material Events. (a) This Section 5 shall govern the giving of notice of the occurrence of any of the following events (“Material Events”) with respect to the Bonds: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701–TEB), or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; 7. Modifications to rights of security holders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities, if material; 11. Rating changes; 12. Bankruptcy, insolvency, receivership or similar event of the obligated person; 13. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. (b) The Issuer shall file a notice of such occurrence with the Repository or with the MSRB within ten (10) business days of the occurrence of the Material Event. (c) Unless otherwise required by law and subject to technical and economic feasibility, the Issuer shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the Issuer’s information. II-4 Section 6. EMMA. The SEC has designated EMMA as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. Until the EMMA system is amended or altered by the MSRB and the SEC, the Issuer shall make all filings required under this Disclosure Certificate solely with EMMA. Section 7. Termination of Reporting Obligation. The Issuer’s obligations under the Resolutions and this Disclosure Certificate shall terminate upon the redemption in full of all Bonds or payment in full of all Bonds. Section 8. Agent. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under the Resolutions and this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent. Section 9. Amendment; Waiver. Notwithstanding any other provision of the Resolutions or this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not, in and of itself, cause a violation of the Rule. The provisions of the Resolutions requiring continuing disclosure pursuant to the Rule and this Disclosure Certificate, or any provision hereof, shall be null and void in the event that the Issuer delivers to the Repository an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which impose the continuing disclosure requirements of the Resolutions and the execution and delivery of this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply to the Bonds. The provisions of the Resolutions requiring continuing disclosure pursuant to the Rule and this Disclosure Certificate may be amended without the consent of the Holders of the Bonds, but only upon the delivery by the Issuer to the Repository of the proposed amendment and an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance with the Rule. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Holder of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under the Resolutions and this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Participating Underwriters, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity. II-5 IN WITNESS WHEREOF, we have executed this Disclosure Certificate in our official capacities effective as of the date and year first written above. CITY OF LINO LAKES, MINNESOTA Mayor City Administrator APPENDIX III III-1 SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND MINNESOTA REAL PROPERTY VALUATION Following is a summary of certain statutory provisions relative to tax levy procedures, tax payment and credit procedures, and the mechanics of real property valuation. The summary does not purport to be inclusive of all such provisions or of the specific provisions discussed, and is qualified by reference to the complete text of applicable statutes, rules and regulations of the State of Minnesota. Property Valuations (Chapter 273, Minnesota Statutes) Assessor's Estimated Market Value. Each parcel of real property subject to taxation must, by statute, be appraised at least once every five years as of January 2 of the year of appraisal. With certain exceptions, all property is valued at its market value, which is the value the assessor determines to be the price the property to be fairly worth, and which is referred to as the “Estimated Market Value.” The 2013 Minnesota Legislature established the Estimated Market Value as the value used to calculate a municipality’s legal debt limit. Economic Market Value. The Economic Market Value is the value of locally assessed real property (Assessor’s Estimated Market Value) divided by the sales ratio as provided by the State of Minnesota Department of Revenue plus the estimated market value of personal property, utilities, railroad, and minerals. Taxable Market Value. The Taxable Market Value is the value that Net Tax Capacity is based on, after all reductions, limitations, exemptions and deferrals. Net Tax Capacity. The Net Tax Capacity is the value upon which net taxes are levied, extended and collected. The Net Tax Capacity is computed by applying the class rate percentages specific to each type of property classification against the Taxable Market Value. Class rate percentages vary depending on the type of property as shown on the last page of this Appendix. The formulas and class rates for converting Taxable Market Value to Net Tax Capacity represent a basic element of the State's property tax relief system and are subject to annual revisions by the State Legislature. Property taxes are the sum of the amounts determined by (i) multiplying the Net Tax Capacity by the tax capacity rate, and (ii) multiplying the referendum market value by the market value rate. Market Value Homestead Exclusion. In 2011, the Market Value Homestead Exclusion Program (MVHE) was implemented to offset the elimination of the Market Value Homestead Credit Program that provided relief to certain homesteads. The MVHE reduces the taxable market value of a homestead with an Assessor’s Estimated Market Value up to $413,800 in an attempt to result in a property tax similar to the effective property tax prior to the elimination of the homestead credit. The MVHE applies to property classified as Class 1a or 1b and Class 2a, and causes a decrease in the City’s aggregate Taxable Market Value, even if the Assessor’s Estimated Market Value on the same properties did not decline. Property Tax Payments and Delinquencies (Chapters 275, 276, 277, 279-282 and 549, Minnesota Statutes) Ad valorem property taxes levied by local governments in Minnesota are extended and collected by the various counties within the State. Each taxing jurisdiction is required to certify the annual tax levy to the county auditor within five (5) working days after December 20 of the year preceding the collection year. A listing of property taxes due is prepared by the county auditor and turned over to the county treasurer on or before the first business day in March. III-2 The county treasurer is responsible for collecting all property taxes within the county. Real estate and personal property tax statements are mailed out by March 31. One-half (1/2) of the taxes on real property is due on or before May 15. The remainder is due on or before October 15. Real property taxes not paid by their due date are assessed a penalty on homestead property of 2% until May 31 and increased to 4% on June 1. The penalty on nonhomestead property is assessed at a rate of 4% until May 31 and increased to 8% on June 1. Thereafter, an additional 1% penalty shall accrue each month through October 1 of the collection year for unpaid real property taxes. In the case of the second installment of real property taxes due October 15, a penalty of 2% on homestead property and 4% on nonhomestead property is assessed. The penalty for homestead property increases to 6% on November 1 and again to 8% on December 1. The penalty for nonhomestead property increases to 8% on November 1 and again to 12% on December 1. Personal property taxes remaining unpaid on May 16 are deemed to be delinquent and a penalty of 8% attaches to the unpaid tax. However, personal property that is owned by a tax-exempt entity, but is treated as taxable by virtue of a lease agreement, is subject to the same delinquent property tax penalties as real property. On the first business day of January of the year following collection all delinquencies are subject to an additional 2% penalty, and those delinquencies outstanding as of February 15 are filed for a tax lien judgment with the district court. By March 20 the county auditor files a publication of legal action and a mailing of notice of action to delinquent parties. Those property interests not responding to this notice have judgment entered for the amount of the delinquency and associated penalties. The amount of the judgment is subject to a variable interest determined annually by the Department of Revenue, and equal to the adjusted prime rate charged by banks but in no event is the rate less than 10% or more than 14%. Property owners subject to a tax lien judgment generally have three years (3) to redeem the property. After expiration of the redemption period, unredeemed properties are declared tax forfeit with title held in trust by the State of Minnesota for the respective taxing districts. The county auditor, or equivalent thereof, then sells those properties not claimed for a public purpose at auction. The net proceeds of the sale are first dedicated to the satisfaction of outstanding special assessments on the parcel, with any remaining balance in most cases being divided on the following basis: county - 40%; town or city - 20%; and school district - 40%. Property Tax Credits (Chapter 273, Minnesota Statutes) In addition to adjusting the taxable value for various property types, primary elements of Minnesota's property tax relief system are: property tax levy reduction aids; the homestead credit refund and the renter’s property tax refund, which relate property taxes to income and provide relief on a sliding income scale; and targeted tax relief, which is aimed primarily at easing the effect of significant tax increases. The homestead credit refund, the renter’s property tax refund, and targeted credits are reimbursed to the taxpayer upon application by the taxpayer. Property tax levy reduction aid includes educational aids, local governmental aid, equalization aid, county program aid and disparity reduction aid. Debt Limitations All Minnesota municipalities (counties, cities, towns and school districts) are subject to statutory “net debt” limitations under the provisions of Minnesota Statutes, Section 475.53. Net debt is defined as the amount remaining after deducting from gross debt the amount of current revenues that are applicable within the current fiscal year to the payment of any debt and the aggregate of the principal of the following: 1. Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. III-3 2. Warrants or orders having no definite or fixed maturity. 3. Obligations payable wholly from the income from revenue producing conveniences. 4. Obligations issued to create or maintain a permanent improvement revolving fund. 5. Obligations issued for the acquisition, and betterment of public waterworks systems, and public lighting, heating or power systems, and of any combination thereof or for any other public convenience from which a revenue is or may be derived. 6. Debt service loans and capital loans made to a school district under the provisions of Minnesota Statutes, Sections 126C.68 and 126C.69. 7. Amount of all money and the face value of all securities held as a debt service fund for the extinguishment of obligations other than those deductible under this subdivision. 8. Obligations to repay loans made under Minnesota Statutes, Section 216C.37. 9. Obligations to repay loans made from money received from litigation or settlement of alleged violations of federal petroleum pricing regulations. 10. Obligations issued to pay pension fund or other postemployment benefit liabilities under Minnesota Statutes, Section 475.52, subdivision 6, or any charter authority. 11. Obligations issued to pay judgments against the municipality under Minnesota Statutes, Section 475.52, subdivision 6, or any charter authority. 12. All other obligations which under the provisions of law authorizing their issuance are not to be included in computing the net debt of the municipality. Levies for General Obligation Debt (Sections 475.61 and 475.74, Minnesota Statutes) Any municipality that issues general obligation debt must, at the time of issuance, certify levies to the county auditor of the county(ies) within which the municipality is situated. Such levies shall be in an amount that if collected in full will, together with estimates of other revenues pledged for payment of the obligations, produce at least five percent in excess of the amount needed to pay principal and interest when due. Notwithstanding any other limitations upon the ability of a taxing unit to levy taxes, its ability to levy taxes for a deficiency in prior levies for payment of general obligation indebtedness is without limitation as to rate or amount. Metropolitan Revenue Distribution (Chapter 473F, Minnesota Statutes) “Fiscal Disparities Law” The Charles R. Weaver Metropolitan Revenue Distribution Act, more commonly known as “Fiscal Disparities,” was first implemented for taxes payable in 1975. Forty percent of the increase in commercial- industrial (including public utility and railroad) net tax capacity valuation since 1971 in each assessment district in the Minneapolis/Saint Paul seven-county metropolitan area (Anoka, Carver, Dakota, excluding the City of Northfield, Hennepin, Ramsey, Scott, excluding the City of New Prague, and Washington Counties) is contributed to an area-wide tax base. A distribution index, based on the factors of population and real property market value per capita, is employed in determining what proportion of the net tax capacity value in the area-wide tax base shall be distributed back to each assessment district. III-4 STATUTORY FORMULAE: CONVERSION OF TAXABLE MARKET VALUE (TMV) TO NET TAX CAPACITY FOR MAJOR PROPERTY CLASSIFICATIONS Local Tax Payable Local Tax Payable Property Type 2014 2015-2018 Residential Homestead (1a) Up to $500,000 1.00% 1.00% Over $500,000 1.25% 1.25% Residential Non-homestead Single Unit (4bb) Up to $500,000 1.00% 1.00% Over $500,000 1.25% 1.25% 1-3 unit and undeveloped land (4b1) 1.25% 1.25% Market Rate Apartments Regular (4a) 1.25% 1.25% Low-Income (4d) 0.75% Up to $121,000(c) 0.75% Over $121,000(c) 0.25% Commercial/Industrial/Public Utility (3a) Up to $150,000 1.50%(a) 1.50%(a) Over $150,000 2.00%(a) 2.00%(a) Electric Generation Machinery 2.00% 2.00% Commercial Seasonal Residential Homestead Resorts (1c) Up to $600,000 0.55% 0.50% $600,000 - $2,300,000 1.00% 1.00% Over $2,300,000 1.25%(a) 1.25%(a) Seasonal Resorts (4c) Up to $500,000 1.00%(a) 1.00%(a) Over $500,000 1.25%(a) 1.25%(a) Non-Commercial (4c12) Up to $500,000 1.00%(a)(b) 1.00%(a)(b) Over $500,000 1.25%(a)(b) 1.25%(a)(b) Disabled Homestead (1b) Up to $50,000 0.45% 0.45% Agricultural Land & Buildings Homestead (2a) Up to $500,000 1.00% 1.00% Over $500,000 1.25% 1.25% Remainder of Farm Up to $1,940,000(d) 0.50%(b) 0.50%(b) Over $1,940,000(d) 1.00%(b) 1.00%(b) Non-homestead (2b) 1.00%(b) 1.00%(b) (a) State tax is applicable to these classifications. (b) Exempt from referendum market value based taxes. (c) Legislative increases, payable 2018. Historical valuations are: Payable 2017 - $115,000; Payable 2016 - $106,000; and Payable 2015 - $100,000. (d) Legislative increases, payable 2018. Historical valuations are: Payable 2017 - $2,050,000; Payable 2016 - $2,140,000; Payable 2015 - $1,900,000; Payable 2014 - $1,500,000; and Payable 2013 - $1,290,000. NOTE: For purposes of the State general property tax only, the net tax capacity of non-commercial class 4c(1) seasonal residential recreational property has the following class rate structure: First $76,000 – 0.40%; $76,000 to $500,000 – 1.00%; and over $500,000 – 1.25%. In addition to the State tax base exemptions referenced by property classification, airport property exempt from city and school district property taxes under M.S. 473.625 is exempt from the State general property tax (MSP International Airport and Holman Field in Saint Paul are exempt under this provision). APPENDIX IV IV -1 EXCERPT OF 2017 COMPREHENSIVE ANNUAL FINANCIAL REPORT Data on the following pages was extracted from the City’s Comprehensive Annual Financial Report (“CAFR”) for fiscal year ended December 31, 2017. The reader should be aware that the complete financial statements may contain additional information which may interpret, explain or modify the data presented here. The City’s CAFRs for the years ending 1996 through 2016 were awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA). The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. The City has submitted its CAFR for the 2017 fiscal year to GFOA. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized CAFR, whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Lino Lakes. 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 ftmd information of the City of Lino Lakes, Minnesota, as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the City of Lino Lakes, Minnesota's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design. implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the financial statements are :free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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. Oplnlom In our opinion, the fmancial 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 infonnation of the City of Lino Lakes, Minnesota, as of December 31, 2017, 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. Emphasis of Matter As described in Note 20 to the :financial statements, the City of Lino Lakes, Minnesota adopted new accounting guidance, GASB Statement No. 75, Accounting and Financial Reporting/or Postemployment Benefits Other Than Pensions for the year ended December 31, 2017. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary comparison information, and the schedules of OPEB and pension information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential pan of financial reporting for placing the basic fmancial 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 lmowledge 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 Lino Lakes, Minnesota's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, statistical section and other information are presented for purposes of additional analysis and are not a required part of the basic financial stat.ements. The combining and individual nonmajor fimd financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory section, the statistical section and other information 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. Other Reporting Required by Government Auditing Standards In accordance with Governmen.t Auditing Standards, we have also issued our report dated May 29, 2018, on our consideration of the City of Lino Lakes, Minnesota's internal control over financial reporting and on our tests ofits compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over :financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over :financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Lino Lakes, Minnesota's internal control over :financial reporting and compliance. ~ ..L c....,,, u-1. REDPATII AND COMPANY, LTD. St. Paul, Minnesota May29,2018 IV-2 MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Lino Lakes, Minnesota (the City), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 20 I 7. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report. Financial Highlights The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $93,293,613 (net position). Of this amount, $26,863,256 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. The City's total net position increased by $5,442,106. As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of$24,056,122, a decrease of$3,774,647. Of this amount, $5,289,641 is restricted by external constraints established by creditors, grantors, contributors, or by state statutory provisions. At the end of the current fiscal year, the general fund balance was $6,816,925. Unassigned fund balance for the general fund was $6,573,608, or 65% of total general fund expenditures and other financing uses. Total outstanding debt decreased by $7,764,838 during 2017. Refunding bonds in the amount of$3,575,000 were issued during November 2016, the proceeds from which were used to pay off two bonds on February I, 2017. In addition, the City prepaid the 2009A Series Note with Anoka County. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: I) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private-sector business. Management's Discussion and Analysis The Statement of Net Position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods ( e.g. uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public services, conservation of natural resources and community development The business-type activities of the City include a water utility and sewer utility. The government-wide financial statements are statements I and 2 of this report. Fund Financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City's near term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures and change in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. IV-3 Management's Discussion and Analysis Toe City maintains five individual major governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balance for the following major funds: • General Fund • G.O. Improvement Bonds of2005A-Debt Service Fund • 0.0. Improvement Notes of2009A-Debt Service Fund • 0.0. Improvement Bonds of2016B-Debt Service Fund • Area and Unit Charge -Capital Project Fund Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. Toe City adopts an annual appropriated budget for its General Fund and its Program Recreation special revenue fund. A budgetary comparison schedule has been provided for those funds to demonstrate compliance with this budget. The basic governmental fund financial statements are statements 3 through 6 of this report. Proprietary funds. Toe City maintains two enterprise funds as a part of its proprietary fund type. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Toe City uses enterprise funds to account for its water and sewer utilities. Toe proprietary fund statements provide the same type of information as the government- wide financial statements, only in more detail. Toe proprietary fund financial statements provide separate information for the water and sewer funds, which are considered to be major funds of the City. The basic proprietary fund financial statements are statements 7 through 9 of this report. Fiduciary Funds. Fiduciary funds are used to account for resources held by the City as an agent for individuals, private organizations, or other governments. Fiduciary funds are not reflected by the government-wide financial statements because the resources of those funds are not available to support the City's own programs. Toe basic fiduciary fund statements are Statements 10 and 28. Notes to the financial statements. Toe notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Toe notes to the financial statements can be found following Statement 10. Other information. The combining statements referred to earlier in connection with non- major governmental funds are presented immediately following the required supplementary Management's Discussion and Analysis information. Combining and individual fund statements and schedules are presented as Statements 19 through 27. Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities by $93,293,613 at the close of the most recent fiscal year. Toe largest portion of the City's net position ($54,700,209, or 59%) reflects its net investment in capital assets ( e.g. land, buildings, equipment, and infrastructure) less any related debt used to acquire those assets that is still outstanding. Toe City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of Lino Lakes' Net Position Governmental Activities Business-TlE!!; Activities Totals 2017 2016 2017 2016 2017 ~ Assets: Current and other assets $32,942,034 $37,480,144 $15,272,668 $14,501,255 $48,214,702 $51,981,399 CapitaJassets 42,6111027 41!154~25 3118311950 311860,608 74,442,977 ~ Total assets $751553,061 $781634,569 $47,104,618 $46.361,863 $122,6571679 $124,996,432 Deferred outflows of resources $5,625,220 $8,780,333 $97,118 $1681302 $517221338 $8,948,635 Liabilities: Loog-tmn liabilities oUl!randing $27,257,669 $42,409,997 $413,334 $468,598 $27,671,003 $42,878,595 Other liabilities 894136 11331~38 43453 287,286 937,589 ~ Tota11iabilities $28,151,805 $431741,335 $456,787 $755,884 $28.6081592 S44,497,219 Deferred inflows of resources $6.4101858 $115461117 $66,954 $50 224 $61477.812 ~• t Netposition: Net investment in capital assets $22,868,259 $18,597,344 $31,831,950 $31,860,610 $54,700,209 $50,457,954 Restricted 11,730,147 13,342,852 11,730,147 13,342,852 Unrestricted 1210171212 10,187,254 1418461045 13!8631447 2618631!:57 241050,701 Total net position $461615,618 $421127,450 ~677,995 $451724,057 $93,2931613 $87,8:5I 1S_Q_7 $11,730,147 of the City's net position represents resources that are subject to external restrictions on how they may be used. Toe remaining balance of unrestricted net position ($26,863,257) may be used to meet ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. IV-4 Management's Discussion and Analysis The City's net position increased by $5,442,106 during 2017. Key elements of this increase are as follows: City of Lino Lakes' Changes in Net Position Governmental Activities Business-Tre_e Activities Totals ~~ ~~ ..2Q!Z..._~ Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: General property taxes Tax increment $3,600,902 $2,744,984 1,106,014 722,858 4,141,383 5,046,307 9,441,819 9,049,671 312,152 293,829 181,712 91,385 207,792 210,142 $2,849,797 836,029 106,488 $2,754,219 1,543,947 107,119 $6,450,699 1,106,014 4,977,412 9,441,819 312,152 181,712 314,280 $5.499,203 722,858 6,590,254 9,049,671 293,829 91,385 317,261 Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on disposal of capital assets 38,022 66,255 38,022 66,255 Total revenues 19,029,796 18225431 3,792,314 4,405,285 22,822,110 22,630,716 Expenses: General government Public safety Public services Conservation of naturual resources Community development Interest and fees on long-term debt Water Sewer Total expenses Increase in net position before special item and transfers Special item Transfers Change in net position Net position -January I, as previously reported Prior period adjustment Net position -January I, as restated Net position -December 31 Governmental Activities 2,395,633 5,166,538 5,492,395 200,016 459,455 518,897 14,232,934 4,796,862 (308,694) 4,488,168 42,819,930 (692,480) 42,127.450 $46,615,618 2.456,864 6,567,523 6,228,893 216,905 454,144 831,529 16,755,858 1,469,573 1,333.166 (914.414) I 888,325 40,754,159 177,446 40,931,605 $42,819,930 1,245,249 1,901,821 3,147,070 645,244 308,694 953,938 45,724,057 45,724,057 $46,677,995 1,367,693 1.850,962 3,218,655 1,186,630 914,414 2,101 044 43,800.459 (177,446) 43,623,013 $45,724,057 2,395,633 5,166,538 5,492.395 200,016 459,455 518,897 1,245,249 1,901,821 17,380,004 5,442,106 5,442,106 88,543,987 (692,480) 87,851,507 $93,293,6 I 3 Governmental activities increased the City's net position by $4,488,168 during 2017. The cumulative effect of increased charges for services and decreases in public safety expenses and public services spending account for the increase in 2017. This increase was partially offset by transfers out to business-type activities of $308,694. 2,456,864 6,567,523 6,228,893 216,905 454,144 831,529 1,367,693 1,850,962 19,974,513 2,656,203 1,333,166 3,989,369 84,554,618 84 554 618 $88,543,987 Management's Discussion and Analysis Below are specific graphs which provide comparisons of the governmental activities revenues and expenses: Governmental Activities -Revenues Generalpropenytaxe5 49% Governmental Activities -Expenses Public Services 39% Conservation ofNatural Interest and Fees on Long- Term Debt Charges for services 19% Operating grants and contributions 6% Capital grants and contributions 22% Public safety 36% IV-5 Management's Discussion and Analysis Business-Type Activities Business-type activities increased the City's net position by $953,938 during 2017. The increase was due to contributions of capital assets from private sources, as well as the City's governmental activities, in the amount of$1,006,239. Below are specific graphs which provide comparisons of the business-type activities revenues and expenses: Capital grants and contributions 22% Business-Type Activities -Revenues Business-Type Activities -Expenses s,- 60% Unrestricted investment earnings 3% Charges for services 75% Water 40% Management's Discussion and Analysis Financial Analysis of the Government's Funds Governmental Funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of$24,056,122. Approximately 22% of this total amount ($5,289,641) constitutes fund balance restricted by external constraints established by creditors, grantors, contributors, or by state statutory provisions. $344,976 of fund balance is not in a spendable form, $175,401 has been committed, $14,581,669 has been assigned, and $3,664,435 is unassigned. The fund balance of the General Fund increased by $560,734 in 2017, while the City anticipated the use of $518,000 of the general fund balance. Overall, signs of continued economic recovery are being seen with increased building and development activities taking place which resulted in increased license and permit revenues for the year. The City also saw a significant increase in the number of roofmg and siding permits issued during the year due to a storm causing significant damage throughout the City in June of 2017. Finally, reduced expenditures, primarily for personal services through vacant positions, fuel costs, and professional and contractual services helped to increase the year end fund balance. The G.O. Improvement Bonds of2005A fund balance decreased by $226,135. The 2005A series bonds were refunded in 2016 and the fund made a debt service payment of$2,420,000 in February 2017. The G.O. Improvement Note of2009A fund, to service the debt issued by Anoka County as the City's financial commitment for the I-35E interchange project, ended the year with a fund balance of $0, a decrease of $22. The City prepaid the note in 2017 using MSA funds. As deferred special assessments are received the MSA funds will be replenished. The outstanding balance on the note as of December 31, 2017 was $0. The G.O. Improvement Bonds of2016B fund decreased by $1,932,000. The 2016B series bonds were issued to refund the 2005A series bonds and fund the Legacy at Woods Edge improvements. Future tax increment and land sale proceeds are expected to cover debt service and the interfund loan payable. The Area and Unit Charge fund has a total fund balance of$7,656,155, all of which is assigned for financing capital improvements. The fund balance during the current year increased by $1,389,955 due to the collection of prepaid special assessments and trunk utility development fees. IV-6 Management's Discussion and Analysis The combined fund balance ofother governmental funds decreased $3,567,167 during 2017. Primary reasons for the decrease include the issuance of $1,600,000 of G.O. Tax Abatement Refunding Bonds, Series 2016C, the proceeds from which were used to pay-off the G.O. Tax Abatement Bonds of 2006C on February 1, 2017. Also, the fund balance of the Municipal State Aid (MSA) Construction fund decreased $1,169,000 as MSA funds were used to prepay the 2009A Note with Anoka County for the city's share of the 35E Interchange project. Proprietary funds. The City's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The water fund has total net position at year-end of$22,621,564, of which $5,455,247 is unrestricted. The increase in net position of $602,293 was primarily due to capital contributions, partially offset by a net operating loss. The sewer fund has total net position at year-end of $24,056,431, of which $9,390,798 is unrestricted. The increase in net position of $351,645 was primarily due to capital contributions, partially offset by a net operating loss. Budgetary Highlights General Fund The General Fund budget was amended several times during the year to reflect increased revenues relative to building and licensing activities, state aid, and other operating transfers, as well as changes in expenditure areas due to personnel vacancies, changes to professional and contracted services, variances in supplies, investment in the Civic Complex air conditioning units, and finally the transfer for the park land loan and the comprehensive plan update budgeted over 3 years (2016-2018). The final amended expenditure budget was $150,759 less than the original adopted budget. Revenues were $5,934 over budget for the year. General property tax, intergovernmental revenue, and miscellaneous refunds and reimbursements were $66,444 under budget; however, this variance was more than offset by greater than anticipated license and permit revenues, fines and forfeits, and investment earnings. Expenditures came in under budget by $311,492 due to many factors including lower than expected personal service costs from vacant positions. Fuel and fleet maintenance supply costs were much lower than anticipated and the Civic Complex air-conditioning upgrades were not completed in 2017, resulting in favorability in capital outlay. Management's Discussion and Analysis Capital Asset and Debt Administration Capital assets. The City's investment in capital assets for its governmental and business- type activities as of December 31, 2017, amounted to $74,442,977 (net of accumulated depreciation), an increase of$1,427,942 from the prior year. This investment in capital assets includes land, wetland credits, construction in progress, buildings, equipment, vehicles, and infrastructure. The City completed the Shenandoah Area street improvements, NorthPointe 2nd Addition infrastructure improvements, Fire Station #2, Pump House #6, the reconditioning of Water Tower #1, Aqua Lane to Blackduck Drive water main improvements, the build-out of two Ford F-650 light rescue fire vehicles, and the upgrade of the air conditioning system (Phase I ) at the Civic Complex. The City has continued to work to complete the Birch Street tum lanes and infrastructure improvements in 2017. In addition, the City began land preparation activities for NorthPointe Park, the upgrade of the air conditioning system (Phase II) at the Civic Complex, and the Council Chambers upgrade. Developer lead infrastructure improvements at various stages of completion include NorthPointe 3rd, 4'h, 5th, and 6th Additions, Saddle Club 2nd and 3rd Additions, Century Farms 6th Addition, Woods Edge 1st and 2nd Additions, Clearwater Creek, St Clair Estates, and Chavez Estates. Land Wetland credits Construction in progress Buildings Office equipment and furniture Vehicles Machinery and shop equipment Other equipment Infrastructure Total City of Lino Lakes' Capital Assets (Net of Depreciation) Governmental Activities Business-T~ee Activities 2017 2016 2017 -----1Q.1i $3,320,059 $3,275,859 162,372 2.482,238 8,961.062 1,507,153 5,617,436 6,376,011 2,706,355 236,777 157,704 2,016,355 1,370,732 1,133,624 1,017,332 147,568 167,440 267,096 206,385 26,616,495 23 458,996 30,177,229 26,075,734 $42,611,027 $41,154,425 $31,831,950 $31,860,610 Totals 2017 $3,320,059 162,372 3,989,391 6,376,011 236,777 2,016,355 1,281,192 267,096 56,793,724 $74,442,977 2016 $3,275,859 14,578,498 2,706,355 157,704 1,370,732 1,184,772 206,385 49,534,730 $73,015,035 Additional information on the City's capital assets can be found in Note 5 to the financial statements. IV-7 Management's Discussion and Analysis Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $19,976,243. Of this amount, $14,714,250 comprises tax supported debt and $4,905,000 is special assessment debt. All outstanding debt carries the general obligation backing for which the City is liable in the event of default by the property owners subject to the specific taxes, special assessments or revenues pledged to the retirement of the debt. In addition, the City has a note payable to the City of Circle Pines for its share of the cost of capital equipment to be used by the North Metro Telecommunications Commission in the operation of a cable communications system in the amount of$233,475. City of Lino Lakes' Outstanding Debt Governmental Activities Business-T~ee Activities Totals 2017 2016 2017 2016 2017 2016 General obligation bonds $14,947,725 $18,460,250 $ $ $14,947,725 $18,460,250 G.O. special assessment bonds 4,905,000 7,795,000 4,905,000 7,795,000 Note payable -Anoka County 1,345,000 1,345,000 Bond premium 123,518 140,831 123,518 140,831 Total $19,976,243 $27,741,081 $0 $0 $19,976,243 $27,741,081 The City of Lino Lakes' total bonded debt decreased by $7,764,838 during the current fiscal year. The key factors for the change include the issuance of $311,000 of Certificates of Indebtedness to finance capital equipment purchases, as well as principal retired in the · amount of $8,508,525 during the year. Additional information on the City's long-term debt can be found in Note 6. Requests for information. This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, City of Lino Lakes, 600 Town Center Parkway, Lino Lakes, Minnesota, 55014. IV-8 CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET POSITION December 31, 2017 Assets: Cash and investments Accrued interest receivable Due from other governmental units Accounts receivable -net Prepaid items Internal balances Inventory Taxes receivable Special assessments receivable Long-term notes receivable Net pension asset Capital assets -nondepreciable Capital assets -net of accumulated depreciation Total assets Deferred outflows of resources related to pensions Liabilities: Accounts payable and other current liabilities Accrued interest payable Compensated absences payable: Due within one year Due in more than one year Other post employment benefits Bonds and notes payable: Due within one year Due in more than one year Net pension liability: Due in more than one year Total liabilities Deferred inflows ofresources: Pension related OPEB related Total deferred inflows of resources Net position: Net investment in capital assets Restricted for: Debt service Economic development Tax increment purposes Environmental improvements -nonexpendable Environmental improvements -expendable Other purposes Unrestricted Total net position Primary Government Governmental Business-Type Activities Activities $24,934,980 $13,921,698 84,517 133,556 1,614 51,052 376,957 244,976 27,082 (914,949) 914,949 30,368 100,047 7,954,861 225,000 127,994 5,964,669 1,507,153 36,646,358 30,324,797 75,553,061 47,104,618 5,625,220 97,118 736,608 43,453 157,528 492,042 38,130 276,866 28,426 738,061 8,480 3,130,600 16,845,643 5,774,457 338,298 28,151,805 456,787 6,359,775 66,954 51,083 6,410,858 66,954 22,868,259 31,831,950 10,564,305 225,000 479,695 100,000 23,316 337,831 12,017,212 14,846,045 $46,615,618 $46,677,995 The accompanying notes are an integral part of these financial statements. Total $38,856,678 84,517 135,170 428,009 272,058 30,368 100,047 7,954,861 225,000 127,994 7,471,822 66,971,155 122,657,679 5,722,338 780,061 157,528 530,172 305,292 746,541 3,130,600 16,845,643 6,112,755 28,608,592 6,426,729 51,083 6,477,812 54,700,209 10,564,305 225,000 479,695 100,000 23,316 337,831 26,863,257 $93,293,613 IV-9 CITY OF LINO LAKES, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2017 Functions/Programs Primary government: Governmental activities: General government Public safety Public services Conservation of natural resources Community development Interest and fees on long-term debt Total governmental activities Business-type activities: Water Sewer Total business-type activities Total primary government ~enses $2,395,633 5,166,538 5,492,395 200,016 459,455 518,897 14,232,934 1,245,249 1,901,821 3,147,070 $17,380,004 The accompanying notes are an integral part of these financial statements. ~Revenues Charges For Services $550,117 2,249,152 801,633 3,600,902 1,150,834 1,698,963 2,849,797 $6,450,699 ProJ!!!!!!c Revenues Operating Capital Grants and Grants and Contributions Contributions $1,460 351,258 661,302 91,994 1,106,014 0 $1,106,014 General revenues: General property taxes Tax increment Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on disposal of capital assets Transfers $ 4,141,383 4,141,383 421,608 414,421 836,029 $4,977,412 Total general revenues and transfers Change in net position Net position -January I, as previously reported Prior period adjustment Net position -January I, as restated Net position -December 31 Net (Expense) Revenue and Changes in Net Position ~ Government Governmental Business-Type Activities Activities ($1,844,056) $ (2,566,128) 111,923 (108,022) (459,455) (518,897) (5,384,635) 0 327,193 211,563 0 538,756 (5,384,635) 538,756 9,441,819 312,152 181,712 207,792 106,488 38,022 (308,694) 308,694 9,872,803 415,182 4,488,168 953,938 42,819,930 45,724,057 (692,480) 42,127,450 45,724,057 $46,615,618 $46,677,995 The accompanying notes are an integral part of these financial statements. Total ($1,844,056) (2,566,128) 111,923 (108,022) (459,455) (518,897) (5,384,635) 327,193 211,563 538,756 (4,845,879) 9,441,819 312,152 181,712 314,280 38,022 10,287,985 5,442,106 88,543,987 (692,480) 87,851,507 $93,293,613 IV-10 CITY OF LINO LAKES, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2017 Assets Cash and investments Accrued interest receivable Due from other governmental units Accounts receivable -net Prepaid items Taxes receivable: Due from county Delinquent Special assessments receivable: Due from county Delinquent Deferred Interfund loan receivable Long-term notes receivable Total assets General Fund $6,648,162 84,517 133,556 23,758 243,317 23,611 56,559 329 $7,213,809 333 G.O. 342G.O. Improvement Improvement 406Areaand Note of2009A Bonds of2016B UnitChars;e $ $944,886 $7,528,465 25,439 2,400 9,129 2,639,483 2,994,379 1,117,458 100,361 $2,639,483 $3,939,265 $8,783,252 Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities: Accounts payable $194,538 $ $705 $510 Salaries payable 110,845 Due to other governmental units 34,613 Contracts payable Interfund loan payable 2,876,643 Total liabilities 339,996 0 2,877,348 510 Deferred inflows of resources: Unavailable revenue 56,888 2,639,483 2,994,379 1,126,587 Fund balance: Nonspendable 243,317 Restricted Committed Assigned 7,656,155 Unassigned 6,573,608 (1,932,462} Total fund balance 6,816,925 0 (1,932,462} 7,656,155 Total liabilities, deferred inflows ofresources, and fund balance $7,213,809 $2,639,483 $3,939,265 $8,783,252 The accompanying notes are an integral part of these financial statements. Other Total Governmental Governmental Funds Funds $9,813,467 $24,934,980 84,517 133,556 1,855 51,052 1,659 244,976 6,789 30,400 13,088 69,647 798 3,198 9,151 18,280 1,181,734 7,933,383 2,934,516 3,034,877 225,000 225,000 $14,188,057 $36,763,866 $257,313 $453,066 453 111,298 12,176 46,789 125,455 125,455 1,073,183 3,949,826 1,468,580 4,686,434 1,203,973 8,021,310 101,659 344,976 5,289,641 5,289,641 175,401 175,401 6,925,514 14,581,669 (976,711} 3,664,435 11,515,504 24,056,122 $14,188,057 $36,763,866 IV-11 CITY OF LINO LAKES, MINNESOTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION December 31, 2017 Fund balance -total governmental funds (Statement 3) Net position reported for governmental activities in the Statement ofNet Position is different because: Certain assets used in governmental activities are not current financial resources and, therefore, are not reported in the funds. Capital assets Net pension asset Other long-term assets are not available to pay for current-period expenditures and therefore, are reported as unavailable revenue in the funds: Delinquent taxes receivable Delinquent special assessments receivable Deferred special assessments receivable Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Long-term liabilities at year end consist of: Bonds and notes payable Unamortized bond premiums Unamortized bond discounts Accrued interest payable Compensated absences payable Other post employment benefits Net pension liability Deferred outflows and inflows of resources related to pensions and OPEB are associated with long-term liabilities that are not due and payable in the current period, and therefore, are not reported in the funds. Balances at year end are: Deferred outflows of resources Deferred inflows of resources Net position of governmental activities (Statement 1) $24,056,122 42,611,027 127,994 69,647 18,280 7,933,383 (19,852,725) (142,182) 18,664 (157,528) (768,908) (738,061) (5,774,457) 5,625,220 (6,410,858) $46,615,618 IV-12 CITY OF LINO LAKES, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For The Year Ended December 31, 2017 3270.0. 333 G.O. 3420.0. Improvement Improvement Improvement 406Areaand Other Total General Fund Bonds of2005A Note of2009A Bonds of2016B UnitC!!5e Governmental Funds Governmental Funds Revenues: General property taxes $7,338,876 $ $ $ $ $2,121,713 $9,460,589 Tax increment 312,152 312,152 Licenses and permits 1,447,571 1,447,571 Intergovernmental 667,520 413,433 1,080,953 Special assessments 4,293 287,628 1,325,125 666,928 2,283,974 Charges for services 302,038 257,468 768,275 1,327,781 Fines and forfeits 147,977 465,616 613,593 Investment earnings 40,913 6,486 69,217 91,176 207,792 Miscellaneous 295,439 115,201 410,640 Total revenues 10,244,627 6,486 287,628 0 1,651,810 4,954,494 17,145,045 Expenditures: Current: General government 1,945,691 ' 6,978 1,952,669 Public safety 4,347,108 13,409 4,360,517 Public services 2,178,725 25,307 1,210,380 3,414,412 Conservation of natural resources 183,392 183,392 Community development 426,653 6,491 433,144 Capital outlay: General government 87,104 228,895 315,999 Public safety 66,587 893,831 960,418 Public services 868,184 868,184 Conservation of natural resources 8,247 8,247 Debt service: Principal 2,360,000 1,345,000 4,353,525 8,058,525 Interest and fiscal charges 60,117 68,707 17,015 494,190 640,029 Total expenditures 9,243,507 2,420,117 1,413,707 17,015 25,307 8,075,883 21,195,536 Revenues over (under) expenditures 1,001,120 (2,413,631) (1,126,079) (17,015) 1,626,503 (3,121,389) (4,050,491) Other financing sources (uses): Transfers in 439,373 2,187,503 1,126,057 272,506 2,959,004 6,984,443 Transfers out (879,759) (7) (2,187,503) (236,548) (3,819,110) (7,122,927) Issuance of debt 311,000 311,000 Proceeds from sale of capital assets 103,328 103,328 Total other financing sources (uses) (440,386) 2,187,496 1,126,057 (1,914,997) (236,548) (445,778) 275,844 Net change in fund balance 560,734 (226,135) (22) (1,932,012) 1,389,955 (3,567,167) (3,774,647) Fund balance -January I 6,256,191 226,135 22 (450) 6,266,200 15,082,671 27,830,769 Fund balance -December 31 $6,816,925 $0 $0 ($1,932,462i $7,656,155 $11,515,504 $24,056,122 The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. IV-13 CITY OF LINO LAKES, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended December 31, 2017 Net change in fund balance -total governmental funds (Statement 5) Amounts reported for governmental activities in the Statement of Activities are different because: 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: Depreciation Capital outlay Capital outlay not capitalized Various other transactions involving capital assets increase (decrease) net position on the Statement of Activities, but are not reported in governmental funds because they do not provide ( or use) current financial resources: Contributions of infrastructure from private sources Contributions of infrastructure to business-type activities Gain (loss) on disposal of capital assets Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds: Change in delinquent taxes receivable Change in delinquent special assessments receivable Change in deferred special assessments receivable The issuance of long-term debt provides current financial resources to governmental funds, while repayment of the principal oflong-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effects of bond premiums and discounts when the debt is first issued, whereas amounts are deferred and amortized over the life of the debt in the Statement of Activities. Bonds and notes issued Repayment of principal Amortization of bond premiums and discounts Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Expenses reported in the Statement of Activities include the effects of the changes in these expense accruals as follows: Change in accrued interest payable Change in compensated absences payable Change other post employment benefits liability and related deferred inflows of resources Pension expense in governmental funds is measured by current year employee contributions. Pension expense in the Statement of Activities is measured by the change in the net pension liability and related deferred inflows and outflows of resources. This is the amount by which pension expense differed from pension contributions. Change in net position of governmental activities (Statement 2) The accompanying notes are an integral part of these financial statements. ($3,774,647) (2,959,683) 2,152,848 118,240 2,380,713 (170,210) (65,306) (18,770) 5,570 (544,874) (311,000) 8,058,525 17,313 103,819 (34,493) 483 (470,360) $4,488,168 IV-14 CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2017 Assets: Current assets: Cash and cash equivalents Due from other governmental units Accounts receivable -net Prepaid items Inventory Interfund loan receivable Total current assets Noncurrent assets: Capital assets: Construction in progress Equipment Water and sewer systems Total capital assets Less: Allowance for depreciation Net capital assets Total assets Deferred outflows of resources related to pensions Total assets and deferred outflows Liabilities: Current liabilities: Accounts payable Salaries payable Due to other governments Other accrued liabilities Compensated absences payable -current portion Total current liabilities Noncurrent liabilities: Compensated absences payable -noncurrent portion Other post employment benefits Net pension liability Total noncurrent liabilities Total liabilities Deferred inflows of resources related to pensions Total liabilities and deferred inflows Net position: Investment in capital assets Unrestricted Total net position Business-T~e Activities -Enterprise Funds 601 Water 602 Sewer Total $5,477,346 $8,444,352 $13,921,698 1,614 1,614 157,008 219,949 376,957 9,255 17,827 27,082 30,368 30,368 914,949 914,949 5,673,977 9,598,691 15,272,668 772,676 734,477 1,507,153 143,429 331,225 474,654 24,949,194 23,048,571 47,997,765 25,865,299 24,114,273 49,979,572 (8,698,982) (9,448,640) (18,147,622) 17,166,317 14,665,633 31,831,950 22,840,294 24,264,324 47,104,618 48,559 48,559 97,118 22,888,853 24,312,883 47,201,736 8,256 7,054 15,310 3,917 3,917 7,834 11,683 2,769 14,452 3,289 2,568 5,857 19,065 19,065 38,130 46,210 35,373 81,583 14,213 14,213 28,426 4,240 4,240 8,480 169,149 169,149 338,298 187,602 187,602 375,204 233,812 222,975 456,787 33,477 33,477 66,954 267,289 256,452 523,741 17,166,317 14,665,633 31,831,950 5,455,247 9,390,798 14,846,045 $22,621,564 $24,056,431 $46,677,995 The accompanying notes are an integral part of these financial statements. IV-15 CITY OF LINO LAKES, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS For The Year Ended December 31, 2017 Operating revenues: Charges for services Hook-up charges Water meter sales Other operating revenue Total operating revenues Operating expenses: Personal services Materials and supplies Contractual services MCES sewer charges Depreciation Utilities Other Total operating expenses Operating income (loss) Nonoperating revenues: Investment earnings Income (loss) before contributions and transfers Contributions and transfers: Capital contributions from private sources Capital contributions from governmental activities Transfer in Transfer out Total contributions and transfers Change in net position Net position -January 1 Net position -December 31 Business-T~e Activities -Ente~rise Funds 601 Water 602 Sewer Totals $1,065,379 $1,672,456 $2,737,835 33,010 26,497 59,507 37,606 37,606 14,839 10 14,849 1,150,834 1,698,963 2,849,797 264,673 268,134 532,807 172,864 51,038 223,902 102,165 93,992 196,157 942,972 942,972 580,804 477,094 1,057,898 102,877 41,297 144,174 21,866 27,294 49,160 1,245,249 1,901,821 3,147,070 (94,415) (202,858) (297,273) 39,612 66,876 106,488 (54,803) (135,982) (190,785) 421,608 414,421 836,029 166,246 3,964 170,210 104,969 104,969 209,938 {35,727) (35,727} (71,454) . 657,096 487,627 1,144,723 602,293 351,645 953,938 22,019,271 23,704,786 45,724,057 $22,621,564 $24,056,431 $46,677,995 The accompanying notes are an integral part of these financial statements. IV-16 CITY OF LINO LAKES, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 201 7 Cash flows from operating activities: Receipts from customers and users Payment to suppliers Payment to employees Net cash flows provided by operating activities Cash flows from noncapital financing activities: Interfund loans provided to other funds Transfers in Transfers out Net cash flows provided by (used in) noncapital financing activities Cash flows from capital and related financing activities: Acquisition of capital assets Net cash flows provided by (used in) capital and related financing activities Cash flows from investing activities: Investment earnings Net increase (decrease) in cash and cash equivalents Cash and cash equivalents -January 1 Cash and cash equivalents -December 31 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation Changes in assets and liabilities: Decrease (increase) in due from other governmental units Decrease (increase) in accounts receivable -net Decrease (increase) in prepaid items Decrease (increase) in inventory Decrease (increase) in deferred outflows of resources Increase (decrease) in payables Increase (decrease) in other accrued liabilities Increase (decrease) in compensated absences Increase (decrease) in other post employment benefits Increase (decrease) in net pension liability Increase (decrease) in deferred inflows of resources Total adjustments Net cash provided by operating activities Noncash investing, capital and financing activities: Contributions of capital assets Business-Type Activities -Enterprise Funds 601 Water 602 Sewer Totals $1,136,110 $1,695,698 $2,831,808 (444,107) (1,301,838) (1,745,945) (248,394) (252,391) (500,785) 443,609 141,469 585,078 (355,839) (355,839) 104,969 104,969 209,938 (35,727) (35,727) (71,454) 69,242 (286,597) (217,355) (23,000) (23,000) (23,000) 0 (23,000) 39,612 66,876 106,488 529,463 (78,252) 451,211 4,947,883 8,522,604 13,470,487 $5,477,346 $8,444,352 $13,921,698 ($94,415) ($202,858) ($297,273) 580,804 477,094 1,057,898 409 409 (14,724) (3,674) (18,398) 906 1,259 2,165 51,459 51,459 35,592 35,592 71,184 (96,700) (146,504) (243,204) (46) (582) (628) 83 83 166 4,240 4,240 8,480 (31,955) (31,955) (63,910) 8,365 8,365 16,730 538,024 344,327 882,351 $443,609 $141,469 $585,078 $587,854 $418,385 $1,006,239 The accompanying notes are an integral part of these financial statements. IV-17 CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET POSITION FIDUCIARY FUNDS December 31, 2017 Assets: Cash and investments Liabilities: Deposits payable The accompanying notes are an integral part of these financial statements. $1,719,511 $1,719,511 IV-18 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Lino Lakes, Minnesota (the City) is a public corporation formed under Minnesota Statute 410. As such, the City is under home rule charter regulations and applicable statutory guidelines. The basic financial statements of the City have been prepared in conformity with U.S. generally accepted accounting principles as applied to govermnental units by the Governmental Accounting Standards Board (GASB). The following is a sunnnary of significant accounting policies: A. FINANCIAL REPORTING ENTITY In accordance with GASB pronouncements and accounting principles generally accepted in the United States of America, the financial statements of the reporting entity include those of the City (the primary government) and its component units. The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. COMPONENT UNITS In conformity with accounting principles generally accepted in the United States of America, the financial statements of the component units have been included in the financial report as blended component units. The Economic Development Authority (EDA) of Lino Lakes is an entity legally separate from the City. However, for financial reporting purposes, the EDA is reported as ifit were a part of the City's operation because the governing body is substantially the same as the governing body of the City and a financial benefit or burden relationship exists between the City and the EDA. The EDA does not issue separate financial statements. The Housing and Development Authority (HRA) of Lino Lakes is an entity legally separate from the City. However, for financial reporting purposes, the HRA is reported as ifit were part of the City's operatious because the members of the City Council serve as commission members and a financial benefit or burden relationship exists between the City and the HRA. The HRA has not yet incurred any financial activity. B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the non-fiduciary activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or business-type activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or business-type activity. Program revenues include I) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or business-type activity and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or business-type activity. Taxes and other items not included among program revenues are reported instead as general revenues. The fund financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. The CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 emphasis of governmental and proprietary fund financial statements is on major individual governmental and enterprise funds, with each displayed as separate columns in the fund financial statements. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or incidental activities. The City reports the following major governmental funds: General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. General Obligation Improvement Bonds of 2005A Fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on general long-term debt. The fund was closed in 2017. General Obligation Improvement Note of 2009A Fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on general long-term debt. The note was used to finance improvement projects at the I-35E and County Road 14 interchange. General Obligation Improvement Bonds of2016B Fund accounts for the accumulation ofresources for, and the payment of, interest, principal and related costs on general long-term debt. Area and Unit Charge Fund accounts for the collection of water and sewer unit charges to be used for debt payments and construction of governmental infrastructure. The City reports the following major proprietary funds: The Water Fund accounts for customer water service charges which are used to finance water system operating expenses. The Sewer Fund accounts for customer sewer service charges which are used to finance sanitary sewer system operating expenses. Additionally, the City reports the following fund type: Agency funds account for assets held as an agent for individuals, private organizations and other governmental units. The City's agency fund accounts for pass-through contractor's deposits relating to prospective developments. C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements IV-19 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 imposed by the provider have been met. The City's only fiduciary funds are agency funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement ofresults of operations. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as we11 as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Proprietary Funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the water and sewer enterprise funds are charges to customers for sales and services. Operating expenses for 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. D. BUDGETS Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for the General Fund and the Program Recreation Special Revenue Fund. Budgeted expenditure appropriations lapse at year-end. Budgeted amounts are reported as originally adopted and as amended by the City Council. 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 to facilitate effective cash management. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 E. LEGAL COMPLIANCE -BUDGETS The City follows these procedures in establishing the budgetary data reflected in the financial statements: l. The City Administrator submits to the City Council a proposed operating budget (including the General Fund and Program Recreation Special Revenue Fund) for the fiscal year commencing the following January l. 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 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. 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 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 periodically by the City Council for the Capital Project Funds. However, appropriations for major projects 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 department level unless approved by the City Council. Therefore, the legal level of budgetary control is at the department level (i.e. administration, community development, public safety, public services, and other). 9. The City Council may authorize transfers of budgeted amounts between City funds. F. CASH AND INVESTMENTS Cash and investment balances from all funds 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. Investments are stated at fair value, except for investments in external investment pools that meet GASB 79 requirements, which are stated at amortized cost. Interest earnings are accrued at year-end. For purposes of the Statement of Cash Flows, the Proprietary Funds consider 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 Fund types have original maturities of90 days or less. Therefore, the entire balance in such fund types is considered cash equivalents. IV-20 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Permanently restricted cash and investments represents the principal and earnings portion of resources received that must be retained in a permanent fimd. Only earnings from these fimds may be used for purposes that support environmental maintenance and improvements. G. PROPERTY TAX REVENUE RECOGNITION 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 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 I and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 15 and December 15 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. Within 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. Within the governmental fimd financial statements, the City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and received by the City in July, December, and the following January are recognized as revenue for the current year. Taxes collected by the county by December 31 (remitted to the City the following January) are classified as due from county. Taxes not collected by the county by December 31 are classified as delinquent taxes receivable. Delinquent taxes receivable are fully offset by deferred inflows of resources because they are not available to finance current expenditures. The City's property tax revenue includes payments from the Metropolitan Revenue Distribution (Fiscal Disparities Formula) per State Statute 473F. This statute provides a means of spreading a portion of the taxable valuation of commercial/industrial real property to various taxing authorities within the defined metropolitan area. The valuation "shared" is a portion of commercial/industrial property valuation growth since 1971. H. SPECIAL ASSESSMENT REVENUE RECOGNffiON Special assessments are levied against 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 and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not adjusted by City Council or court action. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. Within the government-wide financial statements, the City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported. Within the fimd financial statements, the revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments are collected by the County and remitted by December 31 (remitted to the City the following January) and are also recognized as revenue for the current year. All remaining delinquent, deferred and special deferred assessments receivable in governmental fimds are completely offset by deferred inflows of resources. I. INVENTORY For governmental fimds, the original cost of materials and supplies are recorded as expenditures at the time of purchase. These fimds do not maintain material amounts of inventories. Inventories of the proprietary fimds are stated at cost, which approximates market, using the first-in, first-out (FIFO) method. J. PREPAID ITEMS Certain prepayments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fimd financial statements. Prepaid items are reported using the consumption method and recorded as expenditures/expenses at the time of consumption. K. INTERFUND TRANSACTIONS During the course of operations, numerous transactions occur between individual fimds for goods provided or services rendered. Interfimd services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fimd for expenditures / expenses initially made from it that are properly applicable to another fimd, are recorded as expenditures/expenses in the reimbursing fimd and as reductions of expenditures/expenses in the fimd that is reimbursed. The City provides temporary advances to fimds that have insufficient cash balances by means of an advance from another fimd. Such advances are classified as "advances to/from other fimds." Long- term interfimd loans are classified as "interfimd loan receivable/payable." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." All other interfimd transactions are reported as transfers. IV-21 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 L. CAPITAL ASSETS Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads, sidewalks, street lights, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $2,500 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. All existing City infrastructure has been capitalized regardless of date ptaced in service. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. For the year ended December 31, 2017, no interest was capitalized in connection with construction in progress. Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with accumulated depreciation reflected in the Statement of Net Position. Capital assets are depreciated using the straight-line method over their estimated useful lives. Since surplus assets are sold for an immaterial amount when declared as no longer needed for City purposes, no salvage value is taken into consideration for depreciation purposes. Useful lives vary from 3 to 30 years for buildings, office furniture and equipment, vehicles, machine shop and equipment and other assets, and 15 to 50 years for infrastructure. M. COMPENSATED ABSENCES It is the City's policy to pennit employees to accumulate earned but unused vacation, PTO (Personal Time Oft), extended leave and sick pay benefits. All vacation pay and PTO and the portion of sick pay allowable as severance is accrued in the government-wide and proprietary fund financial statements. The current portion is calculated based on historical trends. N. LONG-TERMOBLIGATIONS In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type Statement of Net Position. Bond premiums and discounts are amortized over the life of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. 0. DEFINED BENEFIT PENSION PLANS For purposes of measuring the net pension liability, deferred outflows and inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to and deductions from PERA's fiduciary net position have been CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 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 payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. P. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expense) that time. The City has one item that qualifies for reporting in the category. It is the pension related deferred outflows of resources reported in the government-wide Statement of Net Position and the proprietary funds Statement of Net Position. In addition to liabilities, the statement of financial position reports 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 therefore, will not be recognized as an inflow of resources (revenue) until that time. The City has pension and OPEB related deferred inflows of resources reported in the government-wide Statement of Net Pension and the proprietary funds Statements ofNet Position. The City also has a type of item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental fund balance sheet. The governmental funds report unavailable revenues from the following sources: property taxes and special assessments not collected within 60 days from year-end. Q. FUND BALANCE CLASSIFICATIONS In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable -consists of amounts that are not in spendable form, such as prepaid items and corpus of any permanent fund. Restricted -consists of amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed -consists of internally imposed constraints. These constraints are established by a resolution approved by the City Council, and committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by resolution. Assigned -consists of internally imposed constraints for the specific purpose of the City's intended use. These constraints are established by the City Council and/or management. The City Council passed a resolution authorizing the Finance Director to assign fund balances and their intended uses. Unassigned -is the residual classification for the general fund and also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the City's policy to first use restricted resources, and then use unrestricted resources as they are needed. IV-22 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 When committed, assigned or unassigned resources are available for use, it is the City's policy to use resources in the following order: I) committed 2) assigned and 3) unassigned. The City formally adopted a fund balances policy for the general fund. The policy establishes an unassigned fund balance range of 40% -50% of general fund operating expenditures. R. USE OF ESTIMATES Note2 The preparation of financial statements in accordance with generally accepted accounting principles (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. DEPOSITS AND INVESTMENTS A. DEPOSITS In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Custodial Credit Risk -Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. Minnesota Statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. The City has no additional deposit policies addressing custodial credit risk. At December 31, 2017, the bank balance of the City's deposits was insured by the FDIC or covered by pledged collateral held in the City's name. Minnesota Statutes require that securities pledged as cQllateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral includes the following: a) United States government treasury bills, treasury notes, treasury bonds; b) Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; c) General obligation securities of any state or local government with taxing powers which is rated "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; d) General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation; and t) Time deposits that are fully insured by the Federal Deposits Insurance Corporation. At December 31, 2017, the carrying amount of the City's deposits with financial institutions was $257,836. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 B. INVESTMENTS Minnesota Statutes authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities, or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. b) Shares of invesbnent companies registered under the Federal Invesbnent Company Act of 1940 and whose only invesbnents are in securities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements. c) State and local securities as follows: I) any security which is a general obligation of any state or local government with taxing powers which is rated "A" or better by a national bond rating service; 2) any security which is a revenue obligation of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; and 3) a general obligation of the Minnesota Housing Finance Agency which is a moral obligation of the State of Minnesota and is rated "A" or better by a national bond rating agency. d) Bankers acceptance of United States banks. e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. t) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers; or, a bank qualified as a depositor. g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469 .178, subdivision 5; or 4 75 .61, subdivision 6. IV-23 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 201 7 At December 31, 2017, the City had the following investments and maturities: Investment Maturities (in Years} Investment T1E,e Wells Fargo money market Morgan Stanley money market 4MFund Brokered CD's Municipal bonds Federal Home Loan Mortgage Corp. Total NR -Not Rated ~ NR NR NR NR . AAA Fair Less Value Than 1 $4,275,289 $4,275,289 24,165 24,165 7,207,927 7,207,927 16,419,585 6,887,755 l0,908,237 1,568,897 11482JIO $40,3171413 $19,964,033 Total investments Deposits Petty cash 1-5 8,413,876 8,746,306 $17,160,182 • AAA $1,975,589; AA+ $463,359 AA $3,507,002; AA-$2,967,505 A+ $710,532 Total cash and investments These amounts are presented in the financial statements as follows: Cash and investments: Governmental and business-type (Statement 1) Fiduciary (Statement 10) Total $38,856,678 1,719,511 $40,576,189 6-8 1,117,954 593,034 1,482,2IO ~ $40,317,413 257,836 940 $40,576,189 The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The hierarchy has three levels. Level I investments are valued using inputs that are based on quoted prices in active markets for identical assets. Level 2 investments are valued using inputs that are based on quoted prices for similar assets or inputs that are observable, either directly or indirectly. Level 3 investments are valued using inputs that are unobservable. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 The City has the following recurring fair value measurements at December 31, 2017: Investment TlP_e Investments at fair value: Brokered CD's Municipal bonds Federal Home Loan Mortgage Corp. Investments not categoriud: Wells Fargo money market Morgan Stanley money market 4MFund Tot.al investments 12/31/2017 $16,419,585 10,908,237 1,482,210 4,275,289 24,165 7,207,927 $40,317,413 Fair Value Measurement Usin,& ~ Level 2 Level 3 $0 $16,419,585 10,908,237 1,482,210 ~ The 4M Fund is an external investment pool investment which is regulated by Minnesota Statutes and the Board of Directors of the League of Minnesota Cities. It is an unrated pool and the fair value of the position in the pool is the same as the value of pool shares. The pool is managed to maintain a portfolio weighted average maturity of no greater than 60 days and seeks to maintain a constant net asset value (NA V) of$ I per share. The pool measures its investments at amortized cost in accordance with GASB Statement No. 79. The 4M Plus Fund requires funds to be deposited for a minimum of 14 calendar days. Withdrawals prior to the 14-day restriction period are subject to penalty equal to 7 days interest on the amount withdrawn. C. INVESTMENT RISKS Custodial Credit Risk -Investments -For investments in securities, custodial credit risk is the risk that in the event offailure of the counterparty to a transaction, the City will not be able to recover the value of its investment securities that are in the possession of an outside party. Investments in investment pools and money markets are not evidenced by securities that exist in physical or book entry form, and therefore are not subject to custodial credit risk disclosures. The City's investment policy requires its brokers be licensed with the appropriate federal and state agencies. A minimum capital requirement of $5,000,000 and at least five years of operation is mandatory. Investments in securities are held by the City's broker-dealers. The securities at each broker-dealer are insured $500,000 through SIPC. Each broker-dealer has provided additional protection by providing additional insurance. This insurance is subject to aggregate limits applied to all of the broker-dealer's accounts. Interest Rate Risk -Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City's policy to minimize interest rate risk includes investing primarily in short-tenm securities and structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations. Credit Risk -Credit risk is the risk than an issuer of an investment will not fulfill its obligation to the holder of the investment. The City's policy to minimize credit risk includes limiting investing funds to those allowable under Minnesota Statute 118A, annually appointing all financial institutions where $0 IV-24 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 investments are held, and diversifying the investment portfolio. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Concentration of Credit Risk -Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government's investment in a single issuer. The City places no limit on the amount it may invest in any one issuer. At December 31, 2017, no individual investments exceeded 5% of the City's total investment portfolio. Note3 RECEIVABLES Significant receivable balances not expected to be collected within one year of December 31, 2017 are as follows: Property Special Taxes Assessments Notes Receivable Receivable Receivable Major Funds: General Fund $35,344 $ $ G.O. Improvement Note of2009A 2,630,915 G.O. Improvement Bonds of2016B 2,994,379 Area and Unit Charge 1,029,733 Nonmajor Funds 8,179 1,042,887 225,000 Total $43,523 $7,697,914 $225,000 Note4 UNAVAILABLE REVENUE Total $35,344 2,630,915 2,994,379 1,029,733 1,276,066 $7,966,437 Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable revenue reported in the governmental funds are as follows: Property Special Taxes Assessments Receivable Receivable _____!.2tal Major Funds: General Fund $56,559 $329 $56,888 G.O. hnprovement Note of2009A 2,639,483 2,639,483 G.O. Improvement Bonds of2016B 2,994,379 2,994,379 Area and Unit Charge 1,126,587 1,126,587 Nonmajor Funds 13,088 1,190,885 1,203,973 Total $69,647 $7,951,663 $8,021,310 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Notes CAPITAL ASSETS Capital asset activity for the year ended December 31, 2017 was as follows: Beginning Ending Balance Increases ~ Transfers Balance Governmental activities: Capital assets, not being depreciated: Land $3.275,859 $44,200 $ $ $3,320,059 Wetland credits 162,372 162,372 Construction in progress 8,961,062 2,742,038 (9,050,652) 010,2101 2,482,238 Total capital assets, not being depreciated 12~36,921 2,948,610 (9,050,652) 0 70,210) ~669 Capital assets, being depreciated: Buildings 6,891,847 4,029,901 10,921,748 Office equipment and furniture 659,440 124,186 783,626 Vehicles 3,417,668 1,102,354 (175,204) 4,344,818 Machinery and shop equipment 2,309,413 275,921 (28,017) 2,557,317 Other equipment 1,034,126 77,284 1,111,410 Infrastructure 80,738,460 5 144 197 85,882,657 Total capital assets, being depreciated 95,050,954 10,753,843 (203,221! 0 105,601,576 Less accumulated depreciation for: Buildings 4,185,492 360,245 4,545,737 Office equipment and furniture 501,736 45,113 546,849 Vehicles 2,046,936 396,889 (115,362) 2,328,463 Machinery and shop equipment 1,292,081 154,165 (22,553) 1,423,693 Other equipment 827,741 16,573 844,314 Infrastructure 57,279,464 1,986,698 59,266,162 Total accumulated depreciation 66,133,450 2,959,683 (137,915) 0 68,955,218 Total capital assets being depreciated -net 28,917,504 7794160 (65,306! (170,210) 36,646~58 Governmental activities capital assets -net $41,154,425 $10,742,770 ($9,115,958) ($170,210! $42,611,027 Beginning Ending Balance Increases Decreases Transfers Balance Business-type activities: Capital assets, not being depreciated: Construction in progress $5,617,436 $1,006,237 ($511161520) $ .......!!.8153 Capital assets, being depreciated: Machinery and shop equipment 474,654 474,654 Water and sewer systems 42,858~2 4 969 313 170,210 47,997,765 Total capital assets. being depreciated 43,332,896 4,969,313 0 170 210 48,472,419 Accumulated depreciation for: Machinery and shop equipment 307,215 19,870 327,085 Water and sewer systems 16,782,509 1,038,028 17,820,537 Total accumulated depreciation 17,089,724 110511898 0 0 18,147,622 Total capital assets being depreciated -net 26,243,172 3 911,415 0 170~10 30,324,797 Business-type activities capital assets -net $31,860,608 $4,9171652 ($5 11161520! $170,210 $31,831,950 IV-25 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Depreciation expense was charged to functions/programs of the City as follows: Governmental activities: General government Public safety Public services Conservation ofnatural resources Community development Total depreciation expense -governmental activities Business-type activities: Water Sewer Total depreciation expense -business-type activities $361,534 346,690 2,248,202 850 2,407 $2,959,683 $580,804 477,094 $1,057,898 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Note 6 LONG-TERM DEBT The City issues general obligation bonds and certificates of indebtedness to provide funds for the acquisition and construction of major capital facilities and equipment. City indebtedness at December 31, 2017 consisted of the following: Final Issue Maturity Interest Original Payable Date Date Rare Issue ~1/17 Govemmenta1 activities: General Obligation Bonds: 2015A Certificates of Indebtedness 02/01/15 12/31118 1.00% $198,250 $66,250 20158 Certificates oflndebtedness 08/25115 12/31/20 1.50% 963,000 593,000 2016A Certificates oflndebtedness 02101/16 12/31/19 1.00% 469,000 314,000 2017 A Certifciates of Indebtedness 03101/17 12/31/20 1.00% 311,000 311,000 G.O. CIP Refunding Bonds, Series 2006E 11/01106 02/01/18 4.00% 2,990,000 425,000 G.O. TIF Bonds, Series 2007 A 01115101 02101/24 4.00% -4.125% 4,215,000 1,625,000 G.O. Refunding Bonds, Series 2012A 11115112 02/01/24 1.00%-2.00% 2,015,000 1,270,000 G.O. Bonds 2015A 08/01/15 02101131 2.00% -3.00% 3,095,000 2,905,000 EDA Lease Revenue Bonds 2015B IOI0l/15 04/01/36 2.00% -3.00% 4,350,000 4,185,000 G.O. Utility Revenue Bonds, Series 2016A 11/23116 02/01/27 2.00% 1,420,000 1,420,000 G.O. Tax Abatement Refimding Bonds 2016C 11/23/16 02/01/23 1.00%-1.50% l,600,000 t,600,000 Total General Obligation Bonds 21,626,250 14,714,250 Special Assessment Bonds: 0.0. Imp & Utility Revenue Bonds. Series 2010A 01/091IO 02/01/20 2.0IWo -3.00% 1,000,000 325,000 G.O. Improvement Bonds, Series, 2013A 01115113 02/01/24 1.25%-4.00% 615,000 435,000 G.O. Improvement Bonds, Series 2014A 11/20114 02101/26 0.40%-2.30% 2,645,000 2,170,000 G.O. Improvement Refunding Bonds, Series 2016B 11/23116 02101/21 0.875% -1.50%, 1,975,000 1,975,000 Total Special Assessment Bonds 6J35,000 4,905,000 G.O. Capital Note, Series 2016A 04/14116 211/2026 2.00% 294,525 233,475 Unamortized bond premiums 199,750 142,182 Unamortized bond discotmts (51,997) (18,664) Compensated absences payable NIA ~ Total Government Activities $28,303,528 $20,745,151 Business-Type Activities: Compensated absences payable NIA ~556 IV-26 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 CHANGES IN LONG-TERM DEBT The following is a schedule of changes in City indebtedoess for the year ended December 31, 2017: Beginning Ending Balance Additions Deletions Balance Governmental Activities: General obligation bonds $18,196,250 $311,000 $3,793,000 $14,714,250 Special assessment bonds 7,795,000 2,890,000 4,905,000 Total bonded debt 25,991,250 311,000 6,683,000 19,619,250 Improvement note 1,345,000 1,345,000 Capital note 264,000 30,525 233,475 Unamortized bond premiums 166,322 24,140 142,182 Unamortized bond discounts (25,491) (6,827) (18,664) Compensated absences payable 734,415 614,868 580,375 768,908 Total governmental activities $28,475,496 $925,868 $8,656,213 $20,745,151 Business-Type Activities: Compensated absences payable $66,390 $44,663 $44,497 $66,556 DESCRIPTIONS OF LONG-TERM DEBT Due Within One Year $2,084,250 1,015,000 3,099,250 31,350 492,042 $3,622,642 ~130 General Obligation Bonds -The bonds were issued for improvements or projects which benefited the City as a whole and, therefore, are repaid from ad valorem levies. Special Assessment Bonds -The bonds were issued to finance various improvements and will be repaid primarily from special assessments levied on the properties benefiting from the improvements. However, some issues are partly financed by ad valorem levies. Improvement Note-This note was used to finance improvement projects at the I-35E and County Road 14 interchange and was repaid primarily with special assessments levied on the properties benefiting from the improvements. Capital Note-This note was issued to fund the cost of the acquisition of capital equipment to be used by the North Metro Telecommunications Commission in the operation of a cable communications system. The note will be repaid from franchise fee revenue. Utility Revenue Bonds -These bonds were issued to finance various improvements in the water fund and will be repaid primarily from pledged revenues derived from the constructed assets. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 DEBT SERVICE REQUIREMENTS Future principal and interest payments required to retire long-term debt are as follows: Years Ending Bonded Debt Ca12ita1 Note December31 Princil!!!,_ Interest Princi12al Interest 2018 $3,099,250 $417,929 $31,350 $4,670 2019 2,679,000 365,296 32,175 4,042 2020 2,506,000 320,811 33,000 3,399 2021 2,150,000 274,974 33,000 2,739 2022 1,440,000 236,339 33,825 4,191 2023-2027 4,675,000 742,488 70,125 2028-2032 1,970,000 361,919 2033-2037 1,100,000 90,000 Total $19,619,250 $2,809,756 $233,475 ~041 It is not practicable to determine the specific year for payment of long-term compensated absences payable. For governmental activities, compensated absences are liquidated by the General Fund. For business-type activities, compensated absences are liquidated by the Water and Sewer Funds. DEFERRED ADV ALOREM TAX LEVIES -BONDED DEBT All long-term bonded indebtedoess is backed by the full faith and credit of the City, including special assessment and revenue bond issues. General Obligation bond issues are financed by ad valorem tax levies and special assessment bond issues are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax levies is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these taxes 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 full payment of principal and interest. The future scheduled tax levies are not shown as assets in the accompanying financial statements. Future scheduled tax levies for all bonds outstanding at December 31, 2017 totaled $13,005,401. CURRENT REFUNDINGS On November 23, 2016, the City issued $1,975,000 of Taxable General Obligation Improvement Refunding Bonds, Series 2016B with an average interest rate of 1.29%. On February I, 2017, the net proceeds were used to redeem the 2018 through 2021 maturities of the Taxable General Obligation Improvement Bonds, Series 2005A with interest rates of 5.00% -5.15%. The City refunded the bonds to reduce its total debt service payments over four years by $145,931 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new debt) of$130,682. On November 23, 2016, the City issued $1,600,000 of General Obligation Tax Abatement Refunding Bonds, Series 2016C with an average interest rate of 1.34%. On February I, 2017, the net proceeds were used to redeem the 2018 through 2023 maturities of the General Obligation Tax Abatement Bonds, Series 2006C with interest rates of 4.25% -4.30%. The City refunded the bonds to reduce its total debt service payments over six IV-27 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 years by $133,718 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new debt) of$124,952. REVENUE PLEDGED Future revenue pledged for the payment of long-term debt is as follows: Revenue Pied ed CurrentYear Remaining Principal Pledged Tenn of Principal and Interest -Bond Issue Use of Proceeds r~ PledRe and Interest Paid Received Certificates oflndebtedness Equipment purchases Ad valorem taxes 2015-2020 $1,316,355 $606,792 2006E G.O. CIP Bonds Infrastructure improvements Advalorem taxes 2007-2017 S433,500 $431,657 2007A G.O. TIF Bonds Infrastructure improvements MSA funding via 2008-2023 $1,874,899 $475,481 transfenL tax increment 2010A Improvement and Utility General and water infrastructure Special assessments and 2011 -2019 S339,925 $111,955 Revenue Bonds improvements trunkcluu-ge, 2012A G.O. Bonds Infrastructure improvements Ad valorem taxes and 2013-2023 $1,328,093 $242,020 Snec:ialassessmcnts 2013A Improvement Bonds Infrastructure improvements Special assessments 2014-2023 $494,160 $76,853 2014A Improvement Bonds Infrastructure improvements Special assessments 2015-2025 $2,294,501 $402,927 2015A 0.0. Bonds Infrastructure improvements Advaloremtaxes 2016-2030 $3,397,356 $257,817 20158 EDA Leese Revenue Bonds Construction of a fire station Advaloremtaxes 2016-2035 $5,687,956 $299,942 2016A Capital Note Cable communications equipment Franchise fees 2016-202S $252,516 $37,595 2016A Utility Revenue Bonds Water infrastructure improvements Tnmk utility charges via 2017-2026 $1,565,300 $20,269 ... ,,.,, 20 I 68 Improvement Bonds Infrastructure improvements Special assessments, 2017-2020 $2,028,048 $17,015 tax increment 2016C G.O. Tax Abatement Bonds Infrastructure improvements Ad valorem taxes 2017-2022 $1,668,913 $14,671 Note 7 CONDUIT DEBT The City has issued Industrial Development Revenue Bonds and Commercial Revenue Notes 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 $633,871 $462,493 $475,481 $46,247 $200,014 $63,606 $251,212 $271,621 $315,855 $37,595 $274,474 $ $2S9,7IO CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 accompanying financial statements. At December 31, 2017, one series oflndustrial Revenue Bonds was outstanding with an aggregate remaining principal balance of $60,000, and one series of Commercial Revenue Notes was outstanding with an aggregate remaining principal balance of $1,097,227. Note8 DEFINED BENEFIT PENSION PLANS -PERA A. PLAN DESCRIPTION The City 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. I. General Employees Retirement Fund (GERF) All full-time (with the exception of employees covered by PEPFF) and certain part-time employees of the City are covered by the General Employees Retirement Fund (GERF). GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All new members must participate in the Coordinated Plan. 2. Public Employees Police and Fire Fund (PEPFF) The PEP FF, originally established for police officers and firefighters not covered by a local relief association, now covers all police officers and firefighters hired since 1980. Effective July I, 1999, the PEPFF also covers police officers and firefighters belonging to a local relief association that elected to merge with and transfer assets and administration to PERA. B. BENEFITS PROVIDED PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature. Benefit increases are provided to benefit recipients each Janwuy. Increases are related to the funding ratio of the plan. Members in plans that are at least 90% funded for two consecutive years are given 2.5% increases. Members in plans that have not exceeded 90% funded, or have fallen below 80%, are given I% increases. The benefit provisions stated in the following paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. I. GERF Benefits Benefits are based on a member's highest salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA 's Coordinated and Basic Plan members. The retiring member receives the higher of a step-IV-28 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 rate benefit accrual formula {Method I) or a level accrual formula {Method 2). Under Method I, the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first ten years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first ten years and 1. 7% for each remaining year. Under Method 2, the annuity accrual rate is 2. 7% of average salary for Basic Plan members and I. 7% for Coordinated Plan members for each year of service. For members hire prior to July I, 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 l, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. 2. PEPFF Benefits Benefits for the PEPFF members first hired after June 30, 20 I 0, but before July I, 2014, vest on a prorated basis from 50% after five years up to I 00% after ten years of credited service. Benefits for PEPFF members first hired after June 30, 2014, vest on a prorated bases from 50"/o after ten years up to I 00% after twenty years of credited service. The annuity accrual rate is 3% of average salary for each year of service. For PEPFF members who were first hired prior to July I, 1989, a full annuity is available when age plus years of service equal at least 90. C. CONTRIBUTIONS Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. 1. GERF Contributions Basic Plan members and Coordinated Plan members were required to contribute 9.1 % and 6.5%, respectively, of their annual covered salary in calendar year 2017. The City was required to contribute 11. 78% of pay for Basic Plan members and 7 .5% for Coordinated Plan members in calendar year 2017. The City contributions to the GERF for the year ended December 31, 2017 were $192,510. The City contributions were equal to the required contributions as set by state statute. 2. PEPFF Contributions Plan members were required to contribute 10.8% of their annual covered salary in calendar year 2017. The City was required to contribute I 6.2% of pay for PEP FF members in calendar year 2017. The City contributions to the PEPFF for the year ended December 31, 2017 were $416,665. The City contributions were equal to the required contributions as set by state statute. D. PENSION COSTS I. GERF Pension Costs At December 31, 2017, the City reported a liability of $2,642,949 for its proportionate share of GERF's net pension liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of$6 million to the fund in 2017. 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 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 associated with the City totaled $33,230. The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July I, 2016 through June 30, 2017, relative to the total employer contributions received from all of PERA's participating employers. At June 30, 2017, the City's proportionate share was 0.0414%, which was an increase of0.0027% from its proportionate share measured as of June 30, 2016. For the year ended December 31, 2017, the City recognized pension expense of $380,05 I for its proportionate share of the GERF's pension expense. In addition, the City recognized an additional $960 as pension expense {and grant revenue) for its proportionate share of the State of Minnesota's contribution of$6 million to the GERF. At December 31, 2017, the City reported its proportionate share of the GERF's deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual economic experience Changes in actuarial assumptions Difference between projected and actual investment earnings Changes in proportion Contributions paid to PERA subsequent to the measurement date Total Deferred Outflows of Resources $87,104 438,787 19,277 118,300 95,266 $758,734 Deferred Inflows of Resources $171,203 264,956 86,926 $52\085 $95,266 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 during 2018. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: 2. PEPFF Pension Costs Year Ended December 31, 2018 2019 2020 2021 2022 Thereafter Pension Ex_E!:nse $100,060 163,129 {10,618) {112,188) At December 31, 2017, the City reported a liability of $3,469,806 for its proportionate share of the PEPFF's net pension liability. The net pension liability was measured as of June 30, 2017 and the total pension liability used to calculate the net pension liability was determined by an actuarial IV-29 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 valuation as of that date. The City's proportion 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 I, 2016 through June 30, 2017, relative to the total employer contributions received from all of PERA's participating employers. At June 30,2017, the City's proportion was 0.257%, which was a decrease of0.002% from its proportion measured as of June 30, 2016. The City also recognized $23,130 for the year ended December 31, 2017 as revenue (and an offsetting reduction of net pension liability) for its proportionate share of the State of Minnesota's on-behalf contributions to the PEPFF. Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the PEPFF each year, starting in fiscal year 2014. For the year ended December 31, 2017, the City recognized pension expense of $874,127 for its proportionate share of the PEPFF's pension expense. At December 31, 2017, the City reported its proportionate share of the PEPFF's deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual economic experience Changes in actuarial assumptions Difference between projected and actual investment earnings Changes in proportion Contributions paid to PERA subsequent to the measurement date Total Deferred Outflows of Resources $79,868 4,540,933 46,997 75,053 220,753 $4,963,604 Deferred Inflows of Resources $927,062 4,926,263 27,560 $5,880,885 A total of$220,753 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 during 2018. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as outflows: Year Ended Pension December 31 1 Exl!!:!!se 2018 $73,515 2019 73,518 2020 (53,354) 2021 (256,922) 2022 (974,791) Thereafter The net pension liability will be liquidated by the general, water and sewer funds. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 E. ACTUARIAL ASSUMPTIONS The total pension liability in the June 30, 2017 actuarial valuation was determined using the following actuarial assumptions: Inflation Active member payroll growth Investment rate of return 2.50% per year 3 .25% per year 7.50% Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors, and disabilitants were based on RP-2014 tables for the GERF and PEPFF for males or females, as appropriate, with slight adjustments to fit PERA's experience. Cost ofliving benefit increases for retirees are assumed to be I% per year for the GERF through 2044 and PEPFF through 2064 and then 2.5% thereafter. Actuarial assumptions used in the June 30, 2017 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the GERF was completed in 2015. The most recent five-year experience study for PEPFF was completed in 2016. The following changes in actuarial assumptions occurred in 2017: General Employees Fund • The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non-vested deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred member liability and 3.0 percent for non-vested deferred member liability. • The assumed post-retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter. Police and Fire Fund • The single discount rate was changed from 5.6% to 7.5%. • Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. • Assumed rates of retirement were changed, resulting in fewer retirements. • The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested deferred members. The CSA has been changed to 33 percent for vested members and 2 percent for non-vested members. • The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of2006), with male rates adjusted by a factor of0.96. The mortality improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees. • Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. • Assumed percentage of married female members was decreased from 65 percent to 60 percent. IV-30 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 F. • Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. • The assumed percentage offemale members electing Joint and Survivor annuities was increased. • The assumed post-retirement benefit increase rate was changed from 1.00 perfect for all years to 1.00 percent per year through 2064 and 2.50 percent thereafter. The long-term expected rate of return on pension plan investments is 7.5%. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate ofreturn using a building-block method in which best- estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of geometric real rates of return for each major asset are summarized in the following table: Target Long-Term Expected Asset Class Allocation Real Rate of Return Domestic stocks 39% 5.10% International stocks 19% 5.30% Bonds 20% 0.75% Alternative assets 20% 5.90% Cash ~ 0.00% Totals 100% DISCOUNT RATE The discount rate used to measure the total pension liability was 7.5%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employees will be made at the rate set in Minnesota statutes. Based on that assumption, the fiduciary net position of the GERF and the PEPFF 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. At June 30, 2016, the Police and Fire Fund projected benefit payments to exceed the funds projected fiduciary net position after June 30, 2056 and therefore used a single discount rate of 5.6%, which as stated above, increased to 7.5% at June 30, 2017. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 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 ifit were calculated using a discount rate I percentage point lower or I percentage point higher than the current discount rate: City's proportionate share of the GERF net pension liability City's proportionate share of the PEPFF net pension liability City's proportionate share of the I% Decrease in Discount Rate (6.5%) $4,099,410 $6,534,657 H. PENSION PLAN FIDUCIARY NET POSITION Discount Rate (7.5%) $2,642,949 $3,469,806 1 % Increase in Discount Rate (8.5%) $1,450,571 $939,602 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 at www.mnpera.org. I. PENSION EXPENSE Pension expense recognized by the City for the year ended December 31, 2017 is as follows: GERF PEPFF Fire Pension Plan (Note 9) Total $381,0ll 874,127 45,088 $1,300,226 Note 9 DEFINED BENEFIT PENSION PLAN -FIRE DIVISION A. PLAN DESCRIPTION The Lino Lakes Public Safety Department -Fire Division participates in the Statewide Volunteer Firefighter Retirement Plan (SVF), an agent multiple-employer lump-sum defined benefit pension plan administered by the Public Employees Retirement Association of Minnesota (PERA). The SVF plan covers volunteer firefighters of municipal fire departments or independent nonprofit firefighting corporations that have elected to join the plan. At December 31, 2017 (measurement date), the plan covered 23 active firefighters and zero vested terminated fire fighters whose pension benefits are deferred. The plan is established and administered in accordance with Minnesota Statutes, Chapter 353G. IV-31 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 B. BENEFITS PROVIDED The SVF provides lump-sum retirement, death, and supplemental benefits to covered firefighters and survivors. Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City of Lino Lakes. Members are eligible for a lump-sum retirement benefit at 50 years of age with five years of service. Plan provisions include a pro-rated vesting schedule that increases from 5 years at 40% through 20 years at I 00%. C. CONTRIBUTIONS The SVF is funded by fire state aid, investment earnings and, ifnecessary, employer contributions as specified in Minnesota statutes, and voluntary City contributions. The State of Minnesota contributed $113,797 in fire state aid to the plan for the year ended December 31, 2017. Required employer contributions are calculated annually based on statutory provisions. The City's statutorily-required contributions to the SVF plan for the year ended December 31, 2017 were $0. The City's contributions were equal to the required contributions as set by state statute, if applicable. In addition, the City made voluntary contributions of$58,800 to the plan. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 D. PENSION COSTS At December 31, 2017, the City reported a net pension asset of$127,994 for the SVF plan. The net pension asset was measured as of December 31, 2017. The total pension liability used to calculate the net pension asset in accordance with GASB 68 was determined by PERA applying an actuarial formula to specific census data certified by the fire department. The following table presents the changes in net pension liability during the year. Plan Net Total Fiduciary Pension Pension Net Liability Liability Position (Asset) .\!!L_ (b) (a-b) Beginning balance December 31, 2016 $55,240 $44,527 $10,713 Changes for the year: Service cost 47,952 47,952 Interest on pension liability 6,191 6,191 Actuarial experience (gains)/ losses (11,672) (11,672) Projected investment earnings 2,672 (2,672) Contributions -employer 58,800 (58,800) Contributions -State of MN 113,797 (113,797) Asset (gain) / loss 6,481 (6,481) Benefit payouts PERA administrative fee (572) 572 Net changes 42,471 181,178 (138,707) Balance end of year December 31, 2017 $97,711 $225,705 ($127,994) There were no benefit provision changes during the measurement period For the year ended December 31, 2017, the City recognized pension expense of$45,088. At December 31, 2017, the City reported deferred inflows of resources from the following sources: Difference between projected and actual investment earnings Differences between expected and actual economic experience Total Deferred Outflows of Resources $ $0 Deferred Inflows of Resources $5,264 17,495 $22,759 IV-32 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended December 31, 2018 2019 2020 2021 2022 Thereafter E. ACTUARIAL ASSUMPTIONS Pension Ex~se ($6,955) (6,956) (5,215) (3,633) The total pension liability at December 31, 2017, was determined using the entry age normal actuarial cost method and the following actuarial assumptions: • Retirement eligibility at the later of age 50 or 20 years of service • Investment rate of return of 6.0% • Inflation rate of 3.0% There were no changes in actuarial assumptions in 2017 F. DISCOUNTRATE The discount rate used to measure the total pension liability was 6.0%. The projection of cash flows used to determine the discount rate assumed that contributions to the SVF plan will be made as specified in statute. Based on that assumption and considering the funding ratio of the plan, the fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. G. PENSION LIABILITY SENSITIVITY The following presents the City's net pension asset for the SVF plan, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's net pension asset would be ifit were calculated using a discount rate 1 % lower or I% higher than the current discount rate: Net pension asset 1 % Decrease in Discount Rate (5.0%) $118,348 Discount Rate (6.0%) $127,994 1 % Increase in Discount Rate (7.0%) $136,963 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 H. PLANINVESTMENTS I. Investment Policy The Minnesota State Board of Investment (SB!) is established by Article XI of the Minnesota Constitution to invest all state funds. Its membership as specified in the Constitution is comprised of the Governor (who is designated as chair of the Board), State Auditor, Secretary of State and State Attorney General. All investments undertaken by the SB! are governed by the prudent person rule and other standards codified in Minnesota Statutes, Chapter I IA and Chapter 353G. Within the requirements defined by state law, the SB!, with assistance of the SB! staff and the Investment Advisory Council, establishes investment policies for all funds under its control. These investment policies are tailored to the particular needs of each fund and specify investment objectives, risk tolerance, asset allocation, investment management structure and specific performance standards. Studies guide the on-going management of the funds and are updated periodically. 2. Asset Allocation To match the long-term nature of the pension obligations, the SB! maintains a strategic asset allocation for the Statewide Volunteer Firefighter Retirement Plan (VOLP) that includes allocations to domestic equity, international equity, bonds and cash equivalents. The long-term target asset allocation and long-term expected real rate of return is the following: Target Long-Term Expected Asset Class Allocation Real Rate of Return Domestic Stocks 35% 5.10% International Stocks 15% 5.30% Bonds 45% 0.75% Cash 5% 0.00% 100% The 6% long-term expected rate ofreturn on pension plan investments was determined using a building-block method. Best estimates for expected future real rates of return ( expected returns, net of inflation) were developed for each asset class using both long-term historical returns and long-term capital market expectations from a number of investment management and consulting organizations. The asset class estimates and the target allocations were then combined to produce a geometric, long-term expected real rate of return for the portfolio. Inflation expectations were applied to derive the nominal rate of return for the portfolio. 3. Description of significant investment policy changes during the year The SB! made no significant changes to their investment policy during fiscal year 2017 for the Statewide Volunteer Firefighter Retirement Plan. IV-33 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 I. PENSION PLAN FIDUCIARY NET POSITION Detailed infonnation about the SVF plan's fiduciary net position at June 30, 2017 is available in a separately-issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained at www.mnpera.org. Note 10 POST-EMPLOYMENT BENEFITS OTIIER THAN PENSIONS (OPED} A. PLAN DESCRIPTION In addition to providing the pension benefits described in Note 8 and 9, the City provides post- employment health care benefits, as defined in paragraph B, through its group health insurance plan (the plan). The plan is a single-employer defined benefit OPEB plan administered by the City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through its personnel manual and collective bargaining agreements with employee groups. No assets are accumulated in a trust that meets the criteria in paragraph 4 ofGASB Statement No. 75. B. BENEFITS PROVIDED The City is required by State Statute to allow retirees to continue participation in the City's group health insurance plan if the individual terminates service with the City through service retirement or disability retirement. Active employees, who retire from the City when over age 50 and with 20 years of service, may continue coverage with respect to both themselves and their eligible dependent(s) under the City's health benefits program until age 65. The City provides health coverage for peace officers or firefighters disabled or killed in the line of duty in accordance with Minnesota Statute 299A.465. The amount of coverage provided is equal to the employer portion of health insurance premiums that would have otherwise been paid if the officer or firefighter was an active employee. During 2017, benefits were provided to one officer disabled in the line of duty and one officer killed in the line of duty. All health care coverage is provided through the City's group health insurance plans. The retiree is required to pay I 00% of their premium cost for the City-sponsored group health insurance plan in which they participate. The premium is a blended rate determined on the entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. Upon a retiree reaching age 65, Medicare becomes the primary insurer and the City's plan becomes secondary. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 C. PARTICIPANTS As of the January I, 2017 actuarial valuation, participants of the plan consisted of: Active employees Inactive employees or beneficiaries currently receiving benefits Total 46 6 52 D. TOTAL OPED LIABILITY AND CIIANGES IN TOTAL OPED LIABILITY The City's total OPEB liability of$746,540 was measured as of December 31, 2017, and was determined by an actuarial valuation as of January I, 2017. Changes in the total OPEB liability during 2017were: Balance -beginning of year Changes for the year: Service cost Interest Changes of benefit terms $789,627 16,990 22,542 Differences between expected and actual experience Changes in assumptions (51,083) Benefit payments (31,536) Net changes (43,087) Balance -end of year $746,540 E. ACTUARIAL ASSUMPTIONS AND OTIIER INPUTS The total OPEB liability in the January I, 2017 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Inflation Salary increases Discount rate Investment rate of return Healthcare cost trend rates Retirees' share of benefit-related costs 3.50% 3.50% 2.85% 2.85% 8.00% for 2017, decreasing 1.00% per year to an ultimate rate of 3.00% for 2022 and beyond 100% Since the plan is fimded on a pay-as-you-go basis, both the discount rate and the investment rate of return was based on the 20 year AA rated municipal bond rate as of November 22,2017, obtained from www.fmsbonds.com/market-yields. Mortality rates were based on the SOA RP-2014 Total Dataset Mortality tables with Scale MP-2014 and Improvement Scale BB. IV-34 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 20 I 7 Based on past experience of the plan, 90% of future retirees are assumed to continue medical coverage until age 65. 50% of police/fire employees are assumed to retire at age 55, the balance at age 65. 50% of other City employees are assumed to retire at age 62, the balance at age 65. F. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE DISCOUNT RATE The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be ifit were calculated using a discount rate that is 1% lower (1.85%) or 1% higher (3.85%) than the current discount rate: Total OPEB liability 1% Decrease (1.85%) $831,489 Discount Rate (2.85%) $746,540 1% Increase (3.85%) $671,756 G. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE HEAL TH CARE COST TREND RA TES The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using healthcare cost trend rates that are I% lower (7% decreasing to 2%) or I% higher (9% decreasing to 4%) than the current healthcare cost trend rates: Total OPEB liability 1% Decrease (7% decreasing to 2%) $661,327 Healthcare Cost Trend Rates (8% decreasing to 3%) $746,540 1% Increase (9% decreasing to 4%) $845,440 H. OPEB EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES RELATED TO OPEB For the year ended December 31, 2017, the City recognized $39,532 of OPEB expense. At December 31, 2017, the City reported deferred outflows and inflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actua] experience $0 $51,083 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ended OPEB December 31, Exeense 2018 ($3,923) 2019 (3,923) 2020 (3,923) 2021 (3,923) 2022 (3,923) Thereafter (31,468) L$5 l,o83J Note 11 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. DEFICIT FUND BALANCES The City has deficit fund balances at December 31, 2017 as follows: Nonmajor Governmental Funds: G.O. lmprovement Bonds of2016B Tax Increment Financing 1-11 Tax Increment Financing 1-12 2018 Street Reconstruction Fund Balance Deficit ($1,932,462) (777,999) {1,044) (197,668) The City intends to fund these deficits through future tax levies, special assessment levies, tax increments, transfers from other funds, and various other sources. B. EXPENDITURES IN EXCESS OF BUDGET The following is a listing of departments within the General Fund that exceeded budget appropriations: Final Budget Actual ~e General government: Engineering/planning $105,706 $111,441 $5,735 Government buildings 603,318 636,089 32,771 Public services: Parks 639,281 664,740 25,459 Recreation 246,949 248,031 1,082 Additionally, actual expenditures of the Program Recreation Special Revenue Fund exceeded final budgeted expenditures by $26,511. IV-35 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Note 12 INTERFUND RECEIVABLES AND PAY ABLES Long-term interfund loans are classified as interfund loan receivable/payable. A swnmary of such loans at December 31, 2017 is as follows: Receivable ~ble Major Funds: G.O. Improvement Bonds of2016B $ $2,876,643 Area and Unit Charge 100,361 Sewer Fund 914,949 Nonmajor Funds: Closed Bond Fund 616,983 Building and Facilities 2,317,533 Dedicated Parks 100,361 Tax Increment Financing 1-11 775,154 2018 Street Reconstruction 197,668 $3,949,826 $3,949,826 Note 13 INTERFUND TRANSFERS Individual fund transfers for fiscal year 2017 are as follows: Transfer In Transfer Out Major Funds: General Fund $439,373 $879,759 G.O. Improvement Bonds of2005A 2,187,503 7 G.O. Improvement Note of2009A 1,126,057 G.O. Improvement Bonds of2016B 272,506 2,187,503 Area and Unit Charge 236,548 Water Fund 104,969 35,727 Sewer Fund 104,969 35,727 Nonmajor governmental funds 2,959,004 3,819,110 Total $7,194,381 $7,194,381 During 2017, transfers were made to provide funding for capital improvement projects and capital outlay in accordance with the City's capital improvement plan. Transfers were also made to provide resources for debt service payments, to close capital project funds and debt service funds, and to allocate financial resources to funds that received benefit from services provided by another fund. These transfers are routine and consistent with past practices. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Note 14 FUND BALANCE At December 31, 2017, a swnmary of the governmental fund balance classifications is as follows: G.O. Other General Improvement Area and Governmenta1 Fund Bonds of2016B UnitCharE Funds NonspendabJe: Prepaid items $243,317 $ $ $1,659 Corpus of permanent fund 100 000 Tota] nonspendable 243317 0 0 101,659 Restricted for: Debt service 4,223,799 Economic development 225,000 Blue Heron Days 6,965 Narcotics and forfeiture funds 330,866 Tax increment purposes 479,695 Environmental purposes 23,316 Total restricted 0 0 0 ___ 5,289,641 Committed for: Economic development 88,251 Cable TV purposes 83,946 Recreation purposes 3,204 Total committed 0 0 0 175,401 Assigned for: Capital improvements 7,656155 6 925 514 Unassigned 6,573,608 (1,932,462) (976,711) Total fund balance $6,816,925 \$1,932,462) $7,656,155 $11,515,504 Note 15 PROPERTY UNDER LEASE AGREEMENT _..!2!!!/. $244,976 100 000 344,976 4,223,799 225,000 6,965 330,866 479,695 23,316 5,289,641 88,251 83,946 3,204 175,401 14,581,669 3,664,435 $24,056,122 The City entered into an agreement to lease space within the City Hall Complex, which at year end had a cost of $4,744,742 and a net book value of$1,805,168, to New Creations Child Care and Learning Center, LLC. The lease is dated July I, 2014 and continues through June 30, 2019. The lease requires escalating annual lease payments of between $5.94 and $8.65 per square foot over the lease term, for a total of $330,904. Approximate future minimum lease payments receivable under the noncancelable operating lease are as follows: Year Ending December 31, 2018 · 2019 Amount $77,901 39,522 $117,423 IV-36 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Note 16 TAX INCREMENT DISTRICTS The City is the administrating authority for three 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 could have a material effect on the financial statements. The following table reflects values at December 3 I, 2017: TIF 1-5 TIF 1-11 TIF 1-12 Cottage TIF 1-10 Woods Clearwater Homesteads Panattoni Ed!!e Creek Authorizing law M.S.469 M.S.469 M.S.469 M.S. 469 Year established 1994 2004 2005 2006 Final year of district 2022 2023 2031 2026 Net tax capacity: Original $128 $15,869 $7,241 $11,731 Current (payable 2017) 34052 232,094 135,973 11,731 Captured -retained $33,924 $216,225 ~ 732 $0 Note 17 COMMITMENTS AND CONTINGENCIES A. LITIGATION Existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance, of an immaterial amount, or, in the judgment of the City's management, remotely recoverable by plaintiffs. B. FEDERALANDSTATEFUNDS The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2017. C. COMMITTED CONTRACTS At December 3 I, 2017, the City had commitments of$ I 94,558 for uncompleted construction contracts. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 Note 18 RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets, errors and omissions, injuries to employees and natural disasters. Workers compensation coverage is provided through a pooled self-insurance program through the Leagoe of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is not subject to a deductible. The City's workers compensation coverage is retrospectively rated. With this type of coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid. Property and casualty insurance is provided through a pooled self-insurance program through the LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portion of the insurance policies and for any exclusions from the insurance policies. These amounts are considered immaterial to the financial statements. The City continues to carry commercial insurance for all other risks of loss, including disability and employee health insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. Note 19 RECENTLY ISSUED ACCOUNTING STANDARDS The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: Statement No. 83 Certain Asset Retirement Obligations. The provisions of this Statement are effective for reporting periods beginning after June 15, 2018. Statement No. 84 Fiduciary Activities. The provisions of this Statement are effective for reporting periods beginning after December 15, 2018. Statement No. 8S Omnibus 2017. The provisions of this Statement are effective for reporting periods beginning after June 15, 2017. Statement No. 86 Certain Debt Extinguishment Issues. The provisions of this Statement are effective for reporting periods beginning after June 15, 2017. Statement No. 87 Leases. The provisions of this Statement are effective for reporting periods beginning after December 15, 2019. -Statement No. 88 Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. The provisions of this Statement are effective for reporting periods beginning after June 15, 2018. IV-37 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3 I, 2017 The effect these standards may have on future financial statements is not determinable at this time, but it is expected that Statement No. 87 may have a material impact. Note 20 CHANGE IN ACCOUNTING PRINCIPLE For the year ended December 31,2017, the City implemented GASB Statement No. 75, Accounting and Financial Reporting/or Postemployment Benefits Other Than Pensions. GASB Statement No. 75 established new accounting and financial reporting requirements for governments whose employees are provided OPEB. See Note JO for further information. The standard required retroactive implementation which resulted in a restatement of net position for governmental activities at December 31, 2016. Certain amounts necessary to fully restate 2016 financial statements are not determinable, therefore, prior year comparative amounts have not been restated. Details of the prior period adjustment are as follows: Net position -January I, 2017, as previously reported Prior period adjustment: Effect of implementing GASB Statement No. 75 Net position -January I, 2017, as restated Governmental Activities $42,819,930 (692,480) $42,127,450 CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENT ARY JNFORMA TION BUDGETARYCOMPARISONSCHEDULE-GENERALFUND For The Year Ended December 31, 2017 Revenues: General propery taxes: Current and delinquent Fiscal disparities Excess tax increments Total general property taxes Licenses and permits: Business Non-business Total licenses and permits Intergovernmental: State: Police state aid OTS grant MSA maintenance Other County solid waste grant Total intergovernmental Special assessments Charges for services: General government Engineering and planning fees Public safety Public services Investment management charge to other funds Total charges for services Fines and forfeits Invesbnent earnings Miscellaneous: Gas franchise fees Building lease revenue Refunds and reimbursements Donations Other Total miscellaneous Total revenues Variance with Final Budget- 2017 Actual Positive Budseted Amounts Amounts Q:!eS!!;tive) 2!:!s[nal Final $7,410,431 $6,407,494 $6,359,583 ($47,911) 977,937 975,939 (1,998) 3,000 3,354 354 7,410,431 7,388,431 7,338,876 (49,555) 126,229 141,229 146,709 5,480 486,524 1,238,524 1,300,862 62,338 612,753 1,379,753 1,447,571 _______BS 18 195,000 230,000 229,395 (605) 110,000 85,000 84,385 (615) 255,000 240,000 241,138 1,138 14,000 22,000 29,108 7,108 l07,409 107,409 83,494 (23,915) 681,409 684,409 667,520 (16,889) 14,500 4,500 4,293 (207) 11,100 26,100 27,030 930 15,000 25,000 25,459 459 189,200 189,200 187,988 (1,212) 25,500 16,500 11,561 (4,939) 50,000 50,000 50,000 290,800 306,800 302,038 (4,762) 175,600 145,600 147,977 2,377 30,000 30,000 40,913 _____!.Q,913 70,000 50,000 54,689 4,689 102,848 102,848 l02,848 40,000 40,000 29,052 (10,948) 5,000 500 500 2,500 105,852 108,350 2,498 220~ 299J00 295,439 (3,761) 9,435,841 10,238,693 ~627 5,934 IV-38 CITY OF LINO LAKES, MINNESOTA CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE-GENERAL FUND BUDGETARY COMPARISON SCHEDULE -GENERAL FUND For The Year Ended December 31, 2017 For The Year Ended December 3 I, 2017 Variance Variance with Final with Final Budget-Budget- 2017 Actual Positive 2017 Actual Positive Bud11eted Amounts Amounts (Negative) Budgeted Amounts Amounts Q'!el!'!tive) Original Final ____Q!:!J!_inal Final Expenditures: Expenditures: ( continued) General government: General government: ( continued) Mayor and city council: Engineering/planning: Current: Current: Personal services 43,733 43,733 38,966 4,767 Contractual services 105,706 105,706 111,441 (5,735) Other services and charges 18,000 18,500 19,541 (1,o41) Charter commission: Contractual services 17,500 17 500 17,265 235 Current: Total mayor and city council 79,233 79,733 75,772 3,961 Other services and charges 2,500 2,500 624 ____ 1,876 Elections: Government buildings: Current: Current: Personal services 10,130 10,130 8,685 1,445 Personal services 2,460 2,460 2,452 8 Supplies 800 800 257 543 Supplies 48,400 48,400 47,139 1,261 Other services and charges 1,200 1,200 1,923 (723) Other services and charges 361,258 361,258 426,293 (65,035) Contractual services 382 (382) Contractual services 64,200 64,200 77,786 (13,586) Capital outlay 4600 4,600 4,685 (85) Capital outlay 37,000 127,000 82,419 44581 Total elections 16,730 16,730 15,932 798 Total government buildings 513,318 603,318 636,089 (32,771) Administration: Current: Total general government 1,991,732 2,048,432 2,032,795 __ 1_5,637 Personal services 472,255 455,255 447,735 7,520 Other services and charges 21,860 21,860 18,450 3,410 Public safety: Contractual services IO 500 10,500 9,481 1,019 Police: Total administration 504,615 487,615 475,666 11,949 Current: Finance: Personal services 3,562,824 3,562,824 3,436,882 125,942 Current: Supplies 33,150 33,150 27,183 5,967 Personal services 317,635 320,835 319,495 1,340 Other services and charges 100,176 100,176 107,373 (7,197) Supplies 1,000 1,000 246 754 Contractual services 56,520 56,520 41,702 14,818 Other services and charges 207,088 207,088 181,219 25,869 Capital outlay 35,000 35,000 34,036 964 Contractual services 101,067 101,067 101,932 (865) Total police 3,787,670 3,787,670 3,647,176 ______!.1Q,_494 Total finance 626,790 629,990 602,892 27,098 Fire protection: Cable TV: Current: Current: Personal services 474,411 474,411 425,694 48,717 Personal services 2,340 2,340 2,477 (137) Supplies 16,050 16,050 8,135 7,915 Capital outlay 500 500 500 Other services and charges 50,545 50,545 47,648 2,897 Total cable TV 2840 2,840 2,477 363 Contractual services 28,380 28,380 22,532 5,848 Legal consultants: Capital outlay 36,614 36614 32,551 4,063 Current: Total fire protection 606,000 606,000 536,560 ~440 Contractual services 140,000 120,000 111,902 8,098 Building inspection: Current: Personal services 227,428 224,128 221,715 2,413 Supplies 1,650 1,650 591 1,059 Other services and charges 9,110 9,110 6,502 2,608 Contractual services 1,000 1,000 1,151 (151) Capital outlay 600 600 600 Total building inspection 239,788 236,488 229,959 ___ 6,529 Total public safety 4,633,458 4,630,158 4,413,695 ~463 IV-39 CITY OF LINO LAKES, MINNESOTA CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE -GENERAL FUND BUDGETARY COMPARISON SCHEDULE -GENERAL FUND For The Year Ended December 31, 2017 For The Year Ended December 31, 2017 Variance Variance with Final with Final Budget-Budget- 2017 Actual Positive 2017 Actual Positive Budgeted Amounts Amounts Q::!el!!!tive) Budseted Amounts Amounts Q::!egative) Original Final -2!:!ll!.nal Final Expenditures: ( continued) Expenditures: ( continued) Public services: Conservation of natural resources: Streets: Forestry: Current: Current: Personal services 552,424 565,979 539,862 26,117 Persona] services 37,457 37,457 36,540 917 Supplies 159,000 166,097 124,256 41,841 Supplies 4,350 4,350 5,276 (926) Other services and charges 109,600 109,600 149,997 (40,397) Other services and charges 380 380 352 28 Contractual services 198,000 73,000 95,822 (22,822) Contractual services 15,000 15,000 8,704 6,296 Total streets 1,019,024 914,676 909,937 4 739 Capital outlay 7 700 7,700 8,247 (547) Fleet: Total forestry 64,887 64,887 59,119 ___ 5,768 Current: Environmental: Personal services 118,315 121,704 121,627 77 Current: Supplies 194,000 165,000 139,794 25,206 Personal services 54,215 47,215 44,785 2,430 Other services and charges 62,427 62,427 59,779 2,648 Supplies 1,000 1,000 802 198 Contractual services 57,000 57,000 34,817 22,183 Other services and charges 9,150 9,150 6,876 2,274 Total fleet 431,742 406131 356,017 50,114 Contractual services 1,100 1,100 1,133 (33) Parks: Total environmental 65,465 58,465 53,5% __ 4,869 Current: Solid waste abatement: Personal services 477,081 483,081 464,841 18,240 Current: Supplies 26,500 26,500 29,574 (3,074) Personal services 54,900 54,900 47,074 7,826 Other services and charges 39,000 54,000 62,612 (8,612) Other services and charges 11,500 11,500 11,298 202 Contractual services 55,700 75 700 107,713 (32,013) ContractuaJ services 41,000 41,000 20,552 20,448 Total parks 598,281 639,281 664,740 (25,459) Total solid waste abatement 107 400 107,400 78,924 ~476 Recreation: Current: Total conservation of natural resources 237,752 230,752 191,639 ------12,_ 113 Personal services 234,199 227,299 226,836 463 Supplies 2,500 2,500 2,756 (256) Community development: Other services and charges 16,150 16,150 18,001 (1,851) Community development: Contractual services 1,000 1,000 438 562 Current: Total recreation 253,849 246,949 248,031 (1,082) Personal services 210,269 183,469 182,500 969 Supplies 100 100 41 59 Total public services 2,302,896 2,207,037 2,178,725 28,312 Other services and charges 8,150 11,650 11,732 (82) Contractual services 900 900 905 (5) Total community development 219,419 196 119 ~178 941 Economic development: Current: Personal services 21,617 18,617 17,783 834 Other services and charges 90,100 90,100 85,327 4,773 Contractual services 400 400 695 (295) Total economic development 112,117 109,117 103,805 __ 5_,312 IV-40 CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENT ARY INFORMATION BUDGETARY COMPARISON SCHEDULE-GENERAL FUND For The Year Ended December 31, 2017 Expenditures: ( continued) Planning and zoning commission: Current: Personal services Supplies Other services and charges Contractual services Total planning and zoning commission Total community development Other: Contingency Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance -January 1 Fund balance -December 31 Bud11eted Amounts 2!:!s!_nal Final 101,684 101,684 200 200 16,250 16,250 40,250 15J50 158,384 133,384 489,920 438,620 50,000 9,705,758 9,554,999 (269,917) 683,694 317,717 439,373 (565,800) (879,152) (248,083) (439,779) ($518,000) $243,915 Variance with Final Budget- 2017 Actual Positive Amounts (Ne&!!tive) 101,579 105 34 166 10,792 5,458 15,265 (15) 127,670 __ 5_,714 426,653 __ 1_1,967 9,243,507 ----1.!!.,_492 1,001,120 -----111,_426 439,373 (879,759) (607) (440,386) (607) 560,734 ~819 6,256,191 $6,816,925 CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS For The Year Ended December 31, 2017 Total OPEB liability: Service cost Interest Changes of benefit terms Differences between expected and actual experience Changes in assumptions Benefit payments Net change in total OPEB liability Total OPEB liability -beginning Total OPEB liability -ending Covered-employee payroll Total OPEB liability as a percentage of covered-employee payroll 2017 $16,990 22,542 (51,083) (31,536) (43,087) 789,627 $746,540 $3,499,836 21.3% The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2017 and is intended to show a ten year trend. Additional years will be added as they become available. IV-41 CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY - GENERAL EMPLOYEES RETIREMENT FUND For The Year Ended December 31, 2017 State's Proportionate Share City's City's (Amount) Proportionate Proportionate oftheNet Share Share (Amount) Pension Measurement Fiscal Year (Percentage) of ofthe Net Liability Date Ending the Net Pension Pension Associated June 30, December 3 I, Liability Liability !a} with Ci!):(!?) 2015 2015 0.0410% $2,124,883 $ - 2016 2016 0.0387% 3,142,248 41,033 2017 2017 0.0414% 2,642,949 33,230 City's Proportionate Share of the Net Pension Liability and the State's Proportionate Share of the Net Pension Liability Associated with Covered City !&+bl Pal'.!!!11\c) $2,124,883 $2,407,426 3,183,281 2,401,546 2,676,179 2,666,880 The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. City's Proportionate Plan Share of the Fiduciary Net Net Pension Position Liability asa asa Percentage Percentage of the of its Total Covered Pension P~U !!a+b~cl Liability 88.3% 78.2% 132.6% 68.9% 100.3% 75.9% CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PENSION CONTRIBUTIONS -GENERAL EMPLOYEES RETIREMENT FUND For The Year Ended December 31, 2017 Statutorily Contributions in Contribution Fiscal Year Required Relation to the Deficiency Covered Ending Contribution Statutorily Required (Excess) Payroll December 31,__ (a) Contribution (b) (a-b) (c) 2015 $182,102 $182,102 $ $2,428,027 2016 193,684 193,684 2,582,452 2017 192,510 192,510 2,566,800 Contributions as a Percentage of Covered Pa:z:roll (b/c) 7.5% 7.5% 7.5% The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. IV-42 CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY· PUBLIC EMPLOYEES POLICE AND FIRE FUND For The Year Ended December 31, 2017 Proportionate Proportion Share (Amount) Measurement Fiscal Year (Percentage) of of the Net Date Ending the Net Pension Pension J~ December 31, Liahili!l'. Liabili!x !a! 2015 2015 0.2490% $2,829,223 2016 2016 0.2590% 10,394,121 2017 2017 0.2570% 3,469,806 Proportionate Share of the Net Pension Liability as a Percentage of its Covered Covered Pal'.!!?ll!b! Pa~roll !alb! $2,284,973 123.8% 2,495,778 416.5% 2,643,314 131.3% The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years wil1 be reported as they become available. Plan Fiduciary Net Position as a Percentage of the Total Pension Liabili!l'. 86.6% 63.9% 85.4% CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PENSION CONTRIBUTIONS -PUBLIC EMPLOYEES POLICE AND FIRE FUND For The Year Ended December 31, 2017 Statutorily Contributions in Contribution Fiscal Year Required Relation to the Deficiency Covered Ending Contribution Statutorily Required (Excess) Payroll December 31, (a) Contribution (b) (a-b) (c) 2015 $393,551 $393,551 $ $2,429,327 2016 424,970 424,970 2,623,271 2017 416,665 416,665 2,572,006 Contributions as a Percentage of Covered Payroll 0,/c) 16.2% 16.2% 16.2% The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. IV-43 CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN 1HE NET PENSION LIABILITY AND RELATED RATIOS - LINO LAKES PUBLIC SAFETY DEPARTMENT -FIRE DIVISION For The Year Ended December 31, 2017 Fiscal year ending and measurement date Total pension liability: December 31, 2017 Service cost Interest on pension liability Changes of benefit terms Differences between expected and actual experience Changes of assumptions Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability -beginning Total pension liability -ending (a) Plan fiduciary net position: Contributions -employer Contributions -State of Minnesota Net investment income Benefit payments, including refunds of employee contributions Administrative expense Net change in plan fiduciary net position Plan fiduciary net position -beginning Plan fiduciary net position -ending (b) Net pension liabilityl(asset) -ending (a) -(b) $47,952 6,191 (11,672) 42,471 55,240 $97,711 $58,800 113,797 9,153 ~ 181,178 44,527 $225,705 ($127,994) 231.0% Plan fiduciary net position as a percentage of the total pension liability Covered payroll NIA Net pension liability as a percentage of covered employee payroll NIA NI A -the Lino Lakes Fire Department is comprised of paid on-call firefighters, whose pay does not meet the definition of covered payroll. The City created its own fire department in 2016. Therefore, information prior to 2016 is not available. December 31, 2016 $38,419 3,568 (7,804) 34,183 21,057 $55,240 $44,394 133 44,527 $44,527 $10,713 80.6% NIA NIA CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENT ARY INFORMATION SCHEDULE OF CONTRIBUTIONS -LINO LAKES PUBLIC SAFETY DEPARTMENT-FIRE DIVISION For The Year Ended December 31, 2017 Statutorily Contributions in Contribution Fiscal Year Required Relation to the Deficiency Covered Ending Contribution Statutorily Required (Excess) December 31, (a) Contribution (b) (a-b) 2016 $ $44,394 ($44,394) 2017 58,800 (58,800) NI A -the Lino Lakes Fire Department is comprised of paid on-call firefighters, whose pay does not meet the defintion of covered payroll. Payroll (c) NIA NIA The City created its own fire department in 2016. Therefore, information prior to 2016 is not available. Contributions as a Percentage of Covered-Employee Payroll (blc) NIA NIA IV-44 CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO RSI December 31, 2017 Note A LEGAL COMPLIANCE -BUDGETS 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 the General Fund. Note B OPED INFORMATION No assets are accumulated in a trust that meets the criteria in paragraph 4 ofGASB Statement No. 75 to pay related benefits. There are no factors that affect trends in the amounts reported, such as changes of benefit tenns or assumptions. Note C PENSION INFORMATION PERA-General Employees Retirement Fund 20 I 7 Changes Changes in Actuarial Assumptions: • The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non-vested deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred member liability and 3.0 percent for non-vested deferred member liability. • The assumed post-retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter. 2016 Changes Changes in Actuarial Assumptions: • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all future years. The assumed investment return was changed from 7 .9% to 7 .5%. The single discount rate was changed from 7.9% to 7.5%. • Other assumptions were changed pursuant to the experience study dated June 30, 20 I 5. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. PERA Public Employees Police and Fire Fund 2017 Changes Changes in Actuarial Assumptions: • The single discount rate was changed from 5.6% to 7.5%. Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO RSI December 31, 2017 • Assumed rates of retirement were changed, resulting in fewer retirements. • The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested deferred members. The CSA has been changed to 33 percent for vested members and 2 percent for non- vested members. The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of0.96. The mortality improvement scale was changed from Scale AA to Scale MP- 2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees. • Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. • Assumed percentage of married female members was decreased from 65 percent to 60 percent. • Assumed age difference was changed from separate assumptions for male members ( wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. • The assumed percentage offemale members electing Joint and Survivor annuities was increased. • The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year through 2064 and 2.50 percent thereafter. 20 I 6 Changes Changes in Actuarial Assumptions: • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% per year thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7.5%. The single discount rate changed from 7.9% to 5.6%. • The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. Single Employer -Fire Division There are no factors that affect trends in the amounts reported, such as change of benefit terms or assumptions. With only two years reported in the RSI, there is no additional information to include in the notes. IV-45 PROPOSAL SALE DATE: November 13, 2018 ________________________________ Phone: 651-223-3000 * Preliminary; subject to change. Fax: 651-223-3046 Email: bond_services@springsted.com Website: www.springsted.com City of Lino Lakes, Minnesota $7,169,000* General Obligation Bonds, Series 2018A For the Bonds of this Issue which shall mature and bear interest at the respective annual rates, as follow, we offer a price of $_________________ (which may not be less than $7,169,000 (Par)) plus accrued interest, if any, to the date of delivery. Year Interest Rate (%) Yield (%) Dollar Price Year Interest Rate (%) Yield (%) Dollar Price 2020 % % % 2028 % % % 2021 % % % 2029 % % % 2022 % % % 2030 % % % 2023 % % % 2031 % % % 2024 % % % 2032 % % % 2025 % % % 2033 % % % 2026 % % % 2034 % % % 2027 % % % Designation of Term Maturities Years of Term Maturities In making this offer on the sale date of November 13, 2018 we accept all of the terms and conditions of the Terms of Proposal published in the Preliminary Official Statement dated October 23, 2018 including the City’s right to modify the principal amount of the Bonds. (See “Terms of Proposal” herein.) In the event of failure to deliver these Bonds in accordance with said Terms of Proposal, we reserve the right to withdraw our offer, whereupon the deposit accompanying it will be immediately returned. All blank spaces of this offer are intentional and are not to be construed as an omission. By submitting this proposal, we confirm that we have an established industry reputation for underwriting municipal bonds such as the Bonds. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: $____________________________ TRUE INTEREST RATE: ______________ % The Bidder  will not  will purchase municipal bond insurance from . Account Members ______________________________ Account Manager By: ___________________________ Phone: ________________________ ........................................................................................................................................................................................................................... The foregoing proposal has been accepted by the City. Attest: _______________________________ Date: ________________________________ ........................................................................................................................................................................................................................... Extract of Minutes of Meeting of the City Council of the City of Lino Lakes, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Lino Lakes, Minnesota, was duly held in the City Hall in said City on Tuesday, November 13, 2018, commencing at 6:30 p.m. The following members were present: and the following were absent: * * * * * * * * * The Mayor announced that the next order of business was consideration of the proposals that had been received for the purchase of the City’s General Obligation Bonds, Series 2018A, to be issued in the original aggregate principal amount of $7,169,000. The City Administrator presented a tabulation of the proposals that had been received in the manner specified in the Official Terms of Proposal for the Bonds. The proposals were as set forth in EXHIBIT A attached hereto. After due consideration of the proposals, Member ____________________ then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: 539895v2 JAE LN140-118 2 RESOLUTION NO. 18-157 A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION BONDS, SERIES 2018A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $7,169,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the City Council (the “City Council”) of the City of Lino Lakes, Anoka County, Minnesota (the “City”), as follows: Section 1. Sale of Bonds. 1.01 Authorization for Sale of Bonds. Pursuant to a resolution adopted by the City Council of the City on October 8, 2018 (the “Authorizing Resolution”), the City authorized the sale of its General Obligation Bonds, Series 2018A (the “Bonds”), for the following purposes: (a) to finance certain street reconstruction projects (the “Street Reconstruction”) within the City included in the “2017–2021 Five-Year Street Reconstruction Plan for the City of Lino Lakes, Minnesota” (the “Plan”), including, among other projects, the reconstruction of West Shadow Lake Drive, Sandpiper Drive, Shadow Court, LaMotte Drive, and LaMotte Circle (the “Overall Street Reconstruction Project”), pursuant to Minnesota Statutes, Chapter 475, as amended (the “Municipal Debt Act”), specifically Section 475.58, subdivision 3b; and (b) to finance construction of various improvements to the City’s sanitary sewer and water systems, including but not limited to the construction of water and sanitary sewer improvements related to the Overall Street Reconstruction Project (the “Utility Improvements”), pursuant to the Municipal Debt Act and Minnesota Statutes, Chapter 444, as amended (collectively, the “Utility Revenue Act”). 1.02. Award to the Purchaser and Interest Rates. The proposal of ___________ (the “Purchaser”) to purchase the Bonds of the City is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $____________ (the par amount of the Bonds of $7,169,000, [plus original issue premium of $_________,] [less original issue discount of $_________], less an underwriter’s discount of $___________), for Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2020 % 2028 % 2021 2029 2022 2030 2023 2031 2024 2032 2025 2033 2026 2034 2027 True interest cost: ____________% 539895v2 JAE LN140-118 3 1.03. Purchase Contract. The sum of $___________, being the amount proposed by the Purchaser in excess of $7,169,000, shall be credited to the accounts of the Debt Service Fund hereinafter created or deposited in the accounts of the Construction Fund hereinafter created, as determined by the Finance Director of the City in consultation with the City’s municipal advisor. The Finance Director is directed to deposit the good faith check or deposit of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith deposits of the unsuccessful proposers. The Mayor and City Administrator are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Municipal Debt Act and the Utility Revenue Act (together, the “Act”), including Section 475.58, subdivision 3b, in the total principal amount of $7,169,000, originally dated December 19, 2018, in the denomination of $5,000 each or any integral multiple thereof (except that the Bonds maturing on February 1, 2021 may be made in the denomination of $1,000 or any integral multiple thereof), numbered No. R-1 upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2020 $ 2028 $ 2021 2029 2022 2030 2023 2031 2024 2032 2025 2033 2026 2034 2027 (a) $5,124,000 of the Bonds (the “Street Reconstruction Bonds”), maturing on February 1 in the years and amounts set forth below, will be used to finance the Street Reconstruction: Year Amount Year Amount 2021 $ 2028 $ 2022 2029 2023 2030 2024 2031 2025 2032 2026 2033 2027 2034 (b) $2,045,000 of the Bonds (the “Utility Revenue Bonds”), maturing on February 1 in the years and in the amounts set forth below, will be used to finance the Utility Improvements. Year Amount Year Amount 2020 $ 2028 $ 2021 2029 2022 2030 2023 2031 2024 2032 2025 2033 2026 2034 539895v2 JAE LN140-118 4 2027 1.05. Optional Redemption. The City may elect on February 1, 2028, and on any day thereafter to prepay Bonds due on or after February 1, 2029. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in Section 7 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. [1.06. Mandatory Redemption; Term Bonds. TO BE COMPLETED IF TERM BONDS ARE REQUESTED: The Bonds maturing on February 1, 20___, February 1, 20___, and February 1, 20___ shall hereinafter be referred to collectively as the “Term Bonds.” The principal amount of the Term Bonds subject to mandatory sinking fund redemption on any date may be reduced through earlier optional redemptions, with any partial redemptions of the Term Bonds credited against future mandatory sinking fund redemptions of such Term Bonds in such order as the City shall determine. The Term Bonds are subject to mandatory sinking fund redemption and shall be redeemed in part at par plus accrued interest on February 1 of the following years and in the principal amounts as follows:] Sinking Fund Installment Date February 1, 20___ Term Bond Principal Amount ____________________ * Maturity February 1, 20___ Term Bond Principal Amount ____________________ * Maturity February 1, 20___ Term Bond Principal Amount ____________________ * Maturity Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication; or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing 539895v2 JAE LN140-118 5 August 1, 2019, to the registered owners of record thereof as of the close of business on the fifteenth day immediately preceding each interest payment date, whether or not such day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred, or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner’s attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner’s order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees, and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen, or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen, or lost, the Registrar will deliver a new Bond of like amount, number, maturity date, and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen, or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen, or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen, or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or 539895v2 JAE LN140-118 6 indemnity in form, substance, and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Registrar. The City appoints U.S. Bank National Association, Saint Paul, Minnesota, as the initial Registrar. The Mayor and the City Administrator are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of the City Council, the Finance Director must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication, and Delivery. The Bonds will be prepared under the direction of the Finance Director and executed on behalf of the City by the signatures of the Mayor and the City Administrator, provided that those signatures may be printed, engraved, or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this resolution. When the Bonds have been so prepared, executed, and authenticated, the Finance Director will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in EXHIBIT B attached hereto with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form attached hereto as EXHIBIT B. 539895v2 JAE LN140-118 7 3.02. Approving Legal Opinion. The City Administrator is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, and cause the opinion to be printed on or accompany each Bond. Section 4. Payment; Security; Funds; Pledges; and Covenants. 4.01. Debt Service Fund. The Bonds will be payable from the General Obligation Bonds, Series 2018A Debt Service Fund (the “Debt Service Fund”) hereby created. The Debt Service Fund shall be administered by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The City will maintain the following accounts in the Debt Service Fund: the “Street Reconstruction Account” and the “Utility Improvements Account.” Amounts in the Street Reconstruction Account are irrevocably pledged to the Street Reconstruction Bonds and amounts in the Utility Improvements Account are irrevocably pledged to the Utility Revenue Bonds. (a) Street Reconstruction Account. Ad valorem taxes (the “Taxes”) herein levied for the Street Reconstruction are hereby pledged to the Street Reconstruction Account of the Debt Service Fund. There is appropriated to the Street Reconstruction Account a pro rata portion of (i) capitalized interest financed from Bond proceeds, if any; and (ii) amounts over the minimum purchase price of the Bonds paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof. (b) Utility Improvements Account. The City will continue to maintain and operate its Water Fund and Sanitary Sewer Fund to which will be credited all gross revenues of the water system and sanitary sewer system, respectively, and out of which will be paid all normal and reasonable expenses of current operations of such systems. Any balances therein are deemed net revenues (the “Net Revenues”) and will be transferred, from time to time, to the Utility Improvements Account of the Debt Service Fund, which Utility Improvements Account will be used only to pay principal of and interest on the Utility Revenue Bonds and any other bonds similarly authorized. There will always be retained in the Utility Improvements Account a sufficient amount to pay principal of and interest on all the Utility Revenue Bonds, and the Finance Director must report any current or anticipated deficiency in the Utility Improvements Account to the City Council. There is appropriated to the Utility Improvements Account a pro rata portion of (i) capitalized interest financed with the proceeds of the Bonds, if any; and (ii) amounts over the minimum purchase price of the Bonds paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof. 4.02. Construction Fund. The City hereby creates the General Obligation Bonds, Series 2018A Project Fund (the “Construction Fund”). The City will maintain the following accounts in the Construction Fund: the “Street Reconstruction Account” and the “Utility Improvements Account.” Amounts in the Street Reconstruction Account are irrevocably pledged to the Street Reconstruction Bonds, and amounts in the Utility Improvements Account are irrevocably pledged to the Utility Revenue Bonds. (a) Street Reconstruction Account. Proceeds of the Street Reconstruction Bonds, less the appropriations made in Section 4.01(a) hereof, together with any other funds appropriated for the Street Reconstruction and Taxes collected during the construction of the Street Reconstruction, will be deposited in the Street Reconstruction Account of the Construction Fund to be used solely to defray expenses of the Street Reconstruction. When the Street Reconstruction is completed and the cost thereof paid, the Street Reconstruction Account of the Construction Fund is to be closed and subsequent collections of Taxes for the Street Reconstruction are to be deposited in the Street Reconstruction Account of the Debt Service Fund. 539895v2 JAE LN140-118 8 (b) Utility Improvements Account. Proceeds of the Utility Revenue Bonds, less the appropriations made in Section 4.01(b) hereof, will be deposited in the Utility Improvements Account of the Construction Fund to be used solely to defray expenses of the Utility Improvements. When the Utility Improvements are completed and the cost thereof paid, the Utility Improvements Account of the Construction Fund is to be closed and any funds remaining therein may be deposited in the Utility Improvements Account of the Debt Service Fund. 4.03. City Covenants with Respect to the Utility Revenue Bonds. The City Council covenants and agrees with the holders of the Bonds that so long as any of the Bonds remain outstanding and unpaid, it will keep and enforce the following covenants and agreements: (a) The City will continue to maintain and efficiently operate the water system and sanitary sewer system as public utilities and conveniences free from competition of other like municipal utilities and will cause all revenues therefrom to be deposited in bank accounts and credited to the Water Fund and the Sanitary Sewer Fund, respectively, as hereinabove provided, and will make no expenditures from those accounts except for a duly authorized purpose and in accordance with this resolution. (b) The City will also maintain the Utility Improvements Account of the Debt Service Fund as a separate account and will cause money to be credited thereto from time to time out of Net Revenues from the water system and sanitary sewer system in sums sufficient to pay principal of and interest on the Utility Revenue Bonds when due. (c) The City will keep and maintain proper and adequate books of records and accounts separate from all other records of the City in which will be complete and correct entries as to all transactions relating to the water system and sanitary sewer system and which will be open to inspection and copying by any Bondholder or the Bondholder’s agent or attorney at any reasonable time, and it will furnish certified transcripts therefrom upon request and upon payment of a reasonable fee therefor, and said account will be audited at least annually by a qualified public accountant, and statements of such audit and report will be furnished to all Bondholders upon request. (d) The City Council will cause persons handling revenues of the water system and sanitary sewer system to be bonded in reasonable amounts for the protection of the City and the Bondholders and will cause the funds collected on account of the operations of such systems to be deposited in a bank whose deposits are guaranteed under the Federal Deposit Insurance Law. (e) The City Council will keep the water system and sanitary sewer system insured at all times against loss by fire, tornado, and other risks customarily insured against with an insurer or insurers in good standing, in such amounts as are customary for like plants, to protect the holders, from time to time, of the Bonds and the City from any loss due to any such casualty and will apply the proceeds of such insurance to make good any such loss. (f) The City and each and all of its officers will punctually perform all duties with reference to the water system and sanitary sewer system as required by law. (g) The City will impose and collect charges of the nature authorized by Section 444.075 of the Act, at the times and in the amounts required to produce Net Revenues adequate to pay all principal and interest when due on the Utility Revenue Bonds and to create and maintain such reserves securing said payments as may be provided in this resolution. 539895v2 JAE LN140-118 9 (h) The City Council will levy general ad valorem taxes on all taxable property in the City when required to meet any deficiency in Net Revenues. 4.04. General Obligation Pledge. For the prompt and full payment of the principal of and interest on the Bonds, as the same respectively become due, the full faith, credit, and taxing powers of the City will be and are hereby irrevocably pledged. If the balance in the Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Debt Service Fund when a sufficient balance is available therein. 4.05. Pledge of Tax Levy. For the purpose of paying the principal of and interest on the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City. The Taxes will be credited to the Street Reconstruction Account of the Debt Service Fund above provided and will be in the years and amounts as attached hereto as EXHIBIT C. 4.06. Certification to Manager of Property Records and Taxation as to Debt Service Fund Amount. It is hereby determined that the estimated collections of Taxes and Net Revenues will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levy herein provided for the Bonds is irrepealable until all of the Bonds are paid, provided that at the time the City makes its annual tax levies the Finance Director may certify to the Manager of Property Records and Taxation of Anoka County, Minnesota (the “Manager of Property Records and Taxation”) the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the Manager of Property Records and Taxation will thereupon reduce the levy collectible during such year by the amount so certified. 4.07. Filing of Resolution. The City Administrator is authorized and directed to file a certified copy of this resolution with the Manager of Property Records and Taxation and to obtain the certificate required by Section 475.63 of the Act. Section 5. Authentication of Transcript. 5.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits, and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 5.02. Certification as to Official Statement. The Mayor and City Administrator are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 5.03. Other Certificates. The Mayor, the City Administrator, and the Finance Director are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or 539895v2 JAE LN140-118 10 the organization of the City or incumbency of its officers, at the closing the Mayor, the City Administrator, and the Finance Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Finance Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds. Section 6. Tax Covenants. 6.01. Tax-Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees, or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. To that end, the City will comply with all requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. 6.02. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be “private activity bonds” within the meaning of Sections 103 and 141 through 150 of the Code. 6.03. Qualified Tax-Exempt Obligations. In order to qualify the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not “private activity bonds” as defined in Section 141 of the Code; (b) the City designates the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds that are not qualified 501(c)(3) bonds, which will be issued by the City (and all subordinate entities of the City) during calendar year 2018 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2018 have been designated for purposes of Section 265(b)(3) of the Code. 6.04. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 7. Book-Entry System; Limited Obligation of City. 7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (“DTC”). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 539895v2 JAE LN140-118 11 7.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar, and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds; (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption; or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar, and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City’s obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Administrator of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words “Cede & Co.” will refer to such new nominee of DTC; and upon receipt of such a notice, the City Administrator will promptly deliver a copy of the same to the Registrar and Paying Agent. 7.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 7.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 7.05. Payments to Cede & Co. Notwithstanding any other provision of this resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and all notices with respect to the Bond will be made and given, respectively in the manner provided in DTC’s Operational Arrangements, as set forth in the Representation Letter. Section 8. Continuing Disclosure. 539895v2 JAE LN140-118 12 8.01. Execution of Continuing Disclosure Certificate. “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate executed by the Mayor and City Administrator and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 8.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 9. Defeasance. When all the Bonds, and all interest thereon, have been discharged as provided in this section, all pledges, covenants, and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. (The remainder of this page intentionally left blank) 539895v2 JAE LN140-118 13 The motion for the adoption of the foregoing resolution was duly seconded by Member ___________, and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 539895v2 JAE LN140-118 A-1 EXHIBIT A PROPOSALS 539895v2 JAE LN140-118 B-1 EXHIBIT B FORM OF BOND No. R-_____ UNITED STATES OF AMERICA $_________ STATE OF MINNESOTA COUNTY OF ANOKA CITY OF LINO LAKES GENERAL OBLIGATION BOND SERIES 2018A Rate Maturity Date of Original Issue CUSIP February 1, 20__ December 19, 2018 Registered Owner: CEDE & CO. The City of Lino Lakes, Minnesota, a duly organized and existing municipal corporation in Anoka County, Minnesota (the “City”), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered Owner specified above or registered assigns the principal sum of $__________ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above (calculated on the basis of a 360 day year of twelve 30 day months), payable February 1 and August 1 in each year, commencing August 1, 2019, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, Saint Paul, Minnesota, as Registrar, Paying Agent, Transfer Agent, and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1, 2028, and on any date thereafter to prepay Bonds due on or after February 1, 2029. Redemption may be in whole or in part and if in part, at the option of the City and in such order as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company (“DTC”) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. This Bond is one of an issue in the aggregate principal amount of $7,169,000 all of like original issue date and tenor, except as to number, maturity date, redemption privilege, and interest rate, all issued pursuant to a resolution adopted by the City Council on November 13, 2018 (the “Resolution”), for the purpose of providing money to defray the expenses incurred and to be incurred in financing certain street reconstruction and in making various improvements to the water system and sanitary sewer system of the City, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapters 444 and 475, including Section 475.58, subdivision 3b, and the principal hereof and interest hereon are payable in part from ad valorem taxes and in part from net 539895v2 JAE LN140-118 B-2 revenues of the water system and sanitary sewer system, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency, which additional taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof (except that the Bonds maturing on February 1, 2021 may be made in the denomination of $1,000 or any integral multiple thereof) of single maturities. The City Council has designated the issue of Bonds of which this Bond forms a part as “qualified tax- exempt obligations” within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. IT IS HEREBY CERTIFIED AND RECITED That in and by the Resolution, the City has covenanted and agreed that it will continue to own and operate the water system and sanitary sewer system, free from competition by other like municipal utilities; that adequate insurance on said systems and suitable fidelity bonds on employees will be carried; that proper and adequate books of account will be kept showing all receipts and disbursements relating to the Water Fund and the Sanitary Sewer Fund, into which it will pay all of the gross revenues from the water system and sanitary sewer system, respectively; that it will also create and maintain a Utility Improvements Account within the General Obligation Bonds, Series 2018A Debt Service Fund, into which it will pay, out of the net revenues from the water system and sanitary sewer system, a sum sufficient to pay principal of the Utility Revenue Bonds (as defined in the Resolution) and interest on the Utility Revenue Bonds when due; and that it will provide, by ad valorem tax levies, for any deficiency in required net revenues of the water system and sanitary sewer system. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner’s attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner’s attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee, or governmental charge required to be paid with respect to such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory, or charter limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual signature of one of its authorized representatives. 539895v2 JAE LN140-118 B-3 IN WITNESS WHEREOF, the City of Lino Lakes, Anoka County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Administrator and has caused this Bond to be dated as of the date set forth below. Dated: December 19, 2018 CITY OF LINO LAKES, MINNESOTA (Facsimile) (Facsimile) Mayor City Administrator ______________________________________ CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION By Authorized Representative ______________________________________ ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT _________ Custodian _________ (Cust) (Minor) TEN ENT -- as tenants by entireties under Uniform Gifts or Transfers to Minors Act, State of _______________ JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ________________________________________ ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto ________________________________________ the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint _________________________ attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. 539895v2 JAE LN140-118 B-4 Dated: Notice: The assignor’s signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”), the New York Stock Exchange, Inc. Medallion Signatures Program (“MSP”) or other such “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STEMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee ________________________________________ PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration Registered Owner Signature of Officer of Registrar Cede & Co. Federal ID #13-2555119 539895v2 JAE LN140-118 C-1 EXHIBIT C TAX LEVY SCHEDULE YEAR * TAX LEVY 2019 $ 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 * Year tax levy collected. 539895v2 JAE LN140-118 STATE OF MINNESOTA ) ) COUNTY OF ANOKA ) SS. ) CITY OF LINO LAKES ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Lino Lakes, Minnesota (the “City”), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on Tuesday, November 13, 2018, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City’s General Obligation Bonds, Series 2018A, in the original aggregate principal amount of $7,169,000. WITNESS My hand officially as such City Clerk and the corporate seal of the City this ______ day of ________, 2018. City Clerk City of Lino Lakes, Minnesota (SEAL) 539895v2 JAE LN140-118 STATE OF MINNESOTA COUNTY OF ANOKA CERTIFICATE OF MANAGER OF PROPERTY RECORDS AND TAXATION AS TO TAX LEVY AND REGISTRATION I, the undersigned Manager of Property Records and Taxation of Anoka County, Minnesota, hereby certify that a certified copy of a resolution adopted by the governing body of the City of Lino Lakes, Minnesota (the “City”), on November 13, 2018, levying taxes for the payment of the City’s General Obligation Bonds, Series 2018A, in the original aggregate principal amount of $7,169,000, dated December 19, 2018, has been filed in my office and said bonds have been entered on the register of obligations in my office and that such tax has been levied as required by law. WITNESS My hand and official seal this _____ day of __________, 2018. MANAGER OF PROPERTY RECORDS AND TAXATION, ANOKA COUNTY, MINNESOTA By Its (SEAL) City of Lino LakesBond Sale Results Standard & Poor’s Upgrade to AA+ November 13, 2018 PRESENTER: Terri Heaton,Senior Vice President $7,169,000 General Obligation Bonds, 2018A •To finance: –Various street reconstruction projects (West Shadow Lake Drive and LaMotte Areas); –Various water and sewer utility projects related to West Shadow Lake Drive; –Various water utility projects on Lake Drive 2 Bids received Sale held at 11:00 AM this morning •Seven bids representing 31 financial institutions –Low bid from Baird & Company (and syndicate) •True Interest Cost –Estimate in Recommendations dated October 1, 2018 was 3.19% •Built in 15 basis points of contingency –Actual low bid is 3.14% –Bids ranged from 3.14% to 3.26% 3 Market Changes since Recommendations 4 5 What’s In A Bond Rating? •Indication of likelihood of default —The higher the rating, the less likely to default —The less likely to default, the lower the interest rates 6 Rating Scale Moody’s S &P Fitch Highest Aaa AAA AAA Aa 1 AA+AA+ Aa 2 AA AA Aa 3 AA-AA- A1 A+A+ A2 A A A3 A-A- Baa1 BBB+BBB+ Baa2 BBB BBB Lowest (Investment Grade) Baa3 BBB-BBB- 7 Lino Lakes Rationale for Rating Upgrade •The AA+ upgrade is based on the City’s improved economic metrics and sustained, very strong budgetary flexibility and liquidity, coupled with strong performance 8 Lino Lakes Rationale for Rating •The rating on the bonds reflects: –Very Strong Economy with access to broad and diverse metropolitan statistical area; –Strong Management, with good financial policies and practices (more next slide); –Strong budgetary performance with operating surpluses in the general fund and at the total governmental fund level in 2017; –Very strong budgetary flexibility; –Very strong liquidity and access to external liquidity; and –Debt with rapid amortization of 71.7% scheduled to be retired in 10 years 9 Lino Lakes Rationale for Strong Management Rating •Indicates that management practices are strong, with the following highlights: –Strong budget development practices; –Quarterly reporting of budget-to-actual performance; –Long-term operating financial plan looking ahead 5 years; –Long-term capital plan looking ahead 5 years; –Formalized investment policy; and –Formalized fund balance policy 10 AA+ Rating Carefully Considered By Standard & Poor’s •Leadership and staff of the City should be credited with this success and steady climb to AA+ –2010 upgraded to AA –2005 upgraded to Aa3 –2004 upgraded to A1 –2002 upgraded to A2 –1998 upgraded to A3 11 City of Lino Lake’s Standard & Poor’s Upgrade AA+ CITY COUNCIL AGENDA ITEM 2B STAFF ORIGINATOR: Sarah Cotton, Finance Director MEETING DATE: November 13, 2018 TOPIC: Consider Resolution No. 18-158, Calling for a Public Hearing on Consenting to the Issuance of Senior Housing Facility Revenue Notes to Finance a Senior Housing Project VOTE REQUIRED: 3/5 BACKGROUND Heritage Apartments, Inc. (Lyngblomsten) has proposed development of a senior living campus with a continuum of care at the northwest corner of CSAH49/Hogdson Road and CSAH 32/Ash Street/County Road J. The proposal includes a restaurant and a mix of 30 detached townhomes plus 200 units of independent living, assisted living and memory care/enhanced care suites. The Lino Lakes City Council reviewed the Planned Unit Development Concept Plan at its August 6, 2018 meeting. Heritage Apartments, Inc. has submitted a proposal which includes the financing, in part, of the Lino Lakes Project, in addition to the refinancing of an existing facility. State Statute authorizes a municipality to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the governing body of the city in which the property is located consents by resolution to the issuance of such obligations. Heritage Apartments, Inc. has requested that the City of Falcon Heights issue revenue obligations to finance combined multifamily housing and healthcare developments. In order for the City of Falcon Heights to issue the Note, the City of Lino Lakes must grant “host approval” to the issuance of the Note, following a duly noticed public hearing. The attached resolution sets the public hearing for Monday, December 10, 2018. Representatives from Heritage Apartments, Inc. (Lyngblomsten) will be present at the December 10, 2018 meeting to answer any questions the Council may have. RECOMMENDATION Staff recommends approval of Resolution No. 18-158, calling for a public hearing on Monday, December 10, 2018. ATTACHMENTS Resolution No. 18-158 1 EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF LINO LAKES, MINNESOTA Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Lino Lakes, Minnesota, was duly held at the City Hall in said City on November 13, 2018, commencing at 6:30 o’clock P.M. The following Council members were present: and the following were absent: Member ___________ introduced the following resolution and moved its adoption: RESOLUTION NO. 18-158 A RESOLUTION CALLING FOR A PUBLIC HEARING ON CONSENTING TO THE ISSUANCE OF SENIOR HOUSING FACILITY REVENUE NOTES TO FINANCE A SENIOR HOUSING PROJECT The motion for the adoption of the foregoing resolution was duly seconded by member _______________, and after full discussion thereof and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 2 RESOLUTION NO. 18-158 A RESOLUTION CALLING FOR A PUBLIC HEARING ON CONSENTING TO THE ISSUANCE OF SENIOR HOUSING FACILITY REVENUE NOTES TO FINANCE A SENIOR HOUSING PROJECT (a) WHEREAS, Minnesota Statutes, Chapter 462C (the “Act”), confers upon cities, the power to issue revenue obligations to finance combined multifamily housing and health care developments within the boundaries of the city; and (b) WHEREAS, the City of Lino Lakes, Minnesota (the “City”), has received from Heritage Apartments, Inc., a Minnesota nonprofit corporation (the “Borrower”), a proposal that the City of Falcon Heights, Minnesota (“Issuer”), undertake a program to assist in financing in part and refinancing a Project hereinafter described, through the issuance of revenue notes or obligations (in one or more series) (the “Notes”) to be issued in 2018 pursuant to the Act; and (c) WHEREAS, the Notes will be issued, in part, to finance, in part, the acquisition, construction, and equipping of multifamily senior housing facilities, with approximately 103 independent living units, 34 assisted living units, 16 memory care units, 48 skilled nursing units, and 30 townhome units, totaling approximately 106,730 square feet, to be located at 6075 Hodgson Road in the City (the “Lino Lakes Project”); and (d) WHEREAS, Lyngblomsten Senior Housing, Inc., a Minnesota nonprofit corporation, of which the Borrower is an affiliate, will be the owner and operator of the Lino Lakes Project; and (e) WHEREAS, the City has been advised that a public hearing and City Council host approval of and consent to the financing, in part, of the Lino Lakes Project is required under the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), because the facility to be financed by the Notes is located in the City: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lino Lakes, Minnesota, as follows: 1. A public hearing on the proposal of the Borrower will be held at the time and place set forth in the form of Notice of Public Hearing attached hereto as Exhibit A. The general nature of the Project and an estimate of the aggregate principal amount of revenue notes or other obligations to be issued to finance the proposal are described in the Notice of Public Hearing. 2. The City Clerk is hereby authorized and directed to cause the submission of notice of the hearing for publication in the official newspaper of the City and a newspaper of general circulation available in the City, not less than 14 days nor more than 30 days prior to the date fixed for the hearing, substantially in the form of the attached Notice of Public Hearing. 3 Adopted by the City Council of the City of Lino Lakes, Minnesota, this 13th day of November, 2018. _________________________________ Mayor ATTEST: _____________________________________ City Clerk STATE OF MINNESOTA ) COUNTY OF RAMSEY ) CITY OF LINO LAKES ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Lino Lakes, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council of said City duly called and held on the date therein indicated, insofar as such minutes relate to calling for a public hearing on approving the issuance of senior housing and health care revenue obligations for a project in the City. WITNESS my hand this ___ day of ____________, 2018. _______________________________ City Clerk 11150281v3 A-1 EXHIBIT A NOTICE OF PUBLIC HEARING ON CONSENTING TO THE ISSUANCE OF SENIOR HOUSING FACILITY REVENUE NOTES TO FINANCE A SENIOR HOUSING PROJECT Notice is hereby given that the City Council of the City of Lino Lakes, Minnesota (the “City”) will meet at the City Hall, 600 Town Center Parkway, in the City, at 6:30 P.M. on Monday, December 10, 2018, to consider giving host approval and consent to a housing finance program and the proposal of Heritage Apartments, Inc., a Minnesota nonprofit corporation (the “Borrower”) that the City of Falcon Heights, Minnesota (the “Issuer”) issue its revenue notes (the “Notes”) to finance, in part, the Project described below pursuant to Minnesota Statutes, Chapter 462C, and a joint powers agreement between the City, the Issuer, and the City of Saint Paul, Minnesota. The obligations will be issued, in part, to finance the acquisition, construction and equipping of a multifamily senior housing and health care facility, totaling approximately 106,730 square feet, to be located at 6075 Hodgson Road, in the City (the “Project”). The Lino Lakes Project will be owned and operated by Lyngblomsten Senior Housing, Inc., a Minnesota nonprofit corporation, of which the Borrower is an affiliate. The Project is currently anticipated to consist of the following units: Units Number of Units Approximate Square Footage Per Unit Estimated Initial Rents Per Unit Independent Living: One Bedroom 38 730 $ 1,800 One Bedroom & Den 33 900 $ 2,100 Two Bedroom 32 1,120 $ 2,650 Assisted Living: Studio 16 485 $ 2,975 One Bedroom 18 575 $ 3,275 Memory Care: Memory Care 16 515 $ 3,400 Skilled Nursing Units: One Bedroom (MA/PVT) 24 350 $ 267/day One Bedroom (Medicare/HMO) 24 350 $ 475/day Townhomes: Two Bedroom 30 1,800 $ 3,000 11150281v3 A-2 The maximum aggregate estimated principal amount of the Notes or other obligations to be issued in one or more series to finance, in part, the Project pursuant to the housing finance program will be approximately $5,000,000. The Notes or other obligations, if and when issued, will not constitute a charge, lien or encumbrance upon any property of the City or the Issuer, except the Project and the revenues to be derived from the Project. Such Notes or other obligations will not be a charge against the City or the Issuer’s general credit or taxing powers, but will be payable from sums to be paid by the Borrower pursuant to a revenue agreement. Further information concerning the housing finance program and the Project may be obtained from the City Clerk during normal business hours. At the time and place fixed for the public hearing, the City Council of the City will give all persons who appear at the hearing an opportunity to express their views with respect to the housing finance program and proposal. Written comments will be considered if submitted at the above City office on or before the date of the hearing. BY ORDER OF THE CITY COUNCIL OF THE CITY OF LINO LAKES, MINNESOTA By Julianne Bartell Its City Clerk CITY COUNCIL AGENDA ITEM 2C STAFF ORIGINATOR: Sarah Cotton, Finance Director MEETING DATE: November 13, 2018 TOPIC: 1st Reading of Ordinance No. 18-18, Establishing the 2019 City Fee Schedule VOTE REQUIRED: 3/5 INTRODUCTION The City Council is being asked to approve the first reading of Ordinance No. 18-18, Establishing the 2019 City Fee Schedule. BACKGROUND In order to provide for a more efficient and timely method of reviewing and adjusting the various fees charged by the City, fees are consolidated into one schedule to be reviewed and adopted on an annual basis. The City’s current fee schedule has been circulated to department directors with a request to update or amend the schedule as appropriate for 2019. Staff has reviewed the fees in place to ensure their ongoing equity and cost recovery ability. Ordinance No. 18-18 (the proposed 2019 Fee Schedule) is attached. Recommended amendments to the ordinance are printed in red. The changes proposed for 2019 are outlined below for your review: • Weed & Mowing Violation Charges, Building Permits, Escrow Deposits, Water Meter Rental and Testing Fees, Trunk Utility Connection Fees, Lateral Service Connection Fees, Surface Water Management Fees, and Development Fees – Staff has adjusted fees to account for inflationary increases; they are generally consistent with neighboring cities. The 2019 Fee Schedule Ordinance is presented for council review and first reading. Second reading of the ordinance is planned for the next regular council meeting on November 26, 2018. RECOMMENDATION Adopt the first reading of Ordinance No. 18-18, Establishing the 2019 City Fee Schedule. ATTACHMENTS Ordinance No. 18-18 1 1st Reading: November 13, 2018 Publication: December 4, 2018 2nd Reading: November 26, 2018 Effective: January 4, 2019 City of Lino Lakes Ordinance No. 18-18 An Ordinance Adopting The 2018 City of Lino Lakes Fee Schedule and Providing for the Issuance Of Licenses, Permits and Collection of Fees Thereof; Repeals All Ordinances, Parts Of Ordinances and Previous Fee Schedules that Conflict Therewith. The City of Lino Lakes City Council does ordain the following: Section 1. Findings. Pursuant to Minnesota Law, the Lino Lakes City Charter, and the Lino Lakes City Code, and upon a review of a study conducted by City Staff, a fee schedule for City services and licensing is hereby adopted as follows: 2019 FEE SCHEDULE ALCOHOLIC BEVERAGES 3.2 Beer Investigation, Initial Application Only $267.75 (1 or 2); $471.75 (3+) 3.2 Beer Off-Sale $200.00/Year 3.2 Beer On-Sale $300.00/Year 3.2 Beer On-Sale Temporary $50.00 + $5.00/Day Club License $300.00 Liquor License Investigation Fee, Initial Application Only $267.75 (1 or 2); $471.75 (3+) Liquor On-Sale License $4,500.00/Year Liquor Off-Sale $200.00 Liquor Temporary Permit $50.00 Temporary Set-Up License $25.00 Wine License Investigation Fee, Initial Application Only $267.75 (1 or 2); $471.75 (3+) Wine $500.00/Year Sunday Liquor $200.00/Year On-Sale Brewer Taproom $500/Year Off-Sale Growler $200/Year AMUSEMENT & COMMERCIAL RECREATION Cabaret License $35.00 Dances $200.00/Year Gambling Permit Application $10.00 State Licensed Gambling Regulation Tax 0.10% of gross receipts less prizes paid BUSINESS & MISCELLANEOUS Assessment Search Fee $20.00/Search Background Check Fee $35.00/Background Burning Permit $50.00 Dog Kennel - Private $20.00/Year Formatted: Indent: Left: 0.58" Formatted: Indent: Left: 0.58" Formatted: Indent: Left: 0.58" 2 Dog Kennel – Commercial $105.00/Year Dog License Male/Female $10.50 Dog License Male/Female $5.25(Spayed or Neutered) Copies: Per Page 1-10 pages - Free; 11-100 pages - $.25 per page; Over 100 pages – Actual Cost Copies: New Resident Labels $5.00 per Month Flat Fee Copies: Large Scale (>11”x17”) $.50 per sq. foot City Charter 1st Copy Free; $10.00 Each Add’l City Code Book $75.00 City Map $2.50 Comp. Plan. $55.00 CD or DVD $7.00 Environmental Handbook $55.00 Fax Charge 1st 10 Pages Free, then $.25 per Page Garbage Hauler License $75.00/First Truck; $45.00 each add’l Lawn Sprinkling Violation $25.00 for first violation $50.00 for each subsequent citation Overweight Permit $20.00 Pawn Shop Class A $10,000.00 Pawn Shop Class B $7,000.00 Class A Secondhand Goods Dealer $720.00 Class B Secondhand Goods Dealer $105.00 Class C Secondhand Goods Dealer No Fee Massage Therapist License (Individual) $50 annually Therapeutic Massage Business License $200 annually Pawn Shop Investigation $15,400 (deposit on costs) Pawn Shop In-State Investigation $765.00 Pawn Shop Out-State Investigation $20,400.00 Peddler, Solicitor, Transient Merchant $250.00/6 months (Up to 3 Backgrounds – Each Additional Background $35/Background) Rental License (annual) $67.00 for 1 or 2 units $67.00 + $15 per unit for 3 or more units (fee to be reduced by 50% if issues less than six months from expiration date) Rental License Re-inspection Fee $67.00 Return Check Charge $30.00 Special Event Permit $50.00 Tobacco License $50.00 Weed & Mowing Violation $150.00 for first hour $75.00/hr for each additional hour Return Check Charge $30.00 Zoning Maps $5.00/Large or Colored Zoning Ordinance $25.00 PARK & RECREATION USER FEES Field Rental – Resident Only Baseball/Softball Drag Only $20.00/Evening Baseball/Softball Drag & Chalk $30.00/Evening Soccer (Excluding Youth) $65.00/Evening Picnic 3 Shelter Reservation Residents - No Fee; Non-Resident - $25.00 Playground Grab Bags $10.00 / $25.00 FIRE REGULATIONS Annual Permit for Sale $350 exclusive retail seller/ $100 in oOf Consumer Fireworks conjunction with existing retail store POLICE FEES (Costs include all applicable taxes) Achieving Compliance through Education (ACE) Program Fees Equipment Violation $50.00 Moving Violation $100.00 Ordinance Violation $75.00 Parking Violation $100.00 Status Offense $50.00 Other Violations $100.00 Copy of Report Free to subject of data up to 3 pages; 4th page $1.00; then $.25 add’l pages up to 100 Copy of Report – Mail In $4.00 up to 4 pages; $.25 per page thereafter Vehicle Lockouts No charge Clearance Letter $15.00 Fingerprinting $15.00 by appointment Photographs $25.00 plus developing cost Electronic Photographs $10.00 per page of four False Alarms 3 free; 4-10 $52.50; 11 or more $105.00/calendar yr. Vehicle Forfeiture Fee $100.00 per vehicle DVD (Police Dept) $25.00 Dangerous Dog Registration $255.00/Year BUILDING - CONSTRUCTION UTILITIES Building Permit Fee Schedule Building Permit Fees shall be based on the Fee Table. Fire Suppression Permit fee shall be based on Fee Table Minimum fee of $67.00 for all permits Fee Table Total Valuation Fee $1.00 to $1,360.00 $67.00 $1,361.00 to $2,000.00 $23.50 for the first $500.00 plus $3.05 for each additional $100.00, or fraction thereof, to and including $2,000.00 $2,001.00 to $25,000.00 $69.25 for the first $2,000.00 plus $14.00 for each additional $1,000.00, or fraction thereof, to and including $25,000.00 $25,001.00 to $50,000.00 $391.25 for the first $25,000.00 plus $10.10 for each additional $1,000.00, or fraction thereof, to and including $50,000.00 $50,001.00 to $100,000.00 $643.75 for the first $50,000.00 plus $7.00 for each additional $1,000.00, or fraction thereof, to and including $100,000.00 4 $100,001.00 to $500,000.00 $993.75 for the first $100,000.00 plus $5.60 for each additional $1,000.00, or fraction thereof, to and including $500,000.00 $500,001.00 to $1,000,000.00 $3,233.75 for the first $500,000.00 plus $4.75 for each additional $1,000.00, or fraction thereof, to and including $1,000,000.00 $1,000,001.00 and up $5,608.75 for the first $1,000,000.00 plus $3.15 for each additional $1,000.00, or fraction thereof Other Inspections and Fees: Work commencing before permit issuance Double Permit Fee Erosion Control Inspection Fee (single, two-family, townhomes up to 8 units) $160.00 Multi-family > 8 units, Commercial, Industrial and Institutional determined by separate agreement. Change of use/occupancy inspections $67.00 per trip Erosion Control Re-inspection Fee $67.00 per trip Inspections outside of normal business hours $67.00 per hour* Re-inspection fee $67.00 per trip Inspections for which no fee is specifically designed $67.00 per trip Additional plan review required by changes, additions, or revisions $67.00 per hour** For use of outside consultants for plan checking and inspections, or both Actual Cost*** Plan Review Fee a. 65% of the Building Permit Fee b. 25% of the Building Permit Fee for review of similar plans (Master Plan) in a 12 month period Easement Encroachment Fee County Recording Fee plus $25.00 Accessory Building Permit: 200 sq. ft. or under in size $67.00 Accessory Building Permit: over 200 sq. ft. in size See Building Fee Table Fence Permit: 6 feet or under in height $67.00 Fence Permit: over 6 feet in height See Building Fee Table Grading Permit $155.00 Grading Permit Escrow Deposit (if not included in Dev. Contract) $300.00 Roofing Permit $103.00 Siding Permit $103.00 Swimming Pool Permit: In Ground $155.00 Swimming Pool Permit: Above Ground $103.00 Window/Door Replacement Permit $77.00 per unit (max. $155.00) 5 Retaining Wall Permit $67.00 Mechanical (HVAC) permit: Gas Fireplace $67.00 (plus $32.50 for each addt’l fireplace) Mechanical (HVAC) Permit: Residential (except new construction) $67.00 Mechanical (HVAC) Fee: New Construction Residential (does not include fireplaces) $77154.00 Mechanical (HVAC) Permit: Commercial 2% of the contract price ($67.00 minimum fee) Manufactured Home Permits $155250.00 Plumbing Permit 11.00 per fixture ($67.00 minimum fee) Sewer Connection Inspection Fee $200.00 Water Connection Inspection Fee $250.00 Contractor License Verification $5.00 per permit Contractor Lead Certification Verification (effective Feb 1, 2011) $5.00 per permit Contractor License $50.00 Metropolitan Council SAC (Sewer Availability Charge) Per Met Council ¾” Water Meter City cost plus 10% handling fee 1” Water Meter City cost plus 10% handling fee MXU Unit City cost plus 10% handling fee Touch Pad $18.00 Curb Stop Covers $70.00 Septic Installation or Repair Permit $250.00 Septic Pumping Permit $10.00 Demolition Permit $67.00 Lawn Sprinkler/Irrigation System Permit (effective June 26, 2008) $67.00 Irrigating or Watering of New Landscaping Permit (sod or seed) No Charge Lawn Sprinkling Violation $25.00 for first violation $50.00 for each subsequent citation Driveway Replacement Permit $67.00 Formatted: Justified, Indent: Left: 0.08", Right: 0.49", Space Before: 0.15 pt, Line spacing: At least 26 pt, Tab stops: 5.69", Left + 6.61", Left + 6.75", Left 6 Sign Permit: Existing Billboard $85.00 per year Sign Permit: Permanent See Building Fee Table Sign Permit: Sandwich Board $25.00 Sign Permit: Temporary (portable/banner) $25.00/Term Fee Refund – Per applicant request, City staff may refund permit fees up to 80% for voided permits. Plan review fees and state surcharge fees are non-refundable. No refund shall be provided if permit has expired. All permits issued are subject to applicable State surcharge fees. * Inspections made outside of normal business hours is a three-hour minimum charge ** Or the total hourly cost to the jurisdiction, whichever is greatest. This cost shall include supervision, overhead, equipment, hourly wages, and fringe benefits of the employees involved. *** Actual costs include administrative and overhead costs. An escrow may be required, as determined by the City Engineer, to cover all costs incurred by the City for plan revision and construction observation. ESCROW DEPOSITS In order to obtain a Certificate of Occupancy, escrow deposits shall be collected if exterior work cannot be completed due to inclement weather, as determined by City Staff, whereupon a Temporary Certificate of Occupancy would be issued subject to the execution of an escrow agreement and payment thereof. Any unfinished work must be completed within six months (weather permitting) from the date of issuance. The following escrow amounts are hereby established: a. Driveway - $1,000.00 b. Exterior Concrete - $1,000.00 c. As-built Surveys - $1,000.00 d. Stucco (final coat only) - $1,000.00 e. Garage Floor - $1,000.00 f. Landscaping - $2,500.00 (landscaping may be escrowed year-round per City Staff) Escrow deposits include will be charged a $75100.00 non-refundable administrative fee. Escrow deposits can be submitted through one of the following procedures: a.) Escrow can be paid to the City upon execution of an agreement signed by both the payee and the City. b.) The title company or lending institution can hold the escrow upon execution of an agreement signed by both the title company or lending institution and the City. A partial release, of a multi-item escrow, will be charged a $75.00 non-refundable administrative fee. RIGHT-OF-WAY MANAGEMENT Excavation Permit Fees Hole (includes administration, plan review, inspection, testing and mapping)...………….. $125.00 Trench (includes administration, plan review, inspection, testing & mapping)...$70.00 per 100 lineal feet plus hole fee Formatted: Font: 12 pt, Condensed by 0.05 pt 7 Obstruction Permit Fee (includes administration, recording, review & inspection)…$50.00 plus $.05 per lineal foot Permit Extension Fee (includes administration, recording & review)………………………………$55.00 Delay Penalty ……………………………………………………………………………………….$60.00 for up to three days of non-completion and non-prior notice before specified date. After three days an additional charter of $10.00 per day will be levied Degradation Fee Formula: This formula covers degradation for depreciation caused by intrusion into the right-of-way. The depreciation applies to the original surface of the right-of-way and to the overlays and seal-coats applied to the surface. The formula includes life expectancy schedules for each and has an estimated cost per square yard based on the quality of the right-of-way surface required for different levels of traffic. This formula creates a degradation fee which is determined by the cost per square yard for street, overlay, and seal-coat, multiplied by the depreciation schedule, multiplied by the area of the street patch. Degradation Fee: (cost per square yard for street overlay, and seal-coat x depreciation schedule rates) x area of street patch = degradation fee. UTILITY FEES Sewer Utility Rates (to be considered by separate Ordinance, No. 11-13) Water Meter Rental $400600.00 (Deposit) / $25 Per Month Additional Accessories $25.00 Per Month Utility Non-Payment Certification Fee $30.00 Underground Utility Permit $50.00 Meter Testing (Our Cost, Delivered To Minneapolis) 5/8” – 3/4" Meter Test $50100.00 1” Meter Test $65150.00 1-1/2” – 2” Meter Test $10025 0.00 City Trunk Utility Connection Fees The Trunk Utility Connection Fee consists of two components; a Trunk Charge and an Availability Charge. Trunk Charge The trunk charge shall be paid at the time of subdivision approval or at the time of hook-up, whichever is first. Residential trunk charges are based on one unit per dwelling unit. Commercial/Industrial/Institutional (CII) trunk charges are based on a factor of 2.92 units per acre. Sanitary Sewer $1,5051,573.00 Per Unit Water $2,1622,259.00 Per Unit 8 Availability Charge For residential properties, the availability charge shall be paid at the time of subdivision approval or at the time of hook-up, whichever is first. Commercial/Industrial/Institutional availability charges shall be paid at the time of building permit. Fees are based on the number of sanitary access charge (SAC) units assigned by Metropolitan Council Environmental Services (MCES). Residential uses shall be assigned one unit per dwelling unit unless otherwise noted by MCES. City Sewer (CSAC) $1,4081,471.00 Per SAC Unit City Water (CWAC) $1,3601,421.00 Per SAC Unit Lateral Service Connection Fees: If the lot or tract of land, or portion thereof, to be served by a lateral connection has not been assessed for the cost of construction, then the applicant shall pay, upon hook-up, a lateral connection in accordance with Resolution No. 02-149 (Bisel Amendment) based on the following front foot charges: Sanitary Sewer $42.0052.50 Per Front Foot Watermain $39.5049.50 Per Front Foot The Lateral Service Connection Fee shall be in addition to the City Trunk Utility Connection Fees. Water Utility Rates (to be considered by separate Ordinance, No. 11-13) Late Penalty: 10% of unpaid balance, assessed quarterly Vacant Buildings: Owners of a commercial/industrial building(s) connected to City water and/or sewer utilities that are vacant due to business closures or other reasons may apply to have the number of billed REU’s reduced to one (1) REU for purposes of calculating utility fees effective from the date the building(s) were vacated for as long as the building(s) remain unoccupied. When the building(s) again becomes occupied the owner must inform the City of such occupation, at which time the number of REU’s will be determined and utility fees assessed according to the current fee structure. (Ordinance No. 06-13, passed 8-26-13) * REU = a residential equivalent connection: 1. Residential – a single housing unit 2. Non-Residential REU = per Met Council Service Availability Charge Procedures Manual SURFACE WATER MGMT Land Use Type I. II. III. Single/Two Multi Family Commercial/Industrial/ Family Lots Lots Institutional Property Fee Charge per Acre of Development $7,1736,865 $9,2359,646 Area $10,22510,685 Fees are based on developable land in accordance with the policy provisions established in Resolution No. 92-70. Credits may be earned for subwatershed trunk improvements. CULVERT PRICES All culvert prices are based on market prices and include tax & delivery and 15% administration fee 9 10 ESCROW LAND USE FEE DEPOSIT Alternative Urban Area-wide Review (I-35E AUAR) $269 per acre To be charged at the time of land use approval for projects within the I-35E Corridor AUAR area that require preliminary plats; conditional use permits; site and building plans; and planned unit developments. Once paid, the same land will not be charged again. Administrative Permit $67 (no fee for Transient Merchant if issued by City Clerk) Application Fee (Required With Each Submittal) $200 Comprehensive Plan Amendment 40 Acres or Less $3,000 More Than 40 Acres $5,000 Conditional Use Permit Residential $1,000 Commercial/Industrial/Institutional $5,000 Environmental Assessment Worksheet $10,000 Interim Use Permit $1,000 Ordinance Amendment Map Amendment (Rezone) 40 Acres or Less $1,500 Over 40 Acres $5,000 Text Amendment $1,500 Planned Unit Development General Concept Plan $3,000 Development Stage Plan $10,000 Final Plan $5,000 Site Plan Review $5,000 Subdivision Concept Plan Review $1,500 Minor SubdivisionPreliminary Plat 40 Acres or Less $3,000 $5,000 Over 40 Acres $10,000 Final Plat $2,000 11 Tax Increment Financing or Tax Abatement $7,500 Vacation (Street, Utility, Drainage) $1,000 Variance or appeal $750 Zoning Confirmation Letter $30 *An escrow account shall be established as indicated above to cover all expenses incurred by the City as part of the plan review. In the case of applications including multiple requests the highest escrow deposit amount will be the only one initially required. The applicant is responsible for all costs incurred by the City during plan review. If the escrow account drops below 10% of the original deposit amount the City will require the submittal of an additional escrow deposit sufficient to cover any anticipated expenses. Upon City determination that the project is complete or expired, the City will return the remaining escrow deposit to the applicant. DEVELOPMENT FEES GIS Mapping Fee $90.00 per lot Park Dedication – Commercial / Industrial $2,400 per acre Park Dedication - Residential $3,000 per unit Street Sealcoating $0.345 36 per square foot Tree Preservation Mitigation Fee $300.00 per tree Street Lighting Operation Fee (New Development) $105 per light ($7/mo/light x 15 months) ENGINEERING Flood Plain Elevation Certificate $200.00 Fee Elevation Certificate Survey Add’l $1,000.00 Escrow Deposit Digital Contour Mapping $800 per ½ Section Increment STAFF TIME Staff time for chargeable event/projects shall be charged as the employee’s hourly rate of pay plus benefits plus calculated overhead costs (when applicable). Overtime will be charged at 1.5 times the calculated hourly rate. LATE FEE Late penalty fee: a late charge of 10% or $25.00, whichever is greater, will be charged for fees not paid when due. Section 2. Effective Date of Ordinance. This ordinance shall be in force and effect from and after its passage and publication according to the Lino Lakes City Charter. Adopted by the Lino Lakes City Council this 26th day of November, 2018. Jeff Reinert, Mayor ATTEST: Julianne Bartell, City Clerk CITY COUNCIL AGENDA ITEM 3A STAFF ORIGINATOR: Jeff Karlson, City Administrator MEETING DATE: November 13, 2018 TOPIC: 1st Reading of Ordinance No. 17-18, Adjusting Council Salaries VOTE REQUIRED: 3/5 INTRODUCTION The City Council is being asked to consider the 1st Reading of Ordinance No. 17-18, adjusting the salaries of the mayor and councilmembers. BACKGROUND During the September 4th work session, staff recommended the City Council adopt an ordinance that would adjust Council salaries. A recent salary survey of comparable cities showed that the Lino Lakes City Council was considerably below the average since the mayor and councilmembers last received a raise in 2010. Staff presented an updated survey at the October 1st work session that included compensation for work sessions and special meetings. When the Council’s $40 meeting stipend is included in the survey, the compensation gap is still less than other cities. To be more consistent with what other cities are doing, the Council determined that the $40 meeting stipend should be eliminated. Instead, the Council proposed an annual salary of $8,500 for councilmembers, which is a 17.6% increase. This is consistent with total wage adjustments for City employees from 2011-2019, which is 16.75%. Mayor Reinert stated the mayor’s salary should not be adjusted any higher than the councilmembers, which would put the mayor’s salary at $10,112. The proposed ordinance would become effective January 1, 2020, and would be reviewed every two years. RECOMMENDATION Staff is recommending approval of the 1st Reading of Ordinance No. 17-18, increasing the salaries of the mayor and councilmembers. ATTACHMENTS Ordinance No. 17-18 Salary Memo 1st Reading: Publication: 2nd Reading: Effective: CITY OF LINO LAKES ORDINANCE NO. 17-18 AMENDING CHAPTER 203 OF THE LINO LAKES CITY CODE BY ADJUSTING THE SALARIES OF THE MAYOR AND COUNCILMEMBERS The City Council of Lino Lakes ordains: Section 1. That Chapter 203 of the Lino Lakes Code of Ordinances be amended to read as follows: CHAPTER 203: COUNCIL COMPENSATION § 203.01 COMPENSATION OF MAYOR AND COUNCILMEMBERS. (1) Salaries. The compensation of the Mayor and the compensation of each Councilmember shall be established by City Council ordinance pursuant to M.S. § 415.11, as it may be amended from time to time. Effective January 1, 2020, the salary of the Mayor shall be $10,112.00, and the salary of each Councilmember shall be $8,500.00. Thereafter, every two years the City Council will consider whether a salary adjustment is warranted. This salary is intended to cover all meetings that may be attended by the Mayor or Councilmembers except as expressly provided in this Section. (2) Payment. The salaries established hereby are to be paid monthly. (3) Additional Council Compensation. Whenever extra meetings are called and attendance is required by all members of the City Council over and above the two regularly scheduled meetings, members will be compensated for a maximum of four extra meetings per month at a per meeting rate established in the Council member salary ordinance. Council members will be required to attend at least 50% of each meeting for compensation. Members must sign a voucher proving their attendance for reimbursement. (3) Economic Development Authority (EDA) Meetings. The City Council will be compensated for attendance at EDA meetings at the rate of $40.00 per meeting. § 203.02 WORKER'S COMPENSATION. Pursuant to M.S. § 176.011, Subd. 5, as it may be amended from time to time, all of the City Council members shall be covered by worker's compensation. Section 2. Effective Date. This Ordinance shall be effective January 1, 2020. Adopted by the Lino Lakes City Council this 26th day of November 2018. The motion for the adoption of the foregoing ordinance was introduced by Councilmember_____________and was duly seconded by Councilmember ___________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: ____________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk CITY COUNCIL AGENDA ITEM 3B STAFF ORIGINATOR: Jeff Karlson, City Administrator MEETING DATE: November 13, 2018 TOPIC: 1st Reading of Ordinance No. 08-18, Amending Chapter 203 VOTE REQUIRED: 3/5 INTRODUCTION The City Council is being asked to consider the 1st Reading of Ordinance No. 08-18, Amending Chapter 203 of the Lino Lakes Code of Ordinances regarding Council compensation. BACKGROUND The current ordinance states councilmembers must sign a voucher proving their attendance in order to be compensated for special meetings. Since the special meeting stipend will be eliminated, Councilmember Stoesz suggested amending Chapter 203 and using meeting minutes as proof of attendance at work sessions and special meetings. This amendment will only be in effect until January 1, 2020, when the special meeting pay stipend is abolished in accordance with Ordinance No. 17-18. RECOMMENDATION Approve 1st Reading of Ordinance No. 08-18, amending Chapter 203 of the Lino Lakes Code of Ordinances. ATTACHMENTS Ordinance No. 08-18 1st Reading: Publication: 2nd Reading: Effective: CITY OF LINO LAKES ORDINANCE NO. 08-18 AMENDING CHAPTER 203 OF THE LINO LAKES CITY CODE The City Council of Lino Lakes ordains: Section 1. That Chapter 203 of the Lino Lakes Code of Ordinances be amended to read as follows: CHAPTER 203: COUNCIL COMPENSATION § 203.01 COMPENSATION OF MAYOR AND COUNCILMEMBERS. (1) The compensation of the Mayor and the compensation of each Councilmember shall be established from time to time by City Council ordinance pursuant to M.S. § 415.11, as it may be amended from time to time. (2) Payment. The salaries established hereby are to be paid monthly. (3) Additional Council Compensation. Whenever extra meetings are called and attendance is required by all members of the City Council over and above the two regularly scheduled meetings, members will be compensated for a maximum of four extra meetings per month at a per meeting rate established in the Council member salary ordinance. Council members will be required to attend at least 50% of each meeting for compensation. Members must sign a voucher proving their attendance for reimbursement. The Council minutes will provide proof of attendance at work sessions and special meetings. § 203.02 WORKER'S COMPENSATION. Pursuant to M.S. § 176.011, Subd. 5, as it may be amended from time to time, all of the City Council members shall be covered by worker's compensation. Adopted by the Lino Lakes City Council this 26th day of November 2018. The motion for the adoption of the foregoing ordinance was introduced by Councilmember____________and was duly seconded by Councilmember ___________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: ____________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk CITY COUNCIL AGENDA ITEM 3C STAFF ORIGINATOR: Jeff Karlson MEETING DATE: November 13, 2018 TOPIC: 2018-2019 Labor Agreement with LELS, Local 299 VOTE REQUIRED: 3/5 INTRODUCTION Following arbitration and the arbitrator’s award, we have reached a two-year agreement with LELS Local No. 299 for 2018 and 2019. The union accepted the following terms: 1. Wages: 2.75 percent wage increase retroactive to January 1, 2018, and 2.5 percent wage increase, effective January 1, 2019. 2. Health Insurance: Article 19.1 revised to read: a) Effective January 1, 2018, Employer will contribute $566.73 toward the monthly premium for single coverage and $1,182.26 toward the monthly premium for family coverage. b) Effective January 1, 2019, Employer will contribute 100% of the base single plan and $1,182.26 plus 50% of the 2019 premium increase toward the family plan. c) The Employer’s contributions toward the Health Savings Accounts and the cash option for waiving coverage are the same. 3. Funeral Leave: Same as City’s personnel policy. 4. Clothing Allowance: The annual clothing allowance will be equal to the annual wage adjustment (i.e. 2018: $780 x 2.75% = $801.45). 5. Firefighter Stipend: Increases to $1.40 per hour in 2018 and $1.44 in 2019. Thereafter, increases will be equivalent to the annual wage increase. RECOMMENDATION Authorize execution of 2018-2019 labor agreement between the City of Lino Lakes and LELS Local No. 299. CITY COUNCIL AGENDA ITEM 3D STAFF ORIGINATOR: Jeff Karlson MEETING DATE: November 13, 2018 TOPIC: 2018 & 2019 Non-Union Compensation Plans VOTE REQUIRED: 3/5 INTRODUCTION The City Council is being asked to consider resolutions approvi ng the 2018 and 2019 compensation plan for non-union employees. BACKGROUND The 2018 plan contains a salary adjustment of 2.75 percent. This is consistent with the AFSCME and Local 49 union contracts that were previously approved by the Council. Following arbitration with the police officers, in which the arbitrator awarded the City’s position of 2.75 percent in 2018 and 2.50 percent in 2019, the LELS Local No. 299 labor agreement was also included on the November 13 council agenda for approval. The 2019 budget includes a 2.5 percent wage increase for all City personnel. Three labor unions have settled at 2.5% for 2019. We still have not come to terms with the police sergeants. Arbitration is scheduled for November 20. RECOMMENDATION a) Approve Resolution No. 18-151, establishing the 2018 compensation plan for non- union employees, retroactive to January 1, 2018. b) Approve Resolution No. 18-152, established the 2019 compensation plan, effective January 1, 2019. ATTACHMENTS Resolution No. 18-151 Resolution No. 18-152 CITY OF LINO LAKES RESOLUTION NO. 18-151 RESOLUTION ESTABLISHING 2018 COMPENSATION PLAN FOR NON-UNION EMPLOYEES WHEREAS, Section 207.04 of the Code of Ordinances requires the City Administrator to establish and maintain a compensation plan for all positions in the City, which is to be reviewed and approved by the City Council; and WHEREAS, this plan is in compliance with Minnesota Statute 471, which is referred to as the Pay Equity Law; and WHEREAS, the compensation plan includes an all-inclusive 2.75 percent salary increase and a three percent market adjustment for the Community Development Director, retroactive to January 1, 2018. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lino Lakes that the following salary schedule by adopted. City of Lino Lakes 2018 Compensation Plan Effective January 1, 2018 Position Minimum Monthly Step 2 Step 3 Step 4 Step 5 Maximum Monthly City Administrator $9,677 $10,161 $10,645 $11,129 $11,613 $12,097 Public Safety Director $8,518 $8,943 $9,369 $9,795 $10,221 $10,647 Finance Director $7,999 $8,399 $8,799 $9,199 $9,599 $9,999 Comm. Dev. Director $7,934 $8,330 $8,727 $9,124 $9,521 $9,917 Public Serv. Director $7,908 $8,304 $8,699 $9,095 $9,490 $9,886 Dep. Public Safety Dir. $7,460 $7,833 $8,207 $8,580 $8,953 $9,326 Public Safety Captain $6,973 $7,322 $7,670 $8,019 $8,368 $8,716 HR Manager $6,391 $6,711 $7,030 $7,350 $7,669 $7,989 City Clerk $5,249 $5,512 $5,774 $6,037 $6,299 $6,562 Adopted by the Lino Lakes City Council this 13th day of November 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _____________and was duly seconded by Council Member __________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: ____________________________________ Jeff Reinert, Mayor ATTEST: ______________________________________ Julianne Bartell, City Clerk CITY OF LINO LAKES RESOLUTION NO. 18-152 RESOLUTION ESTABLISHING 2019 COMPENSATION PLAN FOR NON-UNION EMPLOYEES WHEREAS, Section 207.04 of the Code of Ordinances requires the City Administrator to establish and maintain a compensation plan for all positions in the City, which is to be reviewed and approved by the City Council; and WHEREAS, this plan is in compliance with Minnesota Statute 471, which is referred to as the Pay Equity Law; and WHEREAS, the compensation plan includes a 2.50 percent salary increase, effective January 1, 2019. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lino Lakes that the following salary schedule by adopted. City of Lino Lakes 2019 Compensation Plan Effective January 1, 2019 Position Minimum Monthly Step 2 Step 3 Step 4 Step 5 Maximum Monthly City Administrator $9,920 $10,416 $10,911 $11,407 $11,903 $12,399 Public Safety Director $8,731 $9,167 $9,604 $10,040 $10,477 $10,913 Finance Director $8,199 $8,609 $9,019 $9,429 $9,839 $10,249 Comm. Dev. Director $8,132 $8,539 $8,945 $9,352 $9,758 $10,165 Public Serv. Director $8,107 $8,512 $8,917 $9,322 $9,728 $10,133 Dep. Public Safety Dir. $7,647 $8,030 $8,412 $8,794 $9,177 $9,559 Public Safety Captain $7,147 $7,504 $7,862 $8,219 $8,577 $8,934 HR Manager $6,551 $6,879 $7,206 $7,534 $7,861 $8,189 City Clerk $5,381 $5,650 $5,919 $6,188 $6,457 $6,726 Adopted by the Lino Lakes City Council this 13th day of November 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _____________and was duly seconded by Council Member __________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: ____________________________________ Jeff Reinert, Mayor ATTEST: ______________________________________ Julianne Bartell, City Clerk CITY COUNCIL AGENDA ITEM 3E STAFF ORIGINATOR: Karissa Bartholomew, Human Resources Manager MEETING DATE: November 13, 2018 TOPIC: Appointment of Utilities Supervisor VOTE REQUIRED: 3/5 INTRODUCTION The Council is being asked to approve the appointment of Justin Williams for the vacant Utilities Supervisor position in the Public Services Department. BACKGROUND Previous Utilities Supervisor Tim Hillesheim retired at the end of October. At this time, staff has completed an internal recruitment process, provided a conditional offer, and is recommending the approval of Mr. Justin Williams for the Utilities Supervisor position. Mr. Williams has been with the City since 2006, working specifically in the Utilities Department for the last three years. Previous to that, Williams worked in the Streets Department. Williams holds all required licenses for the position and was often seen as the ‘go-to’ person and second in command within the Utilities Department prior to the retirement of Hillesheim, and comes highly recommended. The hourly rate of pay would be $37.38. There are no steps within the union contract for supervisors. With the Council’s approval, Williams would start in the position on Wednesday, November 14, 2018. RECOMMENDATION Approve the appointment of Justin Williams for the Utilities Supervisor position. CITY COUNCIL AGENDA ITEM 3F STAFF ORIGINATOR: Karissa Bartholomew, Human Resources Manager MEETING DATE: November 13, 2018 TOPIC: Appointment of Utilities Maintenance Worker VOTE REQUIRED: 3/5 INTRODUCTION The Council is being asked to approve the appointment of Layne Chapman for the Utilities Maintenance Worker position in the Public Services Department. BACKGROUND Staff has recommended the promotion of Utilities Maintenance Worker Williams to the Utilities Supervisor position, which would create a vacancy within the department. In anticipation of this potential vacancy, staff went through the recruitment process for a Utilities Maintenance Worker positon. At this time, staff has completed the recruitment process, provided a conditional offer, and is recommending approval of Mr. Layne Chapman for the Utilities Maintenance Worker position. Chapman has worked with the City as a Seasonal Utilities Maintenance Worker since 2016, and comes highly recommended. Chapman has experience in all required areas of the Utilities Department and is working towards obtaining his water / sewer licenses. The hourly rate of pay would be $25.12, which is step 2 of the union contract. With the Council’s approval, Mr. Chapman would begin employment with the City following November 14, 2018. RECOMMENDATION Approve the appointment of Layne Chapman for the Utilities Maintenance Worker position. CITY COUNCIL AGENDA ITEM 3G STAFF ORIGINATOR: Karissa Bartholomew, Human Resources Manager MEETING DATE: November 13, 2018 TOPIC: Appointment of Paid On-Call Firefighter VOTE REQUIRED: 3/5 INTRODUCTION The Council is being asked to approve the appointment of Mr. Lucas Evens for a Paid On-Call Firefighter position at Fire Station 2. BACKGROUND Currently, the City has 10 firefighters at Fire Station 1 and 12 firefighters and Fire Station 2. A total count of 20 firefighters per station is considered fully staffed. At this time, staff has gone through a recruitment process, provided a conditional offer, and is recommending the approval of Lucas Evens for a Paid On-Call Firefighter position. More interviews are also taking place at this time to get closer to fully staffed. Mr. Evens does not have a background in firefighting, but has been trained in CPR and first aid, is eager to join the team, and will undergo all necessary training to become a firefighter. The hourly rate of pay would be $9.50 for pre-service training and would increase to $10.50 following the completion of all necessary training. With the Council’s approval, Evens would start in the position of Paid On-Call Firefighter following November 14, 2018. RECOMMENDATION Approve the appointment of Lucas Evens for a Paid On-Call Firefighter position at Fire Station 2. CITY COUNCIL AGENDA ITEM 3H STAFF ORIGINATOR: Karissa Bartholomew, Human Resources Manager MEETING DATE: November 13, 2018 TOPIC: Appointment of Community Development Intern VOTE REQUIRED: 3/5 INTRODUCTION The Council is being asked to approve the appointment of Monika Mann to the Community Development Intern position. BACKGROUND Previous Community Development Intern Ryan Saltis, resigned in October. At this time, staff has completed the recruitment process, provided a conditional offer, and is recommending approval of Ms. Mann for the Community Development Intern position. Ms. Mann holds a Bachelor’s Degree in Environmental Science, Policy, and Management and has experience in community planning as a student consultant for the City of Roseville. The hourly rate of pay would be $12. This position would work 29 hours a week. With the Council’s approval, Ms. Mann would begin in the position of Community Development Intern on November 26, 2018. RECOMMENDATION Approve the appointment of Monika Mann for the Community Development Intern position. CITY COUNCIL AGENDA ITEM 4A STAFF ORIGINATOR: John Swenson, Public Safety Director MEETING DATE: November 12, 2018 TOPIC: Multiple Agency Law Enforcement Joint Powers Agreement (JPA) – Financial Crimes Task Force VOTE REQUIRED: 3/5 INTRODUCTION The Lino Lakes Public Safety Department (LLPSD) is requesting council approval to enter into JPA for the investigation of financial crimes. BACKGROUND Minnesota Bureau of Criminal Apprehension (BCA) oversees the Minnesota Financial Crimes Task Force and the appropriated funds for the investigation of financial crimes in Minnesota. Staff from the LLPSD has conducted investigation into financial crimes that have been complex and involved multiple jurisdictions and involved personnel from the MN Financial Crimes Task Force (MNFCTF). If approved to participate in the JPA, the City of Lino Lakes would be authorized to be reimbursed for overtime expenses stemming from the investigation into financial crimes. The City would also have the ability to be reimbursed for expenses related financial crimes training. Participation in this JPA would not result in any staffing changes in the Public Safety Department. RECOMMENDATION Staff recommends approval of the Minnesota Financial Crimes Task Force Multiple Agency Law Enforcement JPA. ATTACHMENTS Minnesota Financial Crimes Task Force Multiple Agency Law Enforcement JPA SWIFT Contract Number: 148783 DPS PO # 3-56507 MNFCTF JPA_2017 STATE OF MINNESOTA FINANCIAL CRIMES TASK FORCE MULTIPLE-AGENCY LAW ENFORCEMENT JOINT POWERS AGREEMENT This Multiple-Agency Law Enforcement Joint Powers Agreement, and amendments and supplements thereto, (“Agreement”) is between the State of Minnesota, acting through its Commissioner of Public Safety on behalf of the Bureau of Criminal Apprehension (“State” or “BCA”), empowered to enter into this Agreement pursuant to Minnesota Statutes § 471.59, subdivisions 10 and 12, and City of Lino Lakes acting on behalf of its Police Department, 640 Town Center Parkway, Lino Lakes, MN 55014 (“Governmental Unit”), empowered to enter into this Agreement pursuant to Minnesota Statutes § 471.59, subdivision 10. WHEREAS, the Governmental Unit wishes to participate in the Minnesota Financial Crimes Task Force (“MNFCTF”) established to investigate and prosecute identity theft and related financial crimes; NOW THEREFORE, the parties agree as follows: 1. Term 1.1 Effective Date. This Agreement is effective on the date State obtains all required signatures pursuant to Minnesota Statutes § 16C.05, subdivision 2. 1.2 Expiration Date. This Agreement expires five (5) years from the Effective Date unless terminated earlier pursuant to clause 12. 2. Purpose The Governmental Unit approves, authorizes, and enters into this Agreement with the purpose of implementing a three-pronged approach to combat financial crimes: prevention, education and enforcement. 3. Standards The Governmental Unit will adhere to the Minnesota Financial Crimes Task Force Standards identified below: 3.1 Provide and assign only licensed peace officers for services pursuant to this Agreement. 3.2 Investigate major financial crimes by organized groups or individuals related to identity theft, e.g. bank fraud, wire fraud, access device fraud, commercial fraud, retail fraud and other similar economically-related forms of fraud (as defined in Minnesota Statutes § 609.52). 3.3 Prepare an investigative plan for each case assigned which will include: the identification of witnesses and witness statements; and obtaining and analyzing appropriate bank and business records. 3.4 Prepare a case synopsis which will include witness lists and relevant evidence for presentation to state and/or federal prosecutors for prosecution. 3.5 Comply with state and/or federal laws in obtaining arrest warrants, search warrants and civil and criminal forfeitures including compliance with proper legal procedures in securing evidence and, when applicable, recovery of computers. 3.6 Understand and use appropriate legal procedures in the handling of informants including documentation of identity, monitoring of activities, use and recordation of payments. SWIFT Contract Number: 148783 DPS PO # 3-56507 MNFCTF JPA_2017 3.7 Use, as appropriate, a comprehensive portfolio of investigative technologies and techniques including surveillance, covert technologies and undercover assignments. 3.8 Interview and prepare reports on the victims of financial crimes, directing those victims to appropriate public and private resources to assist them in the recovery of their identities. 3.9 Investigate cases involving cross-jurisdictional and/or organized financial crime and high value theft schemes. [Note: An assignment may require travel throughout Greater Minnesota in addition to the seven county metropolitan area as investigations expand or as assigned by the task force commander.] 4. Responsibilities of the Governmental Unit and the BCA 4.1 The Governmental Unit will: 4.1.1 Conduct investigations in accordance with provisions of the Minnesota Financial Crimes Task Force Standards, identified in clause 3 above, and conclude such investigations in a timely manner. 4.1.2 Maintain accurate records pertaining to prevention, education, and enforcement activities, to be collected and forwarded quarterly to the MNFCTF Commander, or the Commander’s designee, for statistical reporting purposes. 4.1.3 Assign one or more employees of the Governmental Unit as members to the MNFCTF. All employees of the Governmental Unit assigned as members, and while performing MNFCTF assignments, shall continue to be employed and directly supervised by the same Governmental Unit currently employing that member. All services, duties, acts or omissions performed by the MNFCTF member will be within the course and duty of the member’s employment and therefore covered by the Workers Compensation and other compensation programs of the Governmental Unit including fringe benefits. 4.1.4 Make a reasonable good faith attempt to be represented at all scheduled MNFCTF meetings in order to share information and resources among the MN FCTF members. 4.1.5 Participate fully in any audits required by the Minnesota Financial Crimes Task Force. 4.2 The parties mutually agree that any investigators assigned to the MNFCTF by the Governmental Unit will be provided an undercover vehicle and basic equipment, e.g. gun, handcuffs, vest, etc., by the Governmental Unit. 4.3 Nothing in this Agreement shall otherwise limit the jurisdiction, powers, and responsibilities normally possessed by a member as an employee of the Governmental Unit. 5. Reimbursement Requests and Payments 5.1 Upon the Effective Date of this Agreement, the Governmental Unit will be entitled to reimbursements in accordance with clause 5.3. 5.2 The Governmental Unit will submit a written request to the MNFCTF Commander prior to receiving a reimbursement from the BCA in accordance with clause 5.3. All requests will be submitted using the Financial Crimes Task Force Outside Agency Reimbursement form which will be provided by the BCA upon request from the Governmental Unit. 5.3 The Governmental Unit will only be reimbursed by the BCA for the following expenses which must be pre-approved by the MNFCTF Commander: 1) overtime salary including fringe benefits; 2) equipment; 3) training and training-related expenses directly incurred and relating to performance of MNFCTF assignments. 5.4 Reimbursement by the BCA to the Governmental Unit will be made until all designated member funds have been expended. 5.5 BCA shall reimburse Governmental Unit an amount not to exceed Fifty Thousand and 00/100 Dollars ($50,000.00) during the Term of this Agreement. 5.6 The Governmental Unit shall submit original receipts when seeking reimbursement on pre- approved requests. Approved reimbursements will be paid directly by the BCA to the Governmental Unit within thirty (30) days after the BCA receives reimbursement request. Reimbursement to the Governmental Unit will be paid to Lino Lakes Police Department, 640 Town Center Parkway, Lino Lakes, MN 55014. SWIFT Contract Number: 148783 DPS PO # 3-56507 MNFCTF JPA_2017 6. Authorized Representatives The BCA’s Authorized Representative is the person below or his successor: Name: Scott D. Mueller, MNFCTF Commander Address: Department of Public Safety; Bureau of Criminal Apprehension 1430 Maryland Street East Saint Paul, MN 55106 Telephone: 651.793.1129 E-mail Address: scott.d.mueller@state.mn.us The Governmental Unit’s Authorized Representative is the person below or his/her successor: Name: John Swenson, Chief Address: Lino Lakes Police Department 640 Town Center Parkway Lino Lakes, MN 55014 Telephone: 651.982.2301 E-mail Address: john.swenson@ci.lino-lakes.mn.us 7. Assignment, Amendments, Waiver, and Agreement Complete 7.1 Assignment. The Governmental Unit may neither assign nor transfer any rights or obligations under this Agreement. 7.2 Amendments. Any amendment to this Agreement must be in writing and will not be effective until it has been executed and approved by the same parties who executed and approved the original Agreement, or their successors in office. 7.3 Waiver. If the State fails to enforce any provision of this Agreement, that failure does not waive the provision or its right to enforce it. 7.4 Agreement Complete. This Agreement contains all negotiations and agreements between the BCA and the Governmental Unit. No other understanding regarding this Agreement, whether written or oral, may be used to bind either party. 8. Liability The BCA and the Governmental Unit agree each party will be responsible for its own acts and the results thereof to the extent authorized by law and shall not be responsible for the acts of any others and the results thereof. The BCA’s liability shall be governed by provisions of the Minnesota Tort Claims Act, Minnesota Statutes § 3.736, and other applicable law. The Governmental Unit’s liability shall be governed by provisions of the Municipal Tort Claims Act, Minnesota Statutes §§ 466.01- 466.15, and other applicable law. 9. Audits Under Minnesota Statutes § 16C.05, subdivision 5, the Governmental Unit’s books, records, documents, and accounting procedures and practices relevant to this Agreement are subject to examination by the State and/or the State Auditor and/or Legislative Auditor, as appropriate, for a minimum of six (6) years from the end of this Agreement. 10. Government Data Practices The Governmental Unit and the BCA must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to all data provided by the BCA under this Agreement and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by the Governmental Unit under this Agreement. The civil remedies of Minnesota Statutes § 13.08 apply to the release of the data referred to in this clause by either the Governmental Unit or the BCA. If the Governmental Unit receives a request to release the data referred to in this clause, the SWIFT Contract Number: 148783 DPS PO # 3-56507 MNFCTF JPA_2017 Governmental Unit must immediately notify the BCA. The BCA will give the Governmental Unit instructions concerning the release of the data to the requesting party before the data is released. 11. Venue The venue for all legal proceedings out of this Agreement, or its breach, must be in the appropriate state or federal court with competent jurisdiction in Ramsey County, Minnesota. 12. Expiration and Termination 12.1 Either party may terminate this Agreement at any time, with or without cause, upon 30 days written notice to the other party. To the extent funds are available, the Governmental Unit shall receive reimbursement in accordance with the terms of this Agreement through the date of termination. 12.2 Upon expiration or earlier termination of this Agreement, the Governmental Unit shall provide the MNFCTF Commander, in a timely manner, all investigative equipment that was acquired with funding received under this Agreement. 13. E-Verify Certification (In accordance with Minnesota Statutes § 16C.075) For services valued in excess of $50,000, the Governmental Unit certifies that as of the date of services performed on behalf of the BCA, the Governmental Unit and all its subcontractors will have implemented or be in the process of implementing the federal E-Verify program for all newly hired employees in the United States who will perform work on behalf of the BCA. The Governmental Unit is responsible for collecting all subcontractor certifications and may do so utilizing the E-Verify Subcontractor Certification Form available at http://www.mmd.admin.state.mn.us/doc/EverifySubCertForm.doc. All subcontractor certifications must be kept on file with the Governmental Unit and made available to the BCA upon request. 14. Continuing Obligations The following clauses survive the expiration or cancellation of this Agreement: 8, Liability; 9, Audits; 10, Government Data Practices; and 11, Venue. THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK SWIFT Contract Number: 148783 DPS PO # 3-56507 MNFCTF JPA_2017 The State and the Governmental Unit indicate their agreement and authority to execute this Agreement by signing below. GOVERNMENTAL UNIT Governmental Unit certifies that the appropriate persons have executed this Agreement on behalf of the Governmental Unit and its jurisdictional government entity as required by applicable articles, laws, by-laws, resolutions, or ordinances. __________________________________ ____________________ By and Title: _______________________ Date Governmental Unit __________________________________ ____________________ Governmental Unit Title: Date __________________________________ ____________________ Governmental Unit Title: Date DEPARTMENT OF PUBLIC SAFETY, BUREAU OF CRIMINAL APPREHENSION ______________________________ ____________________ Superintendent Date COMMISSIONER OF ADMINISTRATION As delegated to the Office of State Procurement __________________________________ _____________________ SWIFT Contract Number: 148783 DPS PO # 3-56507 MNFCTF JPA_2017 By and Title: _______________________ Date STATE ENCUMBRANCE VERIFICATION Individual certifies that funds have been encumbered as required by Minnesota Statutes §§ 16A.15 and 16C.05. ____________________________________ ____________________ Date SWIFT P.O. Number: 3-56507 CITY COUNCIL AGENDA ITEM 4B STAFF ORIGINATOR: John Swenson, Public Safety Director MEETING DATE: November 13, 2018 TOPIC: Authorize the Lease with North Memorial Ambulance Service for Use of Lino Lakes Fire Station #1 and #2 VOTE REQUIRED: 3/5 INTRODUCTION The North Memorial Ambulance Service current lease for space at Lino Lakes Fire Station #1 and #2 to base one ambulance and crew expires on December 31, 2018. North Memorial Ambulance wishes to renew this lease agreement for another three years. BACKGROUND The City currently leases space for one ambulance and crew to North Memorial Ambulance Service at one of the Lino Lakes Fire stations. The current lease with North Memorial Ambulance service expires on December 31, 2018. Staff has reviewed the lease and made revisions consistent with the proposed remodeling plans for Lino Lakes Fire Station #1. The placement of the ambulance and crew in the City reduces ambulance response times and thereby enhances emergency medical services provided to community members. This lease allows North Memorial Ambulance to utilize one of the two Lino Lakes fire stations to house one ambulance and crew. North Memorial will pay the City of Lino Lakes $1,200 per month and the lease is for three years. RECOMMENDATION Staff recommends that Council approves this lease. ATTACHMENTS Lease Agreement with North Memorial Ambulance Services Lino Lakes Fire Station No. 1 Exhibit B To Lease Agreement between City of Lino Lakes and North Memorial Health Care Lino Lakes Fire station No. 1 7741 Lake Drive Lino Lakes, MN 55014 z0--i"Tl 0 ;:::o. (') 0 z (/) --i ;:::o C �� G:\ l-f<�•/1IIH1w1t :�015\1404•3 --1. :l)O LaXet hm Houi& fl:?:...,bs;ac1;b�;Dn.,� ·J.2i5i.?.014 '.3 42 40 P�,;1 � EB Exhibit B to Lease Agreement between City of Lino Lakes and North Memorial Health Care Lino Lakes Fire Station No. 2 1710 Birch Street Lino Lakes, MN 55014 Lino Lakes Fire House #2 REVISIONS: =Mm•�•mm �"��'""'·'""'"�'"'I '"·"" • el COPYRIGHT BY CNH ARCHITECTS, INC. SC78 Lino Lakes, Minnesota 1 CITY COUNCIL AGENDA ITEM 6A STAFF ORIGINATOR: Diane Hankee PE, City Engineer MEETING DATE: November 13, 2018 TOPIC: PUBLIC HEARING: Consider 1st Reading of Ordinance No. 16-18, Vacating right of way along Sandpiper Drive and drainage and utility easements within Lakes Addition No. 1 VOTE REQUIRED: 4/5 INTRODUCTION Staff is requesting City Council consideration of the 1st Reading of Ordinance No. 16-18, vacating a portion of the street right of way along Sandpiper Drive and drainage and utility easements originally dedicated in Lakes Addition No. 1, Anoka County, Minnesota. BACKGROUND At the Council Meeting on September 24th, a Joint Powers Agreement with Anoka County was approved. This Joint Powers Agreement is in conjunction with the West Shadow Lake Drive Area project. As part of the agreement, an existing portion of City right-of-way that is currently being used as Golf Course will be vacated. This vacation would result in the reversion of the property to the county. The roadway is not planned to be extended in the future. A cul-de-sac will be constructed at the end of Sandpiper Drive. The Right of Way Vacation Sketch that was included in the Joint Powers Agreement is enclosed. The second reading of the ordinance is scheduled for November 26, 2018. RECOMMENDATION Staff is recommending approval of the 1st Reading of Ordinance No. 16-18 vacating right of way along Sandpiper Drive and drainage and utility easements within Lakes Addition No. 1. ATTACHMENTS 1. Ordinance No. 16-18 2. Right of Way Vacation Sketch 1 1st Reading: 11/12/2018 Publication: 2nd Reading: 11/26/2018 Effective: CITY OF LINO LAKES ORDINANCE NO. 16-18 ORDINANCE VACATING RIGHT OF WAY AND DRAINAGE AND UTLITY EASEMENTS (Sandpiper Drive) The City Council of Lino Lakes ordains: Section 1: Findings of Fact 1. The City Council of Lino Lakes has determined to vacate a portion of the street right of way and drainage and utility easements dedicated with LAKES ADDITION NO. 1, as shown in Exhibit A1 and A2 ; and 2. A public hearing was held on November 13, 2018 before the City Council in the City Hall Council Chambers after due published and posted notice had been given and reasonable attempts were made to give personal notice to all affected property owners, and all persons interested were given an opportunity to be heard; and 3. It appears to be in the best interest of the City to vacate such road right of way; and 4. The right of way and drainage and utility easements vacation shall be recorded through Anoka County Recorder’s Office; and 5. Four-fifths of all members of the City Council concur with this ordinance. Section 2: Easement Vacated The right of way described herein is hereby vacated: “That part of Sandpiper Drive as dedicated in LAKES ADDITION NO. 1, Anoka County, Minnesota, lying westerly and southwesterly of the following described line: Beginning at the southwest corner of Lot 3, Block 3, said LAKES ADDITION NO. 1; thence southwesterly to the northwest corner of Lot 1, Block 1, LAKES ADDITION NO. 4, Anoka County, Minnesota, and said line there terminating; AND the drainage and utility easements dedicated in LAKES ADDITION NO. 1, Anoka County, Minnesota, lying in Lots 1, 2, 3, 4, 5, and 6, Block 1, and Lots 1, 2, 3, 4, 5, 6, 7, 8, and 9, Block 2, and Lots 1 and 2, Block 3, said LAKES ADDITION NO. 1.” 2 Section 3: Effect This ordinance shall be in force and effect from and after its passage and publication according to the Lino Lakes City Charter and upon filing of the Right of Way Vacation for Sandpiper Drive. Adopted by the Lino Lakes City Council this 26th day of November, 2018. The motion for the adoption of the foregoing ordinance was introduced by Council Member_____________and was duly seconded by Council Member ___________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: ____________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk 1 CITY COUNCIL AGENDA ITEM 6B STAFF ORIGINATOR: Katie Larsen, City Planner MEETING DATE: November 13, 2018 TOPIC: Watermark i. Consider Resolution No. 18-143 Approving PUD Final Plan/Final Plat ii. Consider Resolution No. 18-144 Approving Master Development Agreement iii. Consider Resolution No. 18-145 Approving 1st Addition Development Agreement VOTE REQUIRED: 3/5 INTRODUCTION Watermark is a master planned residential community located in the northwest quadrant of I- 35E and CSAH 14/Main Street. It contains 12 parcels totaling approximately 372 gross acres and consists of a residential mix of 692 single family lots and 172 townhome units totaling 864 housing units. Lennar submitted a Land Use Application for Watermark 1st Addition PUD Final Plan/Final Plat. The 1st Addition proposes 93 townhome units and 100 single family lots for a total of 193 housing units. Previous Council approvals include:  June 13, 2016: Resolution No. 16-51 approving PUD Development Stage Plan/Preliminary Plat  October 9, 2017: Resolution No. 17-95 approving amendment #1 to Land Use Plan  December 11, 2017: Resolution No. 16-133 approving amendment #2 to Architectural Design Standards  June 11, 2018: Resolution No. 18-69 approving Grading and Trunk Utility Agreement The following staff report is based on the following information received by the City on September 10, 2018:  Irrigation Plan prepared by Carlson McCain date stamped September 10, 2018  Site Landscape Plan date stamped September 10, 2018  Watermark Final Plan Sheets 1-6 date stamped September 10, 2018  Construction Plans for Turn Lanes Sheets 1-7 date stamped May 11, 2018  Final Utility Plans Sheets 1-44 date stamped September 7, 2018 2  Grading, Development and Erosion Control Plan Sheets 1-24 date stamped September 7, 2018  Final Plat Areas date stamped September 7, 2018  Watermark Specification date stamped May 11, 2018  Final Plat Application Checklist date stamped September 7, 2018  Land Use Application date stamped May 11, 2018  PUD Checklist Final Plan date stamped September 7, 2018  Watermark Description date stamped September 7, 2018 BACKGROUND PUD Development Stage Plan/Preliminary Plat The PUD Development Stage Plan approved via Resolution No. 16-51 establishes Watermark’s overall land use plan, street and utility layout, parks and open space plan, architectural design standards, landscaping and lot development standards. These standards are summarized in the PUD Master Plan Booklet and are incorporated as part of the Master Development Agreement. Each phase (i.e. addition) of development shall submit a PUD Final Plan consistent with the PUD Development Stage Plan. In October 2017, Council approved an amendment to the PUD Development Stage Plan’s overall Land Use Plan. The Land Use Plan established 871 housing units. As the applicant has worked through final plan design to address City and RCWD comments from the preliminary plat, the number of 55’ wide Villas was reduced from 127 units to 120 units. The net number of housing units is now 864. The density reduced from 3.40 units per acre to 3.39 units per acre. This density remains consistent with the comprehensive plan’s required 3.0 to 4.5 units per acre. October 2017 October 2018 Gross Area (acres) 372.24 372.24 Wetlands & Water Bodies 45.21 45.09 Public Parks & Open Space 64.43 66.25 Arterial ROW 5.46 5.46 Other (Undevelopable) 0.68 0.62 Net Area (acres) 256.46 254.82 # of Housing Units 871 864 Gross Density (units/acre) 2.34 2.32 Net Density (units/acre) 3.40 3.39 Grading and Trunk Utility Improvements Lennar commenced grading and trunk utility improvements in September 2018. Phase I grading limits incorporate approximately 150 acres (south 1/3 of the development). The 1st Addition “developed lot” area is approximately 100 acres. 3 PUD Final Plan Watermark 1st Addition proposes to construct 93 townhome units and 100 single family lots for a total of 193 housing units. The PUD Final Plan is consistent with the PUD Development Stage Plan in regards to the land use plan, street and utilities, parks and open space, lot standards and landscaping. Required revisions to the PUD Development Stage Plan have been submitted and approved. The following housing types and products proposed for the 1st Addition are consistent with the Land Use Plan. Housing Type Lot Width Housing Product # Units Single Family 65’ Landmark & Discovery 70 Single Family 55’-60’ Discovery 30 Townhomes 32’-42’ Colonial Patriot (row) 69 Townhomes 32’-45’ Colonial Manor (back-back) 24 TOTAL 193 Architectural Standards Resolution No. 17-133 details required architectural design standards for the Watermark development. As required, a summary booklet titled Watermark 1st Addition Home Plans was submitted as part of the PUD Final Plan. The booklet includes an Architectural Standards Matrix detailing compliance of each housing product with Resolution No. 16-133 in regards to exterior materials and styles, house elevations and garage and porch requirements. Per the matrix, there are 25 different single family house plans with a combination of over 90 different elevations and floor plans proposed for the 1st Addition. Color packages and anti-monotony plans will be submitted with building permit to ensure that the homes elevations are varied with a minimum of five different styles and those homes in proximity to each other not look alike in terms of the combination of color of siding, accent and roofing materials. Coventry by Alside vinyl siding with .042” panel thickness is proposed on all the housing units. As required, engineered hardboard product will be used for the trim on the townhomes. One specific requirement of the resolution was the side elevations of the four (4) townhome buildings facing 21st Avenue North shall be unique since they face a major roadway in the development. The proposed elevations include brick, lap siding and board and batten. They also include a 6 foot deep porch with decorative columns. In summary, the housing types and products meet the architectural design standards requirements of Resolution No. 17-133. Landscaping The Watermark 1st Addition Site Landscape Plan is generally consistent with the PUD Development Stage Landscaping Plan; however, details such as fencing, berms, entrance 4 monuments, tot lot, protected open space signs and townhome unit landscaping are missing. Plans shall be revised. Subdivision Ordinance Conformity with the Comprehensive Plan and Zoning Code The Watermark 1st Addition final plat has been reviewed for compliance with the comprehensive plan, zoning and subdivision ordinance. The proposed final plat meets the performance standards of the subdivision and zoning ordinance and is consistent with the PUD Development Stage Plan/Preliminary Plat and Final Plan. Blocks and Lots The final plat creates 194 lots and 14 outlots. One (1) lot is the common area surrounding the townhome neighborhood. The remaining 193 lots are housing units (100 single family and 93 townhome). The following chart summarizes the intended purpose of the outlots: Outlot Purpose A Future development B Future development C Future development D Future development E Future development F Future development G Stormwater pond H Future development (TH-townhome) I Private Park (TH) J Stormwater pond K Private Park (Discovery) L Future development M Stormwater pond N Stormwater pond Staff originally suggested final platting all of the outlots consistent with those shown on the preliminary plat in order the clearly establish those parcels. Staff, the City Attorney, Lennar and Mattamy are currently negotiating the platting of theses outlots and the timing of public 5 land dedication and deed transfers. These details will be finalized in the Master Development Agreement. Easements Standard drainage and utility easements are being dedicated on individual lots and outlots containing stormwater ponds. An Open Space Easement is being drafted by the City Attorney. This easement will be dedicated over outlots containing wetlands, open space, stormwater ponds, berms etc. Sheet L12 of the Preliminary Landscape Plan details the location of required “Protected Open Space Area” signs. These details shall also be included in the Final Landscape Plan for 1st Addition. A Conservation Easement and Declaration establishing wetland buffer (both favor of RCWD) have been recorded over Wetland 17 as required by RCWD. Street and Utilities The 1st Addition proposes construction of the following streets which are consistent with the PUD Development Stage Plan: Street Name Right-of-Way Width Street Width (Back to Back) 21st Avenue North 80 feet 38 feet 48 feet (median) Watermark Drive 60 feet 32 feet Harriet Lane 60 feet 28 feet Geneva Court 60 feet 28 feet Crane Drive 100 feet 60 feet 48 feet 32 feet Diamond Lane 60 feet 28 feet Balsam Way 60 feet 32 feet Private Road (Townhomes) Ada Drive NA 28 feet Bay Drive NA 28 feet Cass Drive NA 28 feet Dora Drive NA 28 feet Fall Drive NA 28 feet Gull Drive NA 28 feet The private roads (townhomes) will be owned and maintained by the homeowners association 6 (HOA). Per City details, the public street signs will be white letters on green background and private street signs will be white letters on brown background. The Sheets 37-39 of the Watermark 1st Addition Street Construction Plans shall include “Road will be Extended in the Future” signs and locations. Watermain, sanitary sewer main, stormwater facilities, sidewalks and trails are being constructed consistent with the PUD Development Stage Plan. Public Land Dedication and Fees As approved with Resolution No. 16-51, the City will require the following combination of land dedication and cash is lieu of land dedications: 1. Land dedication for the public and private parks will be credited from the total payment in lieu. 2. Costs for public park improvements and trail construction will be credited from the total payment in lieu. 3. Improvements to the private parks and recreational center will not be credited from the total payment in lieu. The 1st Addition will dedicate to the HOA for ownership and maintenance the private park in the townhome neighborhood and the private park in the Discovery home neighborhood. The tot lot in the townhome neighborhood shall be constructed with the 1st Addition. The private park in the Discovery neighborhood is an open space area and will not be developed. Trail will be installed along 21st Avenue North from the south boundary to 20th Avenue and then north along 20th Avenue approximately 560 feet. Trail will also be installed along the northern edge of the townhome neighborhood. The Master Development Agreement (MDA) further details the timing and value of the land dedication and as well as cash payments. The Developer shall pay a cash fee in lieu of park dedication at the time of subdivision approval of each phase. The present fee in lieu of park dedication is $3,000.00 per residential unit. Trail construction costs will be credited. Upon conveyance of title for the Public Park, Developer shall be credited park dedication fees in an amount equal to the fair market value of the unplatted land. The Public Park shall be deeded in fee to the City at the time of the final plat for the first phase of the Development. The deed shall be placed in escrow and released to the City at a future date as specified in the MDA. Watermark 1st Addition Total # Units = 193 x Park Dedication Fee $3,000 = Cash in Lieu Value $579,000 (Trail Construction Costs) = ($56,560) TOTAL CASH FEE DUE = $522,440 7 Wetlands Wetland delineations were approved by RCWD and USACE in 2015. The delineation identified 28 wetlands totaling approximately 20 acres in size. The original approved WCA Sequencing Application proposed wetland impacts, wetland creation, wetland restoration and upland buffer establishment. In April 2018, the developer revised the application to purchase 3.3671 acres of wetland banking credits as the proposed compensatory mitigation action. The 3.3671 acres of wetland fill, impacts and mitigation (wetland bank credits) occur with the Phase I grading limits. As previously noted, a Conservation Easement and Declaration establishing wetland buffer (both favor of RCWD) have been recorded over Wetland 17. “Protected Open Space Area” signs are located along the wetland buffer. When the lots abutting this buffer are graded in the future, these signs will be located along the rear lots lines. The establishment of the greenway corridor including wetlands, trails and open space on the north end of the Watermark development is a critical component of the project and will be developed in future phases. The Master Development Agreement will detail the timing, establishment and management of that corridor. Development Agreement Master Development Agreement Unique to the Watermark development is the requirement of a Master Development Agreement. This Agreement covers the entire 372 acre site and Lennar, Mattamy Homes and the City of Lino Lakes are parties to it. The Agreement details the terms and conditions of City approvals, the Development Plans, the required public and private improvements as part of the first and subsequent phase, the standards for the timing and financing of the improvements, required HOA documents and the terms of payment. The City Attorney, city staff, Lennar, and Mattamy Homes are negotiating the terms of the Master Development Agreement. The Agreement shall be approved by City Council. Development Agreement and Planned Unit Development Agreement The City will also require our standard Development Agreement specific to each phase of development. This agreement further details required improvements and securities. The City Engineer has drafted this Agreement and it shall be approved by the City Council. Title Commitment The City Attorney has received the title commitment and final plat and will provide comments prior to final plat approval. Stormwater Maintenance Agreement A Declaration for Maintenance of Stormwater Facilities for Ponds 100, 200, 300 and 20 was recorded on September 10, 2018. This agreement will eventually be replaced by the City’s and 8 RCWD Programmatic Stormwater Management Facility Maintenance Agreement and the City will be responsible for maintenance of theses public facilities. The stormwater facilities in the townhome neighborhood will be privately maintained by the HOA. A Declaration for Maintenance of Stormwater Facilities shall be recorded by Lennar. Findings of Fact The Findings of Fact for the PUD Final Plat/Final Plat are detailed in Resolution No. 18-143. RECOMMENDATION The Planning & Zoning Board reviewed the PUD Final Plan/Final Plat on October 10, 2018. The Board recommended approval of the PUD Final Plan/Final Plat with a 6-0 vote. Staff will present the PUD Final Plan and Final Plat to Council on November 13, 2018. Staff then recommends continuing this agenda item to the November 26, 2018 Council meeting. .ATTACHMENTS 1. City Engineer Letter dated October 4, 2018 2. Environmental Coordinator dated October 4, 2018 3. Resolution No. 18-143 4. PUD Final Plan-(Townhome Elevations, Landscaping, Berms, Monument Signs, Clubhouse Concept) 5. Final Plat 6. Resolution No. 18-144 7. Master Development Agreement (To Follow) 8. Resolution No. 18-145 9. 1st Addition Development Agreement (To Follow) 178 East 9th Street, Suite 200 | St. Paul, MN 55101 | (651) 286-8450 Building a legacy – your legacy. Equal Opportunity Employer | wsbeng.com S:\Community Development\Projects\Planning Cases\Watermark\1st Addition PUD Final Plan-Final Plat\Staff Reports\20181113 CC (FP)\a1 20181004 Engineering Review - Watermark 1st Addition FP.DOCX Memorandum To: Katie Larsen, City Planner From: Dane Ekdom EIT Diane Hankee PE, City Engineer Date: October 4, 2018 Re: Watermark 1st Addition Final Plat Submittal 09/10/18 012443-000 As requested by City Staff, WSB and Associates, Inc. has review the revised Final Plat for Watermark 1st Addition in Lino Lakes, MN prepared by Carlson McCain received on September 10, 2018. The following documents were reviewed:  Watermark 1st Addition Utility & Street Construction Plans prepared by Carlson McCain dated September 7, 2018  Watermark Phase 1 Grading, Development & Erosion Control Plan revision date September 7, 2018  Watermark 1st Addition Final Plat date stamped September 10, 2018  Watermark Irrigation plans dated September 10, 2018  Trail Phase 1 Exhibit prepared by Carlson McCain date stamped July 3rd, 2018  Watermark 1st Addition Construction Plans for Turn Lanes dated May 11th, 2018 The following are our review comments that should be responded to in writing by the applicant. Engineering  General The 1st Addition of the Watermark Development is located on the south side of the development, connecting to 21st Avenue North to the south and 20th Avenue North (CSAH 54) to the west. The 1st Addition would consist of 100 single-family homes as well as 93 townhomes including associated infrastructure. Comments: 1. The applicant shall adjust 1st Addition Boundaries to include Outlot J. Storm sewer is proposed to discharge to this outlot and grading will be completed prior to storm sewer installation.  Grading, Erosion and Sediment Control The Watermark Development proposes mass grading in multiple phases of the development. Phase 1 of the mass grading includes the 1st Addition, a portion of the proposed lake on site, as well the remaining townhomes and adjacent lots to the southwest and north sides of the 1st Addition. Below are the comments for the Phase 1 Grading, Development & Erosion Control Plan. Comments: Ms. Katie Larsen October 4th, 2018 Page 2 S:\Community Development\Projects\Planning Cases\Watermark\1st Addition PUD Final Plan-Final Plat\Staff Reports\20181113 CC (FP)\a1 20181004 Engineering Review - Watermark 1st Addition FP.DOCX 1. Open space buffer signs MUST be surveyed and locations shall be shown with final grading as-built. The applicant shall note, grading as-built must be approved prior to release of any building permits. 2. The applicant shall label bench for Pond 100 3. The applicant shall show silt fence around entire perimeter of ponds (until street & utility construction is complete). 4. SWPPP Plan to be reviewed by the City’s Environmental Coordinator and not included here within. 5. The applicant shall install an outlet control structure at the temporary pond prior to outletting to Lake 20.  Stormwater Management The stormwater management for the Watermark 1st Addition development includes a storm sewer conveyance system to Pond 100, Pond 200, and Pond 300 for treatment and storage, with an eventual outlet to Lake 20. Comments: 1. The applicant shall provide storm sewer calculations for all of proposed piped systems. 2. The applicant shall clarify NWL for Pond 100. Detail OCS 100A shows Pond NWL at 901 and orifice at 900.2, plan shows NWL at 900.2. Additionally, show location of OCS100A on Storm Sewer plan. 3. The applicant shall provide profile and detail for OCS between Pond 20 & Lake 20. OCS is shown on the Storm Sewer Sheet Index, but not on a detailed plan sheet. 4. The applicant shall label bench for Pond 300. 5. The applicant shall note that CB’s installed adjacent to ped ramps shall allow enough space for ADA curb transitions. 6. The applicant shall limit storm sewer crossings underneath sidewalk when feasible. 7. The applicant shall add a CB on Crane Drive, approx. Sta. 0+50, 20’ LT. 8. The applicant shall add a CB on Cass Drive, approx. Sta. 0+50, 15’ LT. 9. The applicant shall provide narrative regarding re-use system, connections to City supply (if necessary), specific areas watered by re-use system, irrigation used for wetland buffer establishment (if applicable), and why the irrigation area appears to be slightly greater than what was analyzed for the feasibility report. Option 2 from that report included the berm, townhomes, and park. This plan includes additional area from streetscaping. 10. The applicant shall address how the taller native grasses shall be watered by the irrigation system. 11. Based on the watering schedule on Sheet P13, The average rate of the system is higher than the rate proposed in the feasibility report. This will increase the storage volume by 2 MG and change the water level drop to 5 ft versus 4 ft as discussed previously. Since the system is proposed to be expanded in the future, this water level drop will only further increase. The applicant shall provide further analysis and explanation into the storage volumes and watering area for this irrigation line. 12. The applicant shall provide further detail on the pump station shown on sheet P12. It is likely that this source will need disinfection. Does the current pump station include a plan for a filter system or disinfection? 13. Fountain shop drawings were reviewed and approved by Public Works Superintendent.  Water Supply As part of the City’s Comprehensive Plan, 16-inch diameter trunk watermain would be extended north/south, extending from a stub at 21st Avenue, along Street A and north along Street O. A 12-inch watermain loop would serve the townhome area on the southeast side of the development, and 8- inch watermain would serve the remaining lots. 1-inch Type K copper services would be extended to each lot. Comments: Ms. Katie Larsen October 4th, 2018 Page 3 S:\Community Development\Projects\Planning Cases\Watermark\1st Addition PUD Final Plan-Final Plat\Staff Reports\20181113 CC (FP)\a1 20181004 Engineering Review - Watermark 1st Addition FP.DOCX 1. The applicant shall space all fire hydrants at a maximum distance of 400 feet. 2. The applicant shall supply details regarding the interconnect with the City of Centerville. Approval shall be required from both the City of Lino Lakes and the City of Centerville. A Joint Powers Agreement with the City of Centerville is required and being drafted.  Sanitary Sewer The City’s Comprehensive Plan requires 18-inch diameter trunk main be extended north/south in this area to serve future developments to the north. There is an existing 18-inch diameter trunk sanitary sewer located on 21st Avenue along the south side of the Watermark development. This 18-inch diameter trunk sewer would be extended through Street A, and then along the west side of the development. The remainder of the first addition of the development would be served by extending 8- inch poly-vinyl chloride (PVC) pipe along with 4-inch diameter Schedule 40 PVC service pipe to each lot. Comments: 1. No comments.  Transportation A Traffic Study Report was prepared by Spack and reviewed with the Watermark Preliminary Plat. The following comments address the 1st Addition street construction plan sheets as well as the 1st Addition Turn Lane Plans. Comments: 1. The applicant shall submit turn lane plans to Anoka County for approval. Please update the City once the plans are approved. 2. The applicant shall verify that townhome parking will contain any necessary ADA parking spaces. 3. The applicant shall address the following flagging/traffic control items: a. Will the roadway be opened back up to 2 lanes at night? b. Will there be nighttime traffic control, shoulder closure, etc.? 4. Applicant shall adjust median on Crane Drive to have concrete approach nose, and provide a detail. 5. The applicant shall add a pedestrian curb ramp on Bay Drive, on the trail towards Outlot H. 6. The applicant shall provide street lighting plan. 7. The applicant shall show striping along 21st Avenue in the signing and striping plan (double yellow on centerline and white fog lines 11’ from center). 8. The applicant shall tie-in existing striping to 21st Avenue to the south (show on striping plan). 9. That applicant shall show a left turn lane and right/thru arrow on 21st Avenue at the intersection of CSAH 54 as previously discussed. 10. The applicant shall show crosswalk striping across 21st Avenue at the intersection with 20th Avenue. 11. The applicant shall add a note to the detail for street name signs (includes Lino Lakes City logo), to be purchased from EF Anderson.  Wetlands and Mitigation Plan Comments: 1. No comments. Ms. Katie Larsen October 4th, 2018 Page 4 S:\Community Development\Projects\Planning Cases\Watermark\1st Addition PUD Final Plan-Final Plat\Staff Reports\20181113 CC (FP)\a1 20181004 Engineering Review - Watermark 1st Addition FP.DOCX  Landscaping 1. The applicant shall show the correct right-of-way and property lines on the landscaping plans (existing landscape plans do not show sight clearances at intersection of 20th Ave and 21st Ave). 2. The applicant shall adjust tree locations on 21st Avenue so that trees are outside of sight clearances (sight triangle) at intersections with adjacent streets. 3. The applicant shall move the trees located in the median on 21st Avenue (adjacent to intersection of 20th Avenue) out the sight clearances. 4. The applicant shall show a legend for the conservations signs on the landscaping plans. 5. The applicant shall note that final restoration shall be in place prior to release of building permits.  Geotechnical No comments at this time.  Floodplain The Watermark Development proposed fill of, and changes to, the effective FEMA floodplain boundaries with future additions of the development. 1. The applicant shall submit CLOMR application to FEMA (CC City) prior to 1st Addition Final Plat approval. An approved CLOMR will be required prior to final plat approval for the 2nd Addition. 2. The applicant is required to have a LOMR prior to the construction of any lots adjacent to the lake or lots impacted within the existing floodplain.  Drainage and Utility Easements Generally, roadways are proposed within Right-of-way and lots include standard drainage and utility easements. The applicant shall provide adequate drainage and utility easements over to accommodate surface water management per Lino Lakes rules. Comments: 1. All storm sewer greater than 10 feet depth should have a drainage and utility easement that is 2 times the depth of the storm sewer. The storm sewer segments between CBMH101 to Pond 100 appear to not meet this standard. The applicant should provide a storm sewer calculation spreadsheet that could be used for confirming drainage and utility easements are adequate for all storm sewer that is deeper than 10 feet.  Development Agreement A development agreement will be required with the final plat.  Grading Agreement A Grading and Trunk Utility agreement was completed for Phase 1 of the Grading, Development & Erosion Control.  Stormwater Maintenance Agreement The stormwater maintenance for public facilities will be covered under the City’s Programmatic Stormwater Management Agreement including storm sewer systems, Ponds 100, 200, 300 and 20. A stormwater declaration will be required for the private facilities in the Townhome area.  Permits Required 1. NPDES General Construction Permit 2. City of Lino Lakes Zoning Permit for construction 3. Minnesota Pollution Control Agency Sanitary Sewer Extension Permit Received Ms. Katie Larsen October 4th, 2018 Page 5 S:\Community Development\Projects\Planning Cases\Watermark\1st Addition PUD Final Plan-Final Plat\Staff Reports\20181113 CC (FP)\a1 20181004 Engineering Review - Watermark 1st Addition FP.DOCX 4. Minnesota Department of Health Received 5. Anoka County Permit for Work Within Right-of-Way 6. Rice Creek Watershed Permit for Erosion and Sediment Control 7. Proof of CLOMR submission (as previously noted) 8. Army Corp of Engineers Permit Received If you or the applicant have any questions regarding these comments, please contact Diane Hankee at (651) 982-2430 or diane.hankee@ci.lino-lakes.mn.us. You may also contact Dane Ekdom at (763) 762- 2815 or dekdom@wsbeng.com.  Page 1 Memo To: Katie Larsen From: Marty Asleson Date: October 4, 2018 Re: Final Plat Watermark Comments Last issues concerning landscape issues for the final plat of Watermark:  Landscape needs to be shown on all boulevards. Boulevards need to be irrigated sod. Show irrigation and sod on the plan sheets.  Define the private park use on Balsam Way. If this is going to be an active park, then it should be irrigated sod. If it is just open space, than it should be no mow fescue. Must be irrigated in either case.  Areas on the back sides of lots along 21st Ave. north should be changed to sod abutting the lots to the side walk. This would be for lots 46, 47, 48, 49, and lots 1-9. Environmental 1 CITY OF LINO LAKES RESOLUTION NO. 18-143 RESOLUTION APPROVING THE PUD FINAL PLAN/FINAL PLAT FOR WATERMARK WHEREAS, the City received an application for PUD Final Plan/Final Plat approval for Watermark hereafter referred to as “Development”; and WHEREAS, City staff has completed a review of the proposed “Development” based on the following plans and information:  Irrigation Plan prepared by Carlson McCain date stamped September 10, 2018  Site Landscape Plan date stamped September 10, 2018  Watermark Final Plan Sheets 1-6 date stamped September 10, 2018  Construction Plans for Turn Lanes Sheets 1-7 date stamped May 11, 2018  Final Utility Plans Sheets 1-44 date stamped September 7, 2018  Grading, Development and Erosion Control Plan Sheets 1-24 date stamped September 7, 2018  Final Plat Areas date stamped September 7, 2018  Watermark Specification date stamped May 11, 2018  Final Plat Application Checklist date stamped September 7, 2018  Land Use Application date stamped May 11, 2018  PUD Checklist Final Plan date stamped September 7, 2018  Watermark Description date stamped September 7, 2018; and WHEREAS, the City Council the approved the PUD Development Stage Plan/Preliminary Plat with Resolution No. 16-51, PUD Amendment #1-Land Use Plan with Resolution No. 16-133 and PUD Amendment #2-Architectural Design Standards with Resolution No. 16-133; and WHEREAS, the Planning & Zoning Board reviewed and recommended approval of the Watermark final plat at the October 10, 2018 meeting; and WHEREAS, the proposed development is not considered premature and meets the performance standards of the subdivision and zoning ordinance; and NOW, THEREFORE BE IT RESOLVED by The City Council of The City of Lino Lakes hereby makes the following: FINDINGS OF FACT 1. The final plat substantially conforms to the approved preliminary plat subject to the conditions listed below. 2 2. The City Attorney shall approve the status of title/property ownership related to the final plat. 3. A Master Development Agreement and 1st Addition Development Agreement have been completed. 4. Conditions attached to approval of the preliminary plat have been fulfilled or secured by the Development Agreement. 5. All fees, charges and escrow related to the preliminary or final plat have been paid in full. BE IT FURTHER RESOLVED by the City Council of the City of Lino Lakes hereby approves the PUD Final Plan/Final Plat for Watermark, subject to the following conditions: 1. All comments from the City Engineer letter dated October 4, 2018 shall be addressed. 2. All comments from the Environmental Coordinator letter dated October 4, 2018 shall be addressed. 3. The Master Development Agreement shall be approved by the City Council, executed by all parties and recorded against the property. 4. The 1st Addition Development Agreement shall be approved by the City Council, executed and recorded against the property. 5. A Declaration for Maintenance of Stormwater Facilities in the townhome neighborhood shall be recorded by Lennar. 6. The City Attorney shall review and approve the title commitment and final plat. 7. Watermark 1st Addition Home Plans Booklet: a. The Land Use Plan rev date 8/27/18 shall be used on page 2. 8. Watermark 1st Addition Site Landscape Plan: a. All landscaping, fences and berms shall be installed with 1st Addition along the entire south boundary of the development as well as east of the townhome neighborhood along I-35E. Plans shall be revised. b. Fence details and location shall be shown on the plans. c. Townhome neighborhood tot lot details shall be shown on the plans. d. “Protected Open Area Monument Sign” shall be shown on the plans. i. The new City detail for the monument shall be used. e. The Private Park open space area hatch marks shall be revised to show commercial turf-sod. f. Entrance monuments details and locations shall be shown on the plans. g. Townhome unit landscaping details shall be shown on the plans. 9. Watermark 1st Addition Street Construction Plans Sheets 37-40: a. “Road will be Extended in the Future” signs and locations shall be shown on the plans. b. The location of the public street signs (white letters on green background) and private street signs (white letters on brown background) shall be clearly differentiated on the plan sheets. c. All proposed trail construction shall in be included on Plan Sheet 40. 10. Final Plat Required Revisions: a. Outlot E shall have a drainage and utility easement over it. 3 Adopted by the Council of the City of Lino Lakes this 13th day of November, 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _______________and was duly seconded by Council Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: ______________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk Southwest View21 Exterior Image Interior Image HOA Center Site Plan HOA Center Concept Note: Example Only and Subject to Change Upon Further Site Planning at Time of Construction Page 27 CITY OF LINO LAKES RESOLUTION NO. 18-144 RESOLUTION APPROVING MASTER DEVELOPMENT AGREEMENT FOR WATERMARK WHEREAS, the City Council approved the PUD Final Plan/Final Plat for Watermark with Resolution No. 18-143 on October 22, 2018; and WHEREAS, given the size and scope of the Development, it is in the City’s, the Developer’s (US Home Corporation (Lennar)) and the Owner’s (Mattamy Minneapolis LLC) best interest to allow the Development to proceed in multiple phases based on a final plat for each phase and to enter into a Master Development Agreement in order to establish certain terms and conditions of approval prior to the final plat of any phase of the Development. NOW, THEREFORE BE IT RESOLVED by The City Council of The City of Lino Lakes hereby approves the Master Development Agreement between the City of Lino Lakes, US Home Corporation (Lennar) and Mattamy Minneapolis LLC for Watermark and authorizes the Mayor and City Clerk to execute such agreement on behalf of the City. Adopted by the Council of the City of Lino Lakes this 13th day of November, 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _______________and was duly seconded by Council Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: _______________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk CITY OF LINO LAKES RESOLUTION NO. 18-145 RESOLUTION APPROVING DEVELOPMENT AGREEMENT FOR WATERMARK WHEREAS, the City Council approved the PUD Final Plan/Final Plat for Watermark with Resolution No. 18-143 on October 22, 2018; and WHEREAS, the City’s subdivision ordinance and conditions of approval require the execution of a development agreement between the Developer and the City of Lino Lakes. NOW, THEREFORE BE IT RESOLVED by The City Council of The City of Lino Lakes hereby approves the Development Agreement between US Home Corporation and the City of Lino Lakes for Watermark and authorizes the Mayor and City Clerk to execute such agreement on behalf of the City. Adopted by the Council of the City of Lino Lakes this 13th day of November, 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _______________and was duly seconded by Council Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: _______________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk Watermark 1stAddition City Council November 13, 2018 1 Land Use Plan•June 2016: Res. No. 16-51 approved PUD Development Stage Plan/Preliminary Plat (Mattamy) •871 housing units •February 2017: Lennar introduced •PUD Final Plan/Final Plat •864 housing units •Final plan design to address City & RCWD comments •7 of the 55’ wide Villas housing units were omitted •Net density reduced from 3.40 upa to 3.39 upa •3.0 upa to 4.5 upa is required 2 Overall Land Use Plan Lot Width House Product August 2017 August 2018 Difference 75’Landmark 126 126 0 65’ Landmark & Discovery 201 201 0 65’Villas 114 114 0 55’-60’Villas 127 120 -7 60’Discovery 69 69 0 55’Discovery 62 62 0 32’Townhomes 172 172 0 TOTAL 871 864 -7 3 4•August 2017: 871 housing units •August 2018: 864 housing units Final Land Use Plan 5 Watermark 1st Addition 93 townhomes 100 single family lots 193 total housing units Housing Types and Products Housing Type Lot Width Housing Product # Units Single Family 65’-75’Landmark & Discovery 70 Single Family 55’-60’Discovery 30 Townhomes 32’-42’Colonial Patriot (row)69 Townhomes 32’-45’Colonial Manor (back -back)24 TOTAL 193 6 7•Phase 1 Grading Area (Sept 2018) approx 150 acres •Watermark 1st Addition Final Plat approx 100 acres 8 Architectural Standards•Res No 17 -133 detailed arch design standards for Watermark •Exterior materials & styles and house elevations •Garage and porch requirements •Watermark 1st Addition Home Plans booklet •Architectural Standards Matrix •25 different single family house plans •Combination of over 90 different elevations and floor plans •Color packages and anti-monotony will be submitted with BP •Summary: housing types and products meet arch design stnds established in Res No 17-133 Townhomes•172 total TH units in Watermark •93 units in Watermark 1st Addition 9 10 Back to Back Townhomes (Franklin-Revere) •Stone sill and base •Vinyl lap siding (.042 thick panels) •6” wide engineered hardboard trim •Shakes or board & batten •Asphalt shingles •Color packages and anti-monotony will be submitted with BP 11 Side & Front Elevation (Franklin-Revere) 12 Row Townhomes (Jefferson/Madison G&H) •Stone face •Vinyl lap siding (.042 thick panels) •6” and 10” wide engineered hardboard trim •Shakes or board & batten •Asphalt shingles •Color packages and anti-monotony will be submitted with BP 13 Front & Side Elevations (Jefferson/Madison G&H) 14 Jefferson Elevation Madison Elevation •Color variations within each facade 15 21st Avenue North (Street A) Facing Elevation •Street A facing shall be unique •Brick, lap siding and board & batten •6 foot deep porch with decorative columns. Single Family Homes•Architectural Standards Matrix •25 different single family house plans •Combination of over 90 different elevations and floor plans •Color packages and anti-monotony will be submitted with BP •Summary: housing types and products meet arch design stnds established in Res No 17-133 •Following House Elevation Samples 16 17 Landmark Collection (65’-75’ Wide Lots) Exterior Materials and Styles •Stone or brick face •Vinyl lap siding (.042 thick panels) •4” and 6” trim •Shakes or board & batten •Asphalt shingles •Color packages and anti- monotony will be submitted with BP The Wabasha The Summit 18 Discovery Collection (55’-60’ Wide Lots) Exterior Materials and Styles •Stone or brick face •Vinyl lap siding (.042 thick panels) •4” and 6” trim •Shakes or board & batten •Asphalt shingles •Color packages and anti- monotony will be submitted with BP The Armstrong-3 stall tandem garage The Sullivan Landscaping•Final plans are consistent with preliminary plans •Includes: •Fencing •Berms •Entrance monuments •Townhome tot lot •Protected open space signs •Townhome unit landscaping 19 20 •Boulevard Trees •Open Space •Private Park •Tot Lot Main Entrance-20th 21 Townhome Berm + Fence + Landscaping 22Section A: 15’ combination berm + fence + landscaping Section B: 6’ privacy fence + landscaping (park and ride) Section C: 6’ privacy fence + landscaping (20th Avenue) 23 Section F: 8’ berm + 6’ privacy fence + landscaping 24 Townhome Unit Planting Details TH Tot Lot Details 25 26•194 lots and 14 outlots •1 lot is TH common area Subdivision•Easements •Standard D&U •Open Space Easement •Outlots containing wetlands, open space, stormwater ponds, berms •“Protected Open Space Area” signage •Street and Utilities •Proposed streets right of way and widths are consistent with preliminary plat •Watermain, sanitary sewer, stormwater facilities, sidewalks and trails also consistent 27 28 •Res No 16-51 details public land dedication and fees •Dedicate to HOA the TH and Discovery neighborhood private parks •Townhome tot lot will be constructed in 1st Addition •Public park to be dedicated to City •Trail constructed along 21st Ave to 20th Ave and along TH neighborhood Public Land DedicationWatermark 1st Addition Total # Units =193 x Park Dedication Fee $3,000 = Cash in Lieu Value $579,000 (Trail Construction Costs) =($56,560) TOTAL CASH FEE DUE =$522,440 29 1.Land dedication for the public and private parks will be credited from the total payment in lieu. (appraisals) 2.Costs for public park improvements and trail construction will be credited from the total payment in lieu. 3.Improvements to the private parks and recreational center will not be credited from the total payment in lieu. Development Agreements•Master Development Agreement •Covers entire 372 acre site •Lennar, Mattamy Homes and City are parties •Details terms establishing overall Watermark development •Development Agreement and PUD Agreement •Standard DA specific to each addition 30 Recommendation•October 10, 2018: Planning & Zoning Board made recommendation to approve PUD Final Plan/Final Plat •Staff suggests continuing the PUD Final Plan/Final Plat to the November 26, 2018 CC Meeting to finalize review of MDA and 1st Addition DA 31 Council Action (Continue)•Consider Resolution No. 18-143 Approving PUD Final Plan/Final Plat •Consider Resolution No. 18-144 Approving Master Development Agreement •Consider Resolution No. 18-145 Approving 1st Addition Development Agreement 32 33 Wetlands•2015: wetland delineations approved •28 wetlands •20 acres •Original wetland application proposed wetland impacts, wetland creation, wetland restoration and upland buffer establishment •Revised wetland application to purchase 3.3671 acres of wetland banking credits •Greenway corridor critical component of Watermark and will be developed in future phases 34 1 CITY COUNCIL AGENDA ITEM 6C STAFF ORIGINATOR: Kendra Lindahl, Landform MEETING DATE: November 13, 2018 TOPIC: Consider Resolution No. 18-156, Approving I-35E Corridor Comprehensive Plan Amendment CASE NUMBER: CP2018-002 APPLICANTS: City of Lino Lakes REVIEW SCHEDULE: Complete Application Date: September 5, 2018 P & Z Board Meeting: October 10, 2018 City Council Work Session November 5, 2018 City Council Meeting: November 13, 2018 60-Day Review Date: N/A INTRODUCTION Staff is requesting City Council consideration to amend the 2030 Land Use Plan and Utility Staging plan for certain property along the I-35E cooridor. BACKGROUND The City of Lino Lakes has initiated a Comprehensive Plan Amendment for land located east of I-35E and north of Main Street/CSAH 14. The 2030 Comprehensive Plan included a Full Build Land Use Plan which guided most of the east side of the I-35E corridor, north of Main Street, for Commercial and Industrial development. Most of the area was included in the post 2030 utility staging area and shown as Urban Reserve in the 2030 Land Use Plan. The City has been working with local energy providers to promote economic development opportunities along the 35E corridor. This area has begun to receive some interest from site selectors for technology based industries. One key component of the site selection process for prospective developers is project readiness. To further economic development goals and enhance readiness the City is proposing to amend the land use plan consistent with the full build vision for the area along with some modifications considered as part of the 2040 Comprehensive Plan update. An amendment to the utility staging plan is proposed to allow for immediate extension of utilities for eligible projects. 2 The change will make more land readily available for business and industrial development. ANALYSIS We have reviewed the application for consistency with the Comprehensive Plan, as well as City policies. Existing Conditions The 33 subject parcels are owned by multiple parties. The parcels are generally vacant or developed with single family homes. The City published notice of the proposed change in the official newspaper and mailed notice to the property owners whose property is proposed to be reclassified. Land Use Amendment Three changes from the 2030 Land Use Plan are proposed: 1. 278.71 acres will be reclassified from Commercial, Industrial and Medium Density Residential to Business Campus on the Full Build Out Future Land Use Map 2. 559.23 acres will be reclassified from Urban Reserve to Business Campus, Commercial and Industrial on the 2030 Future Land Use Map 3. A new Business Campus Land Use category will be created. • The purpose of this new designation is to provide for the high-quality, integrated development of a wide range of business uses at high visibility locations, particularly the area near the I-35E and I-35W corridors and interchanges. These areas will create a strong image for the city and serve primarily as employment centers, with office, service, research and development, data centers and light industrial uses. • Warehousing and outdoor storage would be limited, as accessory to these primary uses. Other uses would include those that support the businesses and their employees, such as convenience retail or services, hotels, restaurants, daycare facilities, banks or other financial institutions, and park and ride facilities. Additional uses may include destination uses that have a market draw beyond the local area, such as entertainment, public institutions or non-profit or semi-public facilities. • A master plan/ PUD plan will ensure a cohesive development pattern, and provide standards for good aesthetics and architectural quality, while protecting the natural resources of the area. Implementation of this new designation will require new zoning ordinance language. 3 Staging Plan Amendment Two changes to the 2030 Staging Plan are proposed: 1. 226.53 acres will be changed from Stage 2A Planned Service Area to Stage 1B Planned Service Area on the Utility Staging Map 2. 559.23 acres will be changed from Stage 3 Planned Service Area to Stage 1B Planned Service Area on the Utility Staging Map All of these changes have been contemplated in the 2040 Comprehensive Plan that is currently being developed by the City. However, that update will likely not be completed until late 2019. The City wishes to make this land available for business campus, commercial and industrial development sooner rather than later due to market interest in this type of land adjacent to the interstate. Consistency with the Comprehensive Plan The proposed amendments are supported by and consistent with the Economic Development (Chapter 6) goals and policies as noted below: Goal 3: Attract and encourage new light industrial, high tech, business and professional services enterprises and maintain and expand existing businesses in Lino Lakes. Rationale: Lino Lakes’ industrial and commercial development will be concentrated primarily along its existing business corridors. This provides opportunities for a diversified economic base, expanded employment opportunities and maintaining conformity with the existing commercial and light industrial land use patterns. Policies: 1) Protect designated industrial areas from residential encroachment and marginal land uses that will preclude the highest economic use of land available for commercial and light industrial development. 2) Develop strategies and programs to attract high tech and high value industrial and business and professional services enterprises that have an emphasis on job creation. 3) Encourage high-end business park development designed to attract medical, technology, and similar industries, which provide quality employment opportunities and have low service demand for municipal services. 4) Encourage a comprehensive business center with services such as wi-fi access, office space, copy services, postal and overnight delivery pick up, and telephone services to small and start-up entrepreneurial business owners and telecommuters who are able to share space and costs. 5) Continue to support local business retention and expansion initiatives. 6) Recognize the fundamental linkage between housing and economic development and work to match housing availability with community employment. 7) Promote the Anoka County Airport as an asset to corporate users. Goal 4: Promote efficient, planned commercial and industrial expansion within the City’s growth areas, accessible to public infrastructure and transportation. 4 Policies: 1) Identify key commercial and industrial development opportunities within the City’s planned growth areas in locations with access to major transportation systems. 2) Encourage compact commercial development that will make efficient use of infrastructure and resources. 3) Require that new commercial, industrial, and developments may only occur in sewered areas in accordance with the staging plan. 4) Promote the rehabilitation and redevelopment of existing commercial facilities by continuing to pursue and make available various financial programs and assistance. 5) Encourage the success of major regional commercial center which would include various types of restaurants, shopping, and entertainment venues for both adults and children. 6) Review and clearly define design standards to promote consistent application and timely approvals for commercial and industrial development. 7) Promote the use of “Green” building and low impact development techniques in new development. 8) Ensure, as areas are developed, that a specific development project bears its proportionate share of infrastructure improvement costs to the fullest extent possible. The proposed amendment would diversify the city’s tax base by encouraging business campus, commercial and industrial uses in the I-35E corridor. This will provide opportunities for increased tax base, diversified economic base and expanded employment prospects. Findings of Fact The following are Findings of Fact for the Comprehensive Plan Amendment: 1. The proposed 2030 Comprehensive Plan amendments are needed to enhance economic development opportunities in the City. 2. The proposed 2030 Comprehensive Plan amendments are needed to make land development-ready for larger business campus projects in the City of Lino Lakes. 3. The Comprehensive Plan is intended to be evaluated regularly and amended as needed to meet City goals as noted in Chapter 11 (Implementation) of the Comprehensive Plan, which states “The city will biannually review the Plan and amend the Plan, as necessary, to reflect changing needs and conditions.” 4. The proposed land use and staging plan changes are consistent with the current draft 2040 Comprehensive Plan, but that plan is still under review and it is the City’s desire to have these amendments adopted this year to make land available for development. 5. The proposed amendments are consistent with Sanitary Sewer Plan planned infrastructure improvements and simply allows those improvements to occur earlier if development is proposed. 6. The proposed amendments are consistent with Water Supply Plan planned infrastructure improvements and simply allows those improvements to occur earlier if development is proposed. 7. The proposed amendments are consistent with Transportation Plan planned infrastructure improvements and simply allows those improvements to occur earlier if development is 5 proposed. 8. The proposed amendments are consistent with the Economic Development goals in Chapter 6 of the 2030 Comprehensive Plan. 9. Future development will implement the I-35E Corridor Alternative Urban Areawide Review (AUAR) and updates as necessary. Planning and Zoning Board The Planning & Zoning Board held a public hearing and reviewed the request at their October 10, 2018 regular meeting. The Board was supportive of request and voted 7-0 in to approve with the findings of fact noted in the resolution. There was no one present who spoke at the public hearing. However, later in the evening Mr. John Houle, owner of property along 80th Street, spoke and asked if the change in land use would allow him to install a billboard on his property. Staff noted that off-premise advertising signs (billboards) are not permitted anywhere in the City. EDAC The Economic Development Advisory Committee recommended approval at their November 1, 2018 meeting. RECOMMENDATION Staff recommends approval of the of I-35E Corridor Comprehensive Plan Amendments. ATTACHMENTS 1. Resolution No. 18-156 CITY OF LINO LAKES RESOLUTION NO. 18-156 APPROVING A COMPREHENSIVE PLAN AMENDMENT FOR LAND LOCATED EAST OF I-35E AND NORTH OF MAIN STREET/CSAH 14 WHEREAS, the City of Lino Lakes has initiated a comprehensive plan amendment for 33 properties identified with the following PID #s: 12-31-22-11-0007, 12-31-22-12-0002, 12-31-22-41-0001, 12-31-22-42-0001, 01-31-22- 44-0002, 01-31-22-44-0001, 12-31-22-14-0001, 01-31-22-44-0003, 01-31-22-43-0001, 01-31-22-41-0004, 01-31-22-41-0003, 12-31-22-11-0008, 01-31-22-13-0004, 12-31-22- 43-0003, 01-31-22-11-0002, 12-31-22-14-0002, 12-31-22-13-0002, 12-31-22-12-0001, 12-31-22-41-0002, 01-31-22-14-0001, 01-31-22-43-0002, 12-31-22-11-0006, 12-31-22- 44-0001, 01-31, 22-11-0001, 13-31-22-11-0001, 13-31-22-41-0005, 13-31-22-41-0003, 13-31-22-12-0002, 13-31-22-14-0001, 13-31-22-13-0002, 13-31-22-43-0002, 13-31-22- 41-0004 and 13-31-22-42-0001 WHEREAS, the City of Lino Lakes has initiated a land use guide plan amendment to change 278.71 acres from Commercial, Industrial and Medium Density Residential to Business Campus on the 2030 Full Build Out Future Land Use Map as shown on Exhibit A. WHEREAS, the City of Lino Lakes has initiated a land use guide plan amendment to change 559.23 acres from Urban Reserve to Business Campus, Commercial and Industrial on the 2030 Future Land Use Map as shown on Exhibit B. WHEREAS, the City of Lino Lakes has initiated a change to the Utility Stage Plan Map Amendment to move 226.53 acres from Stage 2A Planned Service Area to Stage 1B Planned Service Area and to move 559.23 acres from Stage 3 Planned Service Area to Stage 1B Planned Service Area on the 2030 Utility Staging Map as shown on Exhibit C. WHEREAS, the development is consistent with the Zoning and Subdivision Ordinances; WHEREAS, the Planning Commission has reviewed the requested amendments at a duly called Public Hearing and recommends approval; WHEREAS, the proposed amendments meet the standards outlined in the Comprehensive Plan. Specifically: 1. The proposed 2030 Comprehensive Plan amendments are needed to enhance economic development opportunities in the City. 2. The proposed 2030 Comprehensive Plan amendments are needed to make land development-ready for larger business campus projects in the City of Lino Lakes. 3. The Comprehensive Plan is intended to be evaluated regularly and amended as needed to meet City goals as noted in Chapter 11 (Implementation) of the Comprehensive Plan, which states “The city will biannually review the Plan and amend the Plan, as necessary, to reflect changing needs and conditions.” 4. The proposed land use and staging plan changes are consistent with the current draft 2040 Comprehensive Plan, but that plan is still under review and it is the City’s desire to have these amendments adopted this year to make land available for development. 5. The proposed amendments are consistent with Sanitary Sewer Plan planned infrastructure improvements and simply allows those improvements to occur earlier if development is proposed. 6. The proposed amendments are consistent with Water Supply Plan planned infrastructure improvements and simply allows those improvements to occur earlier if development is proposed. 7. The proposed amendments are consistent with Transportation Plan planned infrastructure improvements and simply allows those improvements to occur earlier if development is proposed. 8. The proposed amendments are consistent with the Economic Development goals in Chapter 6 of the 2030 Comprehensive Plan. 9. Future development will implement the I-35E Corridor Alternative Urban Areawide Review (AUAR) and updates as necessary. NOW, THEREFORE BE IT RESOLVED by The City Council of The City of Lino Lakes that the Land Use Guide Plan Amendment is approved; BE IT FURTHER RESOLVED by The City Council of the City of Lino Lakes that the Utility Sewer Staging Plan Amendment is approved. Adopted by the Council of the City of Lino Lakes this ___ day of _______, 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _______________and was duly seconded by Council Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: _______________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk Exhibit A Exhibit B Exhibit C PUBLIC HEARING. I-35E Corridor Comprehensive Plan Amendment November 13, 2018 City Council Introduction •City-initiated request for Comprehensive Plan Amendment •City has been working with local energy providers –Change will promote economic development –Recent interest from technology companies –Site selectors look for project readiness •Changes proposed to 2030 Plan are consistent with DRAFT 2040 Plan Background •The 33 affected parcels have multiple different owners –Generally vacant land or single family homes •Notice was published in the Paper and sent to affected land owners Proposed changes to 2030 Future Land Use Proposed changes to Full Build Land Use Proposed changes to 2030 Utility Staging Plan Summary •Three changes from the 2030 Land Use Plan are proposed: –559.23 acres will be reclassified from Urban Reserve to Business Campus, Commercial and Industrial on the 2030 Future Land Use Map –278.71 acres will be reclassified from Commercial, Industrial and Medium Density Residential to Business Campus on the Full Build Out Future Land Use Map –A new Business Campus Land Use category will be created. Summary •Two changes to the 2030 Staging Plan are proposed: –226.53 acres will be changed from Stage 2A Planned Service Area to Stage 1B Planned 3 Service Area on the Utility Staging Map –559.23 acres will be changed from Stage 3 Planned Service Area to Stage 1B Planned Service Area on the Utility Staging Map Summary •Proposal is consistent with economic development goals of the Comprehensive Plan •Will diversify the City’s tax base –Encourages business campus, commercial and industrial uses in the I-35E corridor –Opportunities for increased tax base, diversified economy and employment prospects Next Steps •City Council action on November 13th •Submit to Metropolitan Council for review •Amend Zoning Ordinance and Zoning Map within 9 months Recommendation Staff recommends approval of the I-35E Corridor Comprehensive Plan Amendments, based on the findings listed in the staff report CITY COUNCIL AGENDA ITEM 6D STAFF ORIGINATOR: Diane Hankee, City Engineer MEETING DATE: November 13, 2018 TOPIC: Consider Resolution No. 18-155, Approving Payment No. 4 and Final, 2017 Trail Improvement Project VOTE REQUIRED: 3/5 INTRODUCTION Staff is requesting council action to finalize the 2017 Trail Improvement Project. BACKGROUND The 2017 Trail Improvement Project involved two separate trail projects: Birch Street Trail Replacement The Birch Street Trail Replacement project is a trail maintenance project located along Birch Street between Deerwood Lane and Living Waters Lutheran Church. The project was completed at the end of the 2017 construction season. This project was funded through the annual trail maintenance budget. Century Farms Trail The Century Farms Trail project includes the construction of a new trail connecting Century Trail south the Century Trail east through the park. The project was completed during the 2018 construction season and was expanded to include concrete work and American with Disabilities Act pedestrian ramps. This project was funded through park dedication. RECOMMENDATION Approve Resolution No. 18-155, Approving Payment No. 4 and Final, 2017 Trail Improvement Project in the amount of $14,647.29 to Arcade Asphalt, Inc. ATTACHMENTS 1. Resolution 18-155 2. Pay Request No. 4 & Final 3. Project Photos CITY OF LINO LAKES RESOLUTION NO. 18-155 APPROVING PAYMENT NO. 4 AND FINAL FOR THE 2017 TRAIL IMPROVEMENT PROJECT WHEREAS, pursuant to resolution 17-110 of the Council adopted September 25, 2017, awarding the contract for the 2017 Trail Improvement Project to Arcade Asphalt, Inc. WHEREAS, a complete summary of costs are detailed in Payment No. 4 (Final); NOW, THEREFORE, BE IT RESOLVED by the City Council of Lino Lakes that Payment Request No. 4 (Final) is approved for a final contract amount of $100,546.00. Adopted by the Council of the City of Lino Lakes this 13th day of November, 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _______________and was duly seconded by Council Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: _______________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk CITY COUNCIL AGENDA ITEM 6E STAFF ORIGINATOR: Diane Hankee MEETING DATE: November 13, 2018 TOPIC: Consider Resolution 18-159, Authorizing Acquisition of Permanent Easement, 49 & J Trunk Utility Improvements VOTE REQUIRED: 3/5 INTRODUCTION Staff is requesting City Council consideration to authorize acquisition of a permanent easement for the 49 & J Trunk Utility Improvements Project. BACKGROUND To provide municipal utilities to the southwest area of Lino Lakes, the City will need to acquire an easement from the property located at 255 Ash Street. Sanitary sewer forcemain and trunk water main are proposed to be extended across the rear of this property. A 20’wide easement is required across the rear of this property. A minimum damage acquisition report has been completed and an agreement has been reached with the property owner in the amount of $13,100. Funding for the easement acquisition would be from the Trunk Area and Unit fund. RECOMMENDATION Staff is recommending approval of Resolution No. 18-159, Authorizing Acquisition of Permanent Easement, 49 & J Trunk Utility Improvement Project. ATTACHMENTS 1. Resolution No. 18-159 CITY OF LINO LAKES RESOLUTION NO. 18-159 RESOLUTION AUTHORIZING ACQUISITION OF PERMANENT EASEMENT 49 & J TRUNK UTILITY IMPROVEMENT PROJECT WHEREAS, pursuant to Resolution No. 18-34 adopted the 26th day of March, 2018, the City Council Authorized the Preparation of Plans and Specifications for the 49 & J Utility Improvement Project; and WHEREAS, the construction of the project will require the acquisition of various easements; and WHEREAS, the City of Lino Lakes, a Minnesota municipal corporation, acting by and through the City Council, is authorized by law to acquire real estate which is needed for public use or purpose. NOW, THEREFORE BE IT RESOLVED by The City Council of The City of Lino Lakes authorizes the acquisition of a permanent easement for the 49 & J Utility Improvement Project in the amount of $13,100.00. Adopted by the Council of the City of Lino Lakes this 13th day of November, 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _______________and was duly seconded by Council Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: _______________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk CITY COUNCIL AGENDA ITEM 6F STAFF ORIGINATOR: Diane Hankee, City Engineer MEETING DATE: November 13, 2018 TOPIC: Resolution No. 18-160, Accepting Quotes and Awarding Additional Construction Contract, Trunk Watermain Connection at Birch Street and Black Duck Drive VOTE REQUIRED: 3/5 Vote Required INTRODUCTION Staff is requesting authorization to accept quotes and award a construction contract for the Trunk Watermain Connection at Birch Street and Black Duck Drive. BACKGROUND The watermain connection project at Birch Street and Black Duck Drive includes the connection of a 10 inch diameter watermain to the City’s 16 inch diameter trunk watermain. The project is being completed to improve the pressure and supply that is currently being handled through a 6 inch line. The project is funded through the water operating fund. Quotes for the project: CONTRACTOR TOTAL QUOTE Dresel Contracting $20,000.00 Valley Rich $22,200.00 Olson’s Sewer Service, Inc. $28,810.86 The low quote was submitted by Dresel Contracting. of Chisago City, Minnesota, in the amount of $20,000.00. The final completion date for this project is May 31, 2019. RECOMMENDATION Staff recommends adoption of Resolution No. 18-160 accepting quotes and awarding a construction contract for the Trunk Watermain Project at Birch Street and Black Duck Drive, in the amount of $20,000.00 to Dresel Contracting. ATTACHMENTS 1. Resolution No. 18-160 2. Figure CITY OF LINO LAKES RESOLUTION NO. 18-160 RESOLUTION ACCEPTING QUOTES, AND AWARDING A CONSTRUCTION CONTRACT, TRUNK WATERMAIN CONNECT AT BIRCH STREET AND BLACK DUCK DRIVE WHEREAS, pursuant to a request for quotes for the construction of the Trunk Watermain Connection at Birch Street and Black Duck Drive, quotes were received, and tabulated: CONTRACTOR TOTAL QUOTE Dresel Contracting $20,000.00 Valley Rich $22,200.00 Olson’s Sewer Service $28,810.86 WHEREAS, it appears that Dresel Contracting, of Chisago City, Minnesota is the lowest responsible bidder; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lino Lakes that the Mayor and Clerk are hereby authorized and directed to enter into a contract with Dresel Contracting for the construction of the Trunk Watermain Connection at Birch Street and Black Duck Drive in the amount of $20,000.00; Adopted by the Council of the City of Lino Lakes this 13th day of November, 2018. The motion for the adoption of the foregoing resolution was introduced by Council Member _______________and was duly seconded by Council Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: _______________________________ Jeff Reinert, Mayor ATTEST: ________________________ Julianne Bartell, City Clerk N SCALE IN FEET 0 3015 K:\02029-880\Cad\Plan\02029-88-01WMN 2018.dwg 5/22/2018 11:18:59 AM2018 WATERMAIN IMPROVEMENT PROJECT BLACK DUCK DRIVE AT BIRCH STREET 701 Xenia Avenue South, Suite 300 www.wsbeng.com Minneapolis, MN 55416 INFRASTRUCTURE ENGINEERING PLANNING CONSTRUCTION WSB 763-541-4800 - Fax 763-541-1700 WSB Project No. 11695-000 16" TO 10" WATERMAIN CONNECTION Project Cost - ______________BLACK DUCK DRIVEBIRCH ST. (CSAH 34)