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HomeMy WebLinkAboutVLAWMO Annual Financial Report 2007In compliance with MN Rules Ch. 8410.0150 2007 Annual Report for the Vadnais Lake Area Water Management Organization VLAWMO 800 East County Road E, Vadnais Heights, MN 55127 651-204-607; Fax: 651-204-6173; e-mail: office@vlawmo.orq Website: www.vlawmo.orq VLAWMO Annual Report - 2007 TABLE OF CONTENTS PART 1 ACTIVITY REPORT A. 2007 Board of Directors; Technical Commission and acknowledgement of many other people who assisted VLAWMO efforts in 2007 B. Assessment of 2006Annual Work Plan C. 2008 Projected Work Plan D. Local Plan adoption / updates E. Written communication F. Locally adopted wetland banking G. Summary of Wetland Conservation Act activity H. Summary of Water Quality Data collected by VLAWMO PART 2 FINANCIAL REPORT A. 2007 Amended Budget B. 2007 Fiscal year reporting of revenues and expenses -2- VLAWMO Annual Report - 2007 2007 Board of Directors Paul Emeott, Chair 3960 Scheuneman Rd., Gem Lake MN 55110; 651-429-5040 Darryl LeMire, Vice Chair 4779 Otter Lake Road MN 55110; 651-429-6422 h George Rux, Secretary — Treasurer 5 Shadow Lane, North Oaks, MN 55127; 651-484-3753 Mark Johannsen, 771 Bur Oak Drive, Vadnais Heights, MN 55127; 612-336-9302 Bill Mample 4270 Otter Lake Rd, White Bear Township, MN 55110; 651-653-3881 Donna Carlson 6808 East Shadow Lake Drive, Lino Lakes Alternate Commissioners Tom Watson, 45 E Pleasant Lake Road., North Oaks Paul Gaston, 3925 Woodview Ct. Vadnais Heights Paul Auger, 2532 Orchard Ln. White Bear Lake Gretchen Artig-Swomley, 1430 Goose Lake Road, Gem Lake John Bergeson, 6996 W. Shadow Lake Dr. Lino Lakes Technical Commission Paul Peterson, 1770 Garden Lane, White Bear Township, MN 55110; 651-407-0193 John Youngstrom. 11 Anemone Circle, North Oaks, MN 55127 651-483-5857 Gretchen Artig-Swomley, 1430 Goose Lake Road, Gem Lake Mark Graham, 800 East County Road E, Vadnais Heights Neil Franey, 1323 Hedman Way, White Bear Lake Jim Studenski, 600 Town Center Pksy, Lino Lakes Alternates Paul Emeott, 3960 Scheuneman Road Gem Lake Marty Asleson, 600 Town Center Pkwy, Lino Lakes Donn Wiski, 800 East County Road E, Vadnais Heights Mark Burch, 4701 Hwy. 61 White Bear Lake Staff & Consultants Stephanie McNamara, Administrator; 651-204-6073 Kristine Lampert, Program Coordinator, 651-204-6074 Jake Ruzsa, Monitoring & modeling intern; 651-204-6070 Dave Schuler & John Blackstone, Lambert Lake Project co -manager; technical advisor, St. Paul Regional Water Service, 1900 Rice Street. St. Paul, 55113, Roger Jensen, Legal counsel Jensen, Bell, Converse & Erickson, P.A.; 1500 Wells Fargo Bdlg., 30 E. 7 St, St. Paul Debra Jezierski, CPA, Auditor HLB Tautges Redpath, Ltd. 4810 White Bear Parkway, MN 55110; 651-426-7000 Della Young, Water Plan project manager & Water Summit co-sponsor HDR Engineering, Inc.701 Xenia Ave. So. Mpls, MN 55416-3636; 763-591-5400 - 3 - VLAWMO Annual Report - 2007 Citizen's Advisory Committee Larry Briemhurst, Vadnais Heights Joan Brainard, North Oaks Paul Moss, White Bear Lake Roger Ramthun, Vadnais Heights Storm Sewer Utility Task Force Several people worked very hard putting to turn the idea of a Storm Sewer Utility into a viable method of funding the watershed. The watershed sends its sincere thanks. Consulting assistance Jeanne Vogt, Finance Director, City of Vadnais Heights Ron Leaf, Shannon Smith and Dennis Tumberg of Short Elliott Hendrickson Joel Schilling, Schilling Consulting Services Charles LeFevre, Kennedy & Graven, Chartered Thanks also to All of the municipalities for considering and amending the Joint Powers Agreement to accommodate the new funding method. The staff of the City of Vadnais Heights for assisting during billing and helped answer questions. The City administrators who answered questions from many of the watershed residents: Mark Sather, WBL; Gerald Urban, VH,; Bill Short, WB Town; Jim March, North Oaks and Gorden Heitke, Lino Lakes. Water Plan approval Thanks to: Della Young, HDR, Program Manager Brad Wozney, MN Board of Water & Soil Resources Staff assistance on projects and programs provided by: Kristine Lampert, Program Coordinator Stephanie McNamara, Administrator -4- VLAWMO Annual Report - 2007 2007 Annual Report for the Vadnais Lake Area Water Management Organization Introduction The Vadnais Lake Area Water Management Organization (VLAWMO) covers approximately 25 square miles in the northeast metropolitan area. VLAWMO is a joint powers water management organization empowered by its member communities to manage water resources under Minnesota statute Chapters 103A — 103H. VLAWMO shares responsibility with its member communities to: ❑ Protect surface water quality ❑ Manage stormwater and control flooding ❑ Require good erosion control practices, both during development and as a part of good stewardship ❑ Protect and manage wetlands through the Wetland Conservation Act and local effo rt ❑ Protect groundwater quality and recharge areas. Vadnais Lake, in the southwest corner of the watershed, serves as a reservoir for the St. Paul Regional Water Service (SPRWS). The SPRWS provides drinking water to about 400,000 customers in several communities. VLAWMO includes parts of Vadnais Heights, White Bear Township, White Bear Lake, Gem Lake, Lino Lakes and all of North Oaks. Most of the watershed lies in Ramsey County with a small portion in Anoka County. This Annual Report is provided to the public and the State of Minnesota, Board of Water and Soil Resources in compliance with MN Rules Chapter 8410.0150. Financial Reporting The 2007 Approved Budget is included in Part 2 of this Report. Line item footnotes provide further clarification of the budget. Actual expenditures and income are also included. The budget provides detail in each expense and income category. Discussion will follow below. The Balance Sheet for 2007 is also included. Income. The majority of the VLAWMO budget is supported by contributions from the member communities. All requested contributions were received as of this report. The actual income derived from service fees was considerably less than was budgeted ($340 actual vs. $2500 budgeted), less than 1 % of the budget. Income from interest was higher than budgeted ($1400 vs. $2500 budgeted). VLAWMO secured two Certificates of Deposit with market rate interest that provided the above budget interest income. The rest of the income is derived from a state cost share grant covering half of the cost of administering the Wetland Conservation Act. The Capital Improvement budget for 2007 was funded by a continuing grant from the Clean Water Partnership program. -5- VLAWMO Annual Report - 2007 Expense. VLAWMO budget supported a variety of project and program implementation such as: ♦ the citizen's lake monitoring program, ♦ Wetland Conservation Act administration ♦ the Lambert Lake project work (CIP). NEW implementation ♦ Approval and implementation of the storm sewer utility, ♦ Adoption of the 3rd generation Water Plan, ♦ first Annual Water Summit with a focus on local citizens & staff working with water ♦ Final Clean Water Partnership stream bank restoration & flume replacement VLAWMO now employs two full time staff and a summer intern to work on a variety of programs. A Program Coordinator started work in April of 2008 and is working with the monitoring programs, the sustainable lake management plan, the GIS system and other efforts. Several contracted consultants, as well assistance from the St. Paul Regional Water Service, Ramsey County and Ramsey Conservation District enabled these efforts. All actual expenses, except for Legal and bookkeeping were at or less than the budgeted amount. The Legal budget had increased slightly, however there were a variety of questions related to the state approval of the water plan and the amendment to the Joint Powers Agreement allowing the Storm Sewer Utility. It was decided that hiring a bookkeeping service to come in once a month was more efficient use of staff time. More time could then be spent on water resource related work. 2007 WORK PLAN ASSESSMENT Five main goal areas were identified by the VLAWMO Board for 2007: ♦ Implement the new governance structure with a Board of Directors and a Technical Commission. Adopt a Policy Manual to start defining the operations of the watershed. ♦ Finalize the 3rd Generation Water Plan and submit it for Board of Water Soil Resources approval. Complete adoption by the VLAWMO Board by the end of the year. ♦ Establish the feasibility of the a Storm Sewer Utility with the option of amending the JPA and implementing Utility. ♦ Hire a new technical staff person. ♦ Support all on -going VLAWMO programs such as: o Wetland Conservation Act administration, o Citizen's Lake Monitoring program, o Lambert Lake project IMPLEMENT THE NEW GOVERNANCE STRUCTURE The 2007 Joint Powers Agreement established a dual board governance structure. The Board of Directors in responsible for policy and the budget, must meet at least quarterly and has elected officials from each member municipality. They met for the first time in February 2007. This -6- VLAWMO Annual Report - 2007 first year under the new structure, adopting the new Water Plan, and establishing Storm Sewer Utility (SSU) required a number of meetings. The previous Board had worked on a Policy Manual, which was accepted by the Board at its regular meeting. Among other items, it delegated the authority to utilize budgeted funds for the purpose indicated in the budget to the Technical Commission. The Technical Commission meets monthly with Commissioners appointed by each community. It works with VLAWMO staff to oversee ongoing programs and projects. FINALIZE AND ADOPT THE 3RD GENERATION WATER PLAN HDR Engineering, Inc. assisted VLAWMO in finalizing the new Water Management Plan. Meetings were held in 2007 with the Board of Commissioners and the MN Pollution Control Agency. A response to final comments was generated and sent to all agencies or members of the public who had provided comments. Additional changes were made to the Water Plan. These updates were discussed at the first VLAWMO educational Summit. The final Water Plan was sent to BWSR in the fall. VLAWMO appeared before toe BWSR subcommittee and its Board of Directors in December, receiving approval. The VLAWMO Board of Directors adopted the Water Management Plan December 19, 2007. THE STORM SEWER UTILITY AS AN ALTERNATIVE FUNDING SOURCE The new VLAWMO Board of Directors was presented with a preliminary feasibility report on implementing a Storm Sewer Utility (SSU) as the major funding source for the watershed. The Board directed the second phase of development to proceed. This included amendments to the JPA to be proposed to the member communities, establish land use classifications and attendant rates based on the 2008 budget and working with other affected agencies including the counties. The City of Vadnais Heights especially Jeanne Vogt, Finance Director provided essential and substantial assistance in database development, logistical details and trouble shooting. Charles LeFevere guided legal questions and the JPA amendment language. Schilling Consulting provided coordination help through August 2007. In September VLAWMO found it would need to send out a first billing if the 2008 budget were to be collected. The Storm sewer utility Rule was adopted by the Board in October with the first billing to roughly 10,000 property owners in the watershed being sent October 31, 2008. Fees were due November 30. Eighty six percent of the 2008 budget was received by the end of the grace period, December 14th Roughly 1400 delinquent fees were certified to the counties. Ramsey County accepted the certification and included the delinquent fees on the 2008 property tax statements. Anoka County still had questions that will be resolved in 2008. There were -7- VLAWMO Annual Report - 2007 7 parcels in Anoka County affected, the rest paid the utility fee. The SSU was considered successful in that 86% of the budget was collected directly, the database functioned well, and only those property owners within VLAWMO were paying for watershed support. However, receiving a new bill was confusing for residents of the watershed and processing the utility (billing, receiving and entering payments, etc.) as well as answering questions consumed substantial staff time for more than two montl s. Efficiencies will need to be pursued for the 2009 billing cycle. SUPPORT ONGOING VLAWMO PROGRAMS Wetland Conservation Act Administration VLAWMO continues to provide administrative service for the Wetland Conservation Act for the all area within the watershed. 2007 WCA statistics are included in this report. Water Quality Monitoring Program The Citizen's Lake Monitoring Program has now completed its 11 to year with the new Program Coordinator taking over major responsibility. Many of our volunteers have been faithfully providing samples and data since the beginning of the program. VLAWMO appreciates the work of its dedicated volunteers. Many programs would not be possible without them. No volunteer was found or Amelia Lake and staff has done the sampling on this resource in 2007. Analysis will be available in the 2007 VLAWMO Water Quality Monitoring Report and on the VLAWMO website. Expansion of Water Quality Monitoring. Lambert Creek monitoring With the assistance of the Dave Schuler, Chief Engineer at SPRWS, Kristine Lampert, VLAWMO Program Coordinator and the VLAWMO intern, Jacob Ruzsa and a SPRWS intern Lambert Creek was sampled during the summer of 2007. Those results are also available at the end of this report. BATHTUB WATER QUALITY MODEL The results have also been used in a basic computer model of watershed that can anticipate water quality responses to rain events. This basic model was used by Della Young, HDR Eng. as she developed and calibrated the BATHTUB model of the watershed. The model has been distributed to several of the member communities and will be used in future studies. Lake Level monitoring Pleasant Lake level is monitored by SPRWS and the water level in Birch Lake, White Bear has been tracked by Ramsey County in the past. VLAWMO coordinated with the MN Department of Natural Resources to add four lakes to the Lake Level monitoring program: Gilfillan Lake (62-27P), Birch Lake (62-24P), Goose Lake (62-34P) and Gem Lake (62-37P). VLAWMO has agreed to provide annual calibration assistance -8- VLAWMO Annual Report - 2007 in the future. Results are available at the MNDNR website. Education Program Two efforts were implemented in 2007. The Raingarden Workshop was held in July for area residents. Ramsey Conservation District provided trainers. Those attending were very interested and several are applying to the VLAWMO cost -share program to help fund their raingarden or shoreline stabilization project. With the co-sponsorship of HDR, the first annual local educational summit was held in October. Several agencies, HDR and VLAWMO provided speakers for the event held at Tamarack Nature Center. Reviews were good, but more attendance would be sought in upcoming years. Information from the presentations is available on the VLAWMO website. WORK PLAN FOR 2008 Structural & Administrative Components ♦ WATERSHED BOUNDARY UPDATE WITH ADJACENT WATERSHEDS The Water Plan identified areas of the watershed boundary in need of updating. This will require some minor changes to the legal description, which will be sent to the member communities as a JPA amendment. Provided consensus is achieved with the neighboring watersheds and the affected communites, a petition for boundary change will be sent to the Minnesota Board of Water & Soil Resources for approval. This becomes particularly relevant with the SSU, as parcels within the watersheds must be identified for appropriate fees. ♦ The water quality intern will be hired and assist with VLAWMO programs and projects. 6 Joint Powers Agreement amendment in the form an updated legal description of the boundary. ♦ Adopt a VLAWMO Policy Manual. Modifications will be considered and made as needed. • Implement Stormwater Utility Fee as directed by the VLAWMO Board of Directors. 6 Complete the Annual report and Audit as required. WATER QUALITY PROGRAMS ♦ Complete a work plan to address the Impaired Waters status of Lambert Creek and develop a Total Maximum Daily Load (TMDL) study as required. ♦ Implement new water quality standards from the new Water Plan through Local Water Plans of the member communities. ♦ Continue Citizen's Lake Monitoring Program at nine existing sites with possible expansion of metrics. ♦ Continue Lambert Creek monitoring program. ♦ Continue Lake Level program. 6 Work with cooperating agencies to develop the second Sustainable Lake Management Plan for Tamarack Lake. -9- VLAWMO Annual Report - 2007 • Implement the secord year of the cost -share incentive program to encourage watershed restoration projects. • Complete the Lambert Lake restoration portion of the Clean Water Partnership (CWP) project. • Work with MPCA and other partners to implement the remaining elements of the CWP grant along Lambert Creek. This would include a Lower Lambert restoration pilot project. ♦ Continue to administer the Wetland Conservation Act within the VLAWMO jurisdiction. Local Water Plan Status Member Community Last Update New update in progress yes Gem Lake 1999 Lino Lakes 2005 North Oaks 1999 * Yes Vadnais Heights 1996 * Yes White Bear Lake Nov. 1997 yes White Bear Township 2000 * Yes Communication (requirement of MN Rules Ch. 8410.0100) This Annual Report together with the internet website: www.vlawmo.org is intended to meet the requirements under Minnesota Rules. A copy of the VLAWMO Comprehensive Water Plan may be viewed at the VLAWMO office or on the website. The office may be contacted at 651-204-6070 or at office(a�vlawmo.orq on line. - 10 - AUU1 lirrrwvr_ar v. ....... • ••--- EXPENSES 'footnotes subtotal Assessed Amended 2 & 5/2007 6.1.1.1 Office rent, copies, post, tel, supplies $10,000 $10,000 6.1.1.2 Informatior Website maintenance & upgrade $3,000 $3,000 Computer system development $8,000 $5,000 A 6.1.1.3 lnsurance I $3,200 $3,200 O Outside professional consultants Audit $3,900 $3,900 6.1.1.4 I $1.500 Legal $1,500 6.1.1.5 $4,000 B Engineering (8 hr/mo @ $125) $12,000 6.1.1.6 $7,500 B Scientist / Technical $10,000 $500 6.1.1.7 Bookkeeping / office $500 $500 Administrator` $70,000 $70,000 $70,000 6.1.2 Administra summer intern $7,000 $7,000 $7,000 Water resources technician* $55,000 $55,000 $39,000 B 6.1.3 Training (staff/Board)] $1,400 $1,400 6.1.4 Misc. & Cont. I $10,000 $7,000 B 6.2 Technical (Local Plan development $5,000 $5,000 Water Plan update $0 $30,000 C I 6.3 Studies & Programs 6.3.3 Sustainable Lake Management Plan $0 $7,500 $5,000 6.3.4 Financial Incentives cost share $5,000 $6,000 $5,000 A 6.3.5 Public Education $6,000 6.3.6 Maintenani Lambert Lake (3 hr/mo @$50) $2,000 $2,000 $2,000 Grass & Rice Lks (1 hr/mo) $1,000 $1,000 $1,000 Whitaker weir & pond $7,000 $7,000 $6,000 B total' $/0,000 sub Utility $30,500 l 6.3.7 Stormwater program 6.3.8 Monitoring and Assessment Citizen's Lake Monitoring $1,500 $1,500 $1,500 Ramsey Co lab work & bio asses: $5,000 $8,500 $5,000 A Lambert Cr. Data collection- equi $2,500 $2,500 $2,500 I 1 $0 $30,000 D 6.3.8 Watershed modeling 1 I $0 L$234,000 $294,000 * With @ 8 hours/day & 2 wks vacation; 2 wks sick leave, PERA, health ins I INCOME 2007 6.6.1 Fees for review service $2,500 $2,500 12 6.6.2 Interest I I $500 $500 13 6.6.3 Miscellanous WCA sub grant & other $3,000 $3,000 14 6.6.4 Contributions $228,000 $228,000 15 6.6.5 transfer from previous years $0 $60,000 16 $234,000 $294,000 Amendment Footnotes A Approved at the February 2007 Board meeting. The first Sustainable Lake Management Plan was funded by shifting $3000, computer development, $3500 Ramsey Co. lab, $1000 r B Approved at the May 2007 Board meeting. Storm Sewer Utility development and implementtion was funded through the following reductions: Reduction line item new total $8,000 Engineering $4,000 2500 Scientist - Tech $7,500 $16,000 Program Manager/wat $39,000 $3,000 Misc. $7,000 $1,000 Whitaker $6,000 $30,500 Total for Storm Sewer Utility C Water Plan update completion - funded through 2006 budget D Watershed model - reserves saved used to fund effort Communities Gem Lake Lino Lakes North Oaks Water Service Vadnais Heights White Bear Lake White Bear Township May 30, 2008 Mr. Al Roleck, Director of Finance City of Lino Lakes 600 Town Center Parkway Lino Lakes MN 55014 Dear Mr. Roleck: The Vadnais Lake Area Water Management Organization (VLAWMO) has completed its annual reporting requirements. The Annual Report is composed of three elements: the program and project summary, the water quality monitoring report and the audit and management letter. These reports are provided to the members of the Vadnais Lake Area Water Management Organization for their information. All three reports have been submitted to the Minnesota Board of Water and Soil Resources. The audit has also been sent to the state Auditors Office. The VLAWMO Board of Directors accepted the enclosed 2007 audit of its financial records and the accompanying management letter. The audit was performed by Abdo Eick and Meyers LLP. They are being forwarded for your use. If you have any questions you may call Stephanie McNamara at the VLAWMO office at 651-204-6073. Sincerely, d Stephanie McNamara VLAWMO Administrator — Wetland Specialist 800 East Country Road E; Vadnais Heights, MN 55127; 651-204-6070, Fax: 651-204-6173 website: www.vlawmo.orq; email: office©vlawmo.org VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2007 VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA TABLE OF CONTENTS DECEMBER 31, 2007 INTRODUCTORY SECTION Board of Directors and Appointed Officials FINANCIAL SECTION Page No. 1 Independent Auditor's Report 2 Management's Discussion and Analysis 1- IX Basic Financial Statements Government -wide Financial Statements Statement of Net Assets 3 Statement of Activities 4 Fund Financial Statements Governmental Funds Balance Sheets 5 Reconciliation of the Balance Sheets to the Statement of Net Assets 6 Statements of Revenues, Expenditures and Changes in Fund Balances 7 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 8 General Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 9 Notes to Financial Statements 10 -17 OTHER REPORTS Report on Minnesota Legal Compliance Report on Internal Control Over Financial Reporting Based on an Audit of Financial Statement Schedule of Findings and Responses 18 19 20-23 INTRODUCTORY SECTION VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA YEAR ENDED DECEMBER 31, 2007 VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA BOARD OF DIRECTORS AND APPOINTED OFFICIALS DECEMBER 31, 2007 Name BOARD OF DIRECTORS Title Member City Paul Emeott Chairperson Gem Lake Darryl LeMire Vice Chair White Bear Lake George Rux Secretary/Treasurer North Oaks Donna Carlson Director Lino Lakes Marc Johnson Director Vadnais Heights BM Mample Director White Bear Township Name TECHNICAL COMMISSION Title Member City Paul Peterson Chairperson White Bear Township Jim Studenski Vice Chair Lino Lakes Neil Franey Finance Officer White Bear Lake Gretchen Artig-Swomley Commissioner Gem Lake John Youngstrom Commissioner North Oaks Mark Graham Commissioner Vadnais Heights -1- FINANCIAL SECTION VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA YEAR ENDED DECEMBER 31, 2007 ABDO SICK & _ MEYERSLLP Certified Public Accountants & Consultants Grandview Square 5201 Eden Avenue Suite 370 Edina, MN 55436 INDEPENDENT AUDITOR'S REPORT Board of Directors Vadnais Lake Area Water Management Organization Vadnais Heights, Minnesota We have audited the accompanying financial statements of the governmental activities and each major fund of the Vadnais Lake Area Water Management Organization (the Organization), Vadnais Heights, Minnesota, as of and for the year ended December 31, 2007 which collectively comprise the Organization's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Organization's management. Our responsibility is to express opinions on these financial statements based on our audit. The financial statements of the Organization as of December 31, 2006 were audited by other auditors whose report dated March 21, 2007 expressed and unqualified opinion on those statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and each major fund of the Organization as of December 31, 2007, and the results of its operations and budgetary comparisons for the General fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. The management's discussion and analysis, on pages I through IX, is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. iuk,itme11l,P March 19, 2008 ABDO, EICK & MEYERS, LLP Minneapolis, Minnesota Certified Public Accountants 952.835.9090 • Fax 952.835.3261 www.aemcpas.com Management's Discussion and Analysis As management of the Vadnais Lake Area Water Management Organization, (the Organization), Vadnais Heights, Minnesota, we offer readers of the Organization's financial statements this narrative overview and analysis of the financial activities of the Organization for the fiscal year ended December 31, 2007. We encourage readers to consider the information presented here in conjunction with the financial statements, which follow this section. Financial Highlights • The assets of the Organization exceeded its liabilities at the close of the most recent fiscal year by $204,124 (net assets). Of this amount, $38,537 (unrestricted net assets) may be used to meet the Organization's ongoing obligations to its member cities. • The Organization's total net assets increased by $149,930. This increase is primarily due to grant funding received from the State of Minnesota. • As of the close of the current fiscal year, the Organization's governmental funds reported combined ending fund balances of $45,466, a decrease of $11,548 in comparison with the prior year. This decrease in fund balance is due to expenditures in excess of revenues. • The ending General fund balance of $45,466 represents 12 percent of the 2008 budgeted expenditures. This balance represents approximately one and a half months expenditures. • The Organization's unrestricted cash and temporary investments increased to $378,000 from $127,317 during 2007. This increase is primarily due to Storm Water Utility fees collected during 2007. These revenues are deferred in the fund financial statements as they are representative of 2008 budget activity. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Organization's basic financial statements. The Organization's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other required supplemental information in addition to the basic financial statements themselves. -I- Management's Discussion and Analysis - Continued March 19, 2008 The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data The statements are followed by a section of combining and individual fund financial statements and schedules that further explains and supports the information in the financial statements. Figure 1 shows how the required parts of this annual report are arranged and relate to one another. Figure 1 Required Components of the Organization's Annual Financial Report Management's Discussion and Analysis Basic Financial Statements Required Supplementary Information Government -wide Financial Statements Summary MEP Fund Financial Statements Notes to the Financial Statements Detail -II- IL I L Management's Discussion and Analysis - Continued March 19, 2008 Figure 2 summarizes the major features of the City's financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management's discussion and analysis explains the structure and contents of each of the statements. Figure 2 Major features of the Government -wide and Fund Financial Statements Fund Financial Statements Government -wide Statements Governmental Funds Scope Entire Organization The activities of the Organization Required financial statements • Statement of Net Assets • Statement of Activities • Balance Sheet • Statement of Revenues, Expenditures, and Changes in Fund Balances Accounting Basis and measurement focus Accrual accounting and economic resources focus Modified accrual accounting and current financial resources focus Type of asset/liability information All assets and liabilities, both financial and capital, and short-term and long-term Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included Type of in flow/out flow information All revenues and expenses during year, regardless of when cash is received or paid Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter Government -wide Financial Statements The government -wide financial statements are designed to provide readers with a broad overview of the Organization's finances, in a manner similar to a private -sector business. The statement of net assets presents information on all of the Organization's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Organization is improving or deteriorating. The statement of activities presents information showing how the Organization's net assets changed during the most recent fiscal year. All changes in net assets 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., grants and earned but unused vacation and sick leave). The governmental activities of the Organization include general government, programs, and projects. The government -wide financial statements can be found on pages 3 - 4 of this report. -l>1- Management's Discussion and Analysis - Continued March 19, 2008 Fund Financial Statements Afund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Organization, like other state and local government, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. The Organisation currently only uses governmental funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact by the government's near -term financing decisions. Both the governmental fund balance sheets and the governmental fund statements of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Organization adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 4 - 9 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 10 -17 of this report. -IV- L L L Management's Discussion and Analysis - Continued March 19, 2008 Government -wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the Organization, assets exceeded liabilities by $204,124 at the close of the most recent fiscal year. By far, the largest portion of the Organization's net assets (81 percent) reflects its investment in capital assets (e.g., land, buildings, machinery and equipment). The Organization uses these capital assets to provide services to its member cities; consequently, these assets are not available for future spending. Summary of Net Assets December 31, Increase 2007 2006 (Decrease) Assets Current $ 594,943 $ 158,810 $ 436,133 Capital 165,587 165,587 Total assets 760,530 158,810 601,720 Liabilities Current 549,477 101,796 447,681 Noncurrent 6,929 2,820 4,109 Total liabilities 556,406 104,616 451,790 Net assets Invested in capital assets 165,587 165,587 Unrestricted 38,537 54,194 (15,657) Total net assets $ 204,124 $ 54,194 $ 149,930 At the end of the current fiscal year, the Organization is able to report positive balances in both categories of net assets. -y- Management's Discussion and Analysis - Continued March 19, 2008 Governmental activities. Governmental activities increased the City's net assets by $149,930. Changes in Net Assets December 31, Increase 2007 2006 (Decrease) Revenues Program Charges for services $ 228,000 $ 178,540 $ 49,460 Operating grants and contributions 5,526 36,691 (31,165) Capital grants and contribution 138,878 138,878 General Unrestricted investment earnings 1,461 104 1,357 Miscellaneous 300 (300) Total revenues 373,865 215,635 158,230 Expenses General government 141,006 81,655 59,351 Programs 68,143 9,078 59,065 Projects 14,786 104,960 (90,174) Total expenses 223,935 195,693 28,242 Change in net assets 149,930 19,942 129,988 Net assets, January 1, 54,194 34,252 19,942 Net assets, December 31, $ 204,124 $ 54,194 $ 149,930 • Charges for services increased $49,460 despite losing one of the Organization's member cities. The final year in which the Organization assesses its member cities for its operating revenues was 2007. Beginning in 2008, the Organization will send out an annual Storm Water Utility bill to residents within the Organizations borders. • Operating grants and contributions increased $138,878 primarily due to grant proceeds from the Minnesota Pollution Control Agency involved with the Lambert Creek Flume project. • Capital grants and contributions amounts represent unpaid Storm Water Utility charges, which have been assessed by the Organization to the Counties for collection with the 2008 residential property taxes. -VI- I. Management's Discussion and Analysis - Continued March 19, 2008 • The following graph depicts various governmental activities and shows the revenue and expenses directly related to those activities. Expenses and Program Revenues - Governmental Activities $400,000 $350,000 $300,000 $250,000 2 $200,000 $150,000 $100,000 -2--- $50,000 - $- General government General revenues 0.39% Programs IN Expenses • Program Revenues Revenues by Source - Governmental Activities Charges for services 60.98% Capital grants and contributions 37.15% Projects Operating grants and contributions 1.48% -VII- Management's Discussion and Analysis - Continued March 19, 2008 Financial Analysis of the Government's Funds As noted earlier, the Organization uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds. The focus of the Organization's governmental funds is to provide information on near -term inflows, outflows and balances of spendable resources. Such information is useful in assessing the Organization's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Organization's governmental funds reported combined ending fund balances of $45,466, a decrease of $11,548 in comparison with the prior year. All of this balance, $45,466, constitutes unreserved fund balance, which is available for spending at the Organization's discretion. The general fund is the chief operating fund of the Organization. At the end of the current year, the fund balance of the general fund was $45,466. As a measure of the general fund's liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance represents 13 percent of 2007 fiord expenditures and 12 percent of 2008 budgeted fund expenditures. The fund balance of the Organisation's general fund decreased by $11,548 during the current fiscal year. The key factor in this reduction was expenditures in excess of revenues. General Fund Budgetary Highlights The Organization's general fund budget was amended during the year. The actual results were much more favorable than those projected by the 2007 budget. Revenues were in excess of budget by $139,865, due to grant revenues from the State of Minnesota. Expenditures were lower than budgeted by $74,892. The largest variance was provided by general administrative wages, which were under budget by $30,486. Some of the notable negative variances included Projects and Programs monitoring, which were under budget by $20,932 and 16,406 respectively. Capital Asset and Debt Administration Capital Assets. The Organisation's investment in capital assets for its governmental activities as of December 31, 2007, amounts to $165,587 (net of accumulated depreciation). This investment in capital assets includes infrastructure related to the Lambert Creek Flume project. Major capital asset events during the current fiscal year included the following: • From June 2002 to January 2008 VLAWMO completed to improve the water quality along Lambert Creek which empties into Vadnais Lake. Vadnais Lake is the drinking water reservoir for the St. Paul Regional Water Service (SPRWS), which serves 400,000 drinking water customers in eight communities. Stabilization work was done on inlet channel into Lambert Lake in 2007 • In 2007, VLAWMO replaced two flumes (at Oakmede Lane and Kohler Road), improved road drainage areas along Kohler Road and constructed water quality pond improvements just north of Kohler Road. The work for these projects was completed in December 2007. Replacement of vegetation will take place in spring 2008. A third flume is purchased and will likely be installed near County Road F in 2008. Additional information on the Organization's capital assets can be found in Note 3C on page 15 of this report. L L L L L L U L L Management's Discussion and Analysis - Continued March 19, 2008 Economic Factors and Next Year's Budgets • 2008 Budget. o Revenue is chiefly from the Storm sewer utility, with minor income from grants, service fees and interest o Expenses fall into three main categories: Programs, projects, and operations and administration. Programs include: monitoring and data analysis, sustainable lake plans, cost -share, education, and maintenance. 22 percent • Projects include capital projects, the watershed hydrologic model, Lambert creek stabilization, Whittaker pond improvements and Goose Lake TMDL work planning, implementation of sustainable lake plans. 30 percent • Operations and administration include office rent and supplies, bookkeeping and audit, information systems, insurance, all payroll for 2.25 employees and legal expenses. 48 percent All of these factors were considered in preparing the Organization's budget for the 2008 fiscal year. Requests for Information This financial report is designed to provide a general overview of the Organization's finances for all those with an interest in the Organization's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Stephanie McNamara, Administrator, Vadnais Lake Area Water Management Organization, 800 County Road E East, Vadnais Heights, MN 55127. -1X- GOVERNMENT -WIDE FINANCIAL STATEMENTS VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA YEAR ENDED DECEMBER 31, 2007 VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA STATEMENT OF NET ASSETS DECEMBER 31, 2007 Governmental Activities ASSETS Cash and temporary investments $ 378,000 Restricted cash 24,531 Receivables Accounts 5,196 Special assessments 82,503 Due from other governments 104,713 Capital assets Depreciable assets, net of accumulated depreciation 165,587 TOTAL ASSETS 760,530 LIABILl'1TES Accounts payable 100,753 Escrow deposits payable 24,531 Due to other governments 10,219 Unearned revenue 413,974 Noncurrent liabilities Compensated absences payable 6,929 TOTAL LIABILITIES 556,406 NET ASSETS Invested in capital assets Unrestricted 165,587 38,537 TOTAL NET ASSETS $ 204,124 The notes to financial statements are integral part of this statement. -3- 71 I VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2007 Program Revenues Net (Expense) Revenue and Changes in Net Assets Charges Operating Capital Governmental for Grants and Grants and Activities Functions/Programs Expenses Services Contributions Contributions 2007 Governmental Activities General government $ 141,006 $ 171,000 $ 5,526 $ 138,878 $ 174,398 Programs 68,143 45,600 - (22,543) Projects 14,786 11,400 (3,386) Total $ 223,935 $ 228,000 $ 5,526 $ 138,878 148,469 General revenues Unrestricted investment earnings 1,461 Change in net assets Net assets, January 1 Net assets, December 31 149,930 54,194 $ 204,124 The notes to financial statements are integral part of this statement. -4- THIS PAGE IS LEFT BLANK INTENTIONALLY FUND FINANCIAL STATEMENTS VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA YEAR ENDED DECEMBER 31, 2007 L VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA BALANCE SHEETS GOVERNMENTAL FUNDS DECEMBER 31, 2007 AND 2006 ASSETS Cash and temporary investments Restricted cash Receivables Accounts Special assessments Delinquent Due from other governments TOTAL ASSETS LIABILI'1'.IhS AND FUND BALANCES LIABILITIES Accounts payable Escrow deposits payable Due to other governments Deferred revenue TOTAL LIABILITIES FUND BALANCES Unreserved Designated for working capital TOTAL LIABILI'1ThS AND FUND BALANCES 2007 $ 378,000 24,531 5,196 82,503 104,713 2006 $ 127,317 31,493 $ 594,943 $ 158,810 $ 100,753 24,531 10,219 413,974 549,477 45,466 $ 24,107 31,493 7,318 38,878 101,796 57,014 $ 594,943 $ 158,810 The notes to financial statements are integral part of this statement. T -5- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION RECONCILIATION OF THE BALANCE SHEETS TO THE STATEMENT OF NET ASSETS GOVERNMENTAL FUNDS YEAR ENDED DECEMBER 31, 2007 Total fund balances - governmental $ 45,466 Amounts reported for the governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. Cost of capital assets Noncurrent liabilities, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Compensated absences 165,587 (6,929) Total net assets - governmental activities $ 204,124 The notes to the financial statements are an integral part of this statement. -6- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEARS ENDED DECEMBER 31, 2007 AND 2006 2007 2006 REVENUES Intergovernmental Member assessments $ 228,000 $ 177,400 Grants 144,065 36,691 Interest on investments 1,461 104 Miscellaneous 339 1,440 TOTAL REVENUES 373,865 215,635 EXPENDITURES Current General government 136,897 81,894 Programs 68,143 9,078 Projects 180,373 104,960 TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCES, JANUARY 1 385,413 195,932 7 (11,548) 19,703 57,014 37,311 FUND BALANCES, DECEMBER 31 $ 45,466 $ 57,014 7 The notes to financial statements are integral part of this statement. -7- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS YEAR ENDED DECEMBER 31, 2007 Total net change in fund balances - governmental funds $ (11,548) Amounts reported for governmental activities in the statement of activities are different because: Capital outlays are reported in governmental funds as expenditures. However in the statement of activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. Capital outlays Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences 165,587 (4,109) Change in net assets - governmental activities $ 149,930 The notes to financial statements are integral part of this statement. -8- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL, EURASIAN MILFOIL AND SAVE THE LAKE FUNDS YEAR ENDED DECEMBER 31, 2007 (With comparative actual amounts for the year ended December 31, 2006) 2007 2006 Variance with Budgeted Amounts Final Budget Actual Positive Actual Original Final Amounts (Negative) Amounts REVENUES Intergovernmental Member assessments $ 228,000 $ 228,000 $ 228,000 $ $ 177,400 Grants 3,000 3,000 144,065 141,065 36,691 Interest on investments 500 500 1,461 961 104 Miscellaneous 2,500 2,500 339 (2,161) 1,440 TOTAL REVENUES 234,000 234,000 373,865 139,865 215,635 EXPENDITURES Projects 171,305 201,305 180,373 20,932 104,960 Programs Monitoring 12,500 69,500 53,094 16,406 4,705 Maintenance 21,000 26,500 15,049 11,451 4,373 General and administrative Wages 132,000 116,000 85,514 30,486 53,880 Payroll taxes and employee benefits - - 14,361 (14,361) 7,432 Legal 1,500 1,500 4,909 (3,409) 2,465 Professional services 26,400 15,900 13,771 2,129 4,807 Information systems 11,000 8,000 4,894 3,106 1,211 Insurance 3,200 3,200 3,280 (80) 2,562 Office (supplies, postage, and rent) 10,000 10,000 5,740 4,260 4,049 Staff training and expenses 1,400 1,400 1,720 (320) - Telephone - - 722 (722) 1,854 Miscellaneous 10,000 7,000 1,986 5,014 3,634 TOTAL EXPENDITURES 400,305 460,305 385,413 74,892 195,932 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (166,305) (226,305) (11,548) 214,757 19,703 FUND BALANCES, JANUARY 1 57,014 57,014 57,014 37,311 FUND BALANCES, DECEMBER 31 $ (109,291) $ (169,291) $ 45,466 $ 214,757 $ 57,014 The notes to the financial statements are an integral part of this statement. -9- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, NIINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2007 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The Vadnais Lake Area Water Management Organization (the Organization) was established to meet the requirements of the Metropolitan Surface Water Management Act, re -codified as Minnesota Statutes chapters 103-b and 103-d. The general purpose of the Organization is to establish a jointly and cooperatively developed water management plan and program to (1) protect, preserve, and use natural surface and groundwater storage and retention systems; (2) minimize capital expenditures necessary to correct flooding and water quality problems; (3) identify and plan for means to effectively protect and improve surface and groundwater quality; (4) establish more uniform local policies and official controls for surface water, wetland and groundwater management; (5) prevent erosion of soil into surface water systems; (6) promote groundwater recharge; (7) protect and enhance fish and wildlife habitat and water recreational facilities, and secure other benefits associated with the proper management of surface ground water, and be in accordance with the Act. The Organization is governed by a Board of Directors which consists of six members, one from each of the following governmental units: City of North Oaks, City of White Bear Lake, City of Lino Lakes, White Bear Township, City of Vadnais Heights and the City of Gem Lake. The Board exercises legislative authority and determines all matters of policy. The Board appoints personnel responsible for the proper administration of all affairs relating to the Organization's activities. The Organization has considered all potential units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the Organization are such that exclusion would cause the Organization's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the primary government to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the primary government. The Organization has no component units that meet the GASB criteria. B. Government -wide and Fund Financial Statements The government -wide financial statements (i.e., the statements of net assets and the statements of changes in net assets) report information on all of the non -fiduciary activities of the Organization. The statements of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate cohrmns in the fund financial statements. -10- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2007 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED C. Measurement Focus, Basis of Accounting and Basis of Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Organization considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Assessments to members, grants and interest associated with the current fiscal period are all considered susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the organization. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are measurable and become available. Non -exchange transactions, in which the Organization receives value without directly giving equal value in return, include grants, entitlement and donations. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the Organization must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the Organization on a reimbursement basis. On a modified accrual basis, revenue from non -exchange transactions must also be available before it can be recognized. Deferred revenue in the fund financial statements and unearned revenue in the government -wide financial statements arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are also recorded as deferred revenue. On the modified accrual basis, receivables that will not be collected within the available period have also been reported as deferred revenue. The Organization reports the following major governmental fimd: The General fund is the Organization's primary operating fund. It accounts for all financial resources of the Organization. Private -sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in the government -wide financial statements to the extent that those standards do not conflict with or contradict guidance of GASB. When both restricted and unrestricted resources are available for use, it is the Organization's policy to use restricted resources first, then unrestricted resources as they are needed. As a general rule the effect of interfimd activity has been eliminated from government -wide financial statements. 7 -11- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2007 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Amounts reported as program revenues include: (1) charges to customers or member cities for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions, including special assessments. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. D. Assets, Liabilities and Net Assets or Fund Equity Deposits and Investments The Organization's cash and temporary investments are considered to be cash on hand, demand deposits and short term investments with original maturities of three months or less from the date of acquisition. The Organization may also invest idle funds as authorized by Minnesota statutes, as follows: 1. Direct obligations or obligations guaranteed by the United States or its agencies. 2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities in (1) above. 3. General obligations of the State of Minnesota or any of its municipalities. 4. Banker's acceptances of Unites States banks eligible for purchase by the Federal Reserve System. 5. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality, and maturing in 270 days or less. 6. Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitaii7ation exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker -dealers. 7. Guaranteed investment contracts (GIC's) issued or guaranteed by United States commercial banks or domestic branches of foreign banks or United States insurance companies if similar debt obligations of the issuer or the collateral pledged by the issuer is in the top two rating categories, or in the top three rating categories for long-term GIC's issued by Minnesota banks. Investments are stated at fair value. The Organization does not have an investment policy. Accounts Receivable Accounts receivable include amounts billed for services provided before year end. -12- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2007 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Capital Assets Capital assets, which include property, plant and equipment, are reported in the applicable governmental activities cobimns in the government -wide financial statements. Capital assets are defined by the Organization as assets with an initial, individual cost of more than $5,000 (amount not rounded) 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 estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets is included as part of the capitalized value of the assets constructed. Property, plant, and equipment of the Organization are depreciated using the straight-line method over the following estimated useful lives: Assets Infrastructure Compensated Absences Useful Lives in Years 20-30 It is the Organization's policy to permit employees to accumulate earned but unused vacation and sick benefits, which will be paid to the employee upon separation without the considerations of number of years of service. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Fund Equity Designations of fund balance represent tentative management plans that are subject to change. Net Assets Net assets represent the difference between assets and liabilities. Net assets are displayed in three components: a. Invested in capital assets - Consists of capital assets, net of accumulated depreciation. b. Unrestricted net assets - All other net assets that do not meet the definition of "invested in capital assets". c. Unrestricted net assets — All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt." Comparative Data/Reclassifications Comparative total data for the prior year has been presented for the fund financial statements in order to provide an understanding of the change in financial position. Certain amounts presented in prior year data have been reclassified in order to be consistent with the current year's presentation. -13- i L IL L L VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2007 Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary Information Annual budgets are prepared on a basis consistent with accounting principles generally accepted in the United States of America for the General fund. All annual appropriations lapse at year end. The Organization does not use encumbrance accounting. During the budget year, supplemental appropriations and deletions are or may be authorized by the Board. There were amendments to the budget during 2007 for multiple expenditures through allocation of the budget and available fund balance. Note 3: DETAILED NOTES ON ACCOUNTS A. Deposits and Investments For purposes of identifying the risk of investing public funds, the balances are categorized as follows: Deposits Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the Organization's deposits and investments may not be returned or the Organization will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes and as authorized by the Board, the Organization maintains deposits at those depository banks, all of which are members of the Federal Reserve System. Minnesota statutes require that all Organization deposits be protected by insurance, surety bond or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds. Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other State or local government obligations. Minnesota statutes require that securities pledged as collateral be held in safekeeping by the Organization or in a financial institution other than that furnishing the collateral. At year end, the Organization's carrying amount of deposits was $402,481 and the bank balance was $424,813. The bank balance was covered by federal depository insurance and by collateral held in the Organization's name. A reconciliation of cash and temporary investments as shown on the Statements of Net Assets for the Organization follows: Carrying amount of deposits Cash on hand 2007 $ 402,481 50 Total $ 402,531 Cash and investments Unrestricted $ 378,000 Restricted 24,531 Total $ 402,531 -14- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, NIINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2007 Note 3: DETAILED NOTES ON ACCOUNTS - CONTINUED B. Due from Other Governments The amount due from other governments is summarized as follows: Fund Local State Total Governmental Activities Member assessments $ 4,713 $ $ 4,713 Grant 100,000 100,000 Total Governmental Activities $ 4,713 $ 100,000 $ 104,713 1 C. Capital Assets Capital asset activity for the year ended December 31, 2007 was as follows: 7 Beginning Ending Balance Increases Decreases Balance 7 Governmental activities Capital assets, being depreciated Infrastructure $ $ 165,587 $ $ 165,587 1 Less accumulated depreciation for Infrastructure1-1 Total governmental activities $ $ 165,587 $ $ 165,587 There was no depreciation in 2007 due to the asset being put into service at the end of December. 1 D. Deferred Revenue/Unearned Revenue Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Also, governmental funds defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue/unearned revenue reported were as follows: Unavailable Unearned Special assessments - delinquent $ $ 82,503 Storm water utility charges 331,471 Total $ $ 413,974 1 1 1 1 -15- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2007 Note 3: DETAILED NOTES ON ACCOUNTS - CONTINUED E. Changes in long-term liabilities Long-term liability activity for the year ended December 31, 2007, was as follows: Governmental activities Compensated absences payable Note 4: DEFINED BENEFIT PENSION PLANS A. Plan Description Beginning Balance Increases Decreases Ending Balance $ 2,820 $ 6,074 $ (1,965) $ 6,929 - STATEWIDE All full-time and certain part-time employees of the Organization are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) which is a cost -sharing, multiple -employer retirement plan. This plan is established and administered in accordance with Minnesota statutes, chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by Minnesota statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single -life annuity is a lifetime annuity that ceases upon death of the retiree —no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. 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. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF. That report may be obtained on the Internet at mnpera.org, by writing to PERA, 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651) 296-7460 or 1-800-652-9026. -16- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2007 Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED B. Funding Policy Minnesota statutes, chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the State legislature. The Organization makes annual contributions to the pension plans equal to the amount required by Minnesota statutes. PERF Basis Plan members and Coordinated Plan members are required to contribute 9.10 percent and 5.75 percent, respectively, of their annual covered salary in 2007. Contribution rates in the Coordinated Plan will increase in 2008 to 6.0 percent. The Organization is required to contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan PERF members and 6.25 percent for Coordinated Plan PERF members. Employer contribution rates for the Coordinated Plan will increase to 6.5 percent, effective January 1, 2008. The Organization's contributions to the PERF for the years ended December 31, 2007, 2006 and 2005 were $4,817, $2,860, and $2,926, respectively. The Organization's contributions were equal to the contractually required contributions for each year as set by Minnesota statute. Note 5: OTHER INFORMATION Risk Management The Organization is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the Organization carries insurance. The Organization pays annual premiums for its workers compensation and property and casualty insurance. Settled claims have not exceeded the Organization's coverage in any of the past three fiscal years. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The Organization's management is not aware of any incurred but not reported claims. -17- OTHER REPORTS VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA . YEAR ENDED DECEMBER 31, 2007 ABDO 0,15 IEICK & , 1VIEYERSup Grandview Square 5201 Eden Avenue Suite 370 Edina, MN 55436 REPORT ON MINNESOTA LEGAL COMPLIANCE 7 Board of Directors Vadnais Lake Area Water Management Organization Vadnais Heights, Minnesota We have audited the financial statements of the governmental activities and each major fund of the Vadnais Lake Area Water Management Organization (the Organization), Vadnais Heights, Minnesota, as of and for the year ended December 31, 2007, and have issued our report thereon dated March 19, 2008. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the provisions of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated by the Minnesota Office of the State Auditor pursuant to Minnesota statute, section 6.65. Accordingly, the audit included such tests of the accounting records and such other auditing procedures, as we considered necessary in the circumstances. - The Minnesota Legal Compliance Audit Guide for Local Government covers five main categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness and claims and disbursements. Our study included all of the listed categories. The results of our tests indicate that for the items tested, the Organization complied with the material terms and conditions of 1 applicable legal provisions. This report is intended solely for the information and use of the Board of Directors, management and the Minnesota Office of the 1 State Auditor, and is not intended to be and should not be used by anyone other than these specified parties. 0.61buLivieTio,u, March 19, 2008 ABDO, EICK & MEYERS, LLP Minneapolis, Minnesota Certified Public Accountants -18- 952.835.9090 • Fax 952.835.3261 www.aemcpas.com ABDO IEICK& ,10. MEYERS up Certified Public Accountants & Consultants Grandview Square 5201 Eden Avenue Suite 370 Edina, MN 55436 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS Board of Directors Vadnais Lake Area Water Management Organization Vadnais Heights, Minnesota In planning and performing our audit, we considered Vadnais Lake Area Water Management Organization's (the Organization), Vadnais Heights, Minnesota, intemal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in intemal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed in the schedule of findings and responses, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Organization's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Organization's financial statements that is more than inconsequential will not be prevented or detected by the Organization's internal control. We consider findings 2007-1, 2007-2 and 2007-3 to be significant deficiencies in intemal control over financial reporting. A material weakness is a significant deficiency, or combination of significant deficiencies, that result in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Organization's internal control. We believe that finding 2007-4 constitutes a material weakness. The Organization's responses to the findings identified in our audit are described in the accompanying schedule of findings and responses. We did not audit the Organization's responses and, accordingly, we express no opinion on them. This report is intended solely for the information and use of the Board of Directors, management and the Minnesota Office of the State Auditor, and is not intended to be and should not be used by anyone other than these specified parties. 0,66 4Tittro March 19, 2008 ABDO, EICK & MEYERS, LLP Minneapolis, Minnesota Certified Public Accountants -19- 952.835.9090 • Fax 952.835.3261 www.aemcpas.com VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND RESPONSES DECEMBER 31, 2007 Finding Description 2007-1 Limited Segregation of Duties - Cash Disbursements and Cash Receipts Condition: During our audit we reviewed procedures over cash disbursements and cash receipts and found VLAWMO to have limited segregation of duties related to these procedures. Criteria: Cause: There are four general categories of duties: authorization, custody, record keeping and reconciliation. In an ideal system, different employees perform each of these four major functions. In other words, no one person has control of two or more of these responsibilities. During the first part of 2007, VLAWMO only had one employee involved with the accounting processes and procedures. For the second half of 2007, there were two employees and a contracted bookkeeper involved in the accounting processes and procedures to help with the limited segregation of duties. Effect: The existence of this limited segregation of duties increases the risk of fraud. Recommendation: There was great improvement in segregating the accounting duties during the year. We recommend that VLAWMO add the following compensating control. Have another individual, separate from the Administrator (possibly a board member or the bookkeeper) receive and review the unopened bank statements. The review would consist of scanning for unusual activity, agreeing all disbursements to board approved listings and documenting that the review was done. -20- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND RESPONSES - CONTINUED DECEMBER 31, 2007 Finder Description 2007-2 Storm Water Utility Receipts Condition: During a walkthrough of the Organization's procedures over the storm water utility charges, we attempted to reconcile receipts in the accounting software to deposit slips and utility billing software receipts. During this testing, we were not able to reconcile amongst the three documents. Criteria: The Organization should have a well documented and practiced procedures manual in place for important control systems. Cause: There is not a documented and practiced procedure in place. Effect: The process of reconciling bank statements and reconciling revenues between the accounting and utility billing software becomes much more difficult. Recommendation: We recommend that bank deposit slips and the postings into the accounting software are generated from daily receipt batch reports from the utility billing software. -21- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, NIINNESOTA SCHEDULE OF FINDINGS AND RESPONSES - CONTINUED DECEMBER 31, 2007 F dins Description 2007-3 Preparation of Financial Statements Condition: We were requested to draft the audited financial statements and related footnote disclosures as part of our regular audit services. Ultimately, it is management's responsibility to provide for the preparation of your statements and footnotes, and the responsibility of the auditor to determine the fairness of presentation of those statements. However, based on recent auditing standards, it is our responsibility to inform you that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by your management. Essentially, the auditors can not be part of your internal control process. Criteria: Internal controls should be in place to provide reasonable assurance over financial reporting. Cause: Effect: Recommendation: From a practical standpoint, we both prepare the statements and determine the fairness of the presentation at the same time in connection with our audit. This is not unusual for us to do with organizations of your size. The effectiveness of the internal control system relies on enforcement by management. The effect of deficiencies in intemal controls can result in undetected errors in financial reporting. It is your responsibility to make the ultimate decision to accept this degree of risk associated with this condition because of cost and other considerations. We have instructed management to review a draft of the auditor prepared financials in detail for accuracy; we have answered any questions that management might have, and have encouraged research of any accounting guidance in connection with the adequacy and appropriateness of classification of disclosures in your statements. We are satisfied that the appropriate steps have been taken to provide you with the completed financial statements. While the Organization is reviewing the financial statements we recommend a disclosure checklist is utilized to ensure all required disclosures are presented and the Organization should agree its financial software to the numbers reported in the financial statements. Management Response: For now, the Organization's management accepts the degree of risk associated with this condition and thoroughly reviews a draft of the financial statements. -22- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA SCHEDULE OF FINDINGS AND RESPONSES - CONTINUED DECEMBER 31, 2007 F Description 2007-4 Material Audit Adjustments Condition: During our audit adjustments were needed to adjust beginning balances, correct entries, reclassify escrow deposit payable activity and adjust deferred revenue. Criteria: The financial statements are the responsibility of the Organization's management. Cause: Effect: Recommendation: The Organisation's staff has not prepared a year-end trial balance reflecting all necessary accounting entries. This indicates that it would be likely that a misstatement may occur and not be detected by the Organization's system of internal control. The audit firm can not serve as a compensating control over this deficiency. We recommend that management review each journal entry, obtain an understanding of why the entry was necessary and modify current procedures to ensure that future corrections are not needed. -23- VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION 2007 WATER QUALITY MONITORING PROGRAM REPORT Prepared by Kristine Lampert, VLAWMO Project Coordinator February 2008 VLAWMO would like to thank the volunteers for their vital role in the Citizens Lake Monitoring Program. The volunteers for 2007 were: Ron Auger (Birch Lake), Gretchen Artig-Swomley (Gem Lake), Jim and Sue Fox (Gilfillan Lake), Del Kuhlenkamp (Gilfillan Pond), Richard Hafdahl (Goose Lake East), Bernie Napolski (Goose Lake West), Shannon Stewart (Tamarack Lake), and Doug Fienfield (Wilkinson Lake). VLAWMO would also like to acknowledgement and thank the following agencies for their assistance with assuring the quality of water within the watershed: St. Paul Regional Water Service, Minnesota Pollution Control Agency, Minnesota Department ofNatural Resources, Ramsey County Limnology Lab. Definitions & Abbreviations Ammonia (NH3) — an inorganic form of nitrogen that is contained in fertilizers, septic system effluent, and animal wastes. It is also a product of bacterial decomposition of organic matter. NH3 becomes a concern if high levels of the un-ionized form are present. In this form NH3 can be toxic to aquatic organisms. The presence of un-ionized ammonia is a function of the NH3 concentration, pH, and temperature. Conversion of NH3 to NO2 by nitrification requires large quantities of oxygen which can kill aquatic organisms due to the lowered dissolved oxygen concentrations in water. Chlorophyll -a (Chl A) - Chl A is a green pigment in algae. Measuring Chl A concentration gives an indication of how abundant algae are in a waterbody. Colony Forming Units (CFU) — unit used in measuring the level of E. coli in a water sample. Dissolved Oxygen (DO) - The concentration of molecular oxygen (02) dissolved in water. The DO level represents one of the most important measurements of water quality and is a critical indicator of a water body's ability to support healthy ecosystems. Levels above 5 mg/L are considered optimal, and most fish cannot survive for prolonged periods at levels below 3 mg/L. Microbial communities in water use oxygen to breakdown organic materials, such as manure, sewage and decomposing algae. Low levels of dissolved oxygen can be a sign that too much organic material is in a water body. Eutrophic — a water body that is high in nutrients and low oxygen content. A eutrophic lake is usually shallow, green, with limited oxygen in the bottom layer of water. Eutrophication — The aging process by which lakes are fertilized with nutrients. Natural eutrophication will gradually change the character of a lake. Human activities can accelerate the process. Hypereutrophic — A very nutrient -rich lake with murky water, frequent algal blooms and fish kills, foul odor, and rough fish Impaired Waters — The Clean Water Act requires states to publish, every two years, a list of streams and lakes that are not meeting their designated uses because of excess pollutants. The list, known as the 303(d) list, is based on violations of water quality standards. Mesotrophic — the classification between eutrophic and oligotrophic lakes. These lakes have moderately clear water, late -summer algal blooms, moderate macrophyte populations, and occasional fish kills. Nitrate (NO3) — High NO3 levels are often caused by over application of fertilizers that leach into waterbodies. Nitrate loading from water bodies in Minnesota has national implications as it is the primary chemical contributing to the hypoxia (low oxygen) zone at the mouth of the Mississippi River in the Gulf of Mexico. Nitrite (NO2) — The second stage of the nitrogen cycle. Nitrite is poisonous to fish. Levels over 75 ug/L can cause stress in fish and greater than 500 ug/L can be toxic Nitrogen (N) — Nitrogen is second only to phosphorus as an important nutrient for plant and algae growth. The amount of nitrogen in a water body strongly correlates to land use. Nitrogen comes from fertilizers, animal waste, sewage treatment plants and septic systems through surface runoff or groundwater sources. Nitrogen does not occur naturally in soil minerals but is a major component of all organic matter. Nitrogen Cycle - the process of nitrogen breakdown in water. The first stage is the production of NH3. The second stage is the oxidation of NH3 into NO2 which is very poisonous to fish. The final stage is conversion of NO3 which aquatic plants use. Once the plants have used their share, NO3, bacteria change it back into a gaseous form and release it back to the atmosphere. The Nitrogen Cycle is dependent on oxygen. If a water body has low DO, organic decay of nitrogen is slower and the water will have increased interim levels of toxic products (NH3 and NO2). The cycle also moves quicker in warmer water. Oligotrophic — a water body that is generally clear, deep, and free of weeds or large algae blooms. Particulate Phosphorus — a form of phosphorus that is attached to sediment particles and in plant and animal fragments suspended in the water and may not be immediately available to support algae growth. Some of this phosphorus is readily available but the amount can vary. Phosphorus (P) - Phosphorus is the primary cause of excessive plant and algae growth in lake systems. Phosphorus originates from a variety of sources, many of which are human related. Major sources include human and animal wastes, soil erosion, detergents, septic systems and runoff from farmland, yards, and streets. Secchi Disk — a round, white, metal disk that is used to determine water clarity. It is lowered into the water until it is not visible. The depth is recorded, and then the disk is raised until it is visible. The mean value of the two readings gives the clarity. Secchi Disk Transparency (SDT) - the term used in describing the results of a secchi reading. Soluble Reactive Phosphorus (SRP) — a form of phosphorus that dissolves in water and is readily available (bio- available) to algae and has an immediate effect on algae growth and DO depletion. Its concentration varies widely over short periods of time as plants take it up and release it. STORET - (short for STOrage and RETrieval), a repository for water quality, biological, and physical data and is used by state environmental agencies, EPA and other federal agencies, universities, private citizens, and many others. The MPCA uses the information entered into the database to determine the quality of the state's water bodies. If water quality standards are not met, the water body will designated as impaired and will need to have a TMDL study conducted. Total Kjehldahl Nitrogen (TKN) — The sum of NO2, NO3, and NH3 in a water body. High measurements of TKN typically results from sewage and manure discharges to water bodies. Total Maximum Daily Load (TMDL) — Calculation of the maximum amount of a pollutant that a waterbody can receive and still meet water quality standards and an allocation of that amount to the pollutant's source. Total Nitrate and Nitrite Nitrogen - Nitrate (NO3) plus nitrite (NO2) as nitrogen. In lakes, most nitrate/nitrogen is in NO3 form. Total Phosphorus (TP) — A nutrient essential to the growth of organisms, and is commonly the limiting factor in the primary productivity of surface water bodies. Total phosphorus includes the amount of phosphorus in solution (reactive) and in particle form. Agricultural drainage, wastewater, and certain industrial discharges are typical sources of phosphorus, and can contribute to the eutrophication of surface water bodies. Total Suspended Solids (TSS) — Very small particles remaining dispersed in a liquid due to turbulent mixing that can create turbid or cloudy conditions. A measure of the material suspended in water. Total suspended solids (TSS) cause: a) interference with light penetration, b) buildup of sediment and c) potential reduction in aquatic habitat. Solids also carry nutrients that cause algal blooms and other toxic pollutants that are harmful to fish. Clay, silt, and sand from soils, phytoplankton (suspended algae), bits of decaying vegetation, industrial wastes, and sewage are common suspended solids. Trophic Status Indicator (TSI) — TSI is an indicator of water quality. Lakes can be divided into three categories based on trophic state — oligotrophic, mesotrophic and eutrophic. A natural aging process occurs in lakes which cause them to change from oligotrophic to eutrophic over time and eventually fill in. Humans can accelerate this process by allowing nutrients from agriculture, lawn fertilizers, streets, septic systems, and urban storm drains to enter lakes. Trophic status is determined through TP, Chl A, and SDT measurements. Turbidity — a water quality parameter that refers to how clear the water is. It is an indicator of the concentration of suspended solids in the water. Excessive sedimentation in streams and rivers is considered to be the major source of surface water pollution in the United States. Polluted waters are commonly turbid. Turbidity is expressed in NTU (Nephelometric Turbidity Units). Volatile Suspended Solids (VSS) — a measure of the organic matter in suspended particles. When measured in conjunction with TSS, the proportions of organic versus mineral content of the particles can be determined. Introduction The Vadnais Lake Area Water Management Organization (VLAWMO) covers approximately 25 square miles in the northeast metropolitan area. The watershed encompasses the City of North Oaks and portions of the Cities of White Bear Lake, Gem Lake, Vadnais Heights, Lino Lakes, and White Bear Township. The watershed is 96% urbanized; agricultural land exists in the northern end of the boundaries. New land development is occurring near Gem Lake and Wilkinson Lake. Data collected through this program tracks changes in water quality in conjunction with the change in land use around these water bodies. VLAWMO works in conjunction with the St. Paul Regional Water Service (SPRWS) on water quality monitoring. The SPRWS monitors the direct surface water flow into Vadnais Lake to assure high quality drinking water for over 400,000 consumers. The SPRWS monitors the main chain of lakes (Charley Lake, Pleasant Lake, Sucker Lake and Vadnais Lake) and portions of Lambert Creek. Figure 1 Map of VLAWMO SPRWS Chain of Lake rij Amelia; Lino Lakes -- .Wilkinson White ear Charley Twsp __Pleasant Deep, North Oaks Sucker, Vadnais Gilfillan Vadnais Heights1 Tamarack White Bear Lake Birch 96 Lambert Creek N Gem Gem - Lake Goose VLAWMO began the Citizens Lake Monitoring Program (CLMP) in 1997 to monitor several lakes and ponds within the watershed that were identified as having local significance. CLMP volunteers collect samples from 9 water bodies: Amelia Lake, Birch Lake, Gem Lake, Gilfillan Lake, Gilfillan Pond, Goose Lake East, Goose Lake West, Tamarack Lake, and Wilkinson Lake. These lakes are all shallow with depths no greater than 9 feet. Five areas along Lambert Creek are also sampled as part of the Organization's mission to protect and improve the water -related environment. The data received from the monitoring is used by the Minnesota Pollution Control Agency (MPCA) to determine the health of the state's waters. Figure 2 Sites Monitored by VLAWMO Impaired Water Designations The watershed has had several water bodies listed on the MPCA 303(d) list for Impaired Waters recently. The SPRWS Chain of Lakes (Pleasant, Sucker and Vadnais Lakes) have all been listed for nutrient pollution, specifically mercury. It was also revealed this year that the lakes have been infested with zebra mussels though this not a condition of the Impaired Waters listing. Lambert Creek (including Goose Lake and Whittaker Pond) has been added to the impaired list for bacteria, specifically fecal coliform or E. coli. Once listed, these water bodies must complete a TMDL study to determine the extent of pollution and if possible, where the pollutant is coming from. VLAWMO will initiate the study for Lambert Creek while SPRWS will manage the study for Pleasant, Sucker, and Vadnais. Data from 2007 for fecal coliform in Lambert Creek is included with this report. Figure 3 Waterbodies listed on the MPCA 303(d) Impaired Waters List SPRWS Chain of Lake Deep( North Oaks Charley �% Pleasant i Sucker Vadnais Amelia. Lino Lakes Wlkinson White Bear ,Twsp Tamarack] 95 White Bear Gilfillan Lake Birch Whittaker Larr_ihsit Creek Vadnais Heights S5 Pond Gem Gem Lake Goose Typical Measurements for Lakes and Streams VLAWMO's watershed falls with the North Central Hardwood Forest (CHF) ecoregion. This ecoregion is an area of transition between the forested areas to the north and east and the agricultural areas to the south and west. The terrain varies from rolling hills to smaller plains. Upland areas are forested by hardwoods and conifers. Plains include livestock pastures, hay fields and row crops such as potatoes, beans, peas and corn. The ecoregion contains many lakes, and water clarity and nutrient levels are moderate. Land surrounding many of these lakes has been developed for housing and recreation, and the densely populated metropolitan area dominates the eastern portion of this region. Water quality problems that face many of the water bodies in the area are associated with contaminated runoff from paved surfaces and lawns. Below are typical measurements one might find for lakes and streams in the CHF ecoregion: Lakes Field pH TSS (mg/L) NOx (µg/L) TP (µg/L) Turb (NTU) SDT (m) ( Chl-a (µg/L) TKN (µg /L) 8.6-8.8 2-6 <100 23-50 1-2 1.5-3.2 5-22 600-1200 Streams Field pH TSS (mg/L) NOx (µg/L) TP (µg/L) Turb (NTU) Fecal Coliform (cfu/100 ml) Temp (°C) BOD (in mg/L) 7.9-8.3 4.8-16 4-26 6-15 3-8.5 40-360 2-21 1.5 —3.2 Water Quality Standards for VLAWMO The MPCA has water quality standards based on a designated use for the water body. VLAWMO's water is classified as "2B". The SPRWS chain of lakes has a stricter designation of "2Bd" due to it being the drinking water source for St. Paul. The quality of Class 2B water must be suitable for aquatic recreation of all kinds as well as to support fish and aquatic plant life. In 2008, the MPCA will approve new standards which will separate deep from shallow lakes. All of the lakes VLAWMO monitors are considered shallow and therefore those standards will apply. For those parameters which the MPCA does not have standards, the federal Environmental Protection Agency (EPA) has maximum contaminant level standards. VLAWMO's goal is to have its waterbodies within these standards. MPCA Standards Lakes EPA Standards TP (µg/L) Chl A (µg/L) SDT (m) Turb (NTU) TSS (mg/L) TKN (µg/L) NO2 (µg/L) < 60 < 20 > 1 < 25 < 100 < 1000 < 100 MPCA Standards — Rivers and Streams EPA Standards Fecal Coliform daily maximum (cfu/100 ml) Fecal Coliform 30 day mean (cfu/100 ml) Turb (NTU) TSS (mg/L) NH3 (µg/L) TKN (µg/L) NO2 (p.g/L) < 1260 < 126 < 25 < 100 <40 < 1000 < 100 Precipitation in 2007 Major factors influence water quality including the amount of precipitation, timing of precipitation events, and land use practices in the watershed. Long-term monitoring is necessary to characterize the impacts of various land use practices on surface water runoff within VLAWMO. The 2007 monitoring season began with a drought that lasted until mid August when there were nine significant storm events (> 0.5") over a period of six weeks. Despite the heavy rain events in late summer, the season was still nearly 5" short of average. Precipitation moves contaminants resting on lawns, roofs, streets, and parking lots into nearby water bodies or into storm sewers that outlet into water bodies. Typically, the more precipitation that occurs, the more runoff there will be in the watershed. However, the timing and intensity of the precipitation, as well as soil types, land slopes, land uses, as well as other factors can influence the amount of runoff that reaches the water bodies. 2007 Precipitation Data (in inches) Vadnais Lake Ram Gauge, Vadnais Heights, MN 2007 monthly total Historical Average Deviation April 1.50 2.54 -1.04 May 2.59 3.73 -1.14 June 1.54 4.98 -3.44 July 1.20 4.41 -3.21 August 5.86 4.37 +1.49 September 5.60 3.20 +2.40 Precipitation (inches) 2007 Precipitation at Vadnais Lake Rain Gauge 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 April May June July August September -- --2007 monthly total —4—Historical Average Changes in the VLAWMO Monitoring Program for 2007 VLAWMO invested more resources in monitoring during the 2007 season. A new staff person, Kristine Lampert, was hired in April 2007 and has invested time and energy into elevating the monitoring program's objectives and quality. A full time intern worked in the field to collect more data as well as on entering data into the MPCA's STORET database. A light -weight canoe was bought to allow for VLAWMO staff to get out on the water bodies in order to measure dissolved oxygen (DO) and water temperature using a DO meter given to VLAWMO by SPRWS. A flow meter was also acquired from SPRWS but due to the drought of 2007, there was no opportunity to try out the meter. Two flumes along Lambert Creek were replaced this winter and new gauges were installed with the flumes which will aid in recording accurate flow for the stream. Additionally, VLAWMO staff was trained in the calibration of lake level gauges and will assist the MN Department of Natural Resources (DNR) by calibrating the gauges within VLAWMO for future years. Lake Monitoring Details VLAWMO staff work with volunteers to collect samples from the lakes at two -week intervals from May through September. At the time of collection, volunteers measure water transparency with a Secchi disk (SDT), evaluate the physical and recreational conditions of the water, and if available, take a lake level reading. The samples are stored in coolers and brought to the Ramsey County Department of Public Works Limnology Lab by VLAWMO staff for chemical analysis. Parameters measured at the lab include Total Phosphorus (IP), and Chlorophyll -a (Chl A). The data from these tests aid in the determination of the state of the water quality in a particular lake. Standards for water quality are set by the US Environmental Protection Agency (EPA) and enforced through the MPCA. A measure of the lake health and lake age is Carlson's Trophic State Index (TSI), which measures the productivity level of a lake or degree of eutrophication. As a lake ages, it becomes more eutrophic, however human impact speeds up the process. High TSI values correspond to poorer water quality. TSI TP (µg/L) Chi A (µg/L) SDT (m) Oligotrophic 3-10 2-5 2.4-3.66 Mesotrophic 18-27 8-10 2 Eutrophic 30-50 11-15 1.2-1.5 Hypereutrophic >50 >15 <1.2 Water quality grades are given to each lake based on standards established by the Metropolitan Council. The standards give a range to each letter grade for the June — September averages of TP concentration, Chl A concentration, and SDT. The overall lake water quality grade is the average of the grades for each parameter. Other indicators of lake condition, such as aquatic plant growth or invasive species are not factored into the grades. As of 2007, the letter grades assigned to VLAWMO water bodies are as listed below: Lake Name Grade TSI Status Amelia B- Mesotrophic Birch B Mesotrophic Gem C Mesotrophic — Eutrophic Gilfillan C Mesotrophic — Eutrophic Goose F Hypereutrophic Tamarack D- Hypereutrophic Wilkinson D+ Eutrophic - Hypereutrophic VLAWMO's summer intern began to enter data into the MPCA STORET program which makes the determination of impairment. It is likely that some of VLAWMO's lakes will receive the impaired designation in the future and that a TMDL study will need to occur. Recommendations for Future Lake Monitoring The addition of DO & water temperature data provided considerable information to VLAWMO's monitoring program. Ramsey Washington Metro Watershed District and Ramsey County Limnology Lab collect turbidity, conductivity, and pH data on the lakes the monitor. VLAWMO should consider collecting this data as well. To do that, VLAWMO would need to purchase a more advanced (and more expensive) piece of equipment to gather this data. The equipment recommended by the Ramsey County Lab is approximately $3,000 - $4,000 but has the advantages of collecting more data, an internal memory to store the data and the capability of loading the data directly to a computer and generating graphs and charts immediately rather than doing data entry and chart/graph creation through Excel. Additionally, more effort needs to be made to collect samples during storm events from inlets and outlets at water bodies to monitor what is flowing in and out of the lakes. Data was collected twice at three culverts coming into Birch Lake. VLAWMO should continue to collect that data and expand it to include more lakes within the watershed. VLAWMO should also collect snowmelt runoff samples at all lakes to measure Chloride levels running into the lakes. This would mean a larger citizens group to help us with sample collection. VLAWMO may want to consider adding Nitrogen (N) and Total Suspended Solids (TSS) to its lake testing parameters as these are common in other lake monitor programs. Testing for fecal coliform could also be done on a more regular basis. A fecal coliform test was done for one sample on Goose Lake West this summer. VLAWMO should conduct sediment sampling on its lakes as this data provides good information about nutrient loading within the lake rather than through runoff. Sediment sampling does not need to be done on an annual basis; every ten years may be sufficient. Finally, VLAWMO may want to include Fish Lake, Black Lake, Deep Lake, and water bodies that have been created to treat runoff in the sampling program. Sampling at these sites could be rotated on an annual basis so as not to overwhelm the budget. Increased sampling and additional testing would mean a higher lab expense but the information would be quite valuable and will aid in future TMDL studies as more VLAWMO lakes are designated as impaired. 2007 VLAWMO Lake Monitoring Results Amelia Lake Amelia is located in Anoka County and is approximately 217 acres. Maximum depth for the lake is 3 feet. The majority of agriculture land left in the watershed is near Amelia Lake. Due to a lack of volunteers, VLAWMO staff collected samples from Amelia in 2007. Floating bogs at our access point hampered our ability to get on the lake. Additionally, the thick layer of muck at the bottom of the lake makes it impossible to walk out into the water for a sample when our canoe cannot get past the floating bogs. Therefore, only 3 days of DO and temperature data were collected and some water samples were collected off the shore with a bottle attached to a nine foot pole. VLAWMO will continue to search for alternative access points so as to retrieve as many samples as possible through the season. The TP & Chl A data shows a significant rise in mid -summer and a markedly upward trend when compared with other years' averages. The cause of this is unknown at this time but factors could include, changes in land use, weather conditions, sampling error and/or laboratory error. Further study will help in our understanding of what may be happening with this water body. No graph is included with the DO & Water Temp chart due to a lack of data. Hopefully VLAWMO staff will be able to access the lake more frequently in 2008. Amelia 2007 DO & Water Temp Data Date Air Temp (°C) Depth (m) Water Temp (°C) Dissolved Oxygen (mg/L) Avg DO (mg/L) Avg temp (°C) 5/15/2007 12.8 1 18.3 5.8 6.68 18.2 0.5 18.2 7.08 surface 18.1 7.15 6/12/2007 23.9 0.5 24.7 8.11 7.83 24.9 surface 25.1 7.55 7/3/2007 21.1 23.2 7.1 6.9 23.35 su0rface 23.5 6.7 Amelia Lake 2007 TP/Chl A/SDT Data Amelia Lake Historical Avg TP/Chl A/SDT Date TP (µg/L) Ch1 A (µg/L) SDT (m) Year TP (µg/L) Ch1 A (µg/L) SDT (m) 5/15/2007 33 7.0 0.5 1997 28 1.5 5/29/2007 43 15.4 1998 36 14 1.1 6/12/2007 13 2.4 1999 38 9 1.2 6/26/2007 20 2.6 0.3 2000 40 12 0.9 7/10/2007 115 23.8 2001 33 8 1.1 8/7/2007 132 68.9 2002 34 13 1.4 8/21/2007 178 78.4 2003 29 7 1.5 9/11/2007 137 71.3 2004 28 9/25/2007 68 26.3 2005 24 7 2007 Avg 82 32 0.4 2006 36 12 2007 *2 -' I 200 180 160 140 120 100 80 60 40 20 Amelia 2007 TP/ChI A/Secchi Depth Data 2.5 2 1 0.5 0 0 5/15/2007 6/15/2007 7/15/2007 8/15/2007 9/15/2007 tTP -- 4-CI lL A Secchi 90 80 70 60 50 ago 40 30 20 10 0 Amelia Historical TP/ChI A/Secchi Depth Data 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 --AvgTP--E—Avg Chi A Avg Secchi 3 2.5 2 E 1.5 V 1 0.5 0 Birch Lake Birch Lake is located within the City of White Bear Lake and is 127 acres with a maximum depth of 6 feet. Land is completely developed around Birch Lake and there are 4 storm sewer inlets around the lake. Birch Lake is a rare find in the metropolitan area because of its clarity. Secchi disks are continuously visible at the bottom of the lake. Results of CLA and TP are very low for such an urbanized water body. VLAWMO staff collected samples twice over the summer from 3 culverts that bring water into Birch Lake to analyze whether pollutant sources are coming from a certain area. The culvert with the higher pollutants overall is the one on 4th St. The culvert at Birch Lake Avenue has a storm scepter which was installed in 2002. This removes solids from the storm water runoff. Based on the data from 2007, the Birch Lake Ave culvert delivers the least amount of pollutants. A Sustainable Lake Management Plan is in the process of being written for Birch Lake with the help of Steve McComas of Blue Water Science. As part of the plan, an aquatic plant survey was conducted as well as a shoreline survey and homeowner questionnaire. Steve and Kristine will be doing sediment sampling on Birch Lake in the winter of 2008 in order to have more information on the workings of the lake. Birch Lake is surprisingly clean for an urban lake. The research done through the SLMP may give some insight as to how the water stays so clean and clear amidst the urban landscape. One theory being looked into is that the wealth of aquatic plants may play a large role in filtering out contaminants that would otherwise cause algae blooms and murky water. Birch Lake 2007 DO & Water Temp Data Date Air Temp (°C) Depth (m) Water Temp (°C) Dissolved Oxygen (mg/L) Avg DO (mg/L) Avg temp (°C) 5/15/2007 15.6 1 18.1 10.6 10.93 18.2 0.5 18.2 11.2 surface 18.3 11 5/25/2007 16.7 0.5 26 10.6 9.95 26.5 surface 27 9.29 6/27/2007 22.2 1 26 7.7 7.23 26.1 0.5 26.1 7.5 surface 26.1 6.5 7/17/2007 17.2 0 5 25.3 7.63 7.52 25.3 surface 25.3 7.4 7/25/2007 29.4 0.5 26.2 7•5 7.33 26.25 surface 26.3 7.16 8/8/2007 26.7 1 25.4 9.55 8.81 25.55 0.5 25.6 8.5 surface 25.6 8.37 Birch Lake 2007 DO & Water Temp Data 12.00 11.00 10.00 9.00 E O 8.00 0 7.00 6.00 5.00 01 01 01 01 01 01 01 01 01 01 01 01 01 \tio \tio \,Lo \tio el\tio c5\,�o o\9 \,tio o\tio 1\.0 09. 16 1\yo 29 27 25 23 21 a`, 19 17 15 - -Avg DO (mg/L) -111--Avg temp (C) Birch Lake 2007 TP/Chl A/SDT Data Birch Lake Historical Avg TP/Ch1 A/SDT Date TP (µg/L) Ch1 A (µg/L) SDT (m) Year TP 41.g/L) Ch1 A (µg/L) SDT (m) 5/15/2007 51 2.5 2.4 1997 22 14 2.4 5/29/2007 23 5.0 2.4 1998 41 4 2.4 6/12/2007 106 4.7 2.4 1999 31 8 2.4 6/26/2007 27 2.6 2.4 2000 27 14 2.4 7/10/2007 42 5.8 2.4 2001 42 8 2.4 7/24/2007 44 3.2 2.4 2002 31 10 2.4 8/21/2007 17 3.1 2.4 2003 35 13 2.4 9/11/2007 30 13.8 2.4 2004 31 2.4 9/25/2007 28 3.8 2.4 2005 31 4 2.4 2007 Avg 41 5 2.4 2006 32 3 2.4 2007 41 5 2.4 120 100 80 m 60 40 Birch 2007 TP/ChI A/Secchi Depth Data 3 2.5 2 E 1.5 E cu u H 20 0.5 5/15/2007 6/15/2007 7/15/2007 8/15/2007 9/15/2007 tTP---ChIA Secchi 45 40 35 30 25 20 15 10 5 0 Birch Historical TP/Chl A/Secchi Depth Data 1\ / 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -4--Avg TP -f-Avg ChI A Avg Secchi 3 2.5 2 E 1.5 v 1 0.5 0 Birch Lake Culvert Data Site Date TP (µg/L) TKN (µg/L) NH3 (µg/L) NO3(µg/L) TSS (mg/L) VSS (mg/L) 4th St 6/19/2007 261 1600 345 562 5.5 3.8 4n' St 8/28/2007 259 1470 358 87 4.5 3.3 Birch Lake Ave 6/19/2007 120 1070 299 229 2.9 1.6 Birch Lake Ave 8/28/2007 56 507 158 520 3.8 2.0 Bremer Bank 6/19/2007 103 980 237 170 8.8 3.3 Bremer Bank 8/28/2007 121 887 151 _ 142 3.2 2.1 Birch Lake Culverts - TP 300 250 200 150 100 50 0 6/19/2007 ■ 4th St 261 ■ Birch Lk Ave 120 Bremer Bank 103 259 56 121 o1n m z 4th St 400 350 300 250 200 150 100 50 0 ■ Birch Lk Ave Bremer Bank Birch Lake Culverts - NH3 6/19/2007 345 299 237 8/28/2007 358 158 151 i 10.0 -- 9.0 8.0 7.0 e� 6.0 --- 5.0 -- N 4.0 - 3.0 - - 2.0 1.0 0.0 Birch Lake Culverts - TSS 6/19/2007 ■ 4th St 5.5 ■ Birch Lk Ave 2.9 Bremer Bank 8.8 8/28/2007 4.5 3.8 3.2 1800 1600 1400 j 1200 m 1000 a. 800 F 600 400 200 0 Birch Lake Culverts - TKN 6/19/2007 8/28/2007 ■ 4th St • Birch Lk Ave a Bremer Bank 1600 1070 980 1470 507 887 600 500 400 m a 300 200 100 0 ■4th St ■ Birch Lk Ave Bremer Bank Birch Lake Culverts - NO3 6/19/2007 562 229 170 8/28/2007 87 520 142 Birch lake Culverts - VSS 4.0 3.5 3.0 25 2.0 1.5 1.0 0.5 0.0 6/19/2007 8/28/2007 4th St 3.8 3.3 1 Birch Lk Ave 1.6 2.0 Bremer Bank 3.3 2.1 Pollutant Inflow Source into Birch Lake ■ 4th St. ■ Birch Lake Ave Bremer Bank Gem Lake Gem Lake is within the City of Gem Lake and has no public access. It is 25 acres in size and is 10 feet deep. There has been development along portions of the lake in recent years. In 2000, volunteers noticed a distinct algae bloom and noted that water clarity was getting poorer. Two samples that were collected in mid -summer 2007 were found to have an enormous amount of TP and Chl A. Dave Schuler, Chief Engineer at SPRWS, recommended the results be eliminated from the data because the results are nearly impossible to achieve and human error likely caused the samples to be contaminated either in the collection, transportation and/or laboratory. Therefore, we have removed the TP and Chl A results from these two weeks while calculating the annual averages but we will keep it on record to compare with future results. Gem Lake 2007 DO & Water Temp Data Date Air Temp (°C) Depth (m) Water Temp CC) Dissolved Oxygen (mg/L) Avg DO (mg/L) Avg temp (°C) 5/25/2007 17.8 2 19.3 7.79 8.35 20.02 1.5 19.8 8.55 1 20.1 8.45 0.5 20.3 8.55 surface 20.6 8.4 6/5/2007 15.6 2 21 10.22 9.98 20.56 1.5 21 9.96 1 21.1 10 0.5 21.2 9.75 surface 18.5 9.5 6/27/2007 22.2 1.5 26.3 9.4 9.63 26.3 1 26.3 10 0.5 26.3 9.3 surface 26.3 9.8 7/18/2007 21.1 1.5 25.7 10.5 11.45 26.5 1 26.6 11.5 0.5 26.7 11.9 surface 27 11.9 8/9/2007 32.2 1.5 26.4 5.2 5.05 26.55 1 26.5 5.1 0.5 26.6 4.9 surface 26.7 5 Gem Lake 2007 TP/Ch1 A/SDT Data Gem Lake Historical Avg TP/Ch1 A/SDT Date TP (pg/L) Ch1A (µg/L) SDT (m) Year TP (µg/L) Chl A (µg/L) SDT (m) 5/15/2007 37 2.9 1.5 1997 54 1.2 5/29/2007 28 7.0 1.7 1998 33 6/12/2007 30 6.0 1.5 1999 26 16 1.2 6/26/2007 147 20.3 1.8 2000 36 17 1.1 7/24/2007 240 1105.8 1.5 2001 56 12 1.8 8/7/2007 595 1243.7 0.15 2002 39 1.3 8/21/2007 59 18.5 0.5 2003 52 ', 1.4 9 / 11 / 2007 147 96.8 0.5 2004 49 1.5 9/25/2007 140 79.1 0.5 2005 43 2( 2007 Avg 84 33 1.1 2006 63 25 2007 84 1.1 Gem 2007 TP/ChI A/Secchi Depth Data 160 140 120 100 30 60 40 20 0 5/15/2007 6/15/2007 7/15/2007 3/15/2007 t-TP -ChI A Secchi 9/15/2007 2 E 1.5 E v 1 0.5 0 90 30 70 60 J 50 40 30 20 10 0 Gem Historical TP/ChI A/Secchi Depth Data 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 --AvgTP---AvgChl A AvgSecchi 2.5 2 1.5 1 0.5 Gilfillan Lake Gilfillan Lake is located within the City of North Oaks and is surrounded by homes. It is 110 acres with a maximum depth of 9 feet. The volunteers that have been collecting samples since 1998 said that they have lived on the lake for about ten years and said there does not seem to be a change in its quality. They said it has always been a light brown color, with no odor. They have always been able to swim in the lake. The Minnesota Department of Natural Resources has used the lake for walleye stocking and has been successful in the past. According to available information, there has not been any fish stocking activity for a few years. Gilfillan Lake 2007 DO & Water Temp Data Date Air Temp (°C) Depth (m) Water Temp (°C) Dissolved Oxygen (mg/L) Avg DO (mg/L) Avg temp (°C) 5/25/2007 16.7 1.5 23.5 10.4 10.63 24.6 1 24.4 10.9 0.5 25.2 10.8 surface 25.3 10.4 7/3/2007 21.1 1 23.5 6.34 6.16 25.3 0.5 23.5 6.12 surface 23.6 6.03 7/17/2007 17.2 1.5 24.6 6.3 8.18 25.05 1 25 8.83 0.5 25.3 8.78 surface 25.3 8.8 7/24/2007 29.4 1 24.5 7.7 8.9 25.47 0.5 25.1 10 surface 26.8 9 8/22/2007 17.2 1 19.9 6.1 9.4 20.67 0.5 20.9 10.7 surface 21.2 11.4 11.00 10.00 9.00 J G 8.00 0 7.00 6.00 5.00 Gilfillan Lake 2007 DO & Water Temp Data 01 01 01 01 01 °A 01 01 01 °A °A °A °1 h\ti (9\ (9\ \ti \ti \ti 1\ 1\ti 41' 41' (b\ ----Avg DO (mg/L) ---Avg temp ("C) 27 25 17 15 Gilfillan Lake 2007 TP/Chl A/SDT Data Gilfillan Lake Historical Avg TP/Chl A/SDT Date TP (µg/L) Chl A (p.g/L) SDT (m) Year TP (µg/L) Ch1 A (E.tg/L) SDT (m) 5/15/2007 91 19.1 1997 '6 32 5/29/2007 43 8.9 1 1998 47 44 6/12/2007 44 3.4 1.5 1999 72 23 6/26/2007 59 16.5 0.75 2000 35 47 7/10/2007 75 23.5 0.6 2001 84 20 7/24/2007 126 30.4 0.5 2002 '1 13 8/7/2007 117 49.5 0.5 2003 44 1.4 8/21/2007 159 74.3 0.3 2004 58 9/11/2007 181 48.1 0.4 2005 52 8 9/25/2007 102 51.7 0.3 2006 19 2007 Avg 100 32.5 0.7 2007 Gilfillan 2007 TP/ChI A/Secchi Depth Data 200 180 160 140 120 100 80 60 40 20 0 • 5/15/2007 6/15/2007 7/15/2007 8/15/2007 9/15/2007 —DTP-----Chl A Secchi 1 05 120 100 80 n 60 Gilfillan Historical TP/ChI A/Secchi Depth Data 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 tAvgTP—f--AvgChi A -Avg Secchi 1 Gilfillan Storm Pond In 1998, Gilfillan Storm Pond was added to the monitoring program. For the next two years, the inflow of water was cut off due to work being done on Highway 96. In one year the volunteer noticed a four -foot drop in water level. The SDT readings were on an average of one foot (.4 meters). By the end of the 2000 season, the pond had nearly gone dry. Year 2001 was still low and there were no SDT readings for 2002 or 2003. There is only one reading for 2004. Due to the dry weather in 2007, there was virtually no water in the pond. One sample was collected in May and analyzed for TP & Chl A. The result was added to the historical data. I have not included the SDT data with graph because there not enough points to create an accurate line. Gilfillan Pond Historical TP/Chl A/SDT Year TP (µg/L) Chl A (µg/L) SDT (m) 1997 1998 59 44 i� 1999 97 12 2000 23 57 2001 142 13 , , 4 2002 141 42 2003 234 41 2004 97 2005 101 130 2006 344 72 2007 202 131.- Gilfillan Pond Historical TP & Chl A Data 400 350 300 250 200 150 100 50 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 —4— Avg TP ;--Avg Chi A 140 120 100 J 80 0.0 60 L V 40 20 0 Goose Lake Goose Lake is located in White Bear Lake and is 145 acres with a maximum depth of 6 feet. The land use is largely residential and industrial around the lake and Highway 61 cuts through the lake. The old White Bear Lake sewage treatment plant discharged to Goose Lake for almost 50 years. A sediment study conducted in 1989 found that there was PCB contamination as well as high levels of cadmium, lead, and zinc. Another sediment study should be conducted to look for any changes in the last 20 years. Though the lake is connected via culverts under the highway, VLAWMO began to assess the lake on each side of the road to track any differences between the two water bodies. In years past, only the east side of the lake was monitored. In 2006, VLAWMO began to collect samples from the west side. Thus, the report now has two designations of Goose Lake East and Goose Lake West with separate data. Goose East 2007 DO & Water Temp Data Date Air Temp (°C) Depth (m) Water Temp (°C) Dissolved Oxygen (mg/L) Avg DO _mg/L) Avg temp (°C) 5/25/2007 18.3 1.5 22.6 8.13 10.18 23.65 1 22.9 8.07 0.5 23.9 12.14 surface 25.2 12.38 6/5/2007 15.6 2 20.5 9.4 10.76 20.82 1.5 20.5 9.73 1 20.7 10.3 0.5 20.9 11.55 surface 21.5 12.8 7/3/2007 21.1 1.5 23.3 4.1 4.9 23.43 1 23.4 4.4 0.5 23.5 5.5 surface 23.5 5.6 7/17/2007 17.2 1.5 24 5.9 7.91 24.75 1 24.7 7.5 0.5 25 8.9 surface 25.3 9.32 7/24/2007 27.8 1.5 24.1 6.73 7.15 24.43 1 24.2 6.47 0.5 24.3 7.2 surface 25.1 8.2 8/8/2007 26.7 1.5 24.7 7.56 8.97 25.18 1 25 8.12 0.5 25.4 9.93 surface 25.6 10.28 8/22/2007 17.2 1.5 19.4 5.05 20.48 1 20.5 9•17 9.2 0.5 20.9 10.8 surface 21.1 11.78 Goose Lake East 2007 DO & Water Temp Data 11.9 10.9 9.9 8.9 E O 7.9 6.9 5.9 4.9 27.00 25.00 23.00 G. 21.00 19.00 3 17.00 15.00 0A OA OA 0A 01 01 01 01 01 01 0A 01 0A h\yo ,yo ,\,yo (41S' ti�tio ce coe' •yo oyo ^\yo •yo ,SQ' ��yo C") 3‘ o�ti o\ti 61' A‘ A\ti Asti g'\ ,b\ti -♦-AvgDO(mg/L) -i- Avgtemp(C) Goose Lake East 2007 TP/Ch1 A/SDT Data Goose Lake East Historical Avg TP/Chl A/SDT Date TP (µg/L) Ch1 A (µg/L) SDT (m) Year TP (µg/L) Ch1 A (µg/L) SDT (m) 5/15/2007 1997 21 134 0.4 5/29/2007 270 14.6 0.15 1998 17 93 0.2 6/12/2007 366 139.4 0.15 1999 15 56 0.3 6/26/2007 246 129.6 0.15 2000 49 154 0.3 7/10/2007 360 81.2 2001 603 28 0.3 7/24/2007 231 52.5 0.3 2002 613 170 0.2 8/7/2007 242 188.0 0.2 2003 342 66 0.3 8/21/2007 228 104.3 0.3 2004 526 9/11/2007 211 55.3 0.3 2005 407 38 9/25/2007 186 103.3 0.3 2006 392 81 2007 Avg 260 96.5 0.2 2007 260 96.5 ' 1' Goose East 2007 TP/ChI A/Secchi Depth Data 400 - 3.00 350 300 250 0000 200 150 100 50 0 5/29/2007 6/29/2007 2.50 2.00 E 1.50 61 1.00 0.50 0.00 7/29/2007 8/29/2007 +TP - ---ChI A Secchi 3. 700 600 500 400 300 200 100 Goose East Historical TP/ChI A/Secchi Depth Data 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -4-AvgTP--AvgChi A Avg Secchi 3 2.5 1.5 0.5 0 E u u Goose Lake West This is the second year of sample collection for Goose Lake West. I have not included a graph for the historical data as there is only 2 years worth of information and would not represent well in graph form. Cooling water from the Kohler plant enters Goose Lake West year round at a rate of 500 gallons/minute. How this water affects the chemistry of the lake is not completely understood but since Goose Lake will likely be included in the TMDL study in conjunction with Lambert Creek, more information will be gathered and analyzed. Since the water is circulated continually, the higher nutrient levels in the lake most likely come from the sediment. Again, as the TMDL study is conducted, sediment analysis will be an integral part of the research. A sample collected from the west side of Goose Lake on 6/12/2007 was tested for E.coli and the result was 14.5 CFU/100mL. This is well below the daily limit of 1260 CFU/100mL. Goose West 2007 DO & Water Temp Data Date Air Tem_p (°C) Depth (m) Water Temp (°C) Dissolved Oxygen (mg/L) Avg DO (mg/L) Avg temp (°C) 5/25/2007 18.3 2 21 5.08 9.21 21.22 1.5 21 9.56 1 21 9.87 0.5 21.2 10.54 surface 21.9 11 6/5/2007 15.6 2 20.4 7 7.39 20.86 1.5 20.7 6.45 1 20.8 7.4 0.5 20.9 8 surface 21.5 8.1 6/27/2007 22.2 1 25.7 6.14 6.81 25.93 0.5 26 6.6 surface 26.1 7.7 7/ 17 /2007 15.6 1.5 24.6 6.73 6.54 24.7 1 24.7 6.72 0.5 24.7 6.2 surface 24.8 6.5 7/24/2007 26.7 1.5 24.2 6 6.67 24.45 24.2 015 24.4 6.9 surface 25 7.7 8/8/2007 26.7 1.5 24.9 5.12 5.61 25.08 25 5.52 015 25.1 5.72 surface 25.3 6.07 8/22/2007 18.3 1.5 19.9 5.7 7.04 20.18 19.9 6.14 015 20.1 6.82 surface 20.8 9.5 Goose Lake West 2007 DO & Water Temp Data 9.5 9 8.5 8 7.5 7 6.5 6 5.5 5 27 25 23 21 19 17 15 01 O� 6" 01 01 01 01 01 O' 01 s' O� 01 ,ti0 0 .0 ,O ,ti0 ,10 ,LO .0 .0 .O ,LO .0 0 h\tih\ (c's c� \tih\ \tip\\�O\ ,�n�\ O\ 1\ `1” `,03 cb\,y1\ tAvgDO(mg/L) ---Avgtemp(C) Water Temp (C) Goose Lake West TP/Chl A/SDT Data Goose Lake West Historical Avg TP & Chl A Date TP (µg/L) Ch1 A (µg/L) SDT (m) Year TP (µg/L) Ch1 A (µg/L) SDT (m) 5/15/2007 81 17.6 0.15 1997 5/29/2007 53 12.4 0.15 1998 6/12/2007 196 42.5 0.15 1999 6/26/2007 168 131.1 0 2000 7/10/2007 141 41.7 0 2001 7/24/2007 245 101.2 0 2002 8/7/2007 215 131.8 0 2003 8/21/2007 228 83.9 0 2004 9/11/2007 2005 9/25/2007 76 30.6 0 2006 21 2007 Avg 159 65.9 0 2007 Goose West 2007 TP/ChI A/Secchi Depth Data 300 250 200 a 150 100 S0 011 0 — — _ �-- —ic------f-�c 0 3 2.5 2 E 1.5 E 5/1S/2007 6/15/2007 7/15/2007 8/15/2007 -�--TP —4F—Chl A .5ecchi 9/15/2007 0.5 Tamarack Lake Tamarack Lake is part of the Tamarack Nature Center. It is 86 acres and only 3 feet deep. As there is no boat access, samples are taken from the observation dock on the southeast side of the lake. Tamarack Lake is considered a type 5 wetland (water to 6' deep) under the US Fish & Wildlife Circular 39 classification system. The shallow, eutrophic basin was part of a farm before it joined the Ramsey County open space system. Ramsey County restored a large ditched wetland downstream of Tamarack and upstream of Fish Lake, as part of a wetland -banking project in 1997. Tamarack will be studied this year for the development of a Sustainable Lake Water Plan. Tamarack 2007 DO & Water Temp Data Date Air Temp ('C) Depth (m) Water Temp (`C) Dissolved Oxygen (mg/L) Avg DO (mg/L) Avg temp (°C) 5/15/2007 12.8 0.5 18.6 7.3 8.07 18.55 surface 18.5 8.83 6/12/2007 22.2 0.5 24.9 7.57 8.47 25.1 surface 25.3 9.36 6/26/2007 29.4 0.5 26.3 7.9 8.7 26.15 surface 26.8 9.5 7/10/2007 24.4 0.5 25.5 8.62 8.99 25.5 surface 25.5 9.35 7/25/2007 29.4 0.5 24.8 2 9.95 25.3 surface 25.8 11.7 8/7/2007 32.2 0.5 24.4 9.5 9.9 24.6 surface 24.810.3 8/21/2007 20.6 0.5 18.6 5 5.54 18.6 surface 18.6 6.08 Tamarack Lake 2007 DO & Water Temp Data 11.00 10.00 9.00 J 8.00 E 8 0 7.00 6.00 5.00 5/15/2007 6/15/2007 7/15/2007 -•-Avg DO (mg/L)--Avgtemp (4C) 27 25 23 21 19 17 15 8/15/2007 Water Temp ('C) Tamarack Lake TP/Ch1 A/SDT Data Tamarack Lake Historical Avg TP/Chl A/SDT Date TP (µg/L) Chl A (µg/L) SDT (m) Year TP (µg/L) Ch1 A (µg/L) SDT (m) 5/15/2007 123 47.4 0.4 1997 17 1 1 ) 11.2 5/29/2007 105 56.7 0.3 1998 54 32 6/12/2007 80 29.0 0.3 1999 )»i 26 4 6/26/2007 112 35.9 0.3 2000 2 0.4 7/10/2007 176 105.4 0.2 2001 132 -> 1).4 7/24/2007 176 140.6 0.15 2002 1()4 1 6 1).4 8/7/2007 174 188.8 0.15 2003 168 'i-, 'I.' 8/21/2007 206 213.3 0.15 2004 »., 9 / 11 / 2007 183 159.5 2005 ! + 6 5 9/25/2007 143 114.2 0.3 2006 1 2007 Avg 148 109 0.5 2007 i -1, "0 Tamarack 2007 TP/ChI A/Secchi Depth Data 250 0 5/15/2007 6/15/2007 7/15/2007 8/15/2007 9/15/2007 tTP--4-Ch1 A Secchi 3 2.5 2 IT 1.5 1 0.5 0 Tamarack Historical TP/ChI A/Secchi Depth Data 200 180 160 140 120 J MO 100 80 60 40 20 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -r-Avg P-IF-Avg ChI A Avg Secchi Wilkinson Lake Wilkinson Lake was part of the James J. Hill experimental farm and is now part of the Minnesota Land Trust, which preserves the land in a natural condition. The City of North Oaks required 150-foot buffer between the lake edge and any structures. The property beyond that buffer is currently being developed. Until recently, the bottom was continuously stirred up from rough fish. The North Oaks Company has spent considerable time and effort to restore the lake including a fish barrier to attempt to keep the rough fish from the Mississippi River from destroying the natural vegetation and waterfowl habitat. The lake has weathered two draw downs to kill the carp over the winter. The efficacy of the fish barrier is a yearly battle. Wilkinson does not have much data for DO and Water Temperature this year because the area around Wilkinson Lake is gated and a code and key are required to gain access. VLAWMO will continue to ask the North Oaks Company (who manages the land) for a strategy to regularly access Wilkinson in order to collect more data throughout the summer. A graph of the DO & Water Temp data is not included as there is only two days worth of information. Based on this small amount of data, it appears that Wilkinson has the lowest DO levels of all the lakes in VLAWMO. Hopefully, staff will have the ability to get on the lake more in 2008 to see if this trend continues. Wilkinson 2007 DO & Water Temp Data Date Air Temp (°C) Depth (m) Water Temp (°C) Dissolved Oxygen (mg/L) Avg DO (mg/L) Avg temp (°C) 5/14/2007 15.6 1 17 3.69 6.34 17.05 0.5 17.1 9 7/23/2007 23.9 0.5 22.8 4.5 4.75 22.95 surface 23.1 5 Wilkinson Lake TP/Chl A/SDT Data Wilkinson Lake Historical Avg TP/Chl A/SDT Date TP (µg/L) Ch1A (µg/L) SDT (m) Year TP (µg/L) Chl A (µg/L) SDT (m) 5/15/2007 123 12.9 1 1997 5/29/2007 105 11.2 1 1998 48 2i> 1.1 6/12/2007 80 5.8 1 1999 2 8 6/26/2007 112 7.3 1 2000 38 '4 7/10/2007 176 25.9 0.75 2001 2:),) '') 7/24/2007 176 31.5 1 2002 8/7/2007 174 34.7 2003 1 't) 18 8/21/2007 206 20.6 0.75 2004 -' 9/11/2007 183 14.5 0.75 2005 l',; *2 9/25/2007 143 16.7 1 2006 10 2007 Avg 104 18 0.9 2007 i-4 18 Wilkinson 2007 TP/ChI A/Secchi Depth Data 300 3.00 250 200 m 150 6/15/2007 7/15/2007 8/15/2007 —�—TP ---Chl A Secchi 9/15/2007 2.50 2.00 Wilkinson Historical TP/Chl A/Secchi Depth Data 350 3 300 250 200 m 150 100 50 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 tAvgP—+—AvgChlA AvgSecchi 2.5 2 1.5 1 0.5 0 E Q v Historical Average TP Concentrations for all VLAWMO Lakes (µg/L) Year Amelia Lake Birch Lake Gem Lake Gilfillan Lake Gilfillan Pond Goose Lake(E) Goose Lake(W) Tamarack Lake Wilkinson Lake 1997 28 22 54 io 21 17 1998 36 41 33 47 59 17 54 48 1999 38 31 26 72 9 2000 40 27 36 35 23 49 38 2001 33 42 56 2002 34 31 39 81 2003 29 35 52 44 2004 28 31 49 58 `) 2005 24 31 43 52 1 2006 36 32 91 344 2007 82 41 100 202 Avg TP in VLAWMO Lakes 1997-2007 700 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 • Amelia ■ Birch : Gem ■ Gil Lk • Gil Pond Goose East ° Goose West Tamarack Wilkinson Average Chl A Concentrations for VLAWMO Lakes (ig/L) Year Amelia Lake Birch Lake Gem Lake Gilfillan Lake Gilfillan Pond Goose Lake(E) Goose Lake(W) Tamarack Lake Wilkinson Lake 1997 14 23 3 1998 14 4 24 44 44 93 32 26 1999 9 8 16 23 12 56 26 8 2000 12 14 17 47 154 27 34 2001 8 8 12 20 13 28 3- 99 2002 13 10 25 43 42 170 120 40 2003 7 13 20 25 41 66 95 18 2004 2005 7 4 26 8 130 38 65 52 2006 12 3 25 19 _ 81 58 38 10 2007 32 5 33 33 132 97 66 109 18 AvgChl A (ug/L) 200 180 160 140 120 100 80 60 40 20 0 Avg Chl A in VLAWMO Lakes 1997-2007 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 ■ Amelia ■ Birch Gem • Gil Lk ■ Gil Pond Goose East Goose West Tamarack Wilkinson Average SDT for VLAWMO Lakes (m) Year Amelia Lake Birch Lake Gem Lake Gilfillan Lake Gilfillan Pond Goose Lake(E) Goose Lake(W) Tamarack Lake Wilkinson Lake 1997 1.5 2.4 1.2 '.3 0.4 0.2 1998 1.1 2.4 '. 0.2 0.5 1.1 1999 1.2 2.4 1.2 0.3 0.4 2000 2.4 1.1 0.3 0.4 2001 1.1 2.4 1.8 E 0.3 0.4 1 2002 1.4 2.4 1.3 H4 0.2 0.4 2003 1.5 2.4 1.4 1.4 0.3 0.3 2004 1.5 0.8 2005 2006 2007 2.4 1.1 i. 3 2.5 E 1.5 0.5 Avg SDT in VLAWMO Lakes 1997-2007 1997 1993 1999 2000 2001 2002 2003 2004 2005 2006 2007 ■ Amelia ■ Birch '._Gem a Gil Lk ■ Gil Pond Goose East Tamarack Wilkinson 2007 Lambert Creek Monitoring Results 96 Lambert Creek Monitoring Details Samples are collected by VLAWMO staff at 5 sites along Lambert Creek on a weekly basis May through September as well as after significant storm events (at least 0.5 inches). The five sites noted in charts and graphs as: Goose Lk Station, Whittaker Pond, Oakmeade, County Rd F, and Kohler Rd. The samples are analyzed at the Ramsey County Lab for TP, SRP, TKN, NH3, NO3, TSS, and VSS. There are flumes at Goose Lake, Oakmeade, County Rd F and Kohler Rd which have data loggers that collect flow and nutrient information throughout the season. The flumes at Oakmeade and Kohler Rd were replaced this winter due to the deterioration of 20 year old materials, as well as a redesign and construction of a stormwater pond which outlets into Lambert Creek. Plans are to replace the flume at County Rd F in 2008. In addition, a large water quality improvement project in 2004 east of the County Rd F flume where an area was dredged out and a structure put in to create "Lambert Lake" which, according to the plans, will reduce the amount of nutrients reaching further downstream and into Vadnais Lake. SPRWS monitors Lambert Creek as well since it outlets directly into Vadnais Lake. SPRWS manages the data loggers along the creek to collect flow data and nutrient data. VLAWMO will be trained on the retrieval and utilisation of this data in 2008. SPRWS also collect samples for E. coli testing at the five sites along the creek. Figure 4 Lambert Creek Monitoring Sites Vadnais Heights Kohler Rd County Rd F I I Whittaker Pond I I Oakmeade Gem Gem Lake Goose LS Station Goose Lambert Creek has been listed on the MPCA's 303(d) list as impaired due to levels of fecal coliform (E. coli) in the water system. Water contaminated with bacteria from human or animal fecal material can cause illness in humans if ingested. The maximum daily level allowed is 1260 cfu/100mL. The maximum 30 day mean level is 126/100mL. Standards are designed to protect swimmers who might ingest small quantities of water from getting sick. VLAWMO will undertake a TMDL study to address the contamination in 2008 - 2009. Data in red denotes those days that exceeded the daily level threshold in 2007. E. coli (cfu/100mL) Daily Levels Along Lambert Creek (2007) Maximum Level = 1260 cfu/100mL Date Goose Lk Station Whittaker Pond Oakmeade County Rd F Kohler Rd 5/8/2007 12 179 214 33 107 5/16/2007 102 213J 120 65 291 5/22/2007 59 36 411 58 102 5/30/2007 22 119 326 20 135 6/6/2007 93 921 261 225 435 6/11/2007 68 129 816 62 142 6/19/2007 365 1046 I »' 242 6/26/2007 246 74 275 145 7/2/2007 384 135 301 107 7/9/2007 248 I-)+`i 714 144 7/11/2007 48 550 621 114 7/17/2007 226 420 G 7/18/2007 146 1017 292 7/24/2007 20 246 85 7/30/2007 41 435 309 8/6/2007 816 187 8/13/2007 0 610 605 8/15/2007 487 I-H tI-t� 8/20/2007 85 , I (,-E 512 1- ,' ) 317 8/27/2007 833 934 175 2(,l') 712 9/5/2007 98 5- 7) 41 355 171 9/10/2007 155 324 20 620 41 9/17/2007 84 538 285 20 84 10/5/2007 275 i, t ; I 408 .24I'R, - P-2, E. coli 30 Day Geometric Mean Levels Along Lambert Creek (2007) Maximum Level = 126 cfu/100mL Goose Lk Station Whittaker Pond Oakmeade County Rd F Kohler Rd 112.6 588 362.1 215.2 700 600 500 J 400 0 0 e-1 300 E.coli in Lambert Creek - 30 Day Geometric Mean 126 chi/m l 200 max level 100 0 E.coli Levels NIP Goose Lk a Whittaker Pond Oakmeade f Cty Rd F ■ Kohler Rd Goose Lake Station - 2007 Data Date TP (µg/L) SRP (µg/L) TKN (µg/L) NH3 (µg/L) NO2 (µg/L) TSS (mg/L) VSS (mg/L) 5/21/2007 96 39 1360 122 39 9.9 6.1 5/23/2007 81 29 2220 123 29 49.0 26.3 5/29/2007 81 16 1230 104 32 6.1 3.7 6/4/2007 64 19 939 64 9 3.8 2.0 6/11/2007 65 9 1160 97 34 5.2 4.0 6/18/2007 107 36 1500 155 35 14.1 7.5 6/25/2007 88 26 1340 78 17 3.9 3.3 7/2/2007 72 23 1250 72 19 5.1 2.8 7/9/2007 69 12 1050 46 14 6.5 3.7 7/16/2007 59 19 1080 78 11 10.4 5.4 7/23/2007 60 17 1260 106 50 1.7 1.5 7/30/2007 139 36 1720 305 9 2.8 2.1 8/6/2007 271 94 1850 1560 9 9.3 6.3 8/13/2007 192 25 2960 388 18 3.3 2.7 8/20/2007 111 20 1500 124 20 13.7 8.0 8/27/2007 166 10 3060 74 24 53.9 46.7 8/28/2007 174 13 2330 44 9 42.4 30.0 9/4/2007 146 9 1930 37 25 30.7 22.2 9/7/2007 140 23 2080 158 9 23.1 17.2 9/19/2007 113 9 2240 72 13 22.1 9/25/2007 94 10 2060 208 11 20.4 16.4 2007 Avg 114 24 _i i Hi 21 16 11 Whittaker Pond - 2007 Data Date TP (µg/L) SRP (µg/L) TKN (µg/L) NH3 (µg/L) NO3 (µg/L) TSS (mg/L) VSS (mg/L) 5/21/2007 81 51 445 50 1870 3.8 2.6 5/23/2007 99 52 644 36 1980 8.4 4.0 5/29/2007 75 49 809 115 2720 3.8 0.9 6/4/2007 96 60 559 74 1450 1.2 0.6 6/11/2007 92 38 502 100 2850 1.2 1.8 6/18/2007 111 62 635 82 2610 4.7 2.3 6/25/2007 119 72 447 78 2380 5.5 2.6 7/2/2007 84 61 446 66 2310 1.3 0.6 7/9/2007 196 65 1170 119 1490 50.3 10.5 7/16/2007 135 76 1350 187 1250 4.2 1.5 7/23/2007 107 71 522 80 1430 2.3 0.6 7/30/2007 80 23 539 85 564 23.3 6.9 8/6/2007 110 62 1390 70 1650 2.6 0.9 8/13/2007 96 62 690 238 1280 1.5 0.6 8/20/2007 92 73 1240 346 1080 2.5 1.0 8/27/2007 298 182 1220 57 1120 5.3 3.0 8/28/2007 165 139 1500 159 765 11.7 3.7 9/4/2007 93 56 349 46 2290 0.9 0.9 9/7/2007 139 100 1200 495 1330 1.8 0.3 9/19/2007 82 50 914 60 1580 5.1 9/25/2007 82 59 3.0 1.7 2007 Avg 116 70 829 1 ,- 7 2 Oakmeade - 2007 Data Date TP (µg/L) SRP (µg/L) TKN (µg/L) NH3 (µg/L) NO3 (µg/L) 13 TSS (mg/L) 11.8 VSS (mg/L) 5.7 5/21/2007 235 77 1250 98 5/23/2007 265 97 854 132 9 4.8 2.7 5/25/2007 198 60 884 53 28 1.9 1.5 5/29/2007 173 75 705 95 28 2.1 1.4 5/31/2007 187 87 1000 135 22 2.1 1.4 6/4/2007 250 130 624 161 38 1.6 0.7 6/11/2007 288 111 936 113 30 4.7 2.9 6/18/2007 300 122 1450 133 14 6.6 3.3 6/19/2007 228 196 1080 103 19 3.1 1.6 6/25/2007 282 97 869 349 148 5.9 3.4 7/2/2007 351 14 957 443 69 10.3 3.5 7/9/2007 250 82 759 336 227 5.4 2.2 7/16/2007 222 39 1050 449 162 6.0 2.6 7/23/2007 234 74 944 372 315 4.4 1.4 7/27/2007 324 40 956 419 184 9.8 3.9 7/30/2007 180 44 702 326 185 5.5 1.7 8/6/2007 216 60 765 310 182 5.8 2.3 8/13/2007 277 83 774 409 118 3.3 1.2 8/14/2007 213 80 1370 364 183 4.0 2.5 8/20/2007 234 180 1300 310 20 3.0 1.5 8/27/2007 156 127 1040 87 26 2.1 1.6 8/28/2007 199 101 897 72 22 2.5 1.8 9/4/2007 194 186 877 72 9 1.2 0.4 9/7/2007 254 189 1120 231 13 2.3 0.4 9/19/2007 169 130 959 78 16 0.8 9/25/2007 189 129 1070 126 24 1.0 0.7 2007 Avg 233 100 969 22, 81 4 2 County Rd F - 2007 Data Date TP (µg/L) SRP (µg/L) TKN (µg/L) NH3 (µg/L) NO3 (µg/L) TSS (mg/L) VSS (mg/L) 5/21/2007 260 12 1340 395 299 9.0 3.4 5/23/2007 265 9 1270 481 264 14.8 5.6 5/25/2007 465 91 1100 192 60 7.4 4.0 5/29/2007 355 111 1060 128 74 5.5 2.7 5/31/2007 600 317 1040 115 31 6.6 3.1 6/4/2007 770 250 852 134 21 7.0 4.6 6/11/2007 345 125 1340 194 117 8.7 5.6 6/18/2007 332 9 1810 857 374 16.9 7.1 6/19/2007 159 25 1770 567 231 15.0 7.0 6/25/2007 118 9 1630 762 363 16.4 8.1 7/2/2007 177 9 1690 689 390 15.4 6.2 7/9/2007 130 17 1810 584 300 13.0 6.8 7/16/2007 153 10 2360 918 535 14.7 6.7 7/23/2007 202 9 1830 778 422 11.0 4.2 7/27/2007 225 9 1840 832 324 13.2 5.3 7/30/2007 232 9 1780 766 455 11.5 4.2 8/6/2007 178 9 1680 963 174 13.8 4.9 8/13/2007 160 9 1720 808 295 10.6 4.2 8/14/2007 201 32 2000 752 540 11.3 7.9 8/20/2007 205 9 1580 726 633 9.7 4.2 8/27/2007 263 131 1580 318 429 4.3 2.5 8/28/2007 240 160 2320 250 765 73.0 23.3 9/4/2007 240 212 1350 83 29 11.3 5.8 9/7/2007 271 264 1880 371 34 11.0 5.3 9/19/2007 362 336 1410 376 69 5.4 9/25/2007 234 173 901 158 15 4.3 2.3 2007 Avg 275 91 ' -,- 279 13 6 Kohler Rd - 2007 Data Date TP (µg/L) SRP (µg/L) TKN (µg/L) NH3 (µg/L) NO3 (µg/L) TSS (mg/L) 4.1 VSS (mg/L) 1.7 5/21/2007 74 9 1860 1160 415 5/23/2007 58 9 2760 1710 506 2.6 1.0 5/25/2007 102 9 1590 421 127 5.4 2.9 5/29/2007 111 9 1870 788 396 4.5 1.6 5/31/2007 139 25 963 179 70 6.4 2.1 6/4/2007 204 51 1260 320 190 4.4 1.4 6/11/2007 145 9 1640 632 420 6.8 3.5 6/18/2007 89 28 1870 550 804 11.6 3.7 6/19/2007 151 42 1380 321 393 2.8 1.4 6/25/2007 83 30 1420 157 1400 2.8 1.9 7/2/2007 90 41 963 92 640 6.8 2.4 7/9/2007 104 30 2030 883 389 3.8 1.7 7/16/2007 90 25 1090 78 288 8.1 3.2 7/23/2007 192 51 3740 4880 965 5.6 2.0 7/27/2007 121 20 2580 1040 1290 7.0 3.5 7/30/2007 97 25 1200 179 624 12.3 4.4 8/13/2007 80 19 2400 1220 449 5.6 1.9 8/14/2007 232 86 2300 891 203 6.3 3.3 8/20/2007 155 52 1530 470 291 3.9 1.5 8/27/2007 231 38 2500 1200 155 27.8 7.7 8/28/2007 210 54 1830 128 113 8.9 4.5 9/4/2007 226 117 1200 187 80 6.0 1.8 9/7/2007 211 83 1740 346 62 5.6 1.5 9/19/2007 207 94 1400 215 101 17.6 9/25/2007 149 83 1310 129 26 3.7 1.5 2007Avg 142 42 I - _ _ 416 7 3 ABDO Q.EICK& Jt k MEYERSLLP &teed Public Accountants & Consultants • March 19, 2008 Grandview Square 5201 Eden Avenue Suite 370 Edina, MN 55436 Board of Directors Vadnais Lake Area Water Management Organization Vadnais Heights, Minnesota We have audited the financial statements of the governmental activities and each major fund of the Vadnais Lake Area Water Management Organization (the Organization), Vadnais Heights, Minnesota, for the year ended December 31, 2007 and have issued our report thereon dated March 19, 2008. Professional standards require that we provide you with the following information related to our audit. Our Responsibility Under Auditing Standards Generally Accepted in the United States of America As stated in our engagement letter, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your responsibilities. Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. As part of our audit, we considered the internal control of the Organization. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures specifically to identify such matters. Significant Audit Findings In planning and performing our audit, we considered Vadnais Lake Area Water Management Organization (the Organization), Vadnais Heights, Minnesota, internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control over financial reporting. Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control that we consider to be significant deficiencies in internal control over financial reporting. 952.835.9090 • Fax 952.835.3261 www.aemcpas.com Vadnais Lake Area Water Management Organization March 19, 2008 Page 2 A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal controL We consider the deficiencies listed on the following pages to be significant deficiencies in internal control over financial reporting: Limited Segregation of Duties - Cash Disbursements and Cash Receipts Condition: During our audit we reviewed procedures over cash disbursements and cash receipts and found VLAWMO to have limited segregation of duties related to these procedures. Criteria: There are four general categories of duties: authorization, custody, record keeping and reconciliation. In an ideal system, different employees perform each of these four major functions. In other words, no one person has control of two or more of these responsibilities. Cause: During the first part of 2007, VLAWMO only had one employee involved with the accounting processes and procedures. For the second half of 2007, there were two employees and a contracted bookkeeper involved in the accounting processes and procedures to help with the limited segregation of duties. Effect: The existence of this limited segregation of duties increases the risk of fraud. Recommendation: There was great improvement in segregating the accounting duties during the year. We recommend that VLAWMO add the following compensating control. Have another individual, separate from the Administrator (possibly a board member or the bookkeeper) receive and review the unopened bank statements. The review would consist of scanning for unusual activity, agreeing all disbursements to board approved listings and documenting that the review was done. 952.835.9090 • Fax 952.835.3261 www.aemcpaa.com Storm Water Utility Receipts Condition: Criteria: Cause: Effect: Recommendation: Vadnais Lake Area Water Management Organization March 19, 2008 Page 3 During a wallcthrough of the Organization's procedures over the Storm Water Utility charges, we attempted to reconcile receipts in the accounting software to deposit slips and utility billing software receipts. During this testing, we were not able to reconcile amongst the three documents. The Organization should have a well documented and practiced procedures manual in place for important control systems. There is not a documented and practiced procedure in place. The process of reconciling bank statements and reconciling revenues between the accounting and utility billing software becomes much more difficult. We recommend that bank deposit slips and the postings into the accounting software are generated from daily receipt batch reports from the utility billing software. Preparation of Financial Statements Condition: We were requested to draft the audited financial statements and related footnote disclosures as part of our regular audit services. Ultimately, it is management's responsibility to provide for the preparation of your statements and footnotes, and the responsibility of the auditor to determine the fairness of presentation of those statements. However, based on recent auditing standards, it is our responsibility to inform you that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by your management. Essentially, the auditors can not be part of your intemal control process. Criteria: Internal controls should be in place to provide reasonable assurance over financial reporting. Cause: From a practical standpoint, we both prepare the statements and determine the fairness of the presentation at the same time in connection with our audit. This is not unusual for us to do with organizations of your size. Effect: The effectiveness of the internal control system relies on enforcement by management. The effect of deficiencies in intemal controls can result in undetected errors in financial reporting. Recommendation: It is your responsibility to make the ultimate decision to accept this degree of risk associated with this condition because of cost and other considerations. We have instructed management to review a draft of the auditor prepared financials in detail for accuracy; we have answered any questions that management might have, and have encouraged research of any accounting guidance in connection with the adequacy and appropriateness of classification of disclosures in your statements. We are satisfied that the appropriate steps have been taken to provide you with the completed financial statements. While the Organization is reviewing the financial statements we recommend a disclosure checklist is utilized to ensure all required disclosures are presented and the Organization should agree its financial software to the numbers reported in the financial statements. Management Response: For now, the Organization's management accepts the degree of risk associated with this condition and thoroughly reviews a draft of the financial statements. 952.835.9090 • Fax 952.835.3261 www.aemcpas.com Vadnais Lake Area Water Management Organization March 19, 2008 Page 4 A material weakness is a significant deficiency, or combination of significant deficiencies, that result in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. We do believe that the following finding constitutes material weakness. Material Audit Adjustments Condition: During our audit adjustments were needed to adjust beginning balances, correct entries, reclassify escrow deposit payable activity and adjust deferred revenue. Criteria: The financial statements are the responsibility of the Organization's management. Cause: The Organization's staff has not prepared a year-end trial balance reflecting all necessary accounting entries. Effect: This indicates that it would be likely that a misstatement may occur and not be detected by the Organization's system of internal control. The audit firm can not serve as a compensating control over this deficiency. Recommendation: We recommend that management review each journal entry, obtain an understanding of why the entry was necessary and modify current procedures to ensure that future corrections are not needed. Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of compliance with certain provisions of Minnesota statutes. However, the objective of our tests was not to provide an opinion on compliance with such provisions. We noted no instances of noncompliance with Minnesota statutes. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you. Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the Organization are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year ended December 31, 2007. We noted no transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. 952.835.9090 • Fax 952.835.3261 www.aemcpas.com Vadnnis Lake Area Water Management Organization March 19, 2008 Page 5 Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In total we prepared 14 journal entries, 5 of which are considered audit entries and the remaining year-end account entries. These entries are necessary to adjust balances to the proper year end amount. It is important that the Organization understand these entries and prepare to make them in the future. Internal preparation enhances the quality of internal information Following are the audit entries: Adjusting Journal Entries JE # 1 Debit Credit To correct beginning balances to agree with prior year audit report 10100 Checking -1987 $ 119.00 22200 Undeposited Funds 2,604.00 25300 Opening Bal Equity 147,881.00 11500 Accounts Receivable $ 98,830.00 20200 Wetland Mitigation Payable 4,085.00 20201 Dillan Pond 1,493.00 20300 Due to Other Governments 7,318.00 22201 Deferred Revenues 38,878.00 Total Adjusting Journal Entries JE # 2 $ 150,604.00 $ 150,604.00 To remove effect of 380,000 entry made twice 25300 Opening Bal Equity $ 380,000.00 12200 Storm Sewer Utility Fees $ 380,000.00 Total $ 380,000.00 $ 380,000.00 Adjusting Journal Entries JE # 8 To reclass mitigation payout and interest earned against liability 20201 Dillan Pond $ 7,042.00 36220 Mitigation Interest 80.00 20201 Dillan Pond $ 80.00 43100-306 7.0 • Uncategorized Expenses 7,042.00 Total $ 7,122.00 $ 7,122.00 952.835.9090 • Fax 952.835.3261 www.aemcpas.com Vadnais Lake Area Water Management Organization March 19, 2008 Page 6 Adjusting Journal Entries JE # 9 Debit Credit To setup storm water utility charges and assessments as deferred revenue 12100 Assessments Receivable - Deferred $ 82,503.00 34000 6.5.5.1 • Storm Water Utility 53,251.00 34000 6.5.5.1 • Storm Water Utility 331,471.00 11500 Accounts Receivable $ 53,251.00 22201 Deferred Revenues 82,503.00 22201 Deferred Revenues 331,471.00 Total Adjusting Journal Entries JE # 10 To reverse prior year deferred revenue 22201 Deferred Revenues 33400 Grants Total Disagreements with Management $ 467,225.00 $ 467,225.00 $ 38,878.00 $ 38,878.00 $ 38,878.00 $ 38,878.00 For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated March 19, 2008. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Organization's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Organization's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. 952.835.9090 • Fax 952.835.3261 www.aemcpas.com Vadnais Lake Area Water Management Organization March 19, 2008 Page 7 Financial Position and Results of Operations Our principal observations and recommendations are summarized on the following pages. These recommendations resulted from our observations made in connection with our audit of the Organization's financial statements for the year ended December 31, 2007. General Fund The fund balance at December 31, 2007 was $45,466, a decrease of $11,548 in comparison with the prior year. The total fund balance represents 12 percent of the 2008 budget. A table summarizing the General fund balance in relation to budget follows: Year Percent General General of Fund Fund Balance Budget Fund Balance to December 31 Year Budget Budget 2005 $ 37,311 2006 $ 186,400 20 % 2006 57,014 2007 460,305 12 2007 45,466 2008 380,000 12 $550,000 $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $- Fund Balance as a Percent of Next Year's Budget $460,305 $380,000 $186,400 12% 12% 20% • • • 2005 2006 2007 2008 "miGeneral Fund Balance ■—Budget 952.835.9090 • Fax 952.835.3261 www.aemcpas.com • • Vadnais Lake Area Water Management Organization March 19, 2008 Page 8 The purposes and benefits of a General fund balance are as follows: Purposes and Benefits • Expenditures are incurred somewhat evenly throughout the year. However revenues are not received evenly. An adequate fund balance will provide the cash flow required to finance the General fund expenditures. • Expenditures not anticipated at the time the annual budget was adopted may need immediate Board action. These would include capital outlay replacement, lawsuits and other items. An adequate fund balance will provide the financing needed for such expenditures. The 2007 General fiord operations are summarized as follows: Variance with Final Final Budget - Budgeted Actual Positive Amounts Amounts (Negative) Revenues $ 234,000 $ 373,865 $ 139,865 Expenditures 460,305 385,413 74,892 Net change in fund balances (226,305) (11,548) 214,757 Fund balances, January 1 57,014 57,014 Fund balances, December 31 $ (169,291) $ 45,466 $ 214,757 952.835.9090 • Fax 952.835.3261 www.aemcpas.com Vadnais Lake Area Water Management Organization March 19, 2008 Page 9 Future Accounting Standard Changes The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact on future Organization's financial statements: GASB Statement No. 45 - Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions This statement is effective in three phases based on a government's total annual revenues in the first fiscal year ending after June 15, 1999: • Governments that were phase 1 governments for the purpose of implementation of Statement No. 34 - those with annual revenues of $100 million or more - are required to implement this Statement in financial statements for periods beginning after December 15, 2006. • Governments that were phase 2 governments for the purpose of implementation of Statement No. 34 - those with total annual revenues of $10 million or more but less than $100 million - are required to implement this Statement in financial statements for periods beginning after December 15, 2007. • Governments that were phase 3 governments for the purpose of implementation of Statement No. 34 - those with total annual revenues of less than $10 million - are required to implement this Statement in financial statements for periods beginning after December 15, 2008. Statement No. 45 gives the following summary, "In addition to pensions, many state and local governmental employers provide other postemployment benefits (OPEB) as part of the total compensation offered to attract and retain the services of qualified employees. OPEB includes postemployment healthcare, as well as other forms of postemployment benefits (for example, life insurance) when provided separately from a pension plan. This Statement establishes standards for the measurement, recognition, and display of OPEB expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information (RSI) in the financial reports of state and local governmental employers." GASB Statement No. 48 - Sales and Pledges of Receivable,s and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues This statement was issued September 2006 and is effective for periods beginning after December 15, 2006. Therefore, this statement has been implemented for the current financial statements. This standard provides accounting guidance for when certain transactions -such as the sale of delinquent taxes, certain mortgages, student loans, or future revenues such as those arising from tobacco settlement agreements -should be regarded as a sale or a collateralized borrowing. The financial reporting question addressed in Statement No. 48 is whether such transactions should be reported as a sale or collateralized borrowing. In addition to clarifying guidance on accounting for sales and pledges of receivables and future revenues, Statement No. 48 (1) requires enhanced disclosures pertaining to future revenues that have been pledged or sold; (2) provides guidance on the sales of receivables and future revenues within the same financial reporting entity; and (3) provides guidance on recognizing other assets and liabilities arising from the sale of specific receivables or future revenues. 952.835.9090 • Fax 952.835.3261 www.aemcpas.com Vadnais Lake Area Water Management Organization March 19, 2008 Page 10 GASB Statement No. 49 - Accounting and Financial Reporting for Pollution Remediation Obligations This statement was issued November 2007 and is effective for periods beginning after December 15, 2007, but liabilities should be measured at the beginning of that period so that beginning net assets can be restated. This standard is intended to ensure that certain cost and long-term obligations related to pollution clean up not specifically addressed by current governmental accounting standards will be included in financial reports. The standards set forth the key circumstances under which a government would be required to report a liability related to pollution remediation. A government would have to determine whether one or more components of a pollution remediation liability are recognizable if any of the following five obligating events or triggers occurs: • A government is compelled to take remediation action because pollution creates an imminent endangerment to the public health or welfare or environment, leaving it little or no discretion to avoid remediation action. • A government is in violation of a pollution prevention -related permit or license. • The government is named, or evidence indicates it will be named, by a regulator that has identified the government as a responsible party or potentially responsible party for remediation, or as a government responsible for sharing costs. • A government is named, or evidence indicates that it will be named, in a lawsuit to compel the government to participate in remediation. • A government commences or legally obligates itself to commence clean up activities or monitoring or operation and maintenance of the remediation effort. If any of the above bullets are met, the pollution remediation liabilities should be measured at their current value using the expected cash flow technique, which measures the liability as a sum of probability -weighted amounts in a range of possible estimated amounts. Expected recoveries from other responsible parties and from insurers reduce the amount of remediation expense. Statement No. 49 also specifies criteria for capitalization of some pollution remediation outlays. GASB Statement No. 50 - Pension Disclosures This statement was issued May 2007 and is effective for periods beginning after June 15, 2007, except for requirements related to the use of the entry age actuarial cost method for the purpose of reporting a surrogate funded status and funding progress of plans that use the aggregate actuarial cost method, which are effective for periods for which the financial statements and RSI contain information resulting from actuarial valuations as of June 15, 2007 or later. This statement more closely aligns the financial reporting requirements for pensions with those for OPEB and, in doing so, enhances information disclosed in notes to financial statements or presented as required supplementary information (RSI) by pension plans and by employers that provide pension benefits. The reporting changes required by this statement amend applicable note disclosure and RSI requirements of Statement No. 25 , Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, and No. 27 , Accounting for Pensions by State and Local Governmental Employers, to conform with requirements of Statement No. 43 , Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and 45 , Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This statement requires defined benefit pension plans and sole and agent employers present the following information related to note disclosures: • Notes to financial statements should disclose the funded status of the plan as of the most recent actuarial valuation date. Defined benefit pension plans also should disclose actuarial methods and significant assumptions used in the most recent actuarial valuation in notes to financial statements instead of in notes to RSI. 952.835.9090 • Fax 952.835.3261 www.aemcpaa.com ,l A �A Vadnais Lake Area Water Management Organization March 19, 2008 Page 11 • If the aggregate actuarial cost method is used to determine the annual required contribution of the employer (ARC), notes to financial statements should disclose the funded status of the plan, and a schedule of funding progress should be presented as RSI, using the entry age actuarial cost method. Plans and employers also should disclose that the purpose of doing so is to provide information that serves as a surrogate for the funded status and funding progress of the plan. • Notes to financial statements should include a reference linking the funded status disclosure in the notes to financial statements to the required schedule of funding progress in RSI. • If applicable, notes to financial statements should disclose legal or contractual maximum contribution rates. In addition, if relevant, they should disclose that the maximum contribution rates have not been explicitly taken into consideration in the projection of pension benefits for financial accounting measurement purposes. • If an actuarial assumption is different for successive years, notes to financial statements should disclose the initial and ultimate rates. GASB Statement No. 51- Accounting and Financial Reporting for Intangible Assets This statement was issued in June 2007 and is effective for periods beginning after June 15, 2009. The new standard characterizes an intangible asset as an asset that lacks physical substance, is nonfinancial in nature, and has an initial useful life extending beyond a single reporting period. Examples of intangible assets include easements, computer software, water rights, timber rights, patents, and trademarks. This statement requires that intangible assets be classified as capital assets (except for those explicitly excluded from the scope of the new standard, such as capital leases). Relevant authoritative guidance for capital assets should be applied to these intangible assets. The statement provides additional guidance that specifically addresses the unique nature of intangible assets, including: • Requiring that an intangible asset be recognized in the statement of net assets only if it is considered identifiable • Establishing a specified -conditions approach to recognizing intangible assets that are internally generated (for example, patents and copyrights) • Providing guidance on recognizing internally generated computer software • Establishing specific guidance for the amortization of intangible assets. 952.835.9090 • Fax 952.835.3261 www.aemcpas.com ,e A Vadnais Lake Area Water Management Organization March 19, 2008 Page 12 This report is intended solely for the information and use of Board of Directors, management and the Minnesota Office of the State Auditor, and is not intended to be and should not be used by anyone other than these specified parties. Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data, The comments and recommendations in the report are purely constructive in nature, and should be read in this context. If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your convenience. We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to us by your staff. 0146 &it. iftittio Atte March 19, 2008 ABDO, EICK & MEYERS, LLP Minneapolis, Minnesota Certified Public Accountants 952.835.9090 • Fax 952.835.3261 www.aemcpas.com