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04-27-2015 Council Packet
EXPANDED AGENDA CITY COUNCIL AGENDA Monday, April 27, 2015 *********** 6:30 p.m. (Scheduled to be broadcast on Channel 16) City Council: Mayor Reinert, Council Members Kusterman, Rafferty, Roeser and Stoesz City Administrator: Jeff Karlson COUNCIL WORK SESSION, 5:30 P.M. Community Room (not televised) 1. Anoka County Public Safety Data System Update 2. Review Regular Agenda BOARD OF REVIEW, 6:00 P.M. Local Board of Appeal and Equalization Council Chambers CITY COUNCIL MEETING, 6:30 P.M. Roll Call - Council Members Rafferty, Kusterman, Roeser, Stoesz and Mayor Reinert were present Pledge of Allegiance Open Mike / Public Comment Setting the Agenda: Addition or deletion of agenda items The agenda was approved as presented SPECIAL PRESENTATION American Legion Post 566, Presentation of Award to Lino Lakes Police Officer Dan Thill and Firefighter Stewart Domitz 1. CONSENT AGENDA A) Consideration of Expenditures: i) April 27, 2015 (Check No. 100158 through 100251) in the amount of $534,314.71; ii) Centennial Fire District (Check No. 6888 through 6915) in the amount of $53,183.98; B) Consider approval of April 6, 2015 Work Session Minutes Council Member Kusterman absent C) Consider approval of April 13, 2015 Council Meeting Minutes D) Approve Expansion of Outdoor Patio located at 8001 Lake Drive, Paleos E) Consider Resolution No. 15-43, Approving a Special Event and Parade Permit for Ethan’s Reason 5K Run and 1 Mile Walk Council Agenda -2- April 27, 2015 EXPANDED AGENDA F) Consider Approval of 2015 Advisory Board Appointments Action Taken: Motion by Roeser, seconded by Kusterman, to approve the Consent Agenda, Items 1A, 1C, 1D, 1E and 1F as presented, was adopted Action Taken: Motion by Roeser, seconded by Rafferty, to approve Consent Agenda Items 1B as presented, was adopted; Council Member Kusterman abstained 2. FINANCE DEPARTMENT REPORT A) Consider Resolution No. 15-44 Awarding the Sale of General Obligation Bonds, Series 2015A, Al Rolek Action Taken: Motion by Kusterman, seconded by Roeser, to approve Resolution No. 15-44 as presented, was adopted 3. ADMINISTRATION DEPARTMENT REPORT A) Consider Resolution 15-42, Approving On -Sale Wine and 3.2 Beer License with Sunday Sales for Elwood's, Julie Bartell Action Taken: Motion by Kusterman, seconded by Roeser, to refer Resolution No. 15-42 back to staff, was adopted 4. PUBLIC SAFETY DEPARTMENT REPORT A) Public Safety Department Update, John Swenson 5. PUBLIC SERVICES DEPARTMENT REPORT None 6. COMMUNITY DEVELOPMENT REPORT A) Consider Resolution No. 15-45, Granting Conservation Easement to RCWD and Approving Wetland Buffer Maintenance Agreement, Lino Lakes Fire Station, Michael Grochala Action Taken: Motion by Kusterman, seconded by Rafferty, to approve Resolution No. 15-45 as presented, was adopted 7. UNFINISHED BUSINESS None 8. NEW BUSINESS None Adjournment Motion by Kusterman, seconded by Rafferty, to adjourn at 7:10 p.m. was adopted Council Agenda -3- EXPANDED AGENDA April 27, 2015 Community Calendar — A Look Ahead April 27, 2015 through May 11, 2015 6:30 pm, Council Chambers 5:30 pm, Community Room 6:30 pm, Council Chambers 8:00 am, Community Room 6:30 pm, Council Chambers 4- Wednesday, April 29 4- Monday, May 4 4- Monday, May 4 ▪ Thursday, May 7 • Monday, May 11 Environmental Board Council Work Session Park Board EDAC City Council Meeting Updated 4/24/2015 CITY COUNCIL AGENDA Monday, April 27, 2015 *********** 6:30 p.m. (Scheduled to be broadcast on Channel 16) City Council: Mayor Reinert, Council Members Kusterman, Rafferty, Roeser and Stoesz City Administrator: Jeff Karlson COUNCIL WORK SESSION, 5:30 P.M. Community Room (not televised) 1. Anoka County Public Safety Data System Update 2. Review Regular Agenda BOARD OF REVIEW, 6:00 P.M. Local Board of Appeal and Equalization Council Chambers CITY COUNCIL MEETING, 6:30 P.M. ➢ Call to Order and Roll Call ➢ Pledge of Allegiance ➢ Open Mike / Public Comment ➢ Setting the Agenda: Addition or deletion of agenda items SPECIAL PRESENTATION American Legion Post 566, Presentation of Award to Lino Lakes Police Officer Dan Thill and Firefighter Stewart Domitz 1. CONSENT AGENDA A) Consideration of Expenditures: i) April 27, 2015 (Check No. 100158 through 100251) in the amount of $534,314.71; ii) Centennial Fire District (Check No. 6888 through 6915) in the amount of $ 53,183.98; B) Consider approval of April 6, 2015 Work Session Minutes Council Member Kusterman absent C) Consider approval of April 13, 2015 Council Meeting Minutes D) Approve Expansion of Outdoor Patio located at 8001 Lake Drive, Paleos Council Agenda -2- April 27, 2015 E) Consider Resolution No. 15-43, Approving a Special Event and Parade Permit for Ethan's Reason 5K Run and 1 Mile Walk F) Consider Approval of 2015 Advisory Board Appointments 2. FINANCE DEPARTMENT REPORT A) Consider Resolution No. 15-44 Awarding the Sale of General Obligation Bonds, Series 2015A, Al Rolek 3. ADMINISTRATION DEPARTMENT REPORT A) Consider Resolution 15-42, Approving On -Sale Wine and 3.2 Beer License with Sunday Sales for Elwood's, Julie Bartell 4. PUBLIC SAFETY DEPARTMENT REPORT A) Public Safety Department Update, John Swenson 5. PUBLIC SERVICES DEPARTMENT REPORT None 6. COMMUNITY DEVELOPMENT REPORT A) Consider Resolution No. 15-45, Granting Conservation Easement to RCWD and Approving Wetland Buffer Maintenance Agreement, Lino Lakes Fire Station, Michael Grochala 7. UNFINISHED BUSINESS None 8. NEW BUSINESS None Adjournment Community Calendar — A Look Ahead April 27, 2015 through May 11, 2015 4- Wednesday, April 29 14- Monday, May 4 • Monday, May 4 • Thursday, May 7 • Monday, May 11 6:30 pm, Council Chambers 5:30 pm, Community Room 6:30 pm, Council Chambers 8:00 am, Community Room 6:30 pm, Council Chambers Environmental Board Council Work Session Park Board EDAC City Council Meeting WS — Item 1 WORK SESSION STAFF REPORT Work Session Item Date: April 27, 2015 To: City Council From: Director John Swenson Re: Anoka County Public Safety Data System Background During the March 28, 2011 Lino Lakes City Council meeting members for the Joint Law Enforcement Council (JLEC) provided information to the Council on the need to replace the computer aided dispatch, mobile and law enforcement records systems. JLEC partnered with other public safety officials in Anoka County to create a county wide Public Safety Data System that would create avenues for currently "siloed" public safety systems to share data across the public safety disciplines (Dispatch, Police, Fire, Jail and Emergency Management). It was estimated that the cost for such a system would be between $6.8 million to $8.2 million. In order to fund this public safety initiative, JLEC wanted to achieve legislative authority to replace the retiring Anoka County 800 MHz bonds with PSDS bonds. The Lino Lakes City Council, as well as 22 other Anoka County government entities, approved a resolution supporting this legislative change. The legislation was approved during the 2011 legislative session and authorizes the Anoka County Board to issue up $8 million in bonds to purchase a county wide PSDS with approval from the JLEC. Public safety and elected officials engaged in an extensive process to identify vendor(s) that have the ability to create the PSDS in Anoka County. Through this process vendors were identified. Attached is a PowerPoint presentation for the Council Work Session on April 27, 2015 which includes more details regarding this initiative as well as pricing information. Requested Council Direction This is informational only; no Council action need. Attachments PSDS Presentation — Lino Lakes April 27, 2015 Anoka County Public Safety Data System Lino Lakes City Council Informational Presentation April 27, 2015 Expense Type / Year System Management & Administration System Manager/LRMS (1 FTE) Asst. System Manager/FDM (1 FTE) Network Administration CAD Administrator (Exclusive 1 FTE) PSDS Cost Allocation Some amounts are estimates. All amounts subject to change with new information 2015 2016 2017 2018 2019 2020 2021 $100,000 $0 $50,000 $oI $130,000 $60,000 $200,000 $133,900 $61,800 $206,000 $137,917 $63,654 $212,180 $142,055 $65,564 $218,545 $146,316 $67,531 $225,102 $150,706 $69,556 $231,855 $0 $0 so so so $0 GIS (.5 FTE) Hardware Maintenance Insurance Utilities $50,000 $0 $10,000 $15,000 $51,500 $53,045 $54,636 $56,275 $57,964 $59,703 TBD TBD TBD TBD TBD TBD $10,300 $10,300 $10,300 $10,300 $10,300 $10,300 $25,000 $25,750 $26,523 $27,318 $28,138 $28,982 Total Mgmt & Admin $225,000 $476,800 $490,795 $505,210 $520,057 $535,350 $551,101 PSDS Shared Central Comm Police Police & Fire Fire TriTech CAD/Mobile $401,121 $413,155 $425,549 $438,316 $451,465 $465,009 $478,959 LRMS $137,234 $141,351 $145,592 $149,959 $154,458 $159,092 RMS Address Validation & Pin Mapping $7,655 $8,038 $8,440 $8,862 $9,305 $9,584 BAIR Analytics (5 years pre -paid) $0 $0 $0 $10,511 $11,036 $11,367 IRT/Rhodium (5 years pre -paid) $0 $0 $0 $68,839 $72,281 $74,449 CAD North (5 years pre -paid) $0 $0 $0 $4,914 $5,160 $5,314 Kronos Telestaff (4 years pre -paid) $0 $0 $0 $59,015 $61,965 $63,824 Hardware Support - Production Hardware Support - Disaster Recovery $o $o $o $o $0 $22,000 $0 $0 $0 $0 $0 $21,000 Stratus $0 $15,855 $16,648 $17,481 $18,355 $19,273 TriTech Total $401,121 $558,044 $590,793 $608,995 $771,045 $797,569 $864,863 FDM 1 FRMS FDM Analytics $57,174 $8,360 $57,174 $8,360 $57,174 $8,360 $57,174 $8,360 $57,174 $8,360 $57,174 $8,360 Interfaces FDM Total PCI $20,000 $85,534 $20,000 $85,534 $20,000 $85,534 $20,000 $85,534 $20,000 $85,534 $20,000 $85,534 $o $9,200 $9,200 $9,200 $9,200 $9,200 $9,200 Grand Total - PSDS Annual Support Super Formula $626,121 $1,044,044 $1,090,788 $1,123,405 $1,300,303 $1,342,119 $1,510,699 CAD Portion LAW Portion 60.58% 31.31% FIRE Portion 8.11% 100.00% LAW + FIRE LAW FIRE 79.4% 0.0 CAD LAW $401,121 $413,155 $441,404 $454,964 $473,860 $0 $154,089 $158,589 $163,231 $237,546 $488,524 $489,596 $245,964 $253,067 FIRE LAW+FIRE PSDS Total by Category $0 $65,534 $0 $20,000 $225,000 $476,800 $626,121 $1,129,578 $65,534 $65,534 $65,534 $20,000 $20,000 $88,839 $490,795 $505,210 $520,057 $1,176,322 $1,208,939 $1,385,837 $65,534 $65,534 $92,281 $94,449 $535,350 $594,101 $1,427,653 $1,496,748 Central Communications $537,423 $701,994 $738,722 $761,014 $788,905 $812,832 $849,496 Police $70,453 $319,273 $328,155 $337,311 $470,955 $486,896 $514,117 Total by Agency Type $626,121 $1,129,578 $1,176,322 $1,208,939 $1,385,837 $1,427,653 $1,496,748 Agency Syr Avg CFS 2015 2016 2017 2018 2019 2020 2021 ACSO 16.70% $11,767 $53,326 $54,809 $56,339 $78,660 $81,323 $101,006 Anoka PD 9.44% $6,654 $30,155 $30,994 $31,859 $44,482 $45,987 $45,755 Blaine PD 16.21% $11,419 $51,748 $53,188 $54,672 $76,333 $78,917 $80,866 Centennial Lakes PD 2.72% $1,916 $8,684 $8,925 $9,174 $12,809 $13,243 $15,114 Columbia Heights PD 8.57% $6,040 $27,371 $28,133 $28,918 $40,375 $41,742 $42,903 Coon Rapids PD 21.65% $15,252 $69,118 $71,041 $73,023 $101,955 $105,406 $97,482 Fridley PD 11.40% $8,032 $36,397 $37,410 $38,454 $53,689 $55,506 $57,902 Lino Lakes PD 3.51% $2,474 $11,209 $11,521 $11,843 $16,535 $17,094 $19,273 Ramsey PD 5.22% $3,681 $16,681 $17,145 $17,624 $24,606 $25,439 $26,393 St. Francis PD 2.02% $1,425 $6,457 $6,637 $6,822 $9,525 $9,847 $9,107 Spring Lake Park PD 2.55% $1,793 $8,126 $8,352 $8,585 $11,986 $12,392 $13,133 Totals 100.00% $70,453 $319,273 $328,155 $337,311 $470,955 $486,896 $514,117 Agency 2014 JLEC 2015 combined ACSO $32,795 $44,562 Anoka PD $19,890 $26,544 Blaine PD $33,509 $44,928 Centennial Lakes PD $5,316 $7,232 Columbia Heights PD $17,015 $23,055 Coon Rapids PD $43,967 $59,219 Fridley PD $24,330 $32,362 Lino Lakes PD $7,250 $9,724 Ramsey PD $10,281 $13,962 St. Francis PD $4,018 $5,443 Spring Lake Park PD $5,316 $7,109 $203,687 $274,140 Anoka County Public Safety Data System BACKGROUND: • In early 2011 members of the JLEC gave all City Councils in Anoka County a presentation regarding the PSDS and requested a Council Resolution supporting legislative initiative to authorize use of bonding for the project. Anoka County Public Safety Data System BACKGROUND: • All 22 City Councils approved a resolution of support • City of Lino Lakes resolution supporting this legislative initiative was passed at the March 28, 2011 Council meeting. CIT .; 0 F IN , %KE Anoka County Public Safety Data System BACKGROUND: • The 2011 Legislature approved the extension of Anoka County 800 MHz bonding authority for the purchase of the Public Safety Data System • Anoka County Board may issue bonds for countywide public safety projects if approved by a majority vote of the Joint Law Enforcement Council (JLEC) • $8 million dollar cap on outstanding principal at any time through 2023 CIT IN KE Anoka County Public Safety Data System BACKGROUND: • 800 MHz bonds were paid off in 2012. • Once approved by County Board and JLEC, PSDS bonds are expected to be issued in early 2014 (Anoka County is funding this purchase without bonding for the purchase) • Preliminary cost estimates for the PSDS project were between $6.8 and $8.2 million • Estimate did not include on-going system maintenance & support Anoka County Public Safety Data System Current Systems: • Communications/Dispatch Center (CAD / Mobile) • Police Records System (LRMS) • Jail Records (JMS) • Fire Records System (FRMS) • Currently all of these systems are "siloed" with no data share (LRMS to FRMS) Anoka County Public Safety Data System Anoka County PSDS Vision: • Create a PSDS which enables all public safety entities to share data in manner that is consistent with current business practices in Anoka County Benefits of PSDS: • Increase the speed of data share • Eliminate the entry of redundant information between CAD, LRMS, FRMS, & JMS • Better coordinated response • Improved functionality to facilitate criminal investigations • Provide data analysis for more effective resource allocation Anoka County Public Safety Data System PSDS Work Plan • Completed Steps: ✓ Business Needs Assessment ✓ Develop Functional Requirements ✓ Develop Interface Requirements ✓ Develop Selection & Evaluation Plan ✓ Launch RFP ✓ Evaluate Vendor Submissions ✓ Identified Finalists ✓ Vendor Demonstrations ✓ Site Visits ✓ Select Vendors ✓ Contract Scoping and Negotiations Anoka County Public Safety Data System II1Type / Year ri Management &Administration Annual System Maintenance & Administration 2015 111 System Manager/LRMS (1 FTE) Asst. System Manager/FDM (1 FTE) Network Administration CAD Administrator (Exclusive 1 FTE GIS (.5 FTE) Hardware Maintenance Insurance Utilities $100,000 $0 $50,000 $0 $50,000 $0 $10,000 $15,000 $130,000 $60, 000 $200,000 $0 $51,500 TBD $10, 300 $25, 000 $133,900 $61,800 $206,000 $0 $53,045 TBD $10,300 $25, 750 $137,917 $142,055 $146,316 $150,706 $63,654 $65,564 $67,531 $69,556 $212,180 $218,545 $225,102 $231,855 $0 $0 $0 $0 $54,636 $56,275 $57,964 $59,703 TBD TBD TBD TBD $10,300 $10,300 $10,300 $10,300 $26,523 $27,318 $28,138 $28,982 225,000 $476,800 $490,795 $505,21, Anoka County Public Safety Data System Lino Lakes Annual Police Maintenance / Support: • Cost Allocation formula ratified by JLEC for LRMS is based on a city's calls for service averaged over 5 year. • Based on this Lino Lakes is responsible for 3.51% of the total system annual cost. 2015 2016 2016 Cost 2014 Budget Estimate Estimate Percentage Allocation Request Low High 3.51% $ 8,000 $ 17,000 $ 11,934 $ 18,954 Anoka County Public Safety Data System Lino Lakes Annual Fire Maintenance / Support: • Cost Allocation formula ratified by ACFPC for Fire RMS is based on a city's calls for service averaged over 5 year, city market value, and population • Based on this Lino Lakes is responsible for 5.06% of the total system annual maintenance / support. Cost 2014 2015 Budget 2106 Budget Percentage Allocation Request Estimate 5.06% UNK $923 $5,478 Anoka County Public Safety Data System Approval Process: • October 15, 2013 — Anoka County Board Finance Committee — Informational Presentation • October 15, 2013— Informational Meeting with Anoka County Police & Fire Chiefs • October 15 — October 30, 2013 — Chief provide informational presentation to City Councils • October 17, 2013 — Anoka County Public Safety Committed Approved PSDS • October 24, 2013 — PSDS Governance Committee Approval • October 30, 2013 — JLEC Approval • November 12, 2013 — Anoka County Board Approval • December, 2014 — TriTech CAD / Mobile went live in Anoka County • September, 2015 — TriTech LRMS will go live in Anoka County • 2015 — FDM FRMS phased in go live throughout the year Anoka County Public Safety Data System QUESTIONS AIL ANOKA COUNTY 20T5 ASSESSOR'S REPORT BOARD OF APPEAL AND EQUALIZATION Anoka County City of Lino Lakes 2015 Local Board of Appeal and Equalization Agenda April 27th, 2015 1. CaII the Board of Review to Order 2. Roll Call 3. Read Official Notice of the Board of Review 4. Board Chair outlines the ground rules for the meeting. The specific ground rules may vary for each local board but should include: • Purpose of the meeting; • Remind property owners that only appeals for the current year valuation or classification may be made. The 2015 board is to review the assessment as of January 2, 2015, which will be used to compute the property taxes payable in 2016. Prior years' assessments or taxes (including taxes payable in 2015) are not within the jurisdiction of the board; • The order of the appellants - by appointment first, followed by walk-ins on a first- come basis. The board will also receive written appeals from property owners. The secretary will record the required information (name, mailing address, telephone number, and address of property, etc.) • The expectations of the appellant when presenting their appeal (i.e. the appeal must be substantiated by facts; where the appellant should stand or sit; the appellant should be prepared to answer questions posed by the board, etc.); • Time limits imposed (if any); • The procedure the board will follow for making decisions (Will the board hear all appeals before making any decisions? Will the board send a letter to appellants to inform them of the decision? Etc.) The Board may correct any erroneous valuation and add any omission of properties or increase of value after due process. The total decrease of valuations may not exceed one percent of the total valuation of the taxing district; 5. The Board Chair should give the assessor the opportunity to present a brief overview of the property tax process and a recap of the current assessment. 6. Appellants should then present their appeals to the board. If the assessor has had a chance to review the property prior to the meeting, the assessor can present facts and information either supporting the valuation and or classification, or recommend that the board make a change. If the assessor has not had a chance to review the property prior to the meeting, the board may ask the assessor to review the property and present his/her findings to the board at a reconvene meeting. 7. Recess or Close the Meeting. (If needed, the meeting will be reconvened at a date to be determined. The Board of Appeal and Equalization of any city must complete its work and adjourn within twenty days from the time of convening as specified in the notice of the clerk, unless a longer period is approved by the Commissioner of Revenue. No action taken subsequent to such date shall be valid.) 1 Anoka County City of Lino Lakes Lino Lakes Assessment Staff Scott Schutz Residential Appraiser Peggy Nordrum Residential Appraiser John Leone Commercial Industrial Appraiser Molly Johnson Apartment Appraiser Mike Sutherland County Assessor 2015 Assessment Calendar Jan 2 Feb 1 Feb 1 Mar 1 Mar 16 Apr - May Apr 30 May 1 May 15 May 29 Jun 11 Jun 15 Jun 28 Jul 1 Aug 15 Aug 31 Sep 1 Oct 15 Nov 15 Dec 15 2015 Market Values for Property Established Final Day to Deliver Assessment Records to County by Local Assessors Final Day to File for an Exemption from Taxation Final Day to File for 1B with County Assessor 2015 Valuation Notices Mailed Local Boards of Appeal and Equalization and Open Book Meetings Final Day to File a Tax Court Petition for 2014 (payable 2015) Assessment Final Day to File an Application for Green Acres First Half of Payable 2015 Real Estate Tax is Due Final Day to Apply for Manufactured Home Homestead State Board of Equalization County Board of Appeal and Equalization 2015 Assessment Finalized (After CBAE Adjourns) Ownership Deadline for Tax Exempt Status Final Day to File for 2015 Property Tax Refund First Half of Payable 2015 Manufactured Home Tax is Due 2015 Abstract Due to Department of Revenue 2nd Half of Payable 2015 Tax is Due* 2nd Half of Payable 2015 Tax is Due on Ag and Manufactured Home Parcels* Final Day to Apply for Real Estate Homestead *2nd Half Tax due on October 15th for all property types except for A grucultural and Manufactured Home, those are due on November 15th. 2 Anoka County City of Lino Lakes Understanding Assessment and Tax Calculation Assessment Process Timeline In Minnesota it is the duty of the Assessor to value and classify property. This is done annually as of the assessment date of January 2nd. Each year's assessment is based on arms -length transactions (sales that meet the criteria of an open market transaction, see market value definition below) that occurred the previous October thru September. When the assessment is complete the local taxing jurisdictions begin their budgeting process for the following year. They use the total assessment to determine their tax base and develop their tax rates (formerly referred to as mill rates). All aspects of the assessment, including but not limited to the assessment date, sales period for each assessment and property tax classification are dictated by state statute and under the oversight of the Minnesota Department of Revenue. Market Value Defined As in private appraisal, Market Value is defined as: The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by any undue stimulus. Implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: • buyer and seller are typically motivated: • both parties are well informed or well advised, and acting in what they consider their own best interests; • a reasonable time is allowed for exposure in the open market; • payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; • the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale (a foreclosure sale or a short sale [a sale to avoid foreclosure] is not considered an arms -length transaction). Mass Appraisal Defined Property values for Minnesota real estate tax purposes are determined by mass appraisal. Mass appraisal is the practice of determining individual values based on statistical analysis of a group of sales for a large area. The values are determined as of a specific date and are based on arms -length transactions that occurred during a specified sales period. 3 Anoka County City of Lino Lakes As part of this mass appraisal process, all properties are re -valued annually based on the information on record. Properties are physically inspected and property records reviewed once every 5 years (as statutorily required). This is an ongoing process whereby 20% of a city is inspected each year so that in a cycle of 5 years all properties have been inspected at least once. In addition to this quintile review, properties are also inspected when there is a building permit issued or at the request of the property owner. The sale of a property does not initiate a reassessment. As stated earlier, Minnesota state law governs the assessment date, which is January 2nd of each year, as well as the sales periods associated with each assessment date. The 2014 assessment which was used for tax calculations this year (2015) was based on transactions that closed between October 1, 2012 and September 30, 2013. Property owners were notified of their 2014 value on their Notice of Valuation and Classification (also referred to as a valuation notice). The notices were mailed out in March of 2014 in the same envelope as the 2014 tax statement. The appeals process took place at the municipal level during the month of April of 2014 and at the county level in June of 2014. At this point, if a property owner wishes to appeal their 2014 assessment (for taxes payable 2015) their only option is to file a tax court petition. This must be done no later than April 30, 2015. The 2015 assessment has just been completed and the valuation notices were mailed the week of March 15th. This is the assessment that will be used for tax calculations next year for taxes payable in 2016. The sales period associated with this assessment is October 1, 2013 thru September 30, 2014. As with past assessments, the local appeals process will begin in April and finish up in June. The options and requirements to appeal this assessment are listed on the back of the valuation notice. If a property owner has an issue with their 2015 assessment, the first thing they should do is contact their local assessor. The phone numbers are listed on their notice of valuation. In conclusion, all arms -length sales that closed between October 1, 2013 and September 30, 2014 have been used to determine valuations for the 2015 assessment, for taxes payable in 2016. And by the time you are paying your 1st half real estate tax on May 15 of, 2016, the sales that were used to determine the estimated market value on which your taxes are based occurred somewhere between 19 to 31 months earlier. The following chart may be helpful in following the timeline of your assessment. SALES PERIOD ASSESSMENT DATE TAX YEAR October 1, 2011 to September 30, 2012 January 2, 2013 2014 October 1, 2012 to September 30, 2013 January 2, 2014 October 1, 2013 to January 2, 2015 2016 September 30, 2014 4 Anoka County City of Lino Lakes We are aware that due to the time frames we are required to work within it sometimes appears as though the assessor's estimated market value does not represent the market. It seems lower than it should be during times of inflation and higher than it should be in times of deflation. The following chart illustrates the relationship between assessed values and actual sale prices; and how the assessor's market values have been following the changes as they occur in the open market. Note: The Median Assessor's Estimated Market Value represents the homes that are in the sales study. $235,000 $230,000 $225,000 $220,000 $215,000 $210,000 $205,000 $200,000 $195,000 $190,000 $185,000 $180,000 $175,000 $170,000 $165,000 Median Assessed Value as it Relates to Median 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Median Sale Price Tax Payable Year Median Assessor's Estimated Market Value As you can see, there is a point in time where the relationship between the assessor's values and the sales prices intersect. It is at that point in time that the market took a large downward turn. The following year, in response to that market condition, the assessor's values were reduced to reflect that trend. And we have responded by adjusting assessed values each year based on the prior year trends. It's interesting to note the upward shift for the 2012 assessment. It is somewhat deceiving in that the trend in sales prices was actually down, but due to the segment of the market with the most arm's-length transactions, the median sale price did go up for that year. One last important point to make note of is that the assessment process is completed before the budgeting process begins. Assessors do not adjust values in order to increase revenue. There is little correlation between changes in assessments due to market changes and how the resulting real estate tax changes. When we adjust assessments due to market conditions, all properties are adjusted. The only time that an adjustment in an assessor's estimated market value will have an impact on the increase or decrease in tax is if the change in value is due to value added for new construction or value removed due to demolition/destruction of an improvement. 5 Anoka County City of Lino Lakes How your tax amount changes from year to year is influenced more by statutory changes to the tax structure, and revenues needed by your local taxing authorities (including school districts). If we were to reduce all values by 50%, the resulting tax amounts would not be decreased by 50%; the tax rates would be increased to generate the same amount of tax revenue. The following example illustrates that basic concept. 2014 Assessment 2015 Assessment Tax Payable 2015 Tax Payable 2016 Property EMV A B C D E $375,000 $120,000 $150,000 $400,000 $250,000 Total Tax Base $1,295,000 Property EMV A B C D E $187,500 $60,000 $75,000 $200,000 $125,000 Total Tax Base $647,500 Overall Change In EMV -$187,500 -$60,000 -$75,000 -$200,000 -$125,000 -$647,500 2015 Tax Rate Calculation 2016 Tax Rate Calculation Revenue Needed Divided by Total Tax Base Equals Tax Rate $10,000 $1,295,000 0.0077 Revenue Needed Divided by Total Tax Base $647,500 Equals Tax Rate 0.0154 $10,000 DECLINING VALUES REDUCE THE TOTAL TAX RASE A REDUCED TOTAL TAX BASE REQUIRES A HIGHER TAX RATE TO GENERATE THE SAME REVENUE Resulting 2015 Tax Calculations Resulting 2016 Tax Calculations Property A B C D E Tax Amount $2,896 $927 $1,158 $3,089 $1,931 Total Tax Generated Property A B C D E Tax Amount $2,896 $927 $1,158 $3,089 $1,931 $10,000 Total Tax Generated Overall Change In Tax Amount $0 $0 $0 $0 $0 $10,000 $0 INDIVIDUAL TAX AMOUNTS REMAIN IKIrs1-1AAInCrl Adhering to the same timeframes and working within the parameters of the law ensures that everyone is being treated fairly. If assessors were to choose to work outside of those timeframes, the end result would be inequity between taxing jurisdictions. Here is an example of the impact at the local level: The assessment sales period for Anoka County is October 1, 2013 through September 30, 2014, except for Lino Lakes, where the assessor decided to use January 1, 2014 to December 31, 2014. Given the upward trend in market that began late in 2014, the 2014 Lino Lakes assessments could conceivably be measurably higher than the rest of the county assessments. That in turn would not change the amount of county revenue generated by real estate tax. However, it would result in a shift in the tax burden, with Lino Lakes property owners paying more than their fair share than the rest of the County. So in conclusion, while it may seem arbitrary to have a set period to measure an assessment, it does create an environment whereby the assessments are uniform, fair, and equitable. 6 Anoka County City of Lino Lakes 2015 Assessment Statistics As of January 2, 2015 there were 7,981 parcels in the City. This total includes: 6969 Residential Parcels 96 Manufactured Home Parcel 193 Commercial Industrial Parcels 677 Tax Exempt Parcels 30 Personal Property Parcels 9 Apartment Parcels 7 Railroad Parcels & Utility Parcels Distribution of Parcel Count by Property Type Residential 87.32% Manufactured Homes 1.20% Commercial Industrial 2.42% a‘F Tax Exempt Tax Forfeit 8.48% Personal Property 0.38% Apartment 0.11% Utility/Railroad 0.09% 7 Anoka County City of Lino Lakes Reassessment State Statute reads: "All real property subject to taxation shall be listed and reassessed every year with reference to its value on January 2nd preceding the assessment." This has been done, and the owners of property in Lino Lakes have been notified of any value change. Minnesota Statute 273.11 reads: "All property shall be valued at its market value." It further states that "In estimating and determining such value, the Assessor shall not adopt a lower or different standard of value because the same is to serve as a basis for taxation, nor shall the assessor adopt as a criterion of value the price for which such property would sell at auction or at a forced sale, or in the aggregate with all the property in the town or district; but the assessor shall value each article or description of property by itself, and at such sum or price as the assessor believes the same to be fairly worth in money." The Statute says all property shall be valued at market value, not may be valued at market value. This means that no factors other than market factors should affect the Assessor's value and the subsequent action by the Board of Appeal and Equalization. 8 Anoka County City of Lino Lakes In accordance with current state law we physically review all properties at least once every five years. Each year we also inspect all properties with new construction, and at the property owners' request. During 2014 there were 1,487 properties reviewed. City of Lino Lakes ZEN MP lb '°.91r'e #-I . in€Z� - _ Y -IP �ww.. ! k 5 ��, I — g, } .. .. 4Axn.,ti . 11 nx.l s cul or , � C 1TZ1r 4 I 1 ! ,t a,_ 17 w 1.....,.�;_- `fpr c79,1:-;.:1,7/:- �. 16 I i 11 14 39 ,-3 5 r I # 20 21 a 22 23 yycn IY+I k H 1ua IP - - .w11a 4eulz }Lr JtFa fdk 1 ,:r-1 ,__,...,......, ..... 4. .1 I LeJ.111 40. a , ______, 1 —JillArit," ,,.... µtn.,. exatom L. r").-/.1 # NI, — .Q,ro . t -I. #may, Legend 2014 Re -Evaluation Area J"rA 2015 Projected Re Area -Evaluation cities Sections - .1 1.iiii.inravr. Jit. imam"- a,-! Arnim This map illustrates the 2014 (2015 assessment) residential review area and the projected residential review area for 2015 (2016 assessment). 9 Anoka County City of Lino Lakes Authority of the Local Board of Appeal and Equalization Assessments of property are made to provide the means for the measuring of the relative share of each taxpayer in meeting the costs of local government. It is the duty of the Assessor to assess all real and personal property except that which is exempt or taxable under some special method of taxation. If the burden of local government is to be fairly and justly shared among the owners of all property of value, it is necessary that all taxable property be listed on the tax rolls and that all assessments be made accurately. Whenever any property that should be assessed is omitted from the tax rolls, an unfair burden falls upon the owners of all property that has been assessed. If any property is undervalued in relation to the other property on the assessment record, the owners of the other property are called upon automatically to assume part of the tax burden that should be borne by the undervalued property. Fairness and justice in property taxation demands both completeness and equality in assessment. Minnesota Statutes Section 274.01 provides that the council of each city shall be or appoint a Board of Appeal and Equalization. The charter of certain cities provides for the establishment of a Board of Equalization. The provisions of Section 274.01 and this regulation apply to all Boards of Appeal or Boards of Equalization. The 2003 Legislature enacted State Statute 274.014 which requires that there be at least one member at each meeting of a Local Board of Appeal and Equalization who has attended an appeals and equalization course developed or approved by the Commissioner of Revenue within the last four years. Section 274.01 states the county assessor shall fix a date for each Board of Appeal and Equalization to meet for the purpose of reviewing the assessment of property in its respective town or city. The county assessor is required to serve written notice to the clerk of each of such bodies on or before February 15th of each year. These meetings are required to be held between April 1st and May 31st; and the clerk of the Board of Appeal and Equalization is required to give published and posted notice at least ten days before the date set for the first meeting. The Board of Appeal and Equalization of any city, unless a longer period is approved by the Commissioner of Revenue, must complete its work and adjourn within twenty days from the time of convening specified in the notice of the clerk. No action taken subsequent to such date shall be valid. A request for additional time in order to complete the work of the Board of Appeal and Equalization must be addressed to the Commissioner of Revenue in writing. The Commissioner's approval is necessary to legalize any procedure subsequent to the expiration of the twenty -day period. The Commissioner of Revenue will not, however, extend the time for local Boards of Appeal and Equalization to meet beyond the time when the County Board of Equalization meets, which is the Final two weeks of June. The authority of the local Board extends over the individual assessments of real and personal property. The Board does not have the power to increase or decrease by percentage all of the assessments in the district of a given class of property. Changes in aggregate assessments by classes are made by the County Board of Equalization. 10 Anoka County City of Lino Lakes Although the Local Board of Appeal and Equalization has the authority to increase or reduce individual assessments, the total of such adjustments must not reduce the aggregate assessment made by the Assessor by more than one percent of said aggregate assessment. If the total of such adjustments does lower the aggregate assessment made by the Assessor by more than one percent, none of the adjustments will be allowed. This limitation does not apply, however, to the correction of clerical errors or to the removal of duplicate assessments. The Local Board of Appeal and Equalization does not have the authority in any year to reopen former assessments on which taxes are due and payable. The Board considers only the assessments that are in process in the current year. Adjustment can be made only by the process of abatement or by legal action. In reviewing the individual assessments, the Board may find instances of undervaluation. Before the Board can raise the market value of property it must notify the owner. The law does not prescribe any particular form of notice except that the person whose property is to be increased in value must be notified of the intent of the Board to make the increase. The Local Board of Appeal and Equalization meetings assure a property owner an opportunity to contest any other matter relating to the taxability of their property. The Board is required to review the matter and make any corrections that it deems just. When a Local Board of Appeal and Equalization convenes, it is necessary that a majority of the members be in attendance in order that any valid action may be taken. The local assessor is required by law to be present with her/his assessment books and papers. She/he is required also to take part in the proceedings but has no vote. In addition to the local assessor, the county assessor or one of her/his assistants is required to attend. The Board should proceed immediately to review the assessments of property. The Board should ask the local assessor and county assessor to present any tables that have been prepared, making comparisons of the current assessments in the district. The county assessor is required to have maps and tables relating particularly to land values for the guidance of Boards of Appeal and Equalization. Comparisons should be presented of assessments of types of property with previous years and with other assessment districts in the same county. It is the primary duty of each Board of Appeal and Equalization to examine the assessment record to see that all taxable property in the assessment district has been properly placed upon the list and valued by the assessor. In case any property, either real or personal, has been omitted; the Board has the duty of making the assessment. The complaints and objections of persons who feel aggrieved with any assessments for the current year should be considered very carefully by the Board. Such assessments must be reviewed in detail and the Board has the authority to make corrections it deems to be just. The Board may recess from day to day until all cases have been heard. If complaints are received after the adjournment of the Board of Appeal and Equalization they must be handled at the staff level; as a property owner cannot appear before a higher board unless he or she has first appeared at the lower board levels. Pursuant to Minnesota Statute 274.01: The Board may not make an individual market value adjustment or classification change that would benefit the property in cases where the owner or other person having control over the property will not permit the assessor to inspect the property and the interior of any buildings or structures. 11 Anoka County City of Lino Lakes A non-resident may file written objections to his/her assessment with the county assessor prior to the meeting of the Board of Appeal and Equalization. Such objections must be presented to the Board for consideration while it is in session. Before adjourning, the Board of Appeal and Equalization should cause the record of the official proceedings to be prepared. The law requires that the proceedings be listed on a separate form which is appended to the assessment book. The assessments of omitted property must be listed in detail and all assessments that have been increased or decreased should be shown as prescribed in the form. After the proceedings have been completed, the record should be signed and dated by the members of the Board of Appeal and Equalization. It is the duty of the county assessor to enter changes by Boards of Appeal and Equalization in the assessment book of each district. The Local Board of Appeal and Equalization has the opportunity of making a great contribution to the equality of all assessments of property in a district. No other agency in the assessment process has the knowledge of the property within a district that is possessed jointly by the individual members of a Board of Appeal and Equalization. The County or State Board of Equalization cannot give the detailed attention to individual assessments that is possible in the session of the Local Board. The faithful performance of duty by the Local Board of Appeal and Equalization will make a direct contribution to the attainment of equality in meeting the costs of providing the essential services of local government. Market Value Statistics After thorough studies of the sales in the market place are conducted, we establish the assessed value of all real property. During the 2014 study period for the 2015 assessment, we recorded 6,664 sales countywide of all property types. Of these sales, 3,472 were considered "arms -length" transactions. The remaining 3,192 sales not considered arms -length would include foreclosure sales, bank sales, sales involving government entities, and sales between related parties. During the 2014 Sales Period the total number of transactions decreased by 547, or -8.21%. The number of non -arms -length transactions (mostly bank sales and foreclosure sales) decreased by 859, or -21.2% while the number of arm's length sales increased by 312, or 9.87%. We believe that this is reflective of the recovery that we've been hearing about in the media. Later in the report you will see sales analysis information for this city and for the entire county. This information will relate to improved residential properties only and will not include vacant land sales or sales for commercial, industrial or apartment properties. In accordance with the results of these sales studies, certain areas of the city and certain styles and grades of homes may have adjusted values either lower or higher than the previous year's value. The new values reflect market trends during the period of October 2013 thru September 2014. These numbers were then time adjusted based on the time adjustment supplied by the Department of Revenue. 12 Anoka County City of Lino Lakes Growth and Decline in Total Values 2005 to 2015 Year Residential 2005 $1,570551,000 Change NIA Commercial $139,168,600 Change N/A Apartment $4,868,100 %Change N/A City Total $1,772,950,900 %Change N/A 2006 $1,735,095,300 105% $167,992600 20.7% $5,260,500 8.1% $1,974,213,700 11.496 2007 .$1,800,780,400 3.8% $180,063,800 7.2% $5,352,000 1.796 $2,059,287200 4.396 2008 $1.840,780,200 2.2%% $2116,039,800 14.4% $10,555,500 97.496 $2,134,682,700 3.796 2009 $1,738,969,900 -5596 $197,205,100 -4.3% $10,673200 1.0% 82,021453,100 -52% 2010 $1575,719„200 -9.4% $177,938,700 -9.8% $9,433,000 -11.696 $1,825,530200 -9.8% 2011 $1.511.263,300 -4.1% 8155,202,800 -12.696 812,937,400 37.296 $1,739949900 -4.7 2012 $1,417,469,500 -6.296 8135,0118,600 -13.0% $12,504,900 -33% $1,620,735,900 -6.9% 2013 $1414,96.2,000 -0.2% $127,700500 -55% $12,411,400 -0.7% $1,608,053,900 -0.8% 2014 $1584509,600 12.0% $132,631,400 3.9% $12,717,000 25% $1,782239,100 10.696 2015 $1,587,980,600 0.2% 5135,982,800 25% 514,948,000 175%II $1,790,086,700 0.4% $2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 $0 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Residential ■ Commercial • Apartment City Total 13 Anoka County City of Lino Lakes Market Value Effect of New Improvements The next example is a more detailed breakdown of changes for the 2015 assessment as compared to the 2014 assessment. The chart first shows the change in value and percentage of change when not including value added for new improvements; it then shows the change in value including new improvement values. As you can see, the overall increase in value before adjusting for new construction is .4%. When new construction was accounted for, the overall increase changed to 1.2%. Property Type Residential Commercial Industrial Total 2014 Total Estimated Market Value 51,584,509,500 $132,531,400 2015 Estimated Market Value Not Including New Improvement Value $1,587,980,500 $155,982,800 51,717,141,000 51,723,953,400 Percent of Change 2014 to 2015. Not Including New Improvement Value 0.2% 2.5% 0.4% 2015 New Improvement Value 511,089500 $2,013,&00 513,103,100 2015 Estimated Market Value Including New Improvement Value 51,599,070,100 5137,995400 51,737,055,500 Percent of Change 2014 to 2015 Including New Improvement Value 0.9% 4.0% 1.2% 'Total in this table onlg includes Residential and Commercialilndustrial Values. 14 Anoka County City of Lino Lakes Residential Appraisal System Per State Statute, each property must be physically inspected and individually appraised once every five years. For this individual appraisal, or in the event of an assessed value appeal, we use two standard appraisal methods to determine and verify the estimated market value of our residential properties: 1. First, an appraiser inspects each property to verify data. If we are unable to view the interior of a home on the first visit, a tag is left requesting a return telephone call from the owner to schedule this inspection. Interior inspections are necessary to confirm our data on the plans and specifications of new homes and to determine depreciation factors in older homes. market a (CAMA) less The cost stratified uses the to pay to 2. To calculate the estimated value from the property data we use Computer Assisted Mass Appraisal system based on a reconstruction depreciation method of appraisal. variables and land schedules are developed through an analysis of sales within the city. This method "Principle of Substitution" and calculates what a buyer would have replace each home today less age dependent depreciation. 3. A comparative market analysis is used to verify these estimates. The properties used for these studies are those that most recently have sold and by computer analysis, are most comparable to the subject property taking into consideration construction quality, location, size, style, etc. The main point in doing a market analysis is to make sure that you are comparing "apples with apples". This will make the comparable properties "equivalent to" the subject property and establish a probable sale price of the subject. These three steps give us the information to verify assessed value or to adjust it if necessary. The following pages contain an example of the appraisal information for one property. They include data calculations, plan sketch, photo, comparative analysis, and photos and a map of comparable properties. 15 Anoka County City of Lino Lakes Sales Studies According to State Law, it is the assessor's job to appraise all real property at market value for property tax purposes. As a method of checks and balances, the Department of Revenue uses statistics and ratios relating to assessed market value and current sale prices to confirm that the law is upheld. Assessors use similar statistics and sales ratios to identify market trends in developing market values. A sales ratio is obtained by comparing the assessor's market value to the adjusted sales price of each property sold in an arms -length transaction within a fixed period. An "arms - length" transaction is one that is generated after a property has had sufficient time on the open market, between both an informed buyer and seller with no undue pressure on either party. The median or mid -point ratios are calculated and stratified by property classification. 100% The only perfect assessment would have a 100% ratio for every sale. This is of course, impossible. Because we are not able to predict major events that may cause significant shifts in the market, the state allows a 15% margin of error. In previous years the Department of Revenue has adjusted the median ratio by the percentage of growth from the previous year's abstract value of the same class of property within the same jurisdiction. This adjusted median ratio had to fall between 90% and 105%. Any deviation would have warranted a state mandated jurisdiction -wide adjustment of at least 5%. Starting with assessment year 2012 the Department of Revenue changed the methodology they used to adjust sales to reflect the market values. Instead of using the historical or backward looking ratios to time adjust sales they are now applying a multiple regression analysis to the sales in the 21 month sales study for each jurisdiction. If their analysis shows a time trend with statistical significance they then adjust the sales within the 12 month sales ratio period forward to the next assessment year. In a sense they are using the derived time trend to forecast or predict what the value of the sales parcels and thus the market should be at the next assessment date. In Anoka County, we have the ability to stratify the ratios by style, age, quality of construction, size, land zone and value. This assists us in appraising all of our properties closer to our goal ratio. Sales Statistics Defined We have the ability by using statistical analysis to test the accuracy of the assessment. We use these statistics to ensure equity between properties at the neighborhood, municipal and 16 Anoka County City of Lino Lakes county levels. The Minnesota Department of Revenue also uses these same techniques to test for equity between counties. The primary statistics used are: Median Ratio: This is a measure of central tendency that is the midpoint of a group of sales ratios when arrayed from low to high. The median is a useful statistic as it is not affected by extreme ratios. Aggregate Ratio: This is the total market value of all sale properties divided by the total sale prices. It, along with the mean ratio, gives an idea of our assessment level. Within the city, we constantly try to achieve an aggregate and mean ratio of 94% to 95% to give us a margin to account for a fluctuating market and still maintain ratios within state mandated guidelines. Also referred to as the Weighted Mean. Mean Ratio: The mean is the average ratio. We use this ratio not only to watch our assessment level, but also to analyze property values by development, type of dwelling and value range. These studies enable us to track market trends in neighborhoods, popular housing types and classes of property. Coefficient of Dispersion (COD): The COD measures the accuracy of the assessment. It is possible to have a median ratio of 93% with 300 sales, two ratios at 93%, 149 at 80% and 149 at 103%. Although this is an excellent median ratio, there is obviously a great inequality in the assessment. The COD indicates the spread of the ratios from the mean or median ratio. The goal of a good assessment is a COD of 10 to 20. A COD under 10 is considered excellent and anything over 20 will mean an assessment review by the Department of Revenue. Price Related Differential (PRD): This statistic measures the equality between the assessments of high and low valued property. A PRD over 100 indicates a regressive assessment, or the lower valued properties are assessed at a greater degree than the higher. A PRD of less than 100 indicates a progressive assessment or the opposite. A perfect PRD of 100 means that both higher and lower valued properties are assessed exactly equal. Current Sales Study Statistics The following statistics are based upon ratios calculated using 2015 pay 2016 market values and October 2013 thru September 2014 sales. These are the ratios that our office uses for countywide equalization, checking assessment accuracy, and predicting trends in the market. 2015 Anoka County Residential Sales Ratio Statistics Median Ratio 93.22 Coefficient of Dispersion on Median 7.46 Price Related Differential 1.01 Anoka County Ratio Study —2015 Assessment 17 Anoka County City of Lino Lakes Residential Single Family Sales Ratio History 2011 - 2015 Assessment Year Municipality Andover 220 94.50 5.60 156 94.60 7.00 224 94.30 5.80 296 93.40 6.70 310 92.74 6.27 Anoka 83 94.50 7.60 65 94.80 8.40 87 94.90 8.80 104 93.40 8.90 138 91.76 7.14 Bethel 3 98.80 5.60 1 94.60 0.00 1 94.50 0.00 1 142.70 0.00 5 97.20 8.23 Blaine 400 95.40 7.10 313 94.40 7.30 456 94.30 7.70 656 93.20 6.90 699 93.00 6.14 Centerville 23 91.80 10.20 16 94.80 5.10 32 94.40 5.60 47 95.30 7.00 42 93.30 6.40 Circle Pines 27 95.30 7.40 31 94.40 7.80 45 94.30 7.50 36 93.80 6.80 51 92.99 5.84 Columbia Heights 106 96.20 9.40 98 94.10 8.50 125 94.60 11.20 175 92.40 9.60 219 91.69 9.41 Columbus 16 95.90 9.60 8 94.50 3.50 18 95.40 7.10 18 93.50 6.90 23 93.07 10.27 Coon Rapids 247 94.50 5.60 203 94.50 6.20 314 94.80 6.60 449 93.30 7.10 476 93.05 6.05 East Bethel 52 96.10 6.40 50 94.90 7.90 81 95.10 8.20 86 96.80 7.30 111 93.28 8.83 Fridley 117 95.00 7.40 90 94.60 8.20 107 94.30 6.60 163 92.40 8.00 211 93.09 7.01 Ham Lake 72 94.40 8.80 61 94.50 8.60 102 94.50 9.50 152 92.40 7.50 131 93.21 8.27 Hilltop 1 102.30 0.00 0 - - - --- 0 - - - --- 0 --- - - - 0 - -- - - - Lexington 5 96.10 8.10 4 94.30 6.10 7 94.60 13.90 7 95.10 8.20 10 92.90 9.89 Lino Lakes 108 95.20 6.70 94 94.00 8.00 133 94.50 7.70 174 93.20 7.50 184 93.04 6.86 Linwood 23 97.20 9.30 15 94.50 6.80 25 95.50 11.10 37 94.30 12.70 36 91.27 6.38 Nowthen 19 94.40 10.50 6 94.60 4.00 28 94.50 10.90 29 93.70 7.30 33 93.06 10.90 Oak Grove 33 94.50 9.20 28 94.00 7.50 37 94.50 10.30 62 93.50 8.60 69 92.66 10.08 Ramsey 109 94.10 7.40 92 94.00 8.20 128 94.70 6.90 192 93.10 6.90 262 93.33 6.17 Spring Lake Park 36 95.10 9.40 14 94.10 5.70 27 95.50 7.70 57 96.60 6.80 47 93.09 6.80 St. Francis 34 95.20 6.30 25 94.50 6.90 27 94.50 12.20 71 93.70 8.60 86 93.09 7.66 County Total 1734 94.90 6.70 1370 94.50 7.40 2004 94.50 7.70 2812 93.40 7.50 3143 93.22 7.46 Differential 101 101 102 101 101 2011 # Median COD 2012 # Median COD 2013 # Median COD 2014 # Median COD 2015 # Median COD Residential Tax Changes Examined Although the Assessor's Office is considered by many to be the primary reason for any property tax changes there are actually several elements that can contribute to this change, including, but not limited to: • Changes in the approved levies of individual taxing jurisdictions. • Bond referendum approvals. • Tax rate changes approved by the State Legislature. • Changes to the homestead credit, educational credits and agricultural aid. • Changes in assessed market value. • Changes in the classification of the property. A combination of any of these factors can bring about a change in the annual property tax bill. If you have questions, please call 763-323-5400. 18 Anoka County City of Lino Lakes Statutes Minnesota State Statute 270.12 Minnesota State Statute 273.11 Minnesota State Statute 273.121 Minnesota State Statute 273.13 Minnesota State Statute 273.20 Minnesota State Statute 274.01 State Board of Equalization section 8 of subd. 2 outlines sales study period Valuation of Property Valuation of Real Property Notice Classification of Property Assessor May Enter Dwellings, Buildings, or Structures authorizes assessors to make assumptions if unable to gain access to structures Board of Appeal and Equalization subd. 1 b states that the board has no authority to make any change that would benefit the property owner if the assessor has been denied entry Minnesota State Statute 274.014 Local Boards; Appeals and Equalization Course and Meeting Requirements 19 Anoka County City of Lino Lakes 270.12 STATE BOARD OF EQUALIZATION; DUTIES. Subdivision 1.Commissioner of revenue constitutes board. The commissioner of revenue shall constitute the State Board of Equalization. The board may adjourn from day to day and employ necessary clerical assistance. Subd. 2.Meeting dates; duties. The board shall meet annually between April 15 and June 30 at the office of the commissioner of revenue and examine and compare the returns of the assessment of the property in the several counties, and equalize the same so that all the taxable property in the state shall be assessed at its market value, subject to the following rules: (1) The board shall add to the aggregate valuation of the real property of every county, which the board believes to be valued below its market value in money, such percent as will bring the same to its market value in money; (2) The board shall deduct from the aggregate valuation of the real property of every county, which the board believes to be valued above its market value in money, such percent as will reduce the same to its market value in money; (3) If the board believes the valuation for a part of a class determined by a range of market value under clause (8) or otherwise, a class, or classes of the real property of any town or district in any county, or the valuation for a part of a class, a class, or classes of the real property of any county not in towns or cities, should be raised or reduced, without raising or reducing the other real property of such county, or without raising or reducing it in the same ratio, the board may add to, or take from, the valuation of a part of a class, a class, or classes in any one or more of such towns or cities, or of the property not in towns or cities, such percent as the board believes will raise or reduce the same to its market value in money; (4) The board shall add to the aggregate valuation of any part of a class, a class, or classes of personal property of any county, town, or city, which the board believes to be valued below the market value thereof, such percent as will raise the same to its market value in money; (5) The board shall take from the aggregate valuation of any part of a class, a class, or classes of personal property in any county, town or city, which the board believes to be valued above the market value thereof, such percent as will reduce the same to its market value in money; (6) The board shall not reduce the aggregate valuation of all the property of the state, as returned by the several county auditors, more than one percent on the whole valuation thereof; (7) When it would be of assistance in equalizing values the board may require any county auditor to furnish statements showing assessments of real and personal property of any individuals, firms, or corporations within the county. The board shall consider and equalize such assessments and may increase the assessment of individuals, firms, or corporations above the amount returned by the county board of equalization when it shall appear to be undervalued, first giving notice to such persons of the intention of the board so to do, which notice shall fix a time and place of hearing. The board shall not decrease any such assessment below the valuation placed by the county board of equalization; (8) In equalizing values pursuant to this section, the board shall utilize a 12 -month assessment/sales ratio study conducted by the Department of Revenue containing only sales that are filed in the county auditor's office under section 272.115, by November 1 of the previous year and that occurred between October 1 of the year immediately preceding the previous year and September 30 of the previous year. The assessment/sales ratio study may separate the values of residential property into market value categories. The board may adjust the market value categories and the number of categories as necessary to create an adequate sample size for each market value category. The board may determine the adequate sample size. To the extent practicable, the methodology used in preparing the assessment/sales ratio study must be consistent with the most recent Standard on Assessment Sales Ratio Studies published by the Assessment Standards Committee of the International Association of Assessing Officers. The board may determine the geographic area used in preparing the study to accurately equalize values. A sales ratio study separating residential property into market value categories may not be used as the basis for a petition under chapter 278. The sales prices used in the study must be discounted for terms of financing. The board shall use the median ratio as the statistical measure of the level of assessment for any particular category of property; and (9) The board shall receive from each county the estimated market values on the assessment date falling within the study period for all parcels by magnetic tape or other medium as prescribed by the commissioner of revenue. Subd. 3.Jurisdictions in two or more counties. When a taxing jurisdiction lies in two or more counties, if the sales ratio studies prepared by the Department of Revenue show that the average levels of assessment in the several portions of the taxing jurisdictions in the different counties differ by more than five percent, the board may order the 20 Anoka County City of Lino Lakes apportionment of the levy. When the sales ratio studies prepared by the Department of Revenue show that the average levels of assessment in the several portions of the taxing jurisdictions in the different counties differ by more than ten percent, the board shall order the apportionment of the levy unless (a) the proportion of total adjusted gross tax capacity in one of the counties is less than ten percent of the total adjusted gross tax capacity in the taxing jurisdiction and the average level of assessment in that portion of the taxing jurisdiction is the level which differs by more than five percent from the assessment level in any one of the other portions of the taxing jurisdiction; (b) significant changes have been made in the level of assessment in the taxing jurisdiction which have not been reflected in the sales ratio study, and those changes alter the assessment levels in the portions of the taxing jurisdiction so that the assessment level now differs by five percent or less; or (c) commercial, industrial, mineral, or public utility property predominates in one county within the taxing jurisdiction and another class of property predominates in another county within that same taxing jurisdiction. If one or more of these factors are present, the board may order the apportionment of the levy. Notwithstanding any other provision, the levy for the Metropolitan Mosquito Control District, Metropolitan Council, metropolitan transit district, and metropolitan transit area must be apportioned without regard to the percentage difference. If, pursuant to this subdivision, the board apportions the levy, then that levy apportionment among the portions in the different counties shall be made in the same proportion as the adjusted gross tax capacity as determined by the commissioner in each portion is to the total adjusted gross tax capacity of the taxing jurisdiction. For the purposes of this section, the average level of assessment in a taxing jurisdiction or portion thereof shall be the aggregate assessment sales ratio. Gross tax capacities as determined by the commissioner shall be the gross tax capacities as determined for the year preceding the year in which the levy to be apportioned is levied. Actions pursuant to this subdivision shall be commenced subsequent to the annual meeting on April 15 of the State Board of Equalization, but notice of the action shall be given to the affected jurisdiction and the appropriate county auditors by the following June 30. Apportionment of a levy pursuant to this subdivision shall be considered as a remedy to be taken after equalization pursuant to subdivision 2, and when equalization within the jurisdiction would disturb equalization within other jurisdictions of which the several portions of the jurisdiction in question are a part. Subd. 4.Public utility property. For purposes of equalization only, public utility personal property shall be treated as a separate class of property notwithstanding the fact that its class rate is the same as commercial -industrial property. Subd. 5.Equalization orders. The Board of Equalization may, pursuant to its responsibilities under subdivisions 2 and 3, issue orders to ensure that the results of local and county boards of equalization are consistent with the objective of state equalization. The board may issue, at its discretion, a supplemental order to amend, supersede, or correct a prior order of the board or an order of a local or county board. The supplemental order must be issued within 60 days of the order to be changed. The board may issue to a local or county board of equalization, within ten business days of the receipt of minutes of a local or county board of equalization, an order explaining the action that the state board believes will be necessary to effect the objective of state equalization. History: (2366) RL s 863; 1971 c 564 s 3; 1973 c 123 art 5 s 7; 1973c582s3; 1975c295s1; 1975c339s8; 1978 c 766 s 1; 1980 c 616 s 10; 1983 c 222 s 3; 1985 c 300 s 3; 1 Sp 1986 c 1 art 4 s 10; 1987 c 268 art 7 s 20,21; 1988 c 719 art 5 s 84; 1989 c 277 art 2 s 12; 1989c 329 art 15 s 20; 1Sp1989 c 1 art 2 s 11; art 3 s 1; art 9 s 9,10; 1991c291art 1 s7;art 12s3; 1994c416art 1 s7 21 Anoka County City of Lino Lakes 273.11 VALUATION OF PROPERTY. Subdivision 1. Generally. Except as provided in this section or section 273.17, subdivision 1 , all property shall be valued at its market value. The market value as determined pursuant to this section shall be stated such that any amount under $100 is rounded up to $100 and any amount exceeding $100 shall be rounded to the nearest $100. In estimating and determining such value, the assessor shall not adopt a lower or different standard of value because the same is to serve as a basis of taxation, nor shall the assessor adopt as a criterion of value the price for which such property would sell at a forced sale, or in the aggregate with all the property in the town or district; but the assessor shall value each article or description of property by itself, and at such sum or price as the assessor believes the same to be fairly worth in money. The assessor shall take into account the effect on the market value of property of environmental factors in the vicinity of the property. In assessing any tract or lot of real property, the value of the land, exclusive of structures and improvements, shall be determined, and also the value of all structures and improvements thereon, and the aggregate value of the property, including all structures and improvements, excluding the value of crops growing upon cultivated land. In valuing real property upon which there is a mine or quarry, it shall be valued at such price as such property, including the mine or quarry, would sell for at a fair, voluntary sale, for cash, if the material being mined or quarried is not subject to taxation under section 298.015 and the mine or quarry is not exempt from the general property tax under section 298.25. In valuing real property which is vacant, platted property shall be assessed as provided in subdivision 14. All property, or the use thereof, which is taxable under section 272.01, subdivision 2, or 273.19, shall be valued at the market value of such property and not at the value of a leasehold estate in such property, or at some lesser value than its market value. Subd. 1a. Limited market value. In the case of all property classified as agricultural homestead or nonhomestead, residential homestead or nonhomestead, timber, or noncommercial seasonal residential recreational, the assessor shall compare the value with the taxable portion of the value determined in the preceding assessment. For assessment years 2004, 2005, and 2006, the amount of the increase shall not exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 25 percent of the difference between the current assessment and the preceding assessment. For assessment year 2007, the amount of the increase shall not exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 33 percent of the difference between the current assessment and the preceding assessment. For assessment year 2008, the amount of the increase shall not exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 50 percent of the difference between the current assessment and the preceding assessment. This limitation shall not apply to increases in value due to improvements. For purposes of this subdivision, the term "assessment" means the value prior to any exclusion under subdivision 16.The provisions of this subdivision shall be in effect through assessment year 2008 as provided in this subdivision. For purposes of the assessment/sales ratio study conducted under section 127A.48, and the computation of state aids paid under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 477A, market values and net tax capacities determined under this subdivision and subdivision 16, shall be used. Subd. 2.[Repealed, 1979 c 303 art 2 s 38] Subd. 3.[Repealed, 1975 c 437 art 8 s 10] Subd. 4.[Repealed, 1976 c 345 s 3] Subd. 5. Boards of review and equalization. Notwithstanding any other provision of law to the contrary, the limitation contained in subdivisions 1 and 1a shall also apply to the authority of the local board of review as provided in section 274.01, the county board of equalization as provided in section 274.13, the State Board of Equalization and the commissioner of revenue as provided in sections 270.11, subdivision 1, 270.12, 270C.92, and 270C.94. Subd. 6. Solar, wind, methane gas systems. For purposes of property taxation, the market value of real and personal property installed prior to January 1, 1984, which is a solar, wind, or agriculturally derived methane gas system used as a heating, cooling, or electric power source of a building or structure shall be excluded from the market value of that building or structure if the property is not used to provide energy for sale. 22 Anoka County City of Lino Lakes Subd. 6a. Fire -safety sprinkler systems. For purposes of property taxation, the market value of automatic fire -safety sprinkler systems installed in existing buildings after January 1, 1992, meeting the standards of the Minnesota Fire Code shall be excluded from the market value of (1) existing multifamily residential real estate containing four or more units and used or held for use by the owner or by the tenants or lessees of the owner as a residence and (2) existing real estate containing four or more contiguous residential units for use by customers of the owner, such as hotels, motels, and lodging houses and (3) existing office buildings or mixed use commercial -residential buildings, in which at least one story capable of occupancy is at least 75 feet above the ground. The market value exclusion under this section shall expire if the property is sold. Subd. 7.[Repealed, 1984 c 502 art 3 s 36] Subd. 8. Limited equity cooperative apartments. For the purposes of this subdivision, the terms defined in this subdivision have the meanings given them.A "limited equity cooperative" is a corporation organized under chapter 308A or 308B, which has as its primary purpose the provision of housing and related services to its members which meets one of the following criteria with respect to the income of its members: (1) a minimum of 75 percent of members must have incomes at or less than 90 percent of area median income, (2) a minimum of 40 percent of members must have incomes at or less than 60 percent of area median income, or (3) a minimum of 20 percent of members must have incomes at or less than 50 percent of area median income. For purposes of this clause, "member income" shall mean the income of a member existing at the time the member acquires cooperative membership, and median income shall mean the St. Paul -Minneapolis metropolitan area median income as determined by the United States Department of Housing and Urban Development. It must also meet the following requirements:(a) The articles of incorporation set the sale price of occupancy entitling cooperative shares or memberships at no more than a transfer value determined as provided in the articles. That value may not exceed the sum of the following:(1) the consideration paid for the membership or shares by the first occupant of the unit, as shown in the records of the corporation;(2) the fair market value, as shown in the records of the corporation, of any improvements to the real property that were installed at the sole expense of the member with the prior approval of the board of directors;(3) accumulated interest, or an inflation allowance not to exceed the greater of a ten percent annual noncompounded increase on the consideration paid for the membership or share by the first occupant of the unit, or the amount that would have been paid on that consideration if interest had been paid on it at the rate of the percentage increase in the revised Consumer Price Index for All Urban Consumers for the Minneapolis - St. Paul metropolitan area prepared by the United States Department of Labor, provided that the amount determined pursuant to this clause may not exceed $500 for each year or fraction of a year the membership or share was owned; plus(4) real property capital contributions shown in the records of the corporation to have been paid by the transferor member and previous holders of the same membership, or of separate memberships that had entitled occupancy to the unit of the member involved. These contributions include contributions to a corporate reserve account the use of which is restricted to real property improvements or acquisitions, contributions to the corporation which are used for real property improvements or acquisitions, and the amount of principal amortized by the corporation on its indebtedness due to the financing of real property acquisition or improvement or the averaging of principal paid by the corporation over the term of its real property -related indebtedness.(b) The articles of incorporation require that the board of directors limit the purchase price of stock or membership interests for new member -occupants or resident shareholders to an amount which does not exceed the transfer value for the membership or stock as defined in clause (a).(c) The articles of incorporation require that the total distribution out of capital to a member shall not exceed that transfer value.(d) The articles of incorporation require that upon liquidation of the corporation any assets remaining after retirement of corporate debts and distribution to members will be conveyed to a charitable organization described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1992, or a public agency.A "limited equity cooperative apartment" is a dwelling unit owned by a limited equity cooperative."Occupancy entitling cooperative share or membership" is the ownership interest in a cooperative organization which entitles the holder to an exclusive right to occupy a dwelling unit owned or leased by the cooperative. For purposes of taxation, the assessor shall value a unit owned 23 Anoka County City of Lino Lakes by a limited equity cooperative at the lesser of its market value or the value determined by capitalizing the net operating income of a comparable apartment operated on a rental basis at the capitalization rate used in valuing comparable buildings that are not limited equity cooperatives. If a cooperative fails to operate in accordance with the provisions of clauses (a) to (d), the property shall be subject to additional property taxes in the amount of the difference between the taxes determined in accordance with this subdivision for the last ten years that the property had been assessed pursuant to this subdivision and the amount that would have been paid if the provisions of this subdivision had not applied to it. The additional taxes, plus interest at the rate specified in section 549.09, shall be extended against the property on the tax list for the current year. Subd. 9. Condominium property. Notwithstanding any other provision of law to the contrary, for purposes of property taxation, condominium property shall be valued in accordance with this subdivision.(a) A structure or building that is initially constructed as condominiums shall be identified as separate units after the filing of a declaration. The market value of the residential units in that structure or building and included in the declaration shall be valued as condominiums.(b) When 60 percent or more of the residential units in a structure or building being converted to condominiums have been sold as condominiums including those units that the converters retain for their own investment, the market value of the remaining residential units in that structure or building which are included in the declaration shall be valued as condominiums. If not all of the residential units in the structure or building are included in the declaration, the 60 percent factor shall apply to those in the declaration. A separate description shall be recognized when a declaration is filed. For purposes of this clause, "retain" shall mean units that are rented and completed units that are not available for sale.(c) For purposes of this subdivision, a "sale" is defined as the date when the first written document for the purchase or conveyance of the property is signed, unless that document is revoked. Subd. 10.[Repealed, 1999 c 243 art 5 s 54] Subd. 11. Valuation of restored or preserved wetland. Wetlands restored by the federal, state, or local government, or by a nonprofit organization, or preserved under the terms of a temporary or perpetual easement by the federal or state government, must be valued by assessors at their wetland value. "Wetland value" in this subdivision means the market value of wetlands in any potential use in which the wetland character is not permanently altered. Wetland value shall not reflect potential uses of the wetland that would violate the terms of any existing conservation easement, or any one-time payment received by the wetland owner under the terms of a state or federal conservation easement. Wetland value shall reflect any potential income consistent with a property's wetland character, including but not limited to lease payments for hunting or other recreational uses. The commissioner of revenue shall issue a bulletin advising assessors of the provisions of this section by October 1, 1991.For purposes of this subdivision, "wetlands" means lands transitional between terrestrial and aquatic systems where the water table is usually at or near the surface or the land is covered by shallow water. For purposes of this definition, wetlands must have the following three attributes:(1) have a predominance of hydric soils;(2) are inundated or saturated by surface or ground water at a frequency and duration sufficient to support a prevalence of hydrophytic vegetation typically adapted for life in saturated soil conditions; and(3) under normal circumstances support a prevalence of such vegetation. Subd. 12. Neighborhood land trusts. (a) A neighborhood land trust, as defined under chapter 462A, is (i) a community-based nonprofit corporation organized under chapter 317A, which qualifies for tax exempt status under 501(c)(3), or (ii) a "city" as defined in section 462C.02, subdivision 6, which has received funding from the Minnesota housing finance agency for purposes of the neighborhood land trust program. The Minnesota Housing Finance Agency shall set the criteria for neighborhood land trusts. (b) All occupants of a neighborhood land trust building must have a family income of less than 80 percent of the greater of (1) the state median income, or (2) the area or county median income, as most recently determined by the Department of Housing and Urban Development. Before the neighborhood land trust can rent or sell a unit to an applicant, the neighborhood land trust shall verify to the satisfaction of the administering agency or the city that the family income of each person or family applying for a unit in the neighborhood land trust building is within the income criteria provided in this paragraph. The administering agency or the city shall verify to the satisfaction of the county assessor 24 Anoka County City of Lino Lakes that the occupant meets the income criteria under this paragraph. The property tax benefits under paragraph (c) shall be granted only to property owned or rented by persons or families within the qualifying income limits. The family income criteria and verification is only necessary at the time of initial occupancy in the property.(c) A unit which is owned by the occupant and used as a homestead by the occupant qualifies for homestead treatment as class 1a under section 273.13, subdivision 22. A unit which is rented by the occupant and used as a homestead by the occupant shall be class 4a or 4b property, under section 273.13, subdivision 25, whichever is applicable. Any remaining portion of the property not used for residential purposes shall be classified by the assessor in the appropriate class based upon the use of that portion of the property owned by the neighborhood land trust. The land upon which the building is located shall be assessed at the same class rate as the units within the building, provided that if the building contains some units assessed as class 1 a and some units assessed as class 4a or 4b, the market value of the land will be assessed in the same proportions as the value of the building. Subd. 13. Valuation of income-producing property. Beginning with the 1995 assessment, only accredited assessors or senior accredited assessors or other licensed assessors who have successfully completed at least two income-producing property appraisal courses may value income-producing property for ad valorem tax purposes. "Income-producing property" as used in this subdivision means the taxable property in class 3a and 3b in section 273.13, subdivision 24; class 4a and 4c, except for seasonal recreational property not used for commercial purposes; and class 5 in section 273.13, subdivision 31. "Income-producing property" includes any property in class 4e in section 273.13, subdivision 25, that would be income-producing property under the definition in this subdivision if it were not substandard. "Income-producing property appraisal course" as used in this subdivision means a course of study of approximately 30 instructional hours, with a final comprehensive test. An assessor must successfully complete the final examination for each of the two required courses. The course must be approved by the board of assessors. Subd. 14. Vacant land platted before August 1, 2001. (a) All land platted before August 1, 2001, and not improved with a permanent structure, shall be assessed as provided in this subdivision. The assessor shall determine the market value of each individual lot based upon the highest and best use of the property as unplatted land. In establishing the market value of the property, the assessor shall consider the sale price of the unplatted land or comparable sales of unplatted land of similar use and similar availability of public utilities.(b) The market value determined in paragraph (a) shall be increased as follows for each of the three assessment years immediately following the final approval of the plat: one-third of the difference between the property's unplatted market value as determined under paragraph (a) and the market value based upon the highest and best use of the land as platted property shall be added in each of the three subsequent assessment years.(c) Any increase in market value after the first assessment year following the plat's final approval shall be added to the property's market value in the next assessment year. Notwithstanding paragraph (b), if construction begins before the expiration of the three years in paragraph (b), that lot shall be eligible for revaluation in the next assessment year. The market value of a platted lot determined under this subdivision shall not exceed the value of that lot based upon the highest and best use of the property as platted land. Subd. 14a. Vacant land platted on or after August 1, 2001; located in metropolitan counties. (a) All land platted on or after August 1, 2001, located in a metropolitan county, and not improved with a permanent structure, shall be assessed as provided in this subdivision. The assessor shall determine the market value of each individual lot based upon the highest and best use of the property as unplatted land. In establishing the market value of the property, the assessor shall consider the sale price of the unplatted land or comparable sales of unplatted land of similar use and similar availability of public utilities.(b) The market value determined in paragraph (a) shall be increased as follows for each of the three assessment years immediately following the final approval of the plat: one-third of the difference between the property's unplatted market value as determined under paragraph (a) and the market value based upon the highest and best use of the land as platted property shall be added in each of the three subsequent assessment years.(c) Any increase in market value after the first assessment year following the plat's final approval shall be added to the property's market value in the next assessment year. 25 Anoka County City of Lino Lakes Notwithstanding paragraph (b), if construction begins before the expiration of the three years in paragraph (b), that lot shall be eligible for revaluation in the next assessment year. The market value of a platted lot determined under this subdivision shall not exceed the value of that lot based upon the highest and best use of the property as platted Iand.(d) For purposes of this section, "metropolitan county" means the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. Subd. 14b. Vacant land platted on or after August 1, 2001; located in nonmetropolitan counties. (a) All land platted on or after August 1, 2001, located in a nonmetropolitan county, and not improved with a permanent structure, shall be assessed as provided in this subdivision. The assessor shall determine the market value of each individual lot based upon the highest and best use of the property as unplatted land. In establishing the market value of the property, the assessor shall consider the sale price of the unplatted land or comparable sales of unplatted land of similar use and similar availability of public utilities.(b) The market value determined in paragraph (a) shall be increased as follows for each of the seven assessment years immediately following the final approval of the plat: one-seventh of the difference between the property's unplatted market value as determined under paragraph (a) and the market value based upon the highest and best use of the land as platted property shall be added in each of the seven subsequent assessment years.(c) Any increase in market value after the first assessment year following the plat's final approval shall be added to the property's market value in the next assessment year. Notwithstanding paragraph (b), if construction begins before the expiration of the seven years in paragraph (b), that lot shall be eligible for revaluation in the next assessment year. The market value of a platted lot determined under this subdivision shall not exceed the value of that lot based upon the highest and best use of the property as platted land. Subd. 15. Vacant hospitals. In valuing a hospital, as defined in section 144.50, subdivision 2 , that is located outside of a metropolitan county, as defined in section 473.121, subdivision 4, and that on the date of sale is vacant and not used for hospital purposes or for any other purpose, the assessor's estimated market value for taxes levied in the year of the sale shall be no greater than the sales price of the property, including both the land and the buildings, as adjusted for terms of financing. If the sale is made later than December 15, the market value as determined under this subdivision shall be used for taxes levied in the following year. This subdivision applies only if the sales price of the property was determined under an arm's-length transaction. Subd. 16. Valuation exclusion for certain improvements. Improvements to homestead property made before January 2, 2003, shall be fully or partially excluded from the value of the property for assessment purposes provided that (1) the house is at least 45 years old at the time of the improvement and (2) the assessor's estimated market value of the house on January 2 of the current year is equal to or less than $400,000.For purposes of determining this eligibility, "house" means land and buildings. The age of a residence is the number of years since the original year of its construction. In the case of a residence that is relocated, the relocation must be from a location within the state and the only improvements eligible for exclusion under this subdivision are (1) those for which building permits were issued to the homeowner after the residence was relocated to its present site, and (2) those undertaken during or after the year the residence is initially occupied by the homeowner, excluding any market value increase relating to basic improvements that are necessary to install the residence on its foundation and connect it to utilities at its present site. In the case of an owner -occupied duplex or triplex, the improvement is eligible regardless of which portion of the property was improved. If the property lies in a jurisdiction which is subject to a building permit process, a building permit must have been issued prior to commencement of the improvement. The improvements for a single project or in any one year must add at least $5,000 to the value of the property to be eligible for exclusion under this subdivision. Only improvements to the structure which is the residence of the qualifying homesteader or construction of or improvements to no more than one two -car garage per residence qualify for the provisions of this subdivision. If an improvement was begun between January 2, 1992, and January 2, 1993, any value added from that improvement for the January 1994 and subsequent assessments shall qualify for exclusion under this subdivision provided that a building permit was obtained for the improvement between January 2, 1992, and January 2, 1993. Whenever a building permit is issued for property currently classified as homestead, the issuing jurisdiction shall notify the property owner of the possibility 26 Anoka County City of Lino Lakes of valuation exclusion under this subdivision. The assessor shall require an application, including documentation of the age of the house from the owner, if unknown by the assessor. The application may be filed subsequent to the date of the building permit provided that the application must be filed within three years of the date the building permit was issued for the improvement. If the property lies in a jurisdiction which is not subject to a building permit process, the application must be filed within three years of the date the improvement was made. The assessor may require proof from the taxpayer of the date the improvement was made. Applications must be received prior to July 1 of any year in order to be effective for taxes payable in the following year. No exclusion for an improvement may be granted by a local board of review or county board of equalization, and no abatement of the taxes for qualifying improvements may be granted by the county board unless (1) a building permit was issued prior to the commencement of the improvement if the jurisdiction requires a building permit, and (2) an application was completed. The assessor shall note the qualifying value of each improvement on the property's record, and the sum of those amounts shall be subtracted from the value of the property in each year for ten years after the improvement has been made. After ten years the amount of the qualifying value shall be added back as follows:(1) 50 percent in the two subsequent assessment years if the qualifying value is equal to or less than $10,000 market value; or(2) 20 percent in the five subsequent assessment years if the qualifying value is greater than $10,000 market value. If an application is filed after the first assessment date at which an improvement could have been subject to the valuation exclusion under this subdivision, the ten-year period during which the value is subject to exclusion is reduced by the number of years that have elapsed since the property would have qualified initially. The valuation exclusion shall terminate whenever (1) the property is sold, or (2) the property is reclassified to a class which does not qualify for treatment under this subdivision. Improvements made by an occupant who is the purchaser of the property under a conditional purchase contract do not qualify under this subdivision unless the seller of the property is a governmental entity. The qualifying value of the property shall be computed based upon the increase from that structure's market value as of January 2 preceding the acquisition of the property by the governmental entity. The total qualifying value for a homestead may not exceed $50,000. The total qualifying value for a homestead with a house that is less than 70 years old may not exceed $25,000. The term "qualifying value" means the increase in estimated market value resulting from the improvement if the improvement occurs when the house is at least 70 years old, or one-half of the increase in estimated market value resulting from the improvement otherwise. The $25,000 and $50,000 maximum qualifying value under this subdivision may result from multiple improvements to the homestead. If 50 percent or more of the square footage of a structure is voluntarily razed or removed, the valuation increase attributable to any subsequent improvements to the remaining structure does not qualify for the exclusion under this subdivision. If a structure is unintentionally or accidentally destroyed by a natural disaster, the property is eligible for an exclusion under this subdivision provided that the structure was not completely destroyed. The qualifying value on property destroyed by a natural disaster shall be computed based upon the increase from that structure's market value as determined on January 2 of the year in which the disaster occurred. A property receiving benefits under the homestead disaster provisions under section 273.123 is not disqualified from receiving an exclusion under this subdivision. If any combination of improvements made to a structure after January 1, 1993, increases the size of the structure by 100 percent or more, the valuation increase attributable to the portion of the improvement that causes the structure's size to exceed 100 percent does not qualify for exclusion under this subdivision. Subd. 17. Valuation of contaminated properties. (a) In determining the market value of property containing contaminants, the assessor shall reduce the market value of the property by the contamination value of the property. The contamination value is the amount of the market value reduction that results from the presence of the contaminants, but it may not exceed the cost of a reasonable response action plan or asbestos abatement plan or management program for the property.(b) For purposes of this subdivision, "asbestos abatement plan," "contaminants," and "response action plan" have the meanings as used in sections 270.91 and 270.92. Subd. 18. Disclosure of valuation exclusion. No seller of real property shall sell or offer for sale property that, for purposes of property taxation, has an exclusion from market value for home 27 Anoka County City of Lino Lakes improvements under subdivision 16, without disclosing to the buyer the existence of the excluded valuation and informing the buyer that the exclusion will end upon the sale of the property and that the property's estimated market value for property tax purposes will increase accordingly. Subd. 19. Valuation exclusion for improvements to certain business property. Property classified under Minnesota Statutes, section 273.13, subdivision 24, which is eligible for the preferred class rate on the market value up to $150,000, shall qualify for a valuation exclusion for assessment purposes, provided all of the following conditions are met: (1) the building must be at least 50 years old at the time of the improvement or damaged by the 1997 floods;(2) the building must be located in a city or town with a population of 10,000 or less that is located outside the seven -county metropolitan area, as defined in section 473.121, subdivision 2; (3) the total estimated market value of the land and buildings must be $100,000 or less prior to the improvement and prior to the damage caused by the 1997 floods;(4) the current year's estimated market value of the property must be equal to or less than the property's estimated market value in each of the two previous years' assessments;(5) a building permit must have been issued prior to the commencement of the improvement, or if the building is located in a city or town which does not have a building permit process, the property owner must notify the assessor prior to the commencement of the improvement;(6) the property, including its improvements, has received no public assistance, grants or financing except, that in the case of property damaged by the 1997 floods, the property is eligible to the extent that the flood losses are not reimbursed by insurance or any public assistance, grants, or financing;(7) the property is not receiving a property tax abatement under section 469.1813; and (8) the improvements are made after the effective date of Laws 1997, chapter 231, and prior to January 1, 1999.The assessor shall estimate the market value of the building in the assessment year immediately following the year that (1) the building permit was taken out, or (2) the taxpayer notified the assessor that an improvement was to be made. If the estimated market value of the building has increased over the prior year's assessment, the assessor shall note the amount of the increase on the property's record, and that amount shall be subtracted from the value of the property in each year for five years after the improvement has been made, at which time an amount equal to 20 percent of the excluded value shall be added back in each of the five subsequent assessment years. For any property, there can be no more than two improvements qualifying for exclusion under this subdivision. The maximum amount of value that can be excluded from any property under this subdivision is $50,000.The assessor shall require an application, including documentation of the age of the building from the owner, if unknown by the assessor. Applications must be received prior to July 1 of any year in order to be effective for taxes payable in the following year. For purposes of this subdivision, "population" has the same meaning given in Minnesota Statutes, section 477A.011, subdivision 3. Subd. 20. Valuation exclusion for improvements to certain business property. Property classified under section 273.13, subdivision 24, qualifies for a valuation exclusion for assessment purposes, provided all of the following conditions are met: (1) the building must have been damaged by the 2002 floods;(2) the building must be located in a city or town with a population of 10,000 or less that is located in a county in the area included in DR -1419;(3) the total estimated market value of the land and buildings must be $150,000 or less for assessment year 2002;(4) a building permit must have been issued prior to the commencement of the improvement, or if the building is located in a city or town which does not have a building permit process, the property owner must notify the assessor prior to the commencement of the improvement;(5) the property is not receiving a property tax abatement under section 469.1813; and (6) the improvements are made before January 1, 2004.The assessor shall estimate the market value of the building in the assessment year immediately following the year that (1) the building permit was taken out, or (2) the taxpayer notified the assessor that an improvement was to be made. If the estimated market value of the building has increased over the 2002 assessment before any reassessment due to flood damage, the assessor shall note the amount of the increase on the property's record, and that amount shall be subtracted from the value of the property in each year for five years after the improvement has been made. In each of the next five subsequent assessment years, an amount equal to 20 percent of the value excluded in the fifth year for that improvement shall be added back. The maximum amount of value that can be excluded for all improvements to any property 28 Anoka County City of Lino Lakes under this subdivision is $50,000.The assessor shall require an application. Applications must be received by December 31, 2002, or December 31, 2003, in order to be effective for taxes payable in the following year. For purposes of this subdivision, "population" has the meaning given in section 477A.011, subdivision 3 . Subd. 21. Valuation reduction for homestead property damaged by mold. (a) The owner of homestead property may apply in writing to the assessor for a reduction in the market value of the property that has been damaged by mold. The notification must include the estimated cost to cure the mold condition provided by a licensed contractor. The estimated cost must be at least $20,000. Upon completion of the work, the owner must file an application on a form prescribed by the commissioner of revenue, accompanied by a copy of the contractor's estimate.(b) If the conditions in paragraph (a) are met, the county board must grant a reduction in the market value of the homestead dwelling equal to the estimated cost to cure the mold condition. If a property owner applies for a reduction under this subdivision between January 1 and June 30 of any year, the reduction applies for taxes payable in the following year. If a property owner applies for a reduction under this subdivision between July 1 and December 31 of any year, the reduction applies for taxes payable in the second following year.(c) A denial of a reduction under this section by the county board may be appealed to the tax court. If the county board takes no action on the application within 90 days after its receipt, it is considered an approval.(d) For purposes of subdivision 1a, in the assessment year following the assessment year when a valuation reduction has occurred under this section, any market value added by the assessor to the property resulting from curing the mold condition must be considered an increase in value due to new construction. Subd. 22. Lead hazard market value reduction. Owners of property classified as class 1 a, 1 b, 1 c, 2a, 4b, 4bb, or 4d under section 273.13 may apply fora lead hazard valuation reduction, provided that the property is located in a city which has authorized valuation reductions under this subdivision. A city that authorizes reductions under this subdivision must establish guidelines for qualifying lead hazard reduction projects and must designate an agency within the city to issue certificates of completion of qualifying projects. For purposes of this subdivision, "lead hazard reduction" has the same meaning as in section 144.9501, subdivision 17.The property owner must obtain a certificate from the agency stating (1) that the project has been completed and (2) the total cost incurred by the owner, which must be at least $3,000. Only projects originating after July 1, 2005, and completed before July 1, 2010, qualify fora reduction under this subdivision. The property owner shall apply for the valuation reduction to the assessor on a form prescribed by the assessor accompanied by a copy of the certificate of completion from the agency. A qualifying property is eligible for a one-year valuation reduction equal to the actual cost incurred, to a maximum of $20,000. If a property owner applies to the assessor for the valuation reduction under this subdivision between January 1 and June 30 of any year, the reduction applies for taxes payable in the following year. If a property owner applies to the assessor for the valuation reduction under this subdivision between July 1 and December 31, the reduction applies for taxes payable in the second following year. For purposes of subdivision 1 a, any additional market value resulting from the lead hazard removal must be considered an increase in value due to new construction. Subd. 23. First tier valuation limit; agricultural homestead property. (a) Beginning with assessment year 2006, the commissioner of revenue shall annually certify the first tier limit for agricultural homestead property as the product of (i) $600,000, and (ii) the ratio of the statewide average taxable market value of agricultural property per acre of deeded farm land in the preceding assessment year to the statewide average taxable market value of agricultural property per acre of deeded farm land for assessment year 2004. The limit shall be rounded to the nearest $10,000.(b) For the purposes of this subdivision, "agricultural property" means all class 2 property under section 273.13, subdivision 23, except for (1) timberland, (2) a landing area or public access area of a privately owned public use airport, and (3) property consisting of the house, garage, and immediately surrounding one acre of land of an agricultural homestead.(c) The commissioner shall certify the limit by January 2 of each assessment year, except that for assessment year 2006 the commissioner shall certify the limit by June 1, 2006. History: (1992) RL s 810; Ex1967 c 32 art 7 s 3; 1969 c 574 s 1; 1969 c 990 s 1; 1971 c 427 s 1; 1971 c 489 s 1; 1971 c 831 s 1; 1973 c 582 s 3; 1973 c 650 art 23 s 1-4; 1974 c 556 s 14; 1975 c 437 art 8 s 29 Anoka County City of Lino Lakes 4-6; 1976 c 2 s 93; 1976c345s1; 1977 c 423 art 4 s 4; 1978 c 786 s 10,11; 1979 c 303 art 2 s 7; 1Sp1981 c 1 art 2 s 3,4; 1Sp1981 c 4 art 2 s 50; 1982 c 424 s 61,62; 1982 c 523 art 19 s 2; art 21 s 1; 1983 c 222 s 7; 1983 c 342 art 2 s 5-7; 1984 c 502 art 3 s 6; 1 Sp 1985 c 14 art 4 s 35; 1986 c 444; 1Sp1986 c 1 art 4 s 12; 1987 c 268 art 5 s 1; art 7 s 32; 1987 c 384 art 3 s 10; 1988 c 719 art 5 s 84; 1989 c 329 art 13 s 20; 1989 c 356 s 13; 1990 c 480 art 7 s 5; 1990 c 604 art 3 s 9; 1991 c 291 art 1 s 12; 1991 c354art 10s7,8; 1992c511 art 2s 11,12; 1992c556s2,3; 1992c597s 14; 1993c375 art 5 s8-13;art 8 s 14; art11 s 3; art 12 s 9; 1994c416art1s13; 1994c587art5s3-5; 1995c1s2; 1995 c 264 art 16 s 9; 1996 c 471 art 3 s 5; 1997 c 231 art 2 s 10,11,52; art 8 s 2; 1997 c 251 s 16; 1998 c 397 art 11 s 3; 1999 c 243 art 5 s 6,7; 1 Sp2001 c 5 art 3 s 23-26; 1 Sp2002 c 1 s 14; 2003 c 127 art 5 s 15; 1Sp2003 c 21 art 4 s 3; 2005 c 151 art 2 s 6; art 5 s 16; 1Sp2005 c 3 art 1 s 8-10; 2006 c 259 art 4s 11 30 Anoka County City of Lino Lakes 273.121 VALUATION OF REAL PROPERTY, NOTICE. Any county assessor or city assessor having the powers of a county assessor, valuing or classifying taxable real property shall in each year notify those persons whose property is to be included on the assessment roll that year if the person's address is known to the assessor, otherwise the occupant of the property. The notice shall be in writing and shall be sent by ordinary mail at least ten days before the meeting of the local board of appeal and equalization under section 274.01 or the review process established under section 274.13, subdivision 1 c. It shall contain: (1) the market value for the current and prior assessment, (2) the limited market value under section 273.11, subdivision 1 a, for the current and prior assessment, (3) the qualifying amount of any improvements under section 273.11, subdivision 16, for the current assessment, (4) the market value subject to taxation after subtracting the amount of any qualifying improvements for the current assessment, (5) the classification of the property for the current and prior assessment, (6) a note that if the property is homestead and at least 45 years old, improvements made to the property may be eligible for a valuation exclusion under section 273.11, subdivision 16, (7) the assessor's office address, and (8) the dates, places, and times set for the meetings of the local board of appeal and equalization, the review process established under section 274.13, subdivision 1 c, and the county board of appeal and equalization. The commissioner of revenue shall specify the form of the notice. The assessor shall attach to the assessment roll a statement that the notices required by this section have been mailed. Any assessor who is not provided sufficient funds from the assessor's governing body to provide such notices, may make application to the commissioner of revenue to finance such notices. The commissioner of revenue shall conduct an investigation and, if satisfied that the assessor does not have the necessary funds, issue a certification to the commissioner of finance of the amount necessary to provide such notices. The commissioner of finance shall issue a warrant for such amount and shall deduct such amount from any state payment to such county or municipality. The necessary funds to make such payments are hereby appropriated. Failure to receive the notice shall in no way affect the validity of the assessment, the resulting tax, the procedures of any board of review or equalization, or the enforcement of delinquent taxes by statutory means. History: Ex1971 c 31 art 23 s 2; 1973 c 492 s 14; 1974 c 363 s 1; 1975 c 437 art 8 s 7; 1980 c 437 s 3; 1982 c 523 art 23 s 1; 1Sp1985c 14art4s41; 1986c444; 1988 c 719 art 6 s 8; 1993c375art5s 16; 1995c 1s3; 1997c231 art2s 17; 1 Sp2001 c 5 art 7 s 20; 2002 c 377 art 10 s 5 31 Anoka County City of Lino Lakes 273.13 CLASSIFICATION OF PROPERTY. Subdivision 1.How classified. All real and personal property subject to a general property tax and not subject to any gross earnings or other in -lieu tax is hereby classified for purposes of taxation as provided by this section. Subd. 2.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 2a.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 3.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 4.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 5.[Repealed, Ex1971 c 31 art 22 s 5] Subd. 5a.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 6.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 6a.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 7.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 7a.[Repealed, 1988 c 719 art 5 s 81] Subd. 7b.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 7c.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 7d.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 8.[Repealed, Ex1967 c 32 art 4 s 3] Subd. 8a.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 9.[Repealed, 1988 c 719 art 5 s 81] Subd. 10.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 11.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 12.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 13.[Repealed, 1974 c 313 s 1] Subd. 14.[Repealed, 1984 c 593 s 46] Subd. 14a.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 15.[Repealed, Ex1971 c 31 art 36 s 2] Subd. 15a.[Repealed, 1988 c 719 art 5 s 81] Subd. 15b.[Repealed, 1983 c 342 art 2 s 30] Subd. 16.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 17.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 17a.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 17b.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 17c.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 17d.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 18.[Repealed, 1983 c 222 s 45] Subd. 19.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 20.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 21.[Repealed, 1Sp1985 c 14 art 4 s 98] Subd. 21a.Class rate. In this section, wherever the "class rate" of a class of property is specified without qualification as to whether it is the property's "net class rate" or its "gross class rate," the "net class rate" and "gross class rate" of that property are the same as its "class rate." Subd. 21b.Tax capacity. (a) Gross tax capacity means the product of the appropriate gross class rates in this section and market values. (b) Net tax capacity means the product of the appropriate net class rates in this section and market values. Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) and (c), real estate which is residential and used for homestead purposes is class la. In the case of a duplex or triplex in which one of the units is used for homestead purposes, the entire property is deemed to be used for homestead purposes. The market value of class 1a property must be determined 32 Anoka County City of Lino Lakes based upon the value of the house, garage, and land. The first $500,000 of market value of class la property has a net class rate of one percent of its market value; and the market value of class 1 a property that exceeds $500,000 has a class rate of 1.25 percent of its market value. (b) Class 1 b property includes homestead real estate or homestead manufactured homes used for the purposes of a homestead by: (1) any person who is blind as defined in section 256D.35, or the blind person and the blind person's spouse; (2) any person who is permanently and totally disabled or by the disabled person and the disabled person's spouse; or (3) the surviving spouse of a permanently and totally disabled veteran homesteading a property classified under this paragraph for taxes payable in 2008. Property is classified and assessed under clause (2) only if the government agency or income - providing source certifies, upon the request of the homestead occupant, that the homestead occupant satisfies the disability requirements of this paragraph, and that the property is not eligible for the valuation exclusion under subdivision 34. Property is classified and assessed under paragraph (b) only if the commissioner of revenue or the county assessor certifies that the homestead occupant satisfies the requirements of this paragraph. Permanently and totally disabled for the purpose of this subdivision means a condition which is permanent in nature and totally incapacitates the person from working at an occupation which brings the person an income. The first $50,000 market value of class 1 b property has a net class rate of .45 percent of its market value. The remaining market value of class 1 b property has a class rate using the rates for class la or class 2a property, whichever is appropriate, of similar market value. (c) Class 1 c property is commercial use real and personal property that abuts public water as defined in section 103G.005, subdivision 15, and is devoted to temporary and seasonal residential occupancy for recreational purposes but not devoted to commercial purposes for more than 250 days in the year preceding the year of assessment, and that includes a portion used as a homestead by the owner, which includes a dwelling occupied as a homestead by a shareholder of a corporation that owns the resort, a partner in a partnership that owns the resort, or a member of a limited liability company that owns the resort even if the title to the homestead is held by the corporation, partnership, or limited liability company. For purposes of this clause, property is devoted to a commercial purpose on a specific day if any portion of the property, excluding the portion used exclusively as a homestead, is used for residential occupancy and a fee is charged for residential occupancy. Class lc property must contain three or more rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site equipped with water and electrical hookups for recreational vehicles. Class lc property must provide recreational activities such as the rental of ice fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina services, launch services, or guide services; or sell bait and fishing tackle. Any unit in which the right to use the property is transferred to an individual or entity by deeded interest, or the sale of shares or stock, no longer qualifies for class 1 c even though it may remain available for rent. A camping pad offered for rent by a property that otherwise qualifies for class 1 c is also class lc, regardless of the term of the rental agreement, as long as the use of the camping pad does not exceed 250 days. The portion of the property used as a homestead is class la property under paragraph (a). The remainder of the property is classified as follows: the first $600,000 of market value is tier I, the next $1,700,000 of market value is tier II, and any remaining market value is tier III. The class rates for class 1 c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 percent. Owners of real and personal property devoted to temporary and seasonal residential occupancy for recreation purposes in which all or a portion of the property was devoted to commercial purposes for not more than 250 days in the year preceding the year of assessment desiring classification as class 1 c, must submit a declaration to the assessor designating the cabins or units occupied for 250 days or less in the year preceding the year of assessment by January 15 of the assessment year. Those cabins or units and a proportionate share of the land on which they are located must be 33 Anoka County City of Lino Lakes designated as class 1 c as otherwise provided. The remainder of the cabins or units and a proportionate share of the land on which they are located must be designated as class 3a commercial. The owner of property desiring designation as class 1c property must provide guest registers or other records demonstrating that the units for which class 1c designation is sought were not occupied for more than 250 days in the year preceding the assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility operated on a commercial basis not directly related to temporary and seasonal residential occupancy for recreation purposes does not qualify for class 1 c. (d) Class 1d property includes structures that meet all of the following criteria: (1) the structure is located on property that is classified as agricultural property under section 273.13, subdivision 23; (2) the structure is occupied exclusively by seasonal farm workers during the time when they work on that farm, and the occupants are not charged rent for the privilege of occupying the property, provided that use of the structure for storage of farm equipment and produce does not disqualify the property from classification under this paragraph; (3) the structure meets all applicable health and safety requirements for the appropriate season; and (4) the structure is not salable as residential property because it does not comply with local ordinances relating to location in relation to streets or roads. The market value of class 1d property has the same class rates as class la property under paragraph (a). Subd. 23.Class 2. (a) An agricultural homestead consists of class 2a agricultural land that is homesteaded, along with any class 2b rural vacant land that is contiguous to the class 2a land under the same ownership. The market value of the house and garage and immediately surrounding one acre of land has the same class rates as class 1 a or 1 b property under subdivision 22. The value of the remaining land including improvements up to the first tier valuation limit of agricultural homestead property has a net class rate of 0.5 percent of market value. The remaining property over the first tier has a class rate of one percent of market value. For purposes of this subdivision, the "first tier valuation limit of agricultural homestead property" and "first tier" means the limit certified under section 273.11, subdivision 23. (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that are agricultural land and buildings. Class 2a property has a net class rate of one percent of market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a property must also include any property that would otherwise be classified as 2b, but is interspersed with class 2a property, including but not limited to sloughs, wooded wind shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement, and other similar land that is impractical for the assessor to value separately from the rest of the property or that is unlikely to be able to be sold separately from the rest of the property. An assessor may classify the part of a parcel described in this subdivision that is used for agricultural purposes as class 2a and the remainder in the class appropriate to its use. (c) Class 2b rural vacant land consists of parcels of property, or portions thereof, that are unplatted real estate, rural in character and not used for agricultural purposes, including land used for growing trees for timber, lumber, and wood and wood products, that is not improved with a structure. The presence of a minor, ancillary nonresidential structure as defined by the commissioner of revenue does not disqualify the property from classification under this paragraph. Any parcel of 20 acres or more improved with a structure that is not a minor, ancillary nonresidential structure must be split -classified, and ten acres must be assigned to the split parcel containing the structure. Class 2b property has a net class rate of one percent of market value unless it is part of an agricultural homestead under paragraph (a), or qualifies as class 2c under paragraph (d). (d) Class 2c managed forest land consists of no less than 20 and no more than 1,920 acres statewide per taxpayer that is being managed under a forest management plan that meets the requirements of chapter 290C, but is not 34 Anoka County City of Lino Lakes enrolled in the sustainable forest resource management incentive program. It has a class rate of .65 percent, provided that the owner of the property must apply to the assessor in order for the property to initially qualify for the reduced rate and provide the information required by the assessor to verify that the property qualifies for the reduced rate. If the assessor receives the application and information before May 1 in an assessment year, the property qualifies beginning with that assessment year. If the assessor receives the application and information after April 30 in an assessment year, the property may not qualify until the next assessment year. The commissioner of natural resources must concur that the land is qualified. The commissioner of natural resources shall annually provide county assessors verification information on a timely basis. The presence of a minor, ancillary nonresidential structure as defined by the commissioner of revenue does not disqualify the property from classification under this paragraph. (e) Agricultural land as used in this section means contiguous acreage of ten acres or more, used during the preceding year for agricultural purposes. "Agricultural purposes" as used in this section means the raising, cultivation, drying, or storage of agricultural products for sale, or the storage of machinery or equipment used in support of agricultural production by the same farm entity. For a property to be classified as agricultural based only on the drying or storage of agricultural products, the products being dried or stored must have been produced by the same farm entity as the entity operating the drying or storage facility. "Agricultural purposes" also includes enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public Law 99-198 or a similar state or federal conservation program if the property was classified as agricultural (i) under this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment. Agricultural classification shall not be based upon the market value of any residential structures on the parcel or contiguous parcels under the same ownership. (f) Real estate of less than ten acres, which is exclusively or intensively used for raising or cultivating agricultural products, shall be considered as agricultural land. To qualify under this paragraph, property that includes a residential structure must be used intensively for one of the following purposes: (i) for drying or storage of grain or storage of machinery or equipment used to support agricultural activities on other parcels of property operated by the same farming entity; (ii) as a nursery, provided that only those acres used to produce nursery stock are considered agricultural land; (iii) for livestock or poultry confinement, provided that land that is used only for pasturing and grazing does not qualify; or (iv) for market farming; for purposes of this paragraph, "market farming" means the cultivation of one or more fruits or vegetables or production of animal or other agricultural products for sale to local markets by the farmer or an organization with which the farmer is affiliated. (g) Land shall be classified as agricultural even if all or a portion of the agricultural use of that property is the leasing to, or use by another person for agricultural purposes. Classification under this subdivision is not determinative for qualifying under section 273.111. (h) The property classification under this section supersedes, for property tax purposes only, any locally administered agricultural policies or land use restrictions that define minimum or maximum farm acreage. (i) The term "agricultural products" as used in this subdivision includes production for sale of: (1) livestock, dairy animals, dairy products, poultry and poultry products, fur -bearing animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, bees, and apiary products by the owner; (2) fish bred for sale and consumption if the fish breeding occurs on land zoned for agricultural use; (3) the commercial boarding of horses if the boarding is done in conjunction with raising or cultivating agricultural products as defined in clause (1); (4) property which is owned and operated by nonprofit organizations used for equestrian activities, excluding racing; (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed under section 97A.115; (6) insects primarily bred to be used as food for animals; (7) trees, grown for sale as a crop, including short rotation woody crops, and not sold for timber, lumber, 35 Anoka County City of Lino Lakes wood, or wood products; and (8) maple syrup taken from trees grown by a person licensed by the Minnesota Department of Agriculture under chapter 28A as a food processor. (j) If a parcel used for agricultural purposes is also used for commercial or industrial purposes, including but not limited to: (1) wholesale and retail sales; (2) processing of raw agricultural products or other goods; (3) warehousing or storage of processed goods; and (4) office facilities for the support of the activities enumerated in clauses (1), (2), and (3), the assessor shall classify the part of the parcel used for agricultural purposes as class 1 b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its use. The grading, sorting, and packaging of raw agricultural products for first sale is considered an agricultural purpose. A greenhouse or other building where horticultural or nursery products are grown that is also used for the conduct of retail sales must be classified as agricultural if it is primarily used for the growing of horticultural or nursery products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of those products. Use of a greenhouse or building only for the display of already grown horticultural or nursery products does not qualify as an agricultural purpose. (k) The assessor shall determine and list separately on the records the market value of the homestead dwelling and the one acre of land on which that dwelling is located. If any farm buildings or structures are located on this homesteaded acre of land, their market value shall not be included in this separate determination. (I) Class 2d airport landing area consists of a landing area or public access area of a privately owned public use airport. It has a class rate of one percent of market value. To qualify for classification under this paragraph, a privately owned public use airport must be licensed as a public airport under section 360.018. For purposes of this paragraph, "landing area" means that part of a privately owned public use airport properly cleared, regularly maintained, and made available to the public for use by aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing or navigational aids. A landing area also includes land underlying both the primary surface and the approach surfaces that comply with all of the following: (i) the land is properly cleared and regularly maintained for the primary purposes of the landing, taking off, and taxiing of aircraft; but that portion of the land that contains facilities for servicing, repair, or maintenance of aircraft is not included as a landing area; (ii) the land is part of the airport property; and (iii) the land is not used for commercial or residential purposes. The land contained in a landing area under this paragraph must be described and certified by the commissioner of transportation. The certification is effective until it is modified, or until the airport or landing area no longer meets the requirements of this paragraph. For purposes of this paragraph, "public access area" means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival and departure building in connection with the airport. (m) Class 2e consists of land with a commercial aggregate deposit that is not actively being mined and is not otherwise classified as class 2a or 2b, provided that the land is not located in a county that has elected to opt -out of the aggregate preservation program as provided in section 273.1115, subdivision 6. It has a class rate of one percent of market value. To qualify for classification under this paragraph, the property must be at least ten contiguous acres in size and the owner of the property must record with the county recorder of the county in which the property is located an affidavit containing: (1) a legal description of the property; (2) a disclosure that the property contains a commercial aggregate deposit that is not actively being mined but is present on the entire parcel enrolled; (3) documentation that the conditional use under the county or local zoning ordinance of this property is for mining; and (4) documentation that a permit has been issued by the local unit of government or the mining activity is allowed under local ordinance. The disclosure must include a statement from a registered professional geologist, engineer, or soil scientist delineating the deposit and certifying that it is a commercial aggregate deposit. For purposes of this section and section 273.1115, "commercial aggregate deposit" means a deposit that will yield crushed stone or sand and gravel that is suitable for use as a construction aggregate; and "actively 36 Anoka County City of Lino Lakes mined" means the removal of top soil and overburden in preparation for excavation or excavation of a commercial deposit. (n) When any portion of the property under this subdivision or subdivision 22 begins to be actively mined, the owner must file a supplemental affidavit within 60 days from the day any aggregate is removed stating the number of acres of the property that is actively being mined. The acres actively being mined must be (1) valued and classified under subdivision 24 in the next subsequent assessment year, and (2) removed from the aggregate resource preservation property tax program under section 273.1115, if the land was enrolled in that program. Copies of the original affidavit and all supplemental affidavits must be filed with the county assessor, the local zoning administrator, and the Department of Natural Resources, Division of Land and Minerals. A supplemental affidavit must be filed each time a subsequent portion of the property is actively mined, provided that the minimum acreage change is five acres, even if the actual mining activity constitutes less than five acres. (o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions in section 14.386 concerning exempt rules do not apply. Subd. 24.Class 3. (a) Commercial and industrial property and utility real and personal property is class 3a. (1) Except as otherwise provided, each parcel of commercial, industrial, or utility real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent of the remaining market value. In the case of contiguous parcels of property owned by the same person or entity, only the value equal to the first-tier value of the contiguous parcels qualifies for the reduced class rate, except that contiguous parcels owned by the same person or entity shall be eligible for the first-tier value class rate on each separate business operated by the owner of the property, provided the business is housed in a separate structure. For the purposes of this subdivision, the first tier means the first $150,000 of market value. Real property owned in fee by a utility for transmission line right-of-way shall be classified at the class rate for the higher tier. For purposes of this subdivision, parcels are considered to be contiguous even if they are separated from each other by a road, street, waterway, or other similar intervening type of property. Connections between parcels that consist of power lines or pipelines do not cause the parcels to be contiguous. Property owners who have contiguous parcels of property that constitute separate businesses that may qualify for the first-tier class rate shall notify the assessor by July 1, for treatment beginning in the following taxes payable year. (2) All personal property that is: (i) part of an electric generation, transmission, or distribution system; or (ii) part of a pipeline system transporting or distributing water, gas, crude oil, or petroleum products; and (iii) not described in clause (3), and all railroad operating property has a class rate as provided under clause (1) for the first tier of market value and the remaining market value. In the case of multiple parcels in one county that are owned by one person or entity, only one first tier amount is eligible for the reduced rate. (3) The entire market value of personal property that is: (i) tools, implements, and machinery of an electric generation, transmission, or distribution system; (ii) tools, implements, and machinery of a pipeline system transporting or distributing water, gas, crude oil, or petroleum products; or (iii) the mains and pipes used in the distribution of steam or hot or chilled water for heating or cooling buildings, has a class rate as provided under clause (1) for the remaining market value in excess of the first tier. (b) Employment property defined in section 469.166, during the period provided in section 469.170, shall constitute class 3b. The class rates for class 3b property are determined under paragraph (a). Subd. 24a. [Repealed, 1 Sp2001 c 5 art 3 s 96] Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more units and used or held for use by the owner or by the tenants or lessees of the owner as a residence for rental periods of 30 days or more, excluding property qualifying for class 4d. Class 4a also includes hospitals 37 Anoka County City of Lino Lakes licensed under sections 144.50 to 144.56, other than hospitals exempt under section 272.02, and contiguous property used for hospital purposes, without regard to whether the property has been platted or subdivided. The market value of class 4a property has a class rate of 1.25 percent. (b) Class 4b includes: (1) residential real estate containing less than four units that does not qualify as class 4bb, other than seasonal residential recreational property; (2) manufactured homes not classified under any other provision; (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead farm classified under subdivision 23, paragraph (b) containing two or three units; and (4) unimproved property that is classified residential as determined under subdivision 33. The market value of class 4b property has a class rate of 1.25 percent. (c) Class 4bb includes: (1) nonhomestead residential real estate containing one unit, other than seasonal residential recreational property; and (2) a single family dwelling, garage, and surrounding one acre of property on a nonhomestead farm classified under subdivision 23, paragraph (b). Class 4bb property has the same class rates as class 1a property under subdivision 22. Property that has been classified as seasonal residential recreational property at any time during which it has been owned by the current owner or spouse of the current owner does not qualify for class 4bb. (d) Class 4c property includes: (1) except as provided in subdivision 22, paragraph (c), real and personal property devoted to temporary and seasonal residential occupancy for recreation purposes, including real and personal property devoted to temporary and seasonal residential occupancy for recreation purposes and not devoted to commercial purposes for more than 250 days in the year preceding the year of assessment. For purposes of this clause, property is devoted to a commercial purpose on a specific day if any portion of the property is used for residential occupancy, and a fee is charged for residential occupancy. Class 4c property under this clause must contain three or more rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site equipped with water and electrical hookups for recreational vehicles. Class 4c property under this clause must provide recreational activities such as renting ice fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina services, launch services, or guide services; or sell bait and fishing tackle. A camping pad offered for rent by a property that otherwise qualifies for class 4c under this clause is also class 4c under this clause regardless of the term of the rental agreement, as long as the use of the camping pad does not exceed 250 days. In order for a property to be classified as class 4c, seasonal residential recreational for commercial purposes under this clause, at least 40 percent of the annual gross lodging receipts related to the property must be from business conducted during 90 consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests during the year must be for periods of at least two consecutive nights; or (ii) at least 20 percent of the annual gross receipts must be from charges for rental of fish houses, boats and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina services, launch services, and guide services, or the sale of bait and fishing tackle. For purposes of this determination, a paid booking of five or more nights shall be counted as two bookings. Class 4c property classified under this clause also includes commercial use real property used exclusively for recreational purposes in conjunction with other class 4c property classified under this clause and devoted to temporary and seasonal residential occupancy for recreational purposes, up to a total of two acres, provided the property is not devoted to commercial recreational use for more than 250 days in the year preceding the year of assessment and is located within two miles of the class 4c property with which it is used. Owners of real and personal property devoted to temporary and seasonal residential occupancy for recreation purposes and all or a portion of which was devoted to commercial purposes for not more than 250 days in the year preceding the year of assessment desiring classification as class 4c, must submit a declaration to the assessor designating the cabins or units occupied for 250 days or less in the year preceding the year of assessment by January 15 of the assessment year. Those 38 Anoka County City of Lino Lakes cabins or units and a proportionate share of the land on which they are located must be designated class 4c under this clause as otherwise provided. The remainder of the cabins or units and a proportionate share of the land on which they are located will be designated as class 3a. The owner of property desiring designation as class 4c property under this clause must provide guest registers or other records demonstrating that the units for which class 4c designation is sought were not occupied for more than 250 days in the year preceding the assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility operated on a commercial basis not directly related to temporary and seasonal residential occupancy for recreation purposes does not qualify for class 4c; (2) qualified property used as a golf course if: (i) it is open to the public on a daily fee basis. It may charge membership fees or dues, but a membership fee may not be required in order to use the property for golfing, and its green fees for golfing must be comparable to green fees typically charged by municipal courses; and (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d). A structure used as a clubhouse, restaurant, or place of refreshment in conjunction with the golf course is classified as class 3a property; (3) real property up to a maximum of three acres of land owned and used by a nonprofit community service oriented organization and not used for residential purposes on either a temporary or permanent basis, provided that: (i) the property is not used for a revenue-producing activity for more than six days in the calendar year preceding the year of assessment; or (ii) the organization makes annual charitable contributions and donations at least equal to the property's previous year's property taxes and the property is allowed to be used for public and community meetings or events for no charge, as appropriate to the size of the facility. For purposes of this clause, (A) "charitable contributions and donations" has the same meaning as lawful gambling purposes under section 349.12, subdivision 25, excluding those purposes relating to the payment of taxes, assessments, fees, auditing costs, and utility payments; (B) "property taxes" excludes the state general tax; (C) a "nonprofit community service oriented organization" means any corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, fraternal, civic, or educational purposes, and which is exempt from federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal Revenue Code; and (D) "revenue-producing activities" shall include but not be limited to property or that portion of the property that is used as an on -sale intoxicating liquor or 3.2 percent malt liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling alley, a retail store, gambling conducted by organizations licensed under chapter 349, an insurance business, or office or other space leased or rented to a lessee who conducts a for-profit enterprise on the premises. Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use of the property for social events open exclusively to members and their guests for periods of less than 24 hours, when an admission is not charged nor any revenues are received by the organization shall not be considered a revenue-producing activity. The organization shall maintain records of its charitable contributions and donations and of public meetings and events held on the property and make them available upon request any time to the assessor to ensure eligibility. An organization meeting the requirement under item (ii) must file an application by May 1 with the assessor for eligibility for the current year's assessment. The commissioner shall prescribe a uniform application form and instructions; (4) postsecondary student housing of not more than one acre of land that is owned by a nonprofit corporation organized under chapter 317A and is used exclusively by a student cooperative, sorority, or fraternity for on -campus housing or housing located within two miles of the border of a college campus; (5) manufactured home parks as defined in section 327.14, subdivision 3; (6) real property that is actively and exclusively devoted to indoor fitness, health, social, recreational, and related uses, is owned and operated by a not-for-profit corporation, and is located within the metropolitan area as defined in section 39 Anoka County City of Lino Lakes 473.121, subdivision 2; (7) a leased or privately owned noncommercial aircraft storage hangar not exempt under section 272.01, subdivision 2, and the land on which it is located, provided that: (i) the land is on an airport owned or operated by a city, town, county, Metropolitan Airports Commission, or group thereof; and (ii) the land lease, or any ordinance or signed agreement restricting the use of the leased premise, prohibits commercial activity performed at the hangar. If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must be filed by the new owner with the assessor of the county where the property is located within 60 days of the sale; (8) a privately owned noncommercial aircraft storage hangar not exempt under section 272.01, subdivision 2, and the land on which it is located, provided that: (i) the land abuts a public airport; and (ii) the owner of the aircraft storage hangar provides the assessor with a signed agreement restricting the use of the premises, prohibiting commercial use or activity performed at the hangar; and (9) residential real estate, a portion of which is used by the owner for homestead purposes, and that is also a place of lodging, if all of the following criteria are met: (i) rooms are provided for rent to transient guests that generally stay for periods of 14 or fewer days; (ii) meals are provided to persons who rent rooms, the cost of which is incorporated in the basic room rate; (iii) meals are not provided to the general public except for special events on fewer than seven days in the calendar year preceding the year of the assessment; and (iv) the owner is the operator of the property. The market value subject to the 4c classification under this clause is limited to five rental units. Any rental units on the property in excess of five, must be valued and assessed as class 3a. The portion of the property used for purposes of a homestead by the owner must be classified as class 1 a property under subdivision 22; (10) real property up to a maximum of three acres and operated as a restaurant as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) is either devoted to commercial purposes for not more than 250 consecutive days, or receives at least 60 percent of its annual gross receipts from business conducted during four consecutive months. Gross receipts from the sale of alcoholic beverages must be included in determining the property's qualification under subitem (B). The property's primary business must be as a restaurant and not as a bar. Gross receipts from gift shop sales located on the premises must be excluded. Owners of real property desiring 4c classification under this clause must submit an annual declaration to the assessor by February 1 of the current assessment year, based on the property's relevant information for the preceding assessment year; and (11) Iakeshore and riparian property and adjacent land, not to exceed six acres, used as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to the public and devoted to recreational use for marina services. The marina owner must annually provide evidence to the assessor that it provides services, including lake or river access to the public. No more than 800 feet of Iakeshore may be included in this classification. Buildings used in conjunction with a marina for marina services, including but not limited to buildings used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing tackle, are classified as class 3a property. Class 4c property has a class rate of 1.5 percent of market value, except that (i) each parcel of seasonal residential recreational property not used for commercial purposes has the same class rates as class 4bb property, (ii) manufactured home parks assessed under clause (5) have the same class rate as class 4b property, (iii) commercial -use seasonal residential recreational property and marina recreational land as described in clause (11), has a class rate of one percent for the first $500,000 of market value, and 1.25 percent for the remaining market value, (iv) the market value of property described in clause (4) has a class rate of one percent, (v) the market value of property described in clauses (2), (6), and (10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property in clause (9) qualifying for class 4c property has a class rate of 1.25 percent. (e) Class 4d property is qualifying low-income rental housing certified to the assessor by the Housing Finance Agency under section 40 Anoka County City of Lino Lakes 273.128, subdivision 3. If only a portion of the units in the building qualify as low-income rental housing units as certified under section 273.128, subdivision 3, only the proportion of qualifying units to the total number of units in the building qualify for class 4d. The remaining portion of the building shall be classified by the assessor based upon its use. Class 4d also includes the same proportion of land as the qualifying low-income rental housing units are to the total units in the building. For all properties qualifying as class 4d, the market value determined by the assessor must be based on the normal approach to value using normal unrestricted rents. Class 4d property has a class rate of 0.75 percent. Subd. 25a.Elderly assisted living facility property. "Elderly assisted living facility property" means residential real estate containing more than one unit held for use by the tenants or lessees as a residence for periods of 30 days or more, along with community rooms, lounges, activity rooms, and related facilities, designed to meet the housing, health, and financial security needs of the elderly. The real estate may be owned by an individual, partnership, limited partnership, for-profit corporation or nonprofit corporation exempt from federal income taxation under United States Code, title 26, section 501(c)(3) or related sections. An admission or initiation fee may be required of tenants. Monthly charges may include charges for the residential unit, meals, housekeeping, utilities, social programs, a health care alert system, or any combination of them. On-site health care may be provided by in-house staff or an outside health care provider. The assessor shall classify elderly assisted living facility property, depending upon the property's ownership, occupancy, and use. The applicable class rates shall apply based on its classification, if taxable. Subd. 26. [Repealed, 1987 c 268 art 6 s 531 Subd. 27. [Repealed, 1987 c 268 art 6 s 53] Subd. 28. [Repealed, 1987 c 268 art 6 s 53] Subd. 29. [Repealed, 1987 c 268 art 6 s 531 Subd. 30. [Repealed, 1988 c 719 art 5 s 811 Subd. 31.Class 5. Class 5 property includes: (1) unmined iron ore and low-grade iron -bearing formations as defined in section 273.14; and (2) all other property not otherwise classified. Class 5 property has a class rate of 2.0 percent of market value. Subd. 32. [Repealed, 1998 c 389 art 2 s 211 Subd. 33.Classification of unimproved property. (a) All real property that is not improved with a structure must be classified according to its current use. (b) Except as provided in subdivision 23, paragraph (c) or (d), real property that is not improved with a structure and for which there is no identifiable current use must be classified according to its highest and best use permitted under the local zoning ordinance. If the ordinance permits more than one use, the land must be classified according to the highest and best use permitted under the ordinance. If no such ordinance exists, the assessor shall consider the most likely potential use of the unimproved land based upon the use made of surrounding land or land in proximity to the unimproved land. Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value of property owned by a veteran or by the veteran and the veteran's spouse qualifying for homestead classification under subdivision 22 or 23 is excluded in determining the property's taxable market value if it serves as the homestead of a military veteran, as defined in section 197.447, who has a service -connected disability of 70 percent or more. To qualify for exclusion under this subdivision, the veteran must have been honorably discharged from the United States armed forces, as indicated by United States Government Form DD214 or other official military discharge papers, and must be certified by the United States Veterans Administration as having a service -connected disability. (b)(1) For a disability rating of 70 percent or more, $150,000 of market value is excluded, except as provided in clause (2); and (2) for a total (100 percent) and permanent disability, $300,000 of market value is 41 Anoka County City of Lino Lakes excluded. (c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the spouse holds the legal or beneficial title to the homestead and permanently resides there, the exclusion shall carry over to the benefit of the veteran's spouse for one additional assessment year or until such time as the spouse sells, transfers, or otherwise disposes of the property, whichever comes first. (d) In the case of an agricultural homestead, only the portion of the property consisting of the house and garage and immediately surrounding one acre of land qualifies for the valuation exclusion under this subdivision. (e) A property qualifying for a valuation exclusion under this subdivision is not eligible for the credit under section 273.1384, subdivision 1, or classification under subdivision 22, paragraph (b). (f) To qualify for a valuation exclusion under this subdivision a property owner must apply to the assessor by July 1 of each assessment year, except that an annual reapplication is not required once a property has been accepted for a valuation exclusion under paragraph (b), clause (2), and the property continues to qualify until there is a change in ownership. History: (1993) 1913 c 483 s 1; 1923 c 140; 1933 c 132; 1933 c 359; 1937 c 365 s 1; Ex1937 c 86 s 1; 1939 c 48; 1941 c 436; 1941 c 437; 1941 c 438; 1943 c 172 s 1; 1943 c 648 s 1; 1945 c 274 s 1; 1945 c 527 s 1; 1947 c 537 s 1; 1949 c 723 s 1; 1951 c 510 s 1; 1951 c 585 s 1; 1953 c 358 s 1,2; 1953 c 400 s 1; 1953 c 747 s 1,2; 1955 c 751 s 1,2; 1957 c 866 s 1; 1957 c 959 s 1; 1959 c 40 s 1; 1959 c 338 s 1; 1959 c 541 s 1; 1959 c 562 s 3; Ex1959 c 70 art 1 s 2; 1961 c 243 s 1; 1961 c 322 s 1; 1961 c 340 s 3; 1961 c 475 s 1; 1961 c 710 s 1; 1963 c 426 s 1; 1965 c 259 s 1; 1967 c 606 s 1; Ex1967 c 32 art 1 s 2-4; art 4 s 1; art 9 s 1,2; 1969 c 251 s 1; 1969 c 399 s 49; 1969 c 407 s 1; 1969 c 417 s 1; 1969 c 422 s 1,2; 1969 c 709 s 4,5; 1969 c 760 s 1; 1969 c 763 s 1; 1969 c 965 s 2; 1969 c 1126 s 2; 1969 c 1128 s 1,2; 1969 c 1132 s 1; 1969 c 1137 s 1; 1971 c 226 s 1; 1971 c 427 s 3-12,16,17; 1971 c 747 s 1; 1971 c 791 s 1; 1971 c 797 s 3,4; Ex1971 c 31 art 9 s 1; art 22 s 1,2,4,6,7,8; Ex1971 c 31 art 36 s 1; 1973 c 355 s 1,2; 1973 c 456 s 1; 1973 c 492 s 14; 1973 c 582 s 3; 1973 c 590 s 1; 1973 c 650 art 14 s 1,2; art 20 s 3; art 24 s 3; 1973 c 774 s 1; 1974 c 545 s 3; 1974 c 556 s 16; 1975 c 46 s 3; 1975 c 339 s 9; 1975 c 359 s 23; 1975 c 376 s 1; 1975 c 395 s 1; 1975 c 437 art 1 s 25,27,28; 1976 c 2 s 96,159-161,170; 1976 c 181 s 2; 1976 c 245 s 1; 1977 c 319 s 1,2; 1977 c 347 s 43,44; 1977 c 423 art 3 s 5- 8; 1978 c 767 s 7-11; 1979 c 303 art 2 s 11-17; art 10 s 5; 1979 c 334 art 1 s 25. 1980 c 437 s 5; 1980 c 562 s 1; 1980 c 607 art 2 s 7-15; art 4 s 4; 1981 c 188 s 1; 1981 c 356 s 248; 1981 c 365 s 9; 1Sp1981 c 1 art 2 s 7-11; art 5 s 2; 1Sp1981 c 3 s 1; 1Sp1981 c 4 art 2 s 27; 2Sp1981 c 1 s 6; 3Sp1981 c 1 art 1 s 2; 1982 c 523 art 6 s 1; art 14 s 1; art 23 s 2; 1982 c 642 s 9; 1983 c 216 art 1 s 43,44; 1983 c 222 s 11-13; 1983 c 342 art 2 s 9-18; art 8 s 1; 1984 c 502 art 3 s 9-14; art 7 s 1,2; 1984 c 522 s 2; 1984 c 593 s 22-28; 1984 c 654 art 5 s 58; 1985 c 248 s 70; 1985 c 300 s 6; 1 Sp 1985 c 14 art 3 s 5-12; art 4 s 45-56; 1986 c 444; 1 Sp 1986 c 1 art 4 s 18-21; 1987 c 268 art 5 s 4; art 6 s 18,20-23; 1987 c 291 s 208-209; 1987 c 384 art 1 s 25; 1988 c 719 art 5 s 13-19; 1989 c 277 art 2 s 28,29; 1989 c 304 s 137; 1 Sp 1989 c 1 art 2 s 1-8,11; 1990 c 480 art 7 s 7; 1990 c 604 art 3 s 16-19; 1991 c 249 s 31; 1991 c 291 art 1 s 20-25; 1992 c 363 art 1 s 12. 1992 c 511 art 2 s 17,18; art 4 s 4,5; 1993 c 224 art 1 s 27; 1993 c 375 art 3 s 16; art 5 s 23-26; 1994 c 416 art 1 s 18,19; 1994 c 483 s 1; 1994 c 587 art 5 s 10,11; 1995 c 264 art 3 s 9,10; 1996 c 471 art 3 s 10-12; 1997 c 231 art 1 s 6-10; art 2 s 20,21; 3Sp1997 c 3 s 28; 1998 c 254 art 1 s 74; 1998 c 389 art 2 s 8-12; 1999 c 243 art 5 s 15-20; 1999 c 248 s 18; 1999 c 249 s 22; 2000 c 490 art 5 s 12,13; 1 Sp2001 c 5 art 3 s 32-36; 2002 c 377 art 4 s 16,17; art 10 s 6; 2003 c 127 art 2 s 13,14; art 5 s 17; 2003 c 128 art 3 s 45; 1Sp2003 c 21 art 4 s 4; 2005 c 151 art 3 s 12; 1Sp2005 c 3 art 1 s 15,16; 2006 c 259 art 4 s 13; art 5 s 1,2; 2008 c 154 art 2 s 11-14; 2008 c 366 art 6 s 26- 28; art 11 s 13; art 15 s 14,15; 2009 c 12 art 2 s 6; 2009 c 88 art 2 s 18; art 10 s 6-8 NOTE: The amendment to subdivision 22 by Laws 2008, chapter 154, article 2, section 11, is effective for taxes payable in 2010 and thereafter, except the amendments to paragraph (b) and to the portions of paragraph (c) decreasing the class rate and increasing the market value of the first tier of class 1c homestead resorts are effective for taxes payable in 2009 and thereafter. Laws 2008, chapter 154, article 2, section 11, the effective date, and Laws 2008, chapter 366, article 6, section 44. NOTE: The amendment to subdivision 23 by Laws 2008, chapter 366, article 6, section 26, is effective for taxes payable in 2010 and thereafter, except the portions of subdivision 23 reducing the agricultural class rate, expanding the definition of "agricultural purposes" in paragraph (e) and "agricultural products" in paragraph (h), and relating to managed forest land in paragraph (d), are effective for taxes payable in 2009 and thereafter. Laws 2008, chapter 366, article 6, section 26, the effective date. NOTE: The amendment to subdivision 25 by Laws 2008, chapter 154, article 2, section 13, relating to class 4c resorts in paragraph (d), clause (1), is effective for assessment year 2009 and thereafter, for taxes payable in 2010 and thereafter. Laws 2008, chapter 154, article 2, section 13, the effective date. NOTE: The amendment to subdivision 33 by Laws 2008, chapter 366, article 6, section 28, is effective for taxes payable in 2010 and thereafter. Laws 2008, chapter 366, article 6, section 28, the effective date. 42 Anoka County City of Lino Lakes NOTE: The amendment to subdivision 23 by Laws 2009, chapter 12, article 2, section 6, is effective for assessments in 2010 for taxes payable in 2011, and thereafter. Laws 2009, chapter 12, article 2, section 6, the effective date. 43 Anoka County City of Lino Lakes 273.20 ASSESSOR MAY ENTER DWELLINGS, BUILDINGS, OR STRUCTURES. Any officer authorized by law to assess property for taxation may, when necessary to the proper performance of duties, enter any dwelling -house, building, or structure, and view the same and the property therein. Any officer authorized by law to assess property for ad valorem tax purposes shall have reasonable access to land and structures as necessary for the proper performance of their duties. A property owner may refuse to allow an assessor to inspect their property. This refusal by the property owner must be either verbal or expressly stated in a letter to the county assessor. If the assessor is denied access to view a property, the assessor is authorized to estimate the property's estimated market value by making assumptions believed appropriate concerning the property's finish and condition. History: (1997) RL s 814; 1986 c 444; 1999 c 243 art 5 s 24 44 Anoka County City of Lino Lakes 274.01 BOARD OF APPEAL AND EQUALIZATION. Subdivision 1. Ordinary board; meetings, deadlines, grievances. (a) The town board of a town, or the council or other governing body of a city, is the board of appeal and equalization except (1) in cities whose charters provide for a board of equalization or (2) in any city or town that has transferred its local board of review power and duties to the county board as provided in subdivision 3. The county assessor shall fix a day and time when the board or the board of equalization shall meet in the assessment districts of the county. Notwithstanding any law or city charter to the contrary, a city board of equalization shall be referred to as a board of appeal and equalization. On or before February 15 of each year the assessor shall give written notice of the time to the city or town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings must be held between April 1 and May 31 each year. The clerk shall give published and posted notice of the meeting at least ten days before the date of the meeting. The board shall meet at the office of the clerk to review the assessment and classification of property in the town or city. No changes in valuation or classification which are intended to correct errors in judgment by the county assessor may be made by the county assessor after the board has adjourned in those cities or towns that hold a local board of review; however, corrections of errors that are merely clerical in nature or changes that extend homestead treatment to property are permitted after adjournment until the tax extension date for that assessment year. The changes must be fully documented and maintained in the assessor's office and must be available for review by any person. A copy of the changes made during this period in those cities or towns that hold a local board of review must be sent to the county board no later than December 31 of the assessment year.(b) The board shall determine whether the taxable property in the town or city has been properly placed on the list and properly valued by the assessor. If real or personal property has been omitted, the board shall place it on the list with its market value, and correct the assessment so that each tract or lot of real property, and each article, parcel, or class of personal property, is entered on the assessment list at its market value. No assessment of the property of any person may be raised unless the person has been duly notified of the intent of the board to do so. On application of any person feeling aggrieved, the board shall review the assessment or classification, or both, and correct it as appears just. The board may not make an individual market value adjustment or classification change that would benefit the property if the owner or other person having control over the property has refused the assessor access to inspect the property and the interior of any buildings or structures as provided in section 273.20.(c) A local board may reduce assessments upon petition of the taxpayer but the total reductions must not reduce the aggregate assessment made by the county assessor by more than one percent. If the total reductions would lower the aggregate assessments made by the county assessor by more than one percent, none of the adjustments may be made. The assessor shall correct any clerical errors or double assessments discovered by the board without regard to the one percent limitation.(d) A local board does not have authority to grant an exemption or to order property removed from the tax rolls.(e) A majority of the members may act at the meeting, and adjourn from day to day until they finish hearing the cases presented. The assessor shall attend, with the assessment books and papers, and take part in the proceedings, but must not vote. The county assessor, or an assistant delegated by the county assessor shall attend the meetings. The board shall list separately, on a form appended to the assessment book, all omitted property added to the list by the board and all items of property increased or decreased, with the market value of each item of property, added or changed by the board, placed opposite the item. The county assessor shall enter all changes made by the board in the assessment book.(f) Except as provided in subdivision 3, if a person fails to appear in person, by counsel, or by written communication before the board after being duly notified of the board's intent to raise the assessment of the property, or if a person feeling aggrieved by an assessment or classification fails to apply for a review of the assessment or classification, the person may not appear before the county board of appeal and equalization for a review of the assessment or classification. This paragraph does not apply if an assessment was made after the local board meeting, as provided in section 273.01, or if the person can establish not having received notice of market value at least five days before the local board meeting.(g) The local board must complete its work and adjourn within 20 days from the time of convening stated in the notice of the clerk, unless a longer period is approved by the commissioner of revenue. No action taken after that date is valid. All complaints about an assessment or classification made after the meeting of the board must be heard and determined by the county board of equalization. A nonresident may, at any time, before the meeting of the board file written objections to an assessment or classification with the county assessor. The objections must be presented to the board at its meeting by the county assessor for its consideration. Subd. 2. Special board; duties delegated. The governing body of a city, including a city whose charter provides for a board of equalization, may appoint a special board of review. The city may delegate to the special board of review all of the powers and duties in subdivision 1. The special board of review shall serve at the direction and discretion of the appointing body, subject to the restrictions imposed by law. The appointing body shall determine the number of members of the board, the compensation and expenses to be paid, and the term of office of each member. At least one member of the special board of review must be an appraiser, realtor, or other person familiar with property valuations in the assessment district. 45 Anoka County City of Lino Lakes Subd. 3. Local board duties transferred to county. The town board of any town or the governing body of any home rule charter or statutory city may transfer its powers and duties under subdivision 1 to the county board, and no longer perform the function of a local board. Before the town board or the governing body of a city transfers the powers and duties to the county board, the town board or city's governing body shall give public notice of the meeting at which the proposal for transfer is to be considered. The public notice shall follow the procedure contained in section 13D.04, subdivision 2. A transfer of duties as permitted under this subdivision must be communicated to the county assessor, in writing, before December 1 of any year to be effective for the following year's assessment. This transfer of duties to the county may either be permanent or for a specified number of years, provided that the transfer cannot be for less than three years. Its length must be stated in writing. A town or city may renew its option to transfer. The option to transfer duties under this subdivision is only available to a town or city whose assessment is done by the county. History: (2034) RL s 847; 1941 c 402 s 1; 1945 c 402 s 1; 1949 c 543 s 1; Ex1967 c 32 art 8 s 3; 1971 c 434 s 3; 1971 c564s6; 1973c 123art 5s7; 1973c 150s 1; 1973c582s3; 1975c339s5; 1977c434s 11; 1986c444; 1987 c 229 art 4 s 1; 1987 c 268 art 7 s 37; 1988 c 719 art 7 s 8; 1990 c 480 art 7 s 14; 1995 c 264 art 3 s 13; 1997 c 231 art 2 s 23; 1998 c 254 art 1 s 77; 1999 c 243 art 5 s 25; 1Sp2001 c 5 art 7 s 21; 2003 c 127 art 5 s 22; 1 Sp2005 c 3 art 1 s 18 46 Anoka County City of Lino Lakes 274.014 LOCAL BOARDS; APPEALS AND EQUALIZATION COURSE AND MEETING REQUIREMENTS. Subdivision 1. Handbook for local boards. By no later than January 1, 2005, the commissioner of revenue must develop a handbook detailing procedures, responsibilities, and requirements for local boards of appeal and equalization. The handbook must include, but need not be limited to, the role of the local board in the assessment process, the legal and policy reasons for fair and impartial appeal and equalization hearings, local board meeting procedures that foster fair and impartial assessment reviews and other best practices recommendations, quorum requirements for local boards, and explanations of alternate methods of appeal. Subd. 2. Appeals and equalization course. Beginning in 2006, and each year thereafter, there must be at least one member at each meeting of a local board of appeal and equalization who has attended an appeals and equalization course developed or approved by the commissioner within the last four years, as certified by the commissioner. The course may be offered in conjunction with a meeting of the Minnesota League of Cities or the Minnesota Association of Townships. The course content must include, but need not be limited to, a review of the handbook developed by the commissioner under subdivision 1. Subd. 3. Proof of compliance; transfer of duties. (a) Any city or town that conducts local boards of appeal and equalization meetings must provide proof to the county assessor by December 1, 2006, and each year thereafter, that it is in compliance with the requirements of subdivision 2. Beginning in 2006, this notice must also verify that there was a quorum of voting members at each meeting of the board of appeal and equalization in the current year. A city or town that does not comply with these requirements is deemed to have transferred its board of appeal and equalization powers to the county beginning with the following year's assessment and continuing unless the powers are reinstated under paragraph (c).(b) The county shall notify the taxpayers when the board of appeal and equalization for a city or town has been transferred to the county under this subdivision and, prior to the meeting time of the county board of equalization, the county shall make available to those taxpayers a procedure for a review of the assessments, including, but not limited to, open book meetings. This alternate review process shall take place in April and May.(c) A local board whose powers are transferred to the county under this subdivision may be reinstated by resolution of the governing body of the city or town and upon proof of compliance with the requirements of subdivision 2. The resolution and proofs must be provided to the county assessor by December 1 in order to be effective for the following year's assessment. History: 2003 c 127 art 2 s 16; 2005 c 151 art 5 s 25,26 47 Anoka County City of Lino Lakes Appraisal Terminology CLASSIFICATION The class that a type of property is assigned. A property's classification is based upon the existing use of the property. If the land is vacant and there is no identifiable use, the proper classification would be the most probable use of the land, which would most likely be determined by the zoning classification. CLASSIFICATION RATES The class rate assigned to a particular classification of property. Classification rates are established by the state legislature. Class rates are the same upon the same class of property throughout Minnesota. COEFFICIENT OF DISPERSION Average deviation of a group of numbers from the median, expressed as a percentage of the median. COEFFICIENT OF VARIATION Standard deviation expressed as a percentage of the mean. COMPARABLES (COMPARABLE SALES) Recently sold properties that are similar in important respects to a property being appraised to assist in estimating the value of a specific property. COST APPROACH That approach in appraisal analysis which is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements which represent the highest and best use of the land or when relatively unique or specialized improvements are located on the site and for which there exist no comparable properties on the market. DEPRECIATION A loss of utility and, hence, value from any cause. An effect caused by deterioration and/or obsolescence. Deterioration or physical depreciation is evidenced by wear and tear, decay, dry rot, cracks, encrustational or structural defects. Obsolescence is divisible into two parts, functional and economic. Functional obsolescence may be due to poor floor plan, mechanical inadequacy or over adequacy, functional inadequacy or over adequacy due to size, style, age, etc. It is evidenced by conditions within the property. Economic obsolescence is caused by changes external to the property, such as neighborhood infiltrations of inharmonious groups or property uses, legislation, etc. It is also the actual decline in market value of the improvement to land from time of purchase to the time of resale. ■ CURABLE DEPRECIATION Those items of physical deterioration and functional obsolescence which are economically feasible to cure and hence are customarily repaired or replaced by a prudent property owner. The estimate of this depreciation is usually computed as a dollar amount of the cost -to -cure. ■ INCURABLE DEPRECIATION Elements of physical deterioration or functional obsolescence which either cannot be corrected; or, if possible to correct, cannot be corrected except at a cost in excess of their contribution to the value of the property. PHYSICAL DEPRECIATION A reduction in utility resulting from an impairment of physical condition. For purposes of appraisal analysis, it is most common and convenient to divide physical deterioration into curable and incurable components. ■ PHYSICAL CURABLE DEPRECIATION Physical deterioration which the prudent buyer would anticipate correction upon purchase of the property. The cost of effecting the 48 Anoka County City of Lino Lakes correction or cure would be no more than the anticipated addition to utility, and hence ultimately to value, associated with the cure. ■ PHYSICAL INCURABLE DEPRECIATION Physical deterioration which in terms of market conditions as of the date of the appraisal is not feasible or economically justified to correct. The cost of correcting the condition or effecting a cure is estimated to be greater than the anticipated increase in utility, and hence ultimately in value of the property that will result from correcting or curing the condition. FUNCTIONAL DEPRECIATION Impairment of functional capacity or efficiency. Functional obsolescence reflects the loss in value brought about by such factors as overcapacity, inadequacy and changes in the art, that affect the property item itself or its relation with other items comprising a larger property. The inability of a structure to perform adequately the function for which it is currently employed. ■ FUNCTIONAL CURABLE DEPRECIATION Functional obsolescence which may be corrected or cured when the cost of replacing the outmoded or unaccep-table component is at least offset by the anticipated increase in utility, and hence ultimately in value, resulting from the replacement. ■ FUNCTIONAL INCURABLE DEPRECIATION Functional obsolescence that results from structural deficiencies or superadequacies that the prudent purchaser or owner would not be justified in replacing, adding or removing, because the cost of effecting a cure would be greater than the anticipated increase in utility resulting from the replacement, addition or removal. ECONOMIC OBSOLESCENCE Impairment of desirability or useful life arising from factors external to the property, such as economic forces of environmental changes which affect supply -demand relationships in the market. Loss in the use and value of a property arising from the factors of economic obsolescence is to be distinguished from loss in value from physical deterioration and functional obsolescence, both of which are inherent to the property. Also referred to as Locational or Environmental Obsolescence. EASEMENT A right held by one person to use the land of another for a specific purpose such as access to other property. EQUALIZATION The adjustment of estimated market valuation of real property in a particular area to establish a more equitable division of the total tax burden within the area. ESTIMATED MARKET VALUE Represents the assessor's estimate of the property's actual market value. Market value is defined as the most probable price that a well informed buyer would pay a well informed seller for a property without either party being unduly forced to buy or sell. In other words, what the property would likely sell for if it were to be sold in an arm's length transaction. Although the sale price of a property often reflects the market value; market value and sale price are not always synonymous. GRADING OF PROPERTY The process used by an appraiser to identify the quality of construction in the physical structure. HIGHEST AND BEST USE That reasonable and probable use that will support the highest present value, as defined, as of the effective date of an appraisal. 49 Anoka County City of Lino Lakes HOMESTEAD For property tax purposes, homestead is a tax benefit granted to property owners (or qualifying relatives) who are Minnesota residents and who own and occupy their home as their primary place of residence. Homestead is a fact question which may require the assessor to utilize a number of indicators to determine if it is being appropriately claimed. Although factors such as mailing address and drivers license may sometimes be useful indicators to determine where a person lives, in the final analysis, the question comes down to, "Is the residence occupied as the applicant's primary place of residence?" In other words, do they actually live there? If the answer is no, no amount of supporting documentation such as voter registrations or mailing addresses can alter the fact. IMPROVED LAND Land having either on-site improvements, off-site improvements or both. IMPROVEMENT A structure or building permanently attached to the land. INCOME APPROACH That procedure in appraisal analysis which converts anticipated benefits (dollar income or amenities) to be derived from the ownership of property into a value estimate. The income approach is widely applied in appraising income-producing properties. Anticipated future income and/or revisions are discounted to a present worth figure through the capitalization process. INDEX OF REGRESSION Mean assessment ratio divided by the sales weighted -aggregate ratio. LEGAL DESCRIPTION A statement containing a designation by which land is identified according to a system set up by law or approved by law. LIMITED MARKET VALUE A limitation which is imposed on how much the taxable value of certain classes of property (agricultural homestead or nonhomestead, residential homestead or nonhomestead, noncommercial seasonal recreational residential) can increase over the preceding year's value. This limit does not apply to an increase in your value due to improvement made to the property. MARKET APPROACH Traditionally, an appraisal procedure in which the market value estimate is predicated upon prices paid in actual market transactions and current listings, the former fixing the lower limit of value in a static or advancing market (price wise), and fixing the higher limit of value in a declining market; and the latter fixing the higher limit in any market. It is a process of analyzing sales of similar recently sold properties in order to derive an indication of the most probable sales price of the property being appraised. The reliability of this technique is dependent upon (a) the availability of comparable sales data, (b) the verification of the sales data, (c) the degree of comparability or extent of adjustment necessary for time differences; and (d) the absence of non -typical conditions affecting the sale price. MASS APPRAISING A method used in revaluation of a community for tax purposes. As the term implies, it is a method of appraising a large number of properties at one time by adopting standard techniques, and giving due consideration to the appraisal process so that uniformity or equality of values may be achieved between all properties. MEAN ASSESSMENT RATIO Total of ratios divided by number of properties. MEDIAN ASSESSMENT RATIO Middle assessment ratio or the average of the two middle terms when the ratios are lined up from low to high. 50 Anoka County City of Lino Lakes METES AND BOUNDS A description of a parcel of land by reference to the courses (bearings, that is, the angles East or West of due North and due South) and distances (usually feet or chains) of each straight line which forms its boundary, with one of the corners tied to an established point; that is, the bearing and distance from an established point, such as a section corner or to the intersection of the center lines of two roads, etc. If one part of the boundary is on a curve, this part is described by showing the number of degrees of the central angle subtended by the curve (arc), the length of the radius and the length along the curve. MODE Assessment -ratio that appears most frequently. NET TAX CAPACITY New for payable 1990. Is used to extend taxes in accordance to multiplying the market value by the appropriate class rate. OBSOLESCENCE One of the causes of depreciation. It is the impairment of desirability and usefulness brought about by new inventions, current changes in design and improved processes for production, or from external influencing factors, which make a property less desirable and valuable for a continued use. Obsolescence may be either economic or functional. PARCEL A piece of land, regardless of size in one ownership. PROPERTY CLASS The class that has been assigned to the property based upon the use of the property. PROPERTY IDENTIFICATION NUMBER A geographically related parcel numbering system. The number contains twelve digits made up of section, township, range, quarter -quarter and parcel. The first six digits, based on the public land survey, geographically locate the section in which the property is located. The next two digits will designate in which quarter -quarter the property is located. The ninth through twelfth digits indicate the parcel within the quarter -quarter. The parcels will be numbered consecutively beginning with 0001. When a division is made, the next consecutive available number(s) will be assigned, and the old number(s) will be retained for historical data. RANGE Difference between the high sales ratio and the low sales ratio. REVALUATION The mass appraisal of all property within an assessment jurisdiction to obtain equalization of estimated market values. Reappraisal of a former assessment. SALES ASSESSMENT RATIO The ratio derived by dividing the estimated market value by the selling price. AGGREGATE RATIO The ratio determined by dividing the total estimated market value of all sales by the total selling prices. AVERAGE MEAN The total of all the ratios in a given set divided by the number of items in the set. MEDIAN RATIO The value of the middle item where an odd number of items are arranged (arrayed) according to size, or the arithmetic average of the two central items if there is an even number of items. It is a positional average and is not affected by the size of extreme values. 51 Anoka County City of Lino Lakes SALES WEIGHTED AGGREGATE RATIO Total of assessment values divided by total of selling price. SAMPLE SUFFICIENCY GAUGE Square root of half the range divided by the number of properties. SPECIAL ASSESSMENT A charge made by government against real estate to defray the cost of making a public improvement adjacent to the property which, while of general community benefit, is of special benefit to the property so assessed. STANDARD DEVIATION Square root of total of squared deviations from mean divided by number of properties. TAX CAPACITY RATE (Local Tax Rate): Determined by dividing a taxing district's property tax levy by the taxing district's total net tax capacity. The tax capacity rate is expressed as a percentage of net tax capacity. TOPOGRAPHY The contour of land surface, i.e., flat, rolling, mountainous, etc. TRUTH IN TAXATION Provides taxpayers with a preliminary property tax notification if any taxing district proposes to increase taxes through proposed budget increases. Included on the notification is the market value, classification, a proposed tax by taxing district, and time and place of taxing district budget hearings. UNIMPROVED LAND Land without buildings, in its natural state. VACANT LAND Land without buildings. May or may not have improvements such as grading, sewer, etc. VALUE EXEMPTION FOR CERTAIN IMPROVEMENTS (THIS OLD HOUSE) Qualifying homes, 35 years or older, were previously eligible to receive a temporary exemption on all or a portion of the assessor's estimated value for certain newly constructed improvements with an assessed value of $1,000 or more if a building permit was issued by June 30, 1999. Legislative action in 1999 amended this law effective July 1, 1999 that to qualify for exemption of improvements from the property tax, the property must be 45 years of age or older at the time the improvements commence and the property must be receiving the homestead classification. The minimum assessed value must be $5,000 for eligible improvement. This includes properties classified as residential homestead (including duplexes and triplexes), blind/paraplegic veteran/disabled homestead and agricultural homestead. In addition, the owner must have taken out a building permit and file an application for the exemption with the assessor. This law has since expired and only improvements made prior to January 2, 2003 have been grandfathered in and are still enrolled in the program. Appeals Procedure Each spring Anoka County sends out a property tax bill (based on the prior year assessment) along with a notice of the new assessment. Three factors that affect the tax bill are: 1. The amount your local governments (town, city, county, etc.) spend to provide services to your community; 2. The estimated market value of your property; 3. The classification of your property (how it is used). 52 Anoka County City of Lino Lakes The assessor determines the final two factors. You may appeal the value or classification of your property as described below. Informal Appeal • Property owners are encouraged to call the appraiser or assessor whenever they have questions or concerns about their market value, classification of the property, or the assessment process. • • • • Almost all questions can be answered during this informal appeal process. When taxpayers call questioning their market value, every effort is made to make an appointment to inspect properties that were not previously inspected. If the data on the property is correct, the appraiser is able to show the property owner other sales in the market that support the estimated market value. If errors are found during the inspection, or other factors indicate a value reduction is warranted, the appraiser can easily make the changes at this time. Local Board of Appeal and Equalization • The Local Board of Appeal and Equalization is typically made up of city council members or township board members. • The Board meets during late April and early May. • Taxpayers can make their appeal in person or by letter. • The assessor is present to answer any questions and present evidence supporting their value. County Board of Appeal and Equalization In order to appeal to the County Board of Appeal and Equalization, a property owner must first appeal to the Local Board of Appeal and Equalization. • • The County Board of Appeal and Equalization follows the Local Board of Appeal and Equalization in the assessment appeals process. Their role is to ensure equalization among individual assessment districts and classes of property. • The board meets during the Final ten working days in June. • A taxpayer must first appeal to the local board before appealing to the county board. Decisions of the County Board of Appeal and Equalization can be appealed to tax court. 53 Anoka County City of Lino Lakes Minnesota Tax Court The Tax Court has statewide jurisdiction. Except for an appeal to the Supreme Court, the Tax Court shall be the sole, exclusive and final authority for the hearing and determination of all questions of law and fact arising under the tax laws of the state. There are two divisions of tax court: the small claims division and the regular division. The Small Claims Division of the Tax Court only hears appeals involving one of the following situations: • The assessor's estimated market value of the property is <$300,000 • The entire parcel is classified as a residential homestead and the parcel contains no more than one dwelling unit. • The entire property is classified as an agricultural homestead. • Appeals involving the denial of a current year application for homestead classification of the property. The proceedings of the small claims division are less formal and property owners often represent themselves. There is no official record of the proceedings. Decisions made by the small claims division are final and cannot be appealed further. Small claims decisions do not set precedent. The Regular Division of the Tax Court will hear all appeals, including those with the jurisdiction of the small claims division. Decisions made here can be appealed to a higher court. The principal office for the Tax Court is located in St. Paul. However, the Tax Court is a circuit court and can hold hearings at any other place within the state so that taxpayers may appear with as little inconvenience and expense to the taxpayer as possible. Appeals of property located in Anoka County are heard at the Anoka County Courthouse, with trials scheduled to begin on Thursdays. Three judges make up the Tax Court. Each may hear and decide cases independently. However, a case may be tried before the entire court under certain circumstances. The petitioner must file in tax court on or before April 30 of the year in which the tax is payable. 54 Expenditures April 27, 2015 Check #100158 to #100251 534,314.71 Date: 04/22/2015 Time: 14:37:49 City of Lino Lakes FM Entry - Invoice Journal Ranges: Options: Vendor # Vendor If: (A) Invoice #: (A) Entry Journal #: (R) 12581 12599 Trans #: (A) Line #: (A) Due Date: (A) Bank #: (A) Detail / Summary: S Sort: A Name Operator: TJT Page: 1 Invoice Status: A # of copies: 1 Check Over Expend: N Discount # of items Net Gross Discount Lost 000093 ACE SOLID WASTE, INC. 1 744.58 744.58 .00 .00 000408 AFSCME COUNCIL #5 1 684.58 684.58 .00 .00 000100 AID ELECTRIC CORPORATION 2 1,978.60 1,978.60 .00 .00 000370 ANOKA COUNTY CENTRAL COMMUNICATIONS 1 342.00 342.00 .00 .00 004063 ANOKA COUNTY LICENSE BUREAU 1 4,507.15 4,507.15 .00 .00 000420 ANOKA COUNTY PROPERTY RECORDS & TAXATION 1 2,111.17 2,111.17 .00 .00 000421 ANOKA COUNTY TREASURY DEPARTMENT 1 150.00 150.00 .00 .00 000997 ASPEN EQUIPMENT COMPANY 1 5,292.00 5,292.00 .00 .00 000541 ASPEN MILLS, INC. 8 1,480.59 1,480.59 .00 .00 007987 AVON BUSINESS FORMS & PROMOTIONS 2 510.72 510.72 .00 .00 007775 BATTERIES PLUS BULBS 1 696.25 696.25 .00 .00 002743 BCA ATTN: MNJIS-KIM LACEK 1 390.00 390.00 .00 .00 008293 BIFF'S INC. 3 113.57 113.57 .00 .00 008678 BLUETARP FINANCIAL, INC. 2 295.35 295.35 .00 .00 009201 Justin Buchholtz 1 10.00 10.00 .00 .00 008516 BUREAU OF CRIM. APPREHENSION 1 243.25 243.25 .00 .00 008808 BUSINESS DATA RECORD SERVICES 1 52.56 52.56 .00 .00 001040 CENTENNIAL FIRE DISTRICT 1 127,098.50 127,098.50 .00 .00 001110 CENTENNIAL UTILITIES 1 3,038.25 3,038.25 .00 .00 002700 CENTERPOINT ENERGY 1 1,769.81 1,769.81 .00 .00 001067 CENTURY COLLEGE 1 4,500.00 4,500.00 .00 .00 007776 CENTURYLINK 1 51.89 51.89 .00 .00 Date: 04/22/2015 Time: 14:37:51 City of Lino Lakes FM Entry - Invoice Journal Operator: TJT Page: 2 Discount Vendor # Name # of items Net Gross Discount Lost 009206 City of Circle Pines 1 236.97 236.97 .00 .00 900491 CITY OF ROSEVILLE 3 8,772.15 8,772.15 .00 .00 003990 CITY OF SHOREVIEW 1 4,123.91 4,123.91 .00 .00 004125 CITY OF SAINT PAUL 2 330.51 330.51 .00 .00 009057 CNH ARCHITECTS 1 67,270.23 67,270.23 .00 .00 001187 CONNEXUS ENERGY 1 4,443.16 4,443.16 .00 .00 004803 CRITICAL CONNECTIONS ECOLOGICAL SERVICES 1 4,350.00 4,350.00 .00 .00 009013 CROWN MARKING, INC. 1 24.20 24.20 .00 .00 009200 DuPont Holdings LLC 1 74,400.00 74,400.00 .00 .00 008921 FIRST ADVANTAGE LNS OCC. HEALTH 1 352.00 352.00 .00 .00 007698 FRATTALLONE'S/CIRCLE PINES ACE 2 62.03 62.03 .00 .00 008044 FREIMUTH ENTERPRISES, LLC 1 2,500.00 2,500.00 .00 .00 008557 GECK, DUEA & OLSON, PLLC 2 8,291.20 8,291.20 .00 .00 008240 GOPHER STATE ONE -CALL 2 311.95 311.95 .00 .00 000142 MELISSA HAGERT 1 80.72 80.72 .00 .00 001480 HAWKINS, INC. 1 35.00 35.00 .00 .00 004562 HD SUPPLY WATERWORKS, LTD. 2 2,902.81 2,902.81 .00 .00 007224 HUGO EQUIPMENT COMPANY 1 127.92 127.92 .00 .00 001971 INFRATECH 1 1,175.00 1,175.00 .00 .00 000303 INSTRUMENTAL RESEARCH, INC. 1 142.50 142.50 .00 .00 002000 INTL UNION OF OPER ENGR 1 495.00 495.00 .00 .00 000082 J.H. LARSON COMPANY, INC. 1 421.18 421.18 .00 .00 008394 JANI-KING OF MINNESOTA, INC. 2 3,391.00 3,391.00 .00 .00 001860 KENNEDY & GRAVEN, CHARTERED 1 124.00 124.00 .00 .00 008784 KLM ENGINEERING, INC. 1 3,800.00 3,800.00 .00 .00 009202 Natalie Kupetsky 1 5.00 5.00 .00 .00 009203 L.T.G. Power Equipment 1 10,087.40 10,087.40 .00 .00 Date: 04/22/2015 Time: 14:37:51 City of Lino Lakes FM Entry - Invoice Journal Operator: TJT Page: 3 Discount Vendor # Name # of items Net Gross Discount Lost 002208 LAW ENFORCEMENT LABOR SERVICES, INC. 1 1,034.00 1,034.00 .00 .00 009204 LHB, Inc. 1 2,239.25 2,239.25 .00 .00 009036 MANSFIELD OIL COMPANY 2 5,909.75 5,909.75 .00 .00 009117 MAPLEWOOD FIRE DEPARTMENT 1 525.00 525.00 .00 .00 008762 MARTIN-NcALLISTER 1 1,350.00 1,350.00 .00 .00 007370 MARTY LAW FIRM, LLC 1 183.75 183.75 .00 .00 002570 METRO COUNCIL ENRIVONMENTAL SERVICES 1 9,840.60 9,840.60 .00 .00 002584 METRO SALES INCORPORATED 2 148.75 148.75 .00 .00 007694 METROPOLITAN COUNCIL 1 62,637.33 62,637.33 .00 .00 000862 MIDWAY FORD COMPANY 1 42,010.00 42,010.00 .00 .00 008750 MINNESOTA COACHES, INC. 1 110.00 110.00 .00 .00 002931 MN CHILD SUPPORT PAYMENT CENTER 4 1,328.95 1,328.95 .00 .00 002760 MN DEPT OF HEALTH 2 7,123.00 7,123.00 .00 .00 002900 MN DEPT OF PUBLIC SAFETY 1 18.00 18.00 .00 .00 007268 PETE NOLL 1 185.38 185.38 .00 .00 003370 NYSTROM PUBLISHING COMPANY, INC. 1 2,427.81 2,427.81 .00 .00 000900 O'REILLY AUTOMOTIVE STORES, INC. 3 237.99 237.99 .00 .00 000983 OPTUMHEALTH FINANCIAL SERVICES 1 70.00 70.00 .00 .00 009205 Paul Conway Shields 1 54.49 54.49 .00 .00 009159 PERFORMANCE PLUS LLC 1 95.00 95.00 .00 .00 000057 PREMIUM WATERS, INC. 1 49.74 49.74 .00 .00 003600 PRESS PUBLICATIONS, INC. 1 441.69 441.69 .00 .00 000888 RICK JOHNSON DEER & BEAVER INC. 1 90.00 90.00 .00 .00 009048 SAFE -FAST, INC. 2 438.38 438.38 .00 .00 003900 SAFETY KLEEN CORPORATION, INC. 1 45.84 45.84 .00 .00 004716 SHERWIN-WILLIAMS 1 469.41 469.41 .00 .00 008556 STANTEC CONSULTING SERVICES INC. 2 11,215.75 11,215.75 .00 .00 Date: 04/22/2015 Time: 14:37:52 City of Lino Lakes FM Entry - Invoice Journal Operator: TJT Page: 4 Discount Vendor # Name # of items Net Gross Discount Lost 004240 008141 000489 004427 002487 008021 008640 000225 004840 003250 STREICHER'S, INC. 1 215.00 215.00 .00 .00 TASC - CLIENT INVOICES 1 95.00 95.00 .00 .00 TDS METROCOM MN 1 259.56 259.56 .00 .00 TIMESAVER OFF-SITE SECRETARIAL, INC 1 133.00 133.00 .00 .00 TRANS UNION LLC 1 37.20 37.20 .00 .00 Twin Cities Gateway 1 5,286.00 5,286.00 .00 .00 U.S. BANK 1 11,637.53 11,637.53 .00 .00 WHITE BEAR LOCKSMITH, INC. 1 90.00 90.00 .00 .00 WINNICI< SUPPLY, INC. 1 8.80 8.80 .00 .00 XCEL ENERGY 2 11,956.10 11,956.10 .00 .00 Grand Totals: 117 534,314.71 534,314.71 .00 .00* Date: 04/22/2015 Time: 14:38:56 Operator: TJT Ranges: Page: 1 City of Lino Lakes FM Entry - Invoice Payment - Department Report Fund: Dept Id: Program: Vendor #: Invoice #: Schedule Journal #: Bank #: (A) (A) (A) (A) (A) (R) 12588 (A) Options: Print Ranges/Options: Y Page on Department: N Department Vendor Name 12600 # of copies: 1 Description Amount MAYOR/COUNCIL MAYOR/COUNCIL ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION CHARTER CHARTER FINANCE LEGAL CONSULTANTS LEGAL CONSULTANTS AFSCME COUNCIL #5 INTL UNION OF OPER E LAW ENFORCEMENT LABO METRO COUNCIL ENVIRO MN CHILD SUPPORT PAY U.S. BANK Buchholtz, Justin Total for U.S. BANK City of Circle Pines Total for OPTUMHEALTH FINANCIA TASC U.S. U.S. U.S. U.S. - CLIENT INVOIC BANK BANK BANK BANK BUSINESS DATA RECORD APRIL UNION DUES 684.58 APRIL UNION DUES 495.00 APRIL UNION DUES 1,034.00 MARCH 2015 SAC 9,840.60 CHILD SUPPORT 1,328.95 HP/EE COMPUTER PURCHASE 1,155.06 REFUND CONTRACTOR LICENS 10.00 Department 14,548.19* CUB/COOKIES, WATER JOINT PUBLIC DATA REQUEST-COPI Department 401 MARCH COBRA FEE MARCH ADMIN FEE IIMC/MEMBERSHIP J.BARTEL IIMC/MEMBERSHIP L.HOGSTA MCMA ANNUAL CONF J.KARLS TI HOTEL/CITY CLERK CONF DOCUMENT DESTRUCTION FIRST ADVANTAGE LNS ANNUAL ENROLLMENT Total for Department 402 TIMESAVER OFF-SITE S CHARTER COMMISSION MEETI MARTY LAW FIRM, LLC LEGAL -CHARTER COMMISSION Total for Department 405 CITY OF ROSEVILLE IT SERVICES Total for Department 407 18.95 236.97 255.92* 70.00 95.00 195.00 95.00 500.00 76.50 17.52 352.00 1,401.02* 133.00 183.75 316.75* 6,653.75 6,653.75* GECK, DUEA & OLSON, LEGAL -FORFEITURE 41.20 GECK, DUEA & OLSON, LEGAL -PROSECUTION CONTRA 8,250.00 Total for Department 414 8,291.20* ECONOMIC DEVELOPMENT KENNEDY & GRAVEN, CH FEB LEGAL ECONOMIC DEVELOPMENT Twin Cities Gateway MARCH TOURISM TAX ECONOMIC DEVELOPMENT LHB, Inc. FEB 49 CLUB TIF ANALYSIS Total for Department 415 124.00 5,286.00 2,239.25 7,649.25* POLICE HAGERT, MELISSA BATTERIES 80.72 Date: 04/22/2015 Time: 14:38:56 Operator: TJT Department Page: 2 City of Lino Lakes FM Entry - Invoice Payment - Department Report Vendor Name Description Amount POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE POLICE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE WHITE BEAR LOCKSMITH ANOKA COUNTY CENTRAL ASPEN MILLS, ASPEN MILLS, ASPEN MILLS, ASPEN MILLS, ASPEN ASPEN ASPEN MILLS, MILLS, MILLS, INC. INC. INC. INC. INC. INC. INC. CONNEXUS ENERGY METRO SALES INCORPOR BCA ATTN: MNJIS-KIM XCEL ENERGY CITY OF ST. PAUL STREICHER'S, INC. NOLL, PETER U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK BUSINESS DATA RECORD Total for ASPEN MILLS, INC. CENTENNIAL FIRE DIST CENTURY COLLEGE TRANS UNION LLC OF CRIM. APPR BUREAU BUREAU BUREAU BUREAU BUREAU BUREAU CHANGE SAFE COMBO MOTOROLA SMART BATTERIES UNIFORM UNIFORM UNIFORM UNIFORM ALLOWANCE C.SCHI ALLOWANCE J.SWEN ALLOWANCE M.DEMA ALLOWANCE M.PAUL UNIFORM ALLOWANCE N.HAMA UNIFORM ALLOWANCE V.KLOS UNIFORM ALLOWANCE W.WEGE MARCH ELECTRIC COPIER MAINTENANCE CONTR 1ST QTR CJDN CONNECT ELECTRIC INTERVIEW&INTERROGATION UNIFORM ALLOWANCE C.BOEH K9 VET SERVICES ATLAS/SCHEDULING SOFTWAR COLLEGE MUSCLE MOVERS/MO GREEN MILL/INTERVIEW VOL MACIA SYMPOSIUM K.THORST TARGET/BATTERIES TARGET/TRANSCRIPTION HEA TRANS UNION/TLO INVESTIG VERIZON WIRELESS DOCUMENT DESTRUCTION Department 420 NEW HIRE UNIFORM P.PELTI 2ND QTR CENTENNIAL FIRE FIREFIGHTER PROGRAM FIRE BACKGROUND INVESTIG FINGERPRINT CHECK-A.JENN OF CRIM. APPR FINGERPRINT CHECK-C.PERE OF CRIM. APPR FINGERPRINT CHECK-J.FRID OF CRIM. APPR FINGERPRINT CHECK-J.TRYG OF CRIM. APPR FINGERPRINT CHECK-K.TORR OF CRIM. APPR FINGERPRINT CHECK-M.TEMB BUREAU OF CRIM. APPR FINGERPRINT CHECK-T.SAX U.S. BANK 911 SAFETY/GEAR RENTAL J U.S. BANK IMAGE PRINTING/PUBLIC SA U.S. BANK LANDS END/PULLOVER OPEN U.S. BANK MN FIRE CERT BOARD/HAZ M U.S. BANK MN FIRE CERT BOARD/HAZ M U.S. BANK MN FIRE CERT BOARD/HAZ M U.S. BANK MN FIRE CERT BOARD/HAZ M U.S. BANK MN FIRE CERT BOARD/HAZ M U.S. BANK MN FIRE CERT BOARD/HAZ M U.S. BANK MN FIRE CERT BOARD/HAZ M U.S. BANK MN FIRE CERT BOARD/HAZ M U.S. BANK MN FIRE CERT BOARD/HAZ M 90.00 342.00 20.00 68.80 135.70 331.40 154.14 190.55 36.00 20.00 98.00 390.00 3.72 255.00 215.00 185.38 104.00 375.00 48.16 65.00 54.38 21.41 16.75 681.25 35.04 4,017.40* 544.00 127,098.50 4,500.00 37.20 34.75 34.75 34.75 34.75 34.75 34.75 34.75 528.00 374.80 39.95 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 Date: 04/22/2015 Department Time: 14:38:56 Operator: TJT Page: 3 City of Lino Lakes FM Entry - Invoice Payment - Department Report Vendor Name Description Amount FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE FIRE U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK MARTIN-McALLISTER MARTIN-McALLISTER MARTIN-MCALLISTER MN FIRE CERT BOARD/HAZ M MN FIRE CERT BOARD/HAZ M MN FIRE CERT BOARD/HAZ M PERFORMANCE+/EXAM,MASK F PERFORMANCE+/EXAM, MASK F PERFORMANCE+/EXAM, MASK F PERFORMANCE+/EXAM, MASK F PERFORMANCE+/EXAM, MASK F PERFORMANCE+/EXAM,MASK F PERFORMANCE+/HEP B TITER PERFORMANCE+/HEP B TITER PERFORMANCE+/HEP B TITER PERFORMANCE+/MASK FIT C. PERFORMANCE+/MASK FIT J. PERFORMANCE+/MASK FIT K. PERFORMANCE+/MASK FIT V. PERFORMANCE+/MED,MASK FI PERFORMANCE+/MED, MASK FI PERFORMANCE+/SCREEN C.B0 PERFORMANCE+/SCREEN J.SW PERFORMANCE+/SCREEN K.TH PERFORMANCE+/SCREEN V.KL WALGREENS/PHOTOS FOR OPE PUBLIC PUBLIC PUBLIC SAFETY ASSESSMENT SAFETY ASSESSMENT SAFETY ASSESSMENT MAPLEWOOD FIRE DEPAR SCBA'S PERFORMANCE PLUS LLC HEP B 1 OF 3 K.LEIBEL Paul Conway Shields SHIELD W/ 2 PANELS CITY OF ROSEVILLE USER/E-MAIL LICENSES Total for Department 421 BUILDING INSPECTIONS AVON BUSINESS FORMS BUILDING INSPECTIONS AVON BUSINESS FORMS BUILDING INSPECTIONS U.S. BANK BUILDING INSPECTIONS U.S. BANK STREETS STREETS STREETS STREETS STREETS STREETS STREETS STREETS STREETS Total for RICK JOHNSON DEER & CONNEXUS ENERGY XCEL ENERGY CITY OF ST. PAUL CENTURYLINK U.S. BANK BLUETARP FINANCIAL, SAFE -FAST, INC. SAFE -FAST, INC. Total for FLEET O'REILLY AUTOMOTIVE CORRECTION NOTICE FORMS SEPTIC TANK PERMIT FORMS CORNER EXPRESS/BATTERIES VERIZON WIRELESS Department 422 MARCH DEER REMOVAL MARCH ELECTRIC ELECTRIC ASPHALT MIX -11 1 TN SIGNAL PHONE VERIZON WIRELESS METAL TANK FOR APPLICATO SAFETY EQUIPMENT UNIFORM ALLOWANCE R.BOLD Department 430 150 150 150 211 00 00 00 50 211.50 211.50 211.50 211.50 211.50 43.00 43.00 43.00 20.00 20.00 20.00 20.00 190.00 190.00 183.75 183.75 183.75 183.75 17.87 450.00 450.00 450.00 300.00 95.00 54.49 900.00 140,476.06* 200.40 310.32 11.33 19.78 541.83* 90.00 1,311.11 4,453.70 75.51 51.89 19.88 246.38 117.79 85.00 6,451.26* #541 IGNITION SWITCH 199.59 Date: 04/22/2015 Time: 14:38:56 Operator: TJT Department Page: 4 City of Lino Lakes FM Entry - Invoice Payment - Department Report Vendor Name Description Amount FLEET FLEET FLEET FLEET FLEET FLEET FLEET FLEET FLEET FLEET FLEET FLEET FLEET FLEET GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS GOVERNMENT BUILDINGS PARKS PARKS PARKS PARKS PARKS PARKS PARKS PARKS PARKS PARKS O'REILLY AUTOMOTIVE O'REILLY AUTOMOTIVE SAFETY KLEEN CORPORA WINNICK SUPPLY, INC. HUGO EQUIPMENT COMPA U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK BLUETARP FINANCIAL, MANSFIELD OIL COMPAN 1,998 87 UNL W/10°%ETH MANSFIELD OIL COMPAN 900 ULSD 10o BIO DY DYED Total for Department 431 STOCK ALT BRG 20.02 STOCK MOTOR OIL 18.38 SOLVENT 45.84 STOCK 1/2" HOT ROLLED RO 8.80 LITTLE WONDER VACUUM HOS 127.92 AMAZON/REFRIGERANT SCALE 132.33 BILL'S/NON-OXY FUEL 15.00 ONE STOP/NON-OXY GAS 14.92 SIRENNET.COM/BACKUP ALAR 285.09 TOUSLEY/#1229 GROMMET,CO 13.90 TOUSLEY/#1229 HEADLIGHT 35.39 TRAILER PARTS 48.97 PREMIUM WATERS, INC. J.H. LARSON COMPANY, ACE SOLID WASTE, INC AID ELECTRIC CORPORA ANOKA COUNTY PROPERT ANOKA COUNTY TREASUR TDS METROCOM MN CENTENNIAL UTILITIES CONNEXUS ENERGY METRO SALES INCORPOR CENTERPOINT ENERGY CENTERPOINT ENERGY XCEL ENERGY JANI-KING OF MINNESO U.S. BANK U.S. BANK U.S. BANK U.S. BANK U.S. BANK CROWN MARKING, INC. CROWN MARKING, INC. CITY OF ROSEVILLE KANDIYOHI WATER FLUORESCENT LAMPS APRIL TRASH/RECYCLE PD REPLACE SWITCHES 2015 PROPERTY TAXES MAY BROADBAND PHONE SERVICE MARCH NATURAL GAS -600 TO MARCH ELECTRIC COPIER MAINTENANCE CONTR MARCH NATURAL GAS -1187 M MARCH NATURAL GAS -1189 M ELECTRIC APRIL MONTHLY CONTRACT AMAZON/COFFEE FILTERS AMAZON/SHOP VAC CARTRIDG HOME DEPOT/JOINT KNIFE,S MENARDS/TOILET SEATS WALMART/DISHWASHER DETER UPDATED INSERT-SCHWARTZ UPDATED INSERT-SULLIVAN PHONE SERVICE Total for Department 432 ACE SOLID WASTE, INC CENTENNIAL UTILITIES CENTENNIAL UTILITIES CENTENNIAL UTILITIES CONNEXUS ENERGY CENTERPOINT ENERGY CENTERPOINT ENERGY XCEL ENERGY SHERWIN-WILLIAMS SHERWIN-WILLIAMS APRIL TRASH/RECYCLE MARCH NATURAL GAS -6811 L MARCH NATURAL GAS -6918 S MARCH NATURAL GAS -7204 L MARCH ELECTRIC MARCH NATURAL GAS -1179 M MARCH NATURAL GAS -6520 P ELECTRIC PAINT PROSHOT II 3,981.04 1,928.71 6,875.90* 49.74 421.18 588.11 70.78 942.69 150.00 223.23 2,664.93 1,222.94 50.75 429.65 624.83 3,942.81 3,391.00 29.36 45.71 21.42 203.92 9.58 12.10 12.10 1,218.40 16,325.23* 156.47 26.67 185.20 141.49 68.62 65.63 99.85 92.21 40.41 429.00 Date: 04/22/2015 Time: 14:38:57 Operator: TJT Page: 5 City of Lino Lakes FM Entry - Invoice Payment - Department Report Department Vendor Name Description Amount PARKS FRATTALLONE'S/CIRCLE ACETONE,MINERAL SPIRITS, 45.58 PARKS BIFF'S INC. BIFF RENTAL -BIRCH PARK 15.18 PARKS BIFF'S INC. RIFF RENTAL -CITY HALL PA 25.89 PARKS U.S. BANK VERIZON WIRELESS 218.69 PARKS SAFE -FAST, INC. SAFETY EQUIPMENT 117.79 Total for Department 450 1,728.68* RECREATION PRESS PUBLICATIONS, REC SUMMER JOBS AD 441.69 RECREATION U.S. BANK MASUNE/FIRST AID SUPPLIE 365.28 RECREATION U.S. BANK VERIZON WIRELESS 28.38 Total for Department 451 835.35* ENVIRONMENTAL U.S. BANK VERIZON WIRELESS 19.78 Total for Department 461 19.78* SOLID WASTE NYSTROM PUBLISHING C RECYCLING BROCHURE 2,427.81 SOLID WASTE FREIMUTH ENTERPRISES WATERTIGHT SEA CONTAINER 2,500.00 SOLID WASTE BIFF'S INC. BIFF RENTAL -RECYCLING EV 72.50 Total for Department 462 5,000.31* FORESTRY U.S. BANK ANOKA CONSERVATION DISTR 32.14 Total for Department 463 32.14* Total for Fund 101 221,420.02* Kupetsky, Natalie PROGRAM REFUND 5.00 Total for Department 5.00* OTHER U.S. BANK IMAGE PRINTING/PARKS & R 219.15 OTHER U.S. BANK ORIENTAL TRADING/PROGRAM 24.27 OTHER U.S. BANK TARGET/PROGRAM SUPPLIES 175.48 Total for Department 204 418.90* SPECIAL EVENTS/TRIPS MINNESOTA COACHES, I SENIOR TRIP -HISTORY THEA 110.00 Total for Department 205 110.00* YOUTH INSTRUCTIONAL U.S. BANK MASUNE/FIRST AID SUPPLIE 84.33 Total for Department 207 84.33* YOUTH SPORTS U.S. BANK MASUNE/FIRST AID SUPPLIE 253.08 Total for Department 208 253.08* Total for Fund 201 871.31* POLICE ANOKA COUNTY LICENSE #398 PD UNMARKED TAX,TIT 1,725.75 POLICE BATTERIES PLUS BULBS #396 & #399 BATTERIES 696.25 Total for Department 420 2,422.00* FIRE MN DEPT OF PUBLIC SA FIRE LICENSE PLATES 18.00 FIRE MAPLEWOOD FIRE DEPAR FANS,CORD REELS,ATTIC TO 225.00 Date: 04/22/2015 Time: 14:38:57 Operator: TJT Department Page: 6 City of Lino Lakes FM Entry - Invoice Payment - Department Report Vendor Name Description Amount FLEET FLEET FLEET FLEET OTHER OTHER OTHER OTHER OTHER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER WATER Total for Department 421 MIDWAY FORD COMPANY #256 2015 FORD F550 ASPEN EQUIPMENT COMP #256 9'6" V -PLOW ANOKA COUNTY LICENSE #256 TAX,TITLE,PLATES L.T.G. Power Equipme FERRIS IS3200ZBV3661 Total for Department 431 Total for Fund 402 ANOKA COUNTY PROPERT 2015 PROPERTY TAXES CRITICAL CONNECTIONS WOLLEN PARK WETLAND BANK Total for Department 499 Total for Fund 422 CNH ARCHITECTS FIRE HOUSE #2 ARCHITECTU Total for Department 499 Total for Fund 478 STANTEC CONSULTING S MARCH PUMP HOUSE #6 STANTEC CONSULTING S MARCH WELL #6 Total for Department 499 Total for Fund 479 MN DEPT OF HEALTH CITY OF SHOREVIEW 1ST QTR COMMUNITY WATER 1ST QTR WATER & SEWER Total for Department AID ELECTRIC CORPORA INSTRUMENTAL RESEARC TDS METROCOM MN CONNEXUS ENERGY HAWKINS, INC. CENTERPOINT ENERGY CENTERPOINT ENERGY CENTERPOINT ENERGY MN DEPT OF HEALTH XCEL ENERGY CITY OF SHOREVIEW HD SUPPLY WATERWORKS HD SUPPLY WATERWORKS FRATTALLONE'S/CIRCLE GOPHER STATE ONE -CAL GOPHER STATE ONE -CAL U.S. BANK U.S. BANK U.S. BANK WELL #2 ELECTRIC HEATERS MARCH CITY WATER PHONE SERVICE MARCH ELECTRIC CHLORINE CYLINDERS MARCH NATURAL GAS -1180 B MARCH NATURAL GAS -6774 B MARCH NATURAL GAS -6786 C MNAWWA METRO DISTRICT WA ELECTRIC 1ST QTR WATER & SEWER 2-1/2" FLANGE ACCUSTREAM FLAGGING TAPE JANUARY TICKETS MARCH TICKETS BATTERIES+/BATTERIES HOME DEPOT/NIPPLES VERIZON WIRELESS 243.00* 42,010.00 5,292.00 2,781.40 10,087.40 60,170.80* 62,835.80* 126.80 4,350.00 4,476.80* 4,476.80* 67,270.23 67,270.23* 67,270.23* 9,923.75 1,292.00 11,215.75* 11,215.75* 7,023.00 9.54 7,032.54* 1,907.82 142.50 36.33 1,319.33 35.00 148.91 115.77 184.68 100.00 1,855.55 2,759.02 40.30 2,862.51 16.45 56.60 99.38 83.02 9.44 159.16 Date: 04/22/2015 Time: 14:38:57 Operator: TJT Department WATER WATER SEWER SEWER SEWER SEWER SEWER SEWER SEWER SEWER SEWER SEWER SEWER SEWER SEWER SEWER SEWER Page: 7 City of Lino Lakes FM Entry - Invoice Payment - Department Report Vendor Name Description Amount KLM ENGINEERING, INC TOWER #2 FLOAT DOWN EVAL SAFE -FAST, INC. SAFETY EQUIPMENT Total for Department 494 Total for Fund 601 CENTENNIAL UTILITIES CONNEXUS ENERGY INFRATECH CENTERPOINT ENERGY CENTERPOINT ENERGY CENTERPOINT ENERGY CENTERPOINT ENERGY XCEL ENERGY CITY OF SHOREVIEW METROPOLITAN GOPHER STATE GOPHER STATE U.S. U.S. U.S. MARCH NATURAL GAS-SUNRIS MARCH ELECTRIC CLEAN,VAC LIFT STATION MARCH NATURAL GAS -1473 S MARCH NATURAL GAS -2200 E MARCH NATURAL GAS -6300 L MARCH NATURAL GAS -6666 6 ELECTRIC 1ST QTR WATER & SEWER COUNCIL MAY WASTE WATER SERVICES ONE -CAL JANUARY TICKETS ONE -CAL MARCH TICKETS HOME DEPOT/FITTINGS, TAPE OFFICE MAX/BATTERY BACKU VERIZON WIRELESS for Department 495 BANK BANK BANK Total Total for Fund 602 ANOKA COUNTY PROPERT 2015 PROPERTY TAXES DuPont Holdings LLC PARTIAL ESCROW REFUND Total for Department Total for Fund 801 Grand Total 3,800.00 117.80 15,849.57* 22,882.11* 19.96 501.16 1,175.00 46.47 18.47 16.38 19.17 1,608.11 1,355.35 62,637.33 56.60 99.37 38.07 149.98 159.59 67,901.01* 67,901.01* 1,041.68 74,400.00 75,441.68* 75,441.68* 534,314.71* CENTENNIAL FIRE DISTRICT Check Register - FIRE GL Page: 1 Check Issue Dates: 4/3/2015 - 4/22/2015 Apr 22, 2015 03:27PM Report Criteria: Report type: Summary GL Check Check Vendor Period Issue Date Number Number Payee Description Check Amount 04/15 04/22/2015 6888 10040 04/15 04/22/2015 6889 10850 04/15 04/22/2015 6890 11565 04/15 04/22/2015 6891 20355 04/15 04/22/2015 6892 30480 04/15 04/22/2015 6893 30490 04/15 04/22/2015 6894 30500 04/15 04/22/2015 6895 31137 04/15 04/22/2015 6896 50120 04/15 04/22/2015 6897 60650 04/15 04/22/2015 6898 120331 04/15 04/22/2015 6899 120440 04/15 04/22/2015 6900 130205 04/15 04/22/2015 6901 130840 04/15 04/22/2015 6902 131470 04/15 04/22/2015 6903 150145 04/15 04/22/2015 6904 160050 04/15 04/22/2015 6905 160493 04/15 04/22/2015 6906 180600 04/15 04/22/2015 6907 200150 04/15 04/22/2015 6908 200390 04/15 04/22/2015 6909 210405 04/15 04/22/2015 6910 220200 04/15 04/22/2015 6911 220250 04/15 04/22/2015 6912 240100 04/15 04/22/2015 6913 888819 04/15 04/22/2015 6914 888820 04/15 04/22/2015 6915 888821 Grand Totals: ADVANCED FIRST AID, INC ANOKA COUNTY TREASURY D ASPEN MILLS, INC BLAINE EYE CLINIC CENTENNIAL UTILITIES CENTERPOINT ENERGY CENTURY LINK CONNEXUS ENERGY EMERGENCY APPARATUS MAI FRATTALLONE'S HARDWARE S LEAGUE OF MN CITIES INS TR LEXINGTON FIRE DEPT. MMKR, INC MFSCB MUNICIPAL EMERGENCY SERV OFFICE MAX PAETEC, INC PREMIUM WATERS, INC CITY OF ROSEVILLE THOMAS MOTORS, INC TWIN CITY GARAGE DOOR CO, UNIFORMS UNLIMITED, INC VERIZON WIRELESS VIKING TROPHIES, INC XCEL ENERGY MARK REINA ROBERT BELMORE MATTHEW KOHNER SALES TAX MAY BROADBAND UNIFORM SAFETY GLASSES STATION 1 UTILITIES STATION 2 GAS COMMUNICATIONS MAR ELECTRIC STATION 1 SALES TAX MISC SUPPLIES-FUSES/LUBE S WORKERS COMP INS 2/15-2/16 FEMA -EMPLOYEE EXAMS PROGRESS BILLING 2014 AUDI TRAINING HAZ MAT OPS 5 SEARCH & RESCUE HELMET CLEANING SUPPLIES -BATH TIS PHONES STATION 2 BOTTLED H2O SALES TAX ADJ 3 MOS VEH MTC 01 STATION 1 DOOR MTC UNIFORMS COMMUNICATIONS PLAQUES ELECTRIC STATION 2 FEMA -RECRUITMENT BONUS FEMA -RECRUITMENT BONUS FEMA -RECRUITMENT BONUS 666.00 187.50 229.61 113.52 2,197.59 347.15 57.65 461.99 1,511.91 22.52 36,491.00 450.00 3,500.00 150.00 1,360.16 456.66 160.06 11.14 963.07 48.09 917.61 678.00 106.00 161.38 435.37 500.00 500.00 500.00 53,183.98 M = Manual Check, V = Void Check CENTENNIAL FIRE DISTRICT Invoice Register - Edit Report Page: 1 Input Dates: 4/3/2015 - 4/22/2015 Apr 22, 2015 03:25PM Name Vendor Number Invoice Seq Type Description Invoice Date Payment Due Date Total Cost GL Account GL Period 04/20/2015 10040 ADVANCED FIRST AID, INC ADVANCE 10040 1214-509 ADVANCE 10040 1214-509 Total 10040 ADVANCED FIRST AID, INC: 1 Invoi LIFEPAK BATTERIES 2 Invoi SALES TAX 10850 ANOKA COUNTY TREASURY DEPT. ANOKA CO 10850 B150402C 1 Invoi MAY BROADBAND Total 10850 ANOKA COUNTY TREASURY DEPT.: 11565 ASPEN MILLS, INC ASPEN MIL 11565 ASPEN MIL 11565 ASPEN MIL 11565 153534 163613 163614 Total 11565 ASPEN MILLS, INC: 20355 BLAINE EYE CLINIC BLAINE EY 20355 75362 Total 20355 BLAINE EYE CLINIC: 30480 CENTENNIAL UTILITIES CENTENNI 30480 042015 Total 30480 CENTENNIAL UTILITIES: 30490 CENTERPOINT ENERGY CENTERP 30490 042015 Total 30490 CENTERPOINT ENERGY: 30500 CENTURY LINK CENTURY 30500 042015 Total 30500 CENTURY LINK: 31137 CONNEXUS ENERGY CONNEXU 31137 042015 Total 31137 CONNEXUS ENERGY: 50120 EMERGENCY APPARATUS MAINT, INC EMERGEN 50120 79421 1 1 Invoi FEMA -UNIFORMS 1 Invoi EMS UNIFORMS 1 Invoi UNIFORM 1 Invoi SAFETY GLASSES 1 Invoi STATION 1 UTILITIES 1 Invoi STATION 2 GAS 1 Invoi COMMUNICATIONS 1 Invoi MAR ELECTRIC STATION 1 EMERGEN EMERGEN EMERGEN 50120 50120 50120 79421 79553 79553 2 1 2 Invoi INSTALL RADIO,ANTENNAS PL Invoi SALES TAX Invoi INSTALL SURFACE PRO TABLE Invoi SALES TAX Total 50120 EMERGENCY APPARATUS MAINT, INC: 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 60650 FRATTALLONE'S HARDWARE STORE FRATTALL 60650 042015 1 Invoi MISC SUPPLIES-FUSES/LUBE S 04/20/2015 04/20/2015 711.79 801-42-2210-216 04/15 04/20/2015 45.79- 801-21800 666.00 04/15 04/20/2015 187.50 801-42-2210-321 04/15 04/20/2015 04/20/2015 04/20/2015 187.50 79.90 201-42-2210-218 7.50 801-42-2240-218 142.21 801-42-2210-218 229.61 04/15 04/15 04/15 04/20/2015 113.52 801-42-2210-219 04/15 113.52 04/20/2015 2,197.59 801-42-2210-380 04/15 2,197.59 04/20/2015 347.15 801-42-2210-380 04/15 347.15 04/20/2015 57.65 801-42-2210-321 04/15 57.65 04/20/2015 461.99 801-42-2210-380 04/15 461.99 04/20/2015 1,130.16 801-42-2210-406 04/15 04/20/2015 4.66- 801-21800 04/15 04/20/2015 387.09 801-42-2210-406 04/15 04/20/2015 .68- 801-21800 04/15 1,511.91 04/20/2015 22.52 801-42-2210-219 04/15 Total 60650 FRATTALLONE'S HARDWARE STORE: 22.52 CENTENNIAL FIRE DISTRICT Invoice Register - Edit Report Page: 2 Input Dates: 4/3/2015 - 4/22/2015 Apr 22, 2015 03:25PM Name Vendor Number Invoice Seq Type Description Invoice Date Payment Due Date Total Cost GL Account GL Period 120331 LEAGUE OF MN CITIES INS TRUST LEAGUE 0 120331 29433 1 lnvoi WORKERS COMP INS 2/15-2/16 04/20/2015 Total 120331 LEAGUE OF MN CITIES INS TRUST: 120440 LEXINGTON FIRE DEPT. LEXINGTO 120440 042015 Total 120440 LEXINGTON FIRE DEPT.: 130205 MMKR, INC MMKR, INC 130205 Total 130205 MMKR, INC: 1 Invoi FEMA -EMPLOYEE EXAMS 04/20/2015 37105 1 Invoi PROGRESS BILLING 2014 AUDI 04/20/2015 130840 MFSCB MFSCB 130840 3255 1 Invoi TRAINING HAZ MAT OPS Total 130840 MFSCB: 04/20/2015 131470 MUNICIPAL EMERGENCY SERVICES INC MUNICIPAL 131470 00586681 1 Invoi 3 GAS CO MONITORS 04/20/2015 MUNICIPAL 131470 00589105 1 Invoi 5 SEARCH & RESCUE HELMET 04/20/2015 Total 131470 MUNICIPAL EMERGENCY SERVICES INC: 150145 OFFICE MAX OFFICE MA OFFICE MA OFFICE MA OFFICE MA 150145 535740 1 Invoi TRASH BAGS/CAN LINERS 150145 535740 2 Invoi OFFICE SUPPLIES LABEL TAPE 150145 535928 1 Invoi CLEANING SUPPLIES 150145 770883 1 Invoi CLEANING SUPPLIES -BATH TIS Total 150145 OFFICE MAX: 160050 PAETEC, INC PAETEC, 1 160050 58291335 Total 160050 PAETEC, INC: 160493 PREMIUM WATERS, INC PREMIUM 160493 31409766 Total 160493 PREMIUM WATERS, INC: 180600 CITY OF ROSEVILLE CITY OF R CITY OF R CITY OF R 180600 180600 180600 0220098 0220115 0220115 Total 180600 CITY OF ROSEVILLE: 200150 THOMAS MOTORS, INC THOMAS M 200150 26796 Total 200150 THOMAS MOTORS, INC: 1 Invoi PHONES STATION 2 1 Invoi BOTTLED H2O 1 Invoi APRIL IT SERVICES JPA MIS 1 Invoi APRIL PHONE 2 Invoi SALES TAX ADJ 3 MOS 1 lnvoi VEH MTC C1 200390 TWIN CITY GARAGE DOOR CO, INC TWIN CITY 200390 435029 1 Invoi STATION 1 DOOR MTC 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 04/20/2015 36,491.00 801-42-2210-150 04/15 36,491.00 04/20/2015 450.00 201-42-2230-309 04/15 450.00 04/20/2015 3,500.00 801-42-2210-301 04/15 3,500.00 04/20/2015 150.00 801-42-2210-331 04/15 150.00 04/20/2015 567.02 801-42-2210-204 04/15 04/20/2015 793.14 801-42-2210-570 04/15 04/20/2015 04/20/2015 04/20/2015 04/20/2015 1,360.16 131.06 801-42-2210-202 94.36 801-42-2210-201 43.41 801-42-2210-202 187.83 801-42-2210-202 456.66 04/15 04/15 04/15 04/15 04/20/2015 160.06 801-42-2210-321 04/15 04/20/2015 04/20/2015 04/20/2015 04/20/2015 160.06 11.14 801-42-2210-201 04/15 11.14 769.42 801-42-2210-320 233.58 801-42-2210-321 39.93- 801-21800 963.07 04/15 04/15 04/15 04/20/2015 48.09 801-42-2210-404 04/15 48.09 04/20/2015 04/20/2015 917.61 801-42-2210-401 04/15 CENTENNIAL FIRE DISTRICT Invoice Register - Edit Report Page: 3 Input Dates: 4/3/2015 - 4/22/2015 Apr 22, 2015 03:25PM Name Vendor Number Invoice Seq Type Description Invoice Date Payment Due Date Total Cost GL Account GL Period Total 200390 TWIN CITY GARAGE DOOR CO, INC: 917.61 210405 UNIFORMS UNLIMITED, INC UNIFORMS 210405 243541 1 Invoi UNIFORMS 04/20/2015 04/20/2015 678.00 801-42-2210-218 04/15 Total 210405 UNIFORMS UNLIMITED, INC: 678.00 220200 VERIZON WIRELESS VERIZON 220200 97434424 1 Invoi COMMUNICATIONS 04/20/2015 04/20/2015 106.00 801-42-2210-321 04/15 Total 220200 VERIZON WIRELESS: 106.00 220250 VIKING TROPHIES, INC VIKING TR 220250 120669 1 Invoi PLAQUES 04/20/2015 04/20/2015 161.38 801-42-2210-495 04/15 Total 220250 VIKING TROPHIES, INC: 161.38 240100 XCEL ENERGY XCEL ENE 240100 042015 1 Invoi ELECTRIC STATION 2 04/20/2015 04/20/2015 435.37 801-42-2210-380 04/15 Total 240100 XCEL ENERGY: 435.37 888819 MARK REINA MARK REI 888819 042015 1 Invoi FEMA -RECRUITMENT BONUS 04/20/2015 04/20/2015 500.00 201-42-2230-307 04/15 Total 888819 MARK REINA: 500.00 888820 ROBERT BELMORE ROBERT B 888820 042015 1 Invoi FEMA -RECRUITMENT BONUS 04/20/2015 04/20/2015 500.00 201-42-2230-307 04/15 Total 888820 ROBERT BELMORE: 500.00 888821 MATTHEW KOHNER MATTHEW 888821 042015 1 Invoi FEMA -RECRUITMENT BONUS 04/20/2015 04/20/2015 500.00 201-42-2230-307 04/15 Total 888821 MATTHEW KOHNER: 500.00 Total 04/20/2015: 53,183.98 4/20/2015 GL Period Summary GL Period Amount 04/15 53,183.98 Grand Totals: 53,183.98 Grand Totals: 53,183.98 Report GL Period Summary CENTENNIAL FIRE DISTRICT Invoice Register - Edit Report Page: 4 Input Dates: 4/3/2015 - 4/22/2015 Apr 22, 2015 03:25PM GL Period Amount 04/15 53,183.98 Grand Totals: 53,183.98 Vendor number hash: 6214326 Vendor number hash - split: 6655351 Total number of invoices: 35 Total number of transactions: 40 Terms Description Invoice Amount Discount Amount Net Invoice Amount Open Terms 53,183.98 .00 53,183.98 Grand Totals: 53,183.98 .00 53,183.98 CITY COUNCIL WORK SESSION April 6, 2015 DRAFT CITY OF LINO LAKES 2 MINUTES 3 4 DATE : April 6, 2015 5 TIME STARTED : 6:00 p.m. 6 TIME ENDED : 8:30 p.m. 7 MEMBERS PRESENT : Council Member Stoesz, Rafferty, Roeser 8 and Mayor Reinert 9 MEMBERS ABSENT : Council Member Kusterman 10 11 Staff members present: City Administrator Jeff Karlson; Community Development 12 Director Michael Grochala; City Engineer Diane Hankee; Finance Director Al Rolek; 13 Public Safety Director John Swenson; Environmental Coordinator Marty Asleson; City 14 Clerk Julie Bartell 15 16 1. Miss Lino Lakes Ambassador Float- The treasurer of the Lino Lakes Ambassadors 17 Program and another representative were present and reviewed a PowerPoint presentation 18 outlining the program (on file) as follows: 19 - what the program does; 20 - expenses and income; 21 - ambassador activities; 22 - candidate sponsorship. 23 24 They indicated that the council has discussed the possibility of providing some city funds 25 on a regular basis so they are providing some possible uses for that type of funding. 26 27 Mayor Reinert said the more he learns about the Ambassador's program, they more he is 28 impressed. Young women of the community are clearly benefiting from participating 29 and there is a scholarship element also. He knows that the city hasn't been really 30 involved in the program since the float was created with the help of the city. He 31 recognizes that this city council is frugal in its use of city funds but he thinks this program 32 is something that should receive some regular municipal funding. The council did 33 approve up to $6,000 for the float this year. When he asked for the bottom line on 34 annual costs, he was told it is about $12,000. Council Member Roeser suggested that the 35 group should also seek funds from the area tourism association, Twin Cities Gateway. 36 Mayor Reinert suggested that at the next council work session, there will be more review 37 of the organization's budget. 38 39 The council discussed how the city could appropriately be involved in the Ambassador's 40 program. Staff was directed to look at the possibility of the city taking ownership of the 41 float (so maintenance would then become a city responsibility). The council would also 42 like an overall expense rundown for the organization and directed staff to see if any 43 funding would be available through Twin Cities Gateway. 44 1 CITY COUNCIL WORK SESSION April 6, 2015 DRAFT 45 2. 2015 Board of Appeal and Equalization- Alex Guggenberger, Anoka County 46 Assessors Office, and two associates were present and Mr. Guggenberger reviewed the 47 assessment statistics included in the Pre -Board report (on file) for the upcoming Lino 48 Lakes Board of Appeal and Equalization meeting. He noted that the full board report will 49 be ready for the meeting on April 27. 50 51 Council Member Roeser noted an area of several properties where homes are located in 52 one county and a portion of the lot in another county. The city has followed that 53 situation and assisted in getting the property owners a fair deal; he wants to make sure 54 that continues for those property owners. Ms. Nordstrom of the Assessor's Office 55 ensured that staff will continue to follow that situation. 56 57 Mayor Reinert noted that property owners are seeing valuations rise and he wonders if 58 that is generating a lot of calls this year. County Assessor staff indicated that they've 59 probably received about ten calls so far and they've generally been questions and not 60 concerns. The county certainly works to correct any situations when it is appropriate. 61 62 The annual Board of Appeal and Equalization meeting will be held on April 27 at 6:00 63 p.m. and Anoka County staff will be present to assist with the meeting. 64 65 3. Special Legislation for Transferring Firefighter Pension Funds- Administrator 66 Karlson noted that staff has heard from the consultant who helped with this legislation. 67 While it is too late to make this a statewide effort for change, the city can still see an 68 individual bill considered. That bill would basically establish a period of time allowing 69 for the transfer of pension service credits and assets to the city fire pension fund. 70 71 Mayor Reinert noted that the City took the lead on getting this legislation and he's glad to 72 see it is moving along. The city has tried to help with the process of allowing firefighters 73 to come to the new department with their pension credits. The council has received 74 information from Chief Swenson and are aware of his desire to identify fire personnel by 75 September 1. The council could consider taking an action of support for the legislation 76 at the council meeting on April 13. He wants it to be known that the council supports 77 firefighter pensions; the slate of firefighters will be full soon though and candidates 78 wishing to transfer in would have to go through the regular hiring process. 79 80 The council concurred that they would consider an action supporting legislation at the 81 next regular meeting. 82 83 3a. Update on Recycling Saturday- Environmental Coordinator Asleson was present 84 with Barbara Bor of the Environmental Board and John Friemuth, a recycling contractor, 85 to discuss the most recent recycling Saturday when there were more large items than 86 could be taken. Mr. Asleson said that he takes responsibility for the problem. He added 87 that with expansion efforts occurring in the area of recycling, it is sometimes difficult to 88 estimate what will show up and what resources will be needed to handle it. The problem 89 occurred because the container provided for large items filled very quickly and there 2 CITY COUNCIL WORK SESSION April 6, 2015 DRAFT 90 wasn't a backup; as a result some people were sent away. Staff has since discussed how 91 to handle the situation in the future and will have a backup container. Mr. Friemuth 92 added that he has arranged for backup vehicles and he will make sure there is enough 93 capacity in the future. Mayor Reinert remarked that it was a problem to run out of truck 94 space and he knows the city has to be prepared because people count on the availability of 95 recycling when it is promised. Mr. Asleson added that Anoka County is also willing to 96 help and staff is discussing with them the possibility of a new program to take some items 97 for reuse. He added that the city's Public Works facility will be a backup also, just in 98 case. Council Member Rafferty noted that it did say "as available" on the flyer that the 99 city distributed. He wonders about the possibility of doing a curb -side spring clean-up 100 effort because some people may have difficulty bringing items to a drop-off site. 101 Council Member Roeser suggested that volunteers such as boy scouts could help. Mr. 102 Asleson noted that one challenge with curbside is that the city needs to get credit for 103 tonnage. Barbara Bor added that she feels that recycling will continue to increase because 104 people are downsizing. 105 106 4. Council Updates on Boards/Commissions- Council Member Stoesz, who serves 107 on the North Metro Telecommunications Commission, noted that he had sent council 108 members an update on that group's activities. 109 110 4a. Charter Commission Request- Administrator Karlson explained that the Charter 111 Commission has requested that the City Attorney attend their next meeting in order to 112 advise them on a ward amendment for the city. As noted in his report the city attorney 113 reviewed a ward amendment submitted by the Commission in 2014 and prepared a 114 written opinion. Staff is seeking council direction on the Commission's request. 115 116 The council discussed the possibility of a conflict of interest in sending the city attorney 117 and the need for an engagement letter if he were to serve the commission. A member 118 suggested that the Commission should pay for their legal expenses from their budget. 119 The council indicated that discussion of the matter was tabled. 120 121 5. Monthly Progress Report- Administrator Karlson reviewed his written report. 122 The council discussed the need to upgrade the council chambers cameras and multi -media 123 equipment and directed staff to bring in an estimate and funding proposal. 124 125 Regarding the Centennial Fire District expenditure to ArcStone Consulting, 126 Administrator Karlson explained that he received additional information in that the 127 amount noted on the expenditure list was for the whole project and it was originally 128 approved by the fire steering committee; there will be an update on the project at the 129 committee. The project was accomplished through a low bid from a very reputable firm. 130 131 Council Member Roeser noted an item not on the progress report. He is still very 132 interested in receiving information on the history of union negotiations. Mayor Reinert 133 concurred that keeping track of what has been discussed in that area would be helpful to 3 CITY COUNCIL WORK SESSION April 6, 2015 DRAFT 134 new council members as they are asked to make labor decisions. Administrator Karl son 135 indicated he would provide an update as of the first of the year. 136 137 6. Review Regular Agenda of April 13, 2015 — 138 139 Item 6B) — Community Development Director Grochala explained that the request has to 140 do with the wetland bank credits being established in the Wollan Park area. The action 141 dedicates the wetland easement to the state. 142 143 Item 6C) — Community Development Director Grochala explained that the action 144 requested relates to permits through the watershed district for the site of the new fire 145 station. 146 147 Item 6D) — Community Development Director Grochala reviewed the small easement 148 related to the Saddle Club development, paid for by the developer. 149 150 Item 6E) — City Engineer Hankee updated the council on the improvements planned for 151 the Birch Street and Centerville Road area. Staff is recommending approval of the low 152 bid received for the project and she briefly reviewed the elements of the project. Council 153 Member Rafferty asked staff to ensure that there are no drainage issues caused by the 154 project. 155 156 Item 6F) — City Engineer Hankee reviewed the request to accept the low bid received for 157 the 2015 Shenandoah Neighborhood Street Reconstruction Project. The low bid is under 158 the engineer's estimate, engineering fees are under original projections and the project 159 will include a $25,000 grant from the Metropolitan Council. Staff will be providing 160 information on a regular basis through the city website. 161 162 Item 6G) — Community Development Director Grochala explained that the city owned 163 land originally purchased for a recreation center includes a small amount of land owned 164 by NSP. Staff has arranged to receive that land from NSP in exchange for a utility 165 easement. 166 167 Item 6H) — Community Development Director Grochala noted the White Bear Lake 168 Restoration Association and Minnesota Department of Natural Resources Settlement 169 Agreement. Staff is presenting a resolution for council consideration that was discussed 170 at the recent summit of area communities. The resolution disagrees with the settlement. 171 The council confirmed that the city attorney has reviewed the resolution. 172 173 The meeting was adjourned at 8:30 p.m. 174 175 These minutes were considered, corrected and approved at the regular Council meeting held on 176 April 23, 2015. 177 178 Julianne Bartell, City Clerk Jeff Reinert, Mayor 4 COUNCIL MINUTES April 13, 2015 DRAFT 1 CITY OF LINO LAKES 2 MINUTES 3 4 DATE : April 13, 2015 5 TIME STARTED : 6:30 p.m. 6 TIME ENDED : 7:55 p.m. 7 MEMBERS PRESENT : Council Member Stoesz, Kusterman, Rafferty, 8 Roeser, and Mayor Reinert 9 MEMBERS ABSENT : none 10 11 Staff members present: City Administrator Jeff Karlson; Community Development Director Michael 12 Grochala; City Engineer Diane Hankee; and City Clerk Julie Bartell 13 14 PUBLIC COMMENT 15 16 No one was present to address the council regarding a matter not on the agenda. 17 18 Mayor Reinert announced the opening of a new restaurant, Fiesta Cancun Mexican Grill and Bar at 19 7090 21' Avenue North. Representatives of the restaurant were introduced and reviewed their menu. 20 21 SETTING THE AGENDA 22 23 The agenda was approved as presented. 24 25 CONSENT AGENDA 26 27 Council Member Roeser moved to approve the Consent Agenda, Items la through 1F, as presented. 28 Council Member Stoesz seconded the motion. Motion carried on a voice vote. 29 30 ITEM ACTION 31 32 Consideration of Expenditures: 33 34 April 13, 2015 (Check No. 100059-100157, $405,593.45) Approved 35 36 Centennial Fire District ($51,505.00) Approved 37 38 March 23, 2015 Council Work Session Minutes Approved 39 40 March 23, 2015 Council Meeting Minutes Approved 41 42 Application for Exempt Permit from Lawful Gambling 43 License for the Lino Lakes Lions Club Approved 44 45 March 16, 2015 Special Joint Meeting Minutes Approved 1 COUNCIL MINUTES April 13, 2015 DRAFT 46 47 Resolution No. 15-38, Authorizing issuance of a Special 48 Event Permit for Hammerheart Brewing Company Approved 49 50 FINANCE DEPARTMENT REPORT 51 52 There was no report from the Finance Department. 53 54 ADMINISTRATION DEPARTMENT REPORT 55 56 3A) Resolution No. 15-34, Approving new On -Sale and Sunday Sales Liquor License for 57 Fiesta Cancun Mexican Grill and Bar — City Clerk Bartell reported that a new restaurant will be 58 opening soon at 7090 20th Avenue N and the owner has applied for a liquor license, including Sunday 59 Sales. The application process has been completed, related fees have been paid and the applicant has 60 passed the required background check. Representatives of the restaurant were present. 61 62 Council Member Roeser moved to approve Resolution No. 15-34 as presented. Council Member 63 Stoesz seconded the motion. Motion carried on a voice vote. 64 65 3B) Resolution No. 15-07, Establishing the 2015 Compensation Plan for Non -Union 66 Employees- Administrator Karlson reviewed his written report including a resolution approving a 67 two percent salary increase for the city's non-union employees. He noted that he is proposing an 68 additional increase in salary for two positions but the council has requested further review on that 69 matter; in the meantime, he feels it is appropriate to forward the overall two -percent recommendation 70 and make a decision beyond that later. 71 72 The mayor noted that the point system used by the city to set appropriate salaries indicates that some 73 of these salaries may be too high and others too low. Since that could involve a salary freeze, he isn't 74 certain it is appropriate to approve a two -percent increase across the board. The council discussed 75 tabling the matter as they await additional information since the increases would be retroactive. 76 Administrator Karlson indicated that he has been waiting for two months for a Springsted 77 representative to be available for a council work session so the council can have the additional 78 review; he feels it is important to have an expert in the field present for the discussion and he will 79 schedule that for May. In the meantime he wouldn't recommend approving an increase for only some 80 of the non-union positions. 81 82 Council Member Roeser moved to postpone the resolution to no later than the May 26 city council 83 meeting. Council Member Kusterman seconded the motion. Motion carried on a voice vote. 84 85 PUBLIC SAFETY DEPARTMENT REPORT 86 87 4A) Authorization to Hire Paid On -Call Fire Personnel — Administration Karlson reviewed 88 Police Chief Swenson's written request to hire one Paid On -Call Firefighter. Applicant Derek 89 Sadowski has passed through the hiring process and is prepared to enter training. 90 2 COUNCIL MINUTES April 13, 2015 DRAFT 91 Council Member Kusterman moved to approve the hire of Derek Sadowski as a Paid On -Call 92 Firefighter effective April 14, 2015. Council Member Roeser seconded the motion. Motion carried 93 on a voice vote. 94 95 4B) Public Safety Department Update — Administrator Karlson provided the following update: 96 - New Fire Station — awaiting permit from Rice Creek Watershed District (RCWD) to 97 commence construction activities; 98 - Training — fifteen firefighters have full certification; seventeen individuals are currently 99 enrolled in training; seven individuals have applied and are under consideration for hire; 100 - Fire Equipment — the city has taken possession of the two trucks purchased from the City of 101 Woodbury and they are currently being outfitted and labeled and will be available for 102 firefighter training in May; he noted thanks to the Cities of Woodbury and White Bear Lake 103 for storing the trucks. 104 105 Mayor Reinert added, regarding firefighter pensions, the Minnesota Legislature has agreed to an 106 amendment that will allow the transfer of fire pensions and he is glad that the City led the discussion 107 on that. He feels that the City has attempted to work out that situation for the fire personnel (to allow 108 for the transfer of pensions). He's happy that the City fire department will be going to the PERA 109 sponsored plan since that does have some portability built in. 110 111 Council Member Rafferty suggested it would be nice for the council to have the opportunity to see the 112 new fire trucks when they are ready. 113 114 Council Member Kusterman asked if the RCWD approval is a rubber stamp and Community 115 Development Director Grochala said not exactly; staff is working through requirements with them on 116 a couple of components. 117 118 PUBLIC SERVICES DEPARTMENT REPORT 119 120 There was no report from the Public Services Department. 121 122 COMMUNITY DEVELOPMENT DEPARTMENT REPORT 123 124 Note — Item 6A had been deleted from the agenda. 125 126 6B) Consider Resolution No. 15-41, Approving Subordination Agreement and Granting a 127 Conservation Easement to the State of Minnesota, Wollan Park Wetland Bank — Community 128 Development Director Grochala explained that the city has planned and has been working to establish a 129 wetland complex on 17 acres of the high quality wetland within the Wollan Park residential subdivision. 130 Staff has been working the project through the necessary approval process, is finishing up restoration 131 efforts and is ready to establish the necessary easement. The area will provide high value wetland bank 132 credits that can be sold in the future through the state wetland bank system. 133 134 Council Member Kusterman moved to approve Resolution No. 15-41 as presented. Council 135 Member Roeser seconded the motion. Motion carried on a voice vote. 3 COUNCIL MINUTES April 13, 2015 DRAFT 136 137 6C) Consider Resolution No. 15-40, Approving a Stormwater Facilities Maintenance Agreement 138 with RCWD, Lino Lakes Fire Station- Community Development Director Grochala explained that the 139 new fire station project will include stormwater facilities thus requiring a stormwater maintenance plan. 140 The resolution before the council authorizes execution of an agreement for stormwater maintenance with 141 the Rice Creek Watershed District. 142 143 Council Member Kusterman moved to approve Resolution No. 15-40 as presented. Council 144 Member Roeser seconded the motion. Motion carried on a voice vote. 145 146 6D) Consider Resolution No. 15-33, Accepting Roadway, Drainage and Utility Easement from 147 Comcast CCH Subsidiary Holdings, Inc. Relating to Saddle Club First Addition - Community 148 Development Director Grochala explained that staff is requesting council authorization to accept an 149 easement from Comcast to facilitate street and utility improvements for the Saddle Club development. 150 The cost will be borne by the developer but the city needs to provide acceptance. Council Member 151 Roeser asked if the project will include a recreational trail and Mr. Grochala responded that a trail is part 152 of the development but not in the area of this easement; new trail is planned to link with the existing trail 153 system. Council Member Stoesz noted that Comcast is planning to leave the state and asked if that 154 could have an impact on this agreement. Mr. Grochala said this agreement should be in place before any 155 change occurs. 156 157 Council Member Rafferty moved to approve Resolution No. 15-33 as presented. Council Member 158 Stoesz seconded the motion. Motion carried on a voice vote. 159 160 6E) Consider Resolution No. 15-35, Accepting bids and Awarding a Construction Contract, 161 Birch Street & Centerville Road Street and Trunk Utility Improvements - City Engineer Hankee 162 reviewed her written report requesting authorization to accept the low bid received for street and trunk 163 utility improvements at Birch Street and Centerville Road. The bid received is under the engineer's 164 estimate and engineering fees are also lower than expected. She noted the proposed project completion 165 date. Mayor Reinert said he is glad to hear about the savings and he is wondering if the engineer 166 anticipates any challenges with this project. Ms. Hankee noted that there will be some directional 167 drilling required and also some road closure will be involved, of which area residents will be informed. 168 Council Member Rafferty asked if the bid price covers the unforeseen and Ms. Hankee said the project 169 budget includes normal contingencies. 170 171 Council Member Rafferty moved to approve Resolution No. 15-35 as presented. Council Member 172 Stoesz seconded the motion. Motion carried on a voice vote. 173 174 175 6F) Consider Resolution No. 15-36, Accepting bids and Awarding a Construction Contract, 176 2015 Reconstruction Project Shenandoah Neighborhood - City Engineer Hankee reported that bids 177 were received for the reconstruction project. She noted the range of the bids received, the low bidder 178 and the engineer's estimate for the project (under the low bid) as well as the overall project budget. The 179 project costs will be under the voter approved referendum amount. The project will include a city 180 sponsored extension of the water main. The city website will be updated weekly with information on 4 COUNCIL MINUTES April 13, 2015 DRAFT 181 the project. The project will be two -phased. She noted a grant of $25,000 received from the 182 Metropolitan Council to reduce inflow to the sewer system. Mayor Reinert said that it is great that the 183 project will be under budget and that Hokah Drive will get concrete curb and gutter too. Council 184 Member Stoesz asked if the contractor for the project (the low bidder) will be coming before the council 185 and Ms. Hankee explained that it isn't typical for the contractor to do so but she assured council 186 members that staff will keep the coucnil and the residents well informed. Council Member Rafferty said 187 he understands it is the intent of staff to get the project going early in the season; what about school 188 buses? Engineer Hankee noted that there is awareness of the school bus schedule; what work can be 189 done early, will be. 190 191 Council Member Kusterman moved to approve Resolution No. 15-36 as presented. Council 192 Member Roeser seconded the motion. Motion carried on a voice vote. 193 194 6G) Consider Resolution No. 15-37, Approving the Exchange of an Easement for Fee Title to 195 NSP Right -of -Way — Community Development Director Grochala explained that staff is requesting 196 authorization for an easement exchange with NSP. This involves some land owned by NSP that runs 197 across the city owned land at Centerville Road and Birch Street. Staff has worked out an agreement to 198 receive fee title to the NSP property and allow them a utility easement. Council Member Stoesz noted 199 some concern that the agreement allows "towers" and Mr. Grochala said he is comfortable with what is 200 allowed in the agreement which has been reviewed by the city attorney. 201 202 Council Member Kusterman moved to approve Resolution No. 15-37 as presented. Council 203 Member Roeser seconded the motion. Motion carried on a voice vote. 204 205 6)H Consider Resolution No. 15-39, Relating to the Proffered Settlement Agreement by the 206 White Bear Lake Restoration Association Relating to Regionalization of Municipal Drinking 207 Water Supplies — Community Development Director Grochala explained that staff is bringing forward a 208 resolution supporting a position in opposition to the Department of Natural Resources and White Bear 209 Lake Restoration Association Settlement Agreement. He explained that there are several components of 210 the agreement that could impact the city and neighboring cities. So, with other cities in the area, staff 211 recommends that the council approve this resolution agreeing on a position. 212 213 Mayor Reinert said he agrees with the resolution. Council Member Roeser noted that he attended the 214 recent meeting held in Hugo to discuss this subject and heard the concern among cities. It is important 215 to be on guard in this situation and that is what this resolution pronounces. 216 217 Council Member Kusterman moved to approve Resolution No. 15-39 as presented. Council 218 Member Roeser seconded the motion. Motion carried on a voice vote. 219 220 UNFINISHED BUSINESS 221 222 There was no Unfinished Business. 223 224 NEW BUSINESS 225 5 226 227 228 229 230 231 232 COUNCIL MINUTES April 13, 2015 DRAFT There was no New Business. COMMUNITY EVENTS 4th ANNUAL CHAIN OF GIVING FUNDRAISER EVENT will be held at St. Joseph's Church on Saturday, April 18, 2015 6:00 - 9:00 p.m. Event supports military families and Centennial High School Strive Scholarships. For more information contact the Lino Lakes Rotary at 651-747-1563. 233 EARTH DAY CELEBRRATION will be celebrated in Lino Lakes the morning of Saturday, April 234 25, 2015. We are looking for volunteers to help to help pick up trash from City parks and trails. If 235 you interested in a project, call KC Kye at 651-982-2423. Wargo Nature Center Main Event is 12:30 236 — 3:00. Includes climbing wall, bouncy house, popcorn, informational tables, Healthy Living, 237 Organics, etc. 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 COMMUNITY CALENDAR 4 Monday, April 27 Monday, April 27 4- Monday, April 27 Community Calendar - A Look Ahead April 13, 2015 through April 27, 2015 6:00 pm, Community Room 6:00 pm, Council Chambers 6:30 pm, Council Chambers Council Work Session Board of Appeal City Council Meeting ADJOURN There being no further business, Council Member Rafferty moved to adjourn at 7:55 p.m. Council Member Stoesz seconded the motion. Motion carried on a voice vote. These minutes were considered and approved at the regular Council Meeting, April 27, 2015. Julianne Bartell, City Clerk 6 Jeff Reinert, Mayor CITY COUNCIL AGENDA ITEM 1D STAFF ORIGINATOR: Lisa Hogstad-Osterhues, Deputy City Clerk MEETING DATE: April 27, 2015 TOPIC: Approve Outdoor Patio for Paleo's Restaurant Located at 566 Lilac Street VOTE REQUIRED: 3/5 INTRODUCTION John and Elizabeth Pavlick, owners of Paleo's Restaurant, 566 Lilac Street, are requesting a premise change to their current liquor license to expand to a patio service area located on the east side of the building. BACKGROUND Mr. and Mrs. Pavlick have contacted the City for approval of a patio. They have worked with Planning & Zoning and currently have an approved building permit. Staff has contacted the Minnesota Alcohol & Gambling Division and been advised that the statue requires that an outdoor serving area be contiguous to the main building. Mr. and Mrs. Pavlick must follow all building and fire codes to comply with the expansion of the patio and be covered by liability insurance. RECOMMENDATION Authorize the outdoor patio located 566 Lilac Street, Paleo's Restaurant. ATTACHMENT 1. Drawing of proposed patio addition. STAFF ORIGINATOR: MEETING DATE: TOPIC VOTE REQUIRED: INTRODUCTION CITY COUNCIL AGENDA ITEM lE Lisa Hogstad-Osterhues, Deputy City Clerk April 27, 2015 Consider Resolution No. 15-43, Approving a Special Event and Parade Permit for Ethan's Reason 5K Run and 1 Mile Walk 3/5 Ethan's Reason is a 5k run and 1 mile walk scheduled for Saturday, September 12, 2015 from 7:00 a.m. to 12:00 p.m. 100% of the proceeds will go to the non-profit organization, Ethan's Reason, which will be used to help to forward the mission of advancing research, education, and public awareness of Batten Disease and rare diseases and to support individuals and families who have been affected by Batten Disease and rare diseases. BACKGROUND The event is the 2014 5K Run and 1 mile walk/roll staring at Centennial Middle School and running along the routes indicated on the attached map. There will be bathrooms available at the school as well as basic first aid. There will be garbage cans placed midway through the course where water will be provided. A special event application requesting city permission to conduct this activity has been submitted to the city. A Certificate of Liability and Insurance coverage has been submitted to cover this event. It is anticipates there will be approximately 200 participants; the proposed route for the parade would be starting at Centennial Middle School, to Elm Street, to Cinnamon Teal Court, to Ivy Ridge Lane, to Rice Lake Lane, back to Elm Street to the middle school property where the staging area will be located. The Police Department have reviewed the applications and have signed off on the permit with the understanding that the applicants will continue to follow their instructions on safety. The applicant must also have in place all necessary permissions for use of property involved in the event. RECOMMENDATION Approve Resolution No. 15-43, Authorizing a special event and parade permit for Ethan's Reason 5K Run and 1 Mile Walk. ATTACHMENTS Map of Race Resolution 15-43 tawn1 O, REASON9 t SK RUN & 1 miLE W, (RV,'War sr. -0 177 P Ids* CNntwu it 'Addle School • Gene 1 Middl Sch Start! r eck In! •§ gists 9 Elm, treet Finish Line! •+ fix CITY OF LINO LAKES COUNTY OF ANOKA RESOLUTION NO. 15-43 APPROVING A SPECIAL EVENT AND PARADE PERMIT FOR ETHAN'S REASON 5K RUN AND 1 MILE WALK, SEPTEMBER 12, 2015 WHEREAS, Ethan's Reason 5K Run and 1 Mile Walk, is planned for September 12, 2015; and WHEREAS, 100% of the proceeds will go to the non-profit organization, Ethan's Reason, which will be used to help to forward the mission of advancing research, education, and public awareness of Batten Disease and rare diseases and to support individuals and families who have been affected by Batten Disease and rare diseases. WHEREAS, Kristine Davies organizer of Ethan's Reason has submitted an application for a special event and parade permit in conjunction with the event; WHEREAS, the city has conducted a background investigation of the applicant, and WHEREAS, said peiniit application was reviewed for compliance with the City of Lino Lakes for safety considerations by city administration, police, fire and public works divisions; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lino Lakes, Minnesota: That the City Council hereby approves the special event, parade/run applications for the 2015 Ethan's Reason 5K Run and 1 Mile Walk subject to ongoing efforts to ensure proper safety, and related issues. Adopted by the Council of the City of Lino Lakes this 27th of April, 2015. The motion for the adoption of the foregoing resolution was introduced by Council Member and was duly seconded by Council Member and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: Jeff Reinert, Mayor ATTEST: Julianne Bartell, City Clerk CITY COUNCIL AGENDA ITEM 1F STAFF ORIGINATOR: Lisa Hogstad-Osterhues, Deputy Clerk MEETING DATE: April 27, 2015 TOPIC: Annual Advisory Board Appointments VOTE REQUIRED: 3/5 INTRODUCTION Each year, the City council appoints or reappoints citizens to serve on council advisory groups. BACKGROUND The city advertised and received a number of applications from interested residents. Interviews of candidates were conducted by the council and votes were cast and tallied by staff with the following results: Planning & Zoning Board — 1 vacancy (1 terms expired Dec. 31, 2014) 1 candidate interviewed. Matt Kassner Park and Recreation Board- 1 vacancy (1 term expired Dec. 31, 2014) 1 candidate interviewed. Clark Gooder Environmental Board —1 vacancy (1 term expires Dec. 31, 2016) Please note: we are in the process of accepting applications for one vacancy due to a resignation. Economic Development Advisory Committee — 2 vacancies (2 terms expired Dec. 31, 2014. Please note: we are in the process of accepting applications for two vacancies. RECOMMENDATION Approve advisory board appointments as listed above. STAFF ORIGINATOR: MEETING DATE: TOPIC: VOTE REQUIRED: INTRODUCTION CITY COUNCIL AGENDA ITEM 2A Al Rolek, Director of Finance April 27, 2015 Consider Resolution No. 15-44 Awarding Sale of General Obligation Bonds, Series 2015A, in the Proposed Aggregate Principal Amount of $3,645,000 Simple Majority The City of Lino Lakes has awarded bids and will be undertaking street reconstruction projects and other street and improvements projects in 2015. The construction cost of these projects will be financed through the issuance of bonded debt. BACKGROUND In November, 2014 the voters of the City of Lino Lakes approved a referendum to issue up to $3,150,000 in Street Reconstruction bonds to reconstruct streets in the Shenandoah area. Additionally, the construction of a new fire station facility has made it necessary to add turn lanes in the Birch Street and Centerville Road area requiring the issuance of an additional $495,000 in bonded debt. On March 23 the City Council approved Resolution 15-31 providing for the issuance of approximately $3,645,000 G.O. Bonds, Series 2015A to finance the improvements noted above. The bond issue will have a 15 -year term and will be repaid through tax levies and through tax abatements on parcels identified in Resolution 15-30. The City has since issued its Official Statement and advertised for bids for this issue. Bids were received earlier today by the City's financial advisors, Springsted, Inc. Terri Heaton of Springsted, Inc. is here tonight to present the results of the bidding process. The exact amount of the bonds to be sold will be determined pending the outcome of the bids. Approval of Resolution 15-44 awards sale of General Obligation Bonds, Series 2015A, in the proposed aggregate principal amount of $3,645,000. RECOMMENDATION Staff is recommending approval of Resolution No. 15-44. ATTACHMENTS Resolution 15-44 Extract of Minutes of Meeting of the City Council of the City of Lino Lakes, Anoka County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Lino Lakes, Minnesota, was duly held in the City Hall in said City on Monday, April 27, 2015, commencing at 6:30 P.M. The following members were present: and the following were absent: The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City's General Obligation Bonds, Series 2015A, to be issued in the aggregate principal amount of $3,645,000. The City Administrator presented a tabulation of the proposals that had been received in the manner specified in the Terms of Proposal for the Bonds. The proposals are as set forth in EXHIBIT A attached. After due consideration of the proposals, Member then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: 459994v1 JAE LN140-115 RESOLUTION NO. 15-44 A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION BONDS, SERIES 2015A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $3,645,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED by the City Council (the "City Council") of the City of Lino Lakes, Anoka County, Minnesota (the "City"), as follows: Section 1. Sale of Bonds. 1.01. Authorization for Sale of Bonds. Pursuant to a resolution adopted by the City Council on March 23, 2015, the City authorized the sale of its General Obligation Bonds, Series 2015A (the "Bonds"), for the following purposes: (a) to provide funds for street reconstruction and related upgrades of the existing storm water management system designated as the Shenandoah Area Improvements described in the City's Five -Year Street Reconstruction Plan (2015-2019) (the "Street Reconstruction"), as approved by the voters of the City at a duly called special election held on November 4, 2014, and in accordance with Minnesota Statutes, Chapter 475, as amended (the "Municipal Debt Act"); and (b) to provide funds to acquire, construct, and equip a new fire hall in the City, including the construction of necessary public infrastructure (the "Project"), pursuant to Minnesota Statutes, Chapter 475, as amended, and Minnesota Statutes, Sections 469.1812 through 469.1815, as amended (collectively, the "Abatement Act"), as approved by a resolution adopted by the City Council of the City on March 23, 2015 (the "Abatement Resolution"), by providing a property tax abatement (the "Abatements") for certain property in the City (the "Abatement Parcels") over a period of ten (10) years, in an amount sufficient to pay the principal amount of and interest on bonds issued to finance the Project. 1.02. Award to the Purchaser and Interest Rates. The proposal of (the "Purchaser") to purchase the Bonds of the City is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $ (par amount of $3,645,000, [plus original issue premium of $ ,] [less original issue discount of $ ,] less underwriter's discount of $ ), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: 459994v1 JAE LN140-115 2 Year Interest Rate Year Interest Rate 2017 2018 2019 2020 2021 2022 2023 2024 True interest cost: 2025 2026 2027 2028 2029 2030 2031 1.03. Purchase Contract. The sum of $ , being the amount proposed by the Purchaser in excess of $3,608,550, shall be credited to the accounts of the Debt Service Fund hereinafter created or deposited in the accounts of the Construction Fund hereinafter created, as determined by the Finance Director of the City in consultation with the City's municipal advisor. The Finance Director is directed to deposit the good faith check or deposit of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith deposits of the unsuccessful proposers. The Mayor and City Administrator are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Municipal Debt Act and the Abatement Act (collectively, the "Act") in the total principal amount of $3,645,000, originally dated May 28, 2015, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 (a) $3,150,000 of the Bonds (the "Street Reconstruction Bonds"), maturing on February 1 in the years and amounts set forth below, will be used to fmance the Street Reconstruction: 459994v1 JAE LN140-115 3 Year Amount Year Amount 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 (b) The remainder of the Bonds in the amount of $495,000 (the "Abatement Bonds"), maturing on February 1 in the years and amounts set forth below, will be used to finance the Project: Year Amount Year Amount 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1.05. Optional Redemption. The City may elect on February 1, 2023, and on any day thereafter to prepay Bonds due on or after February 1, 2024. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in Section 7 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. [ 1.06. Mandatory Redemption; Term Bonds. To be completed if Term Bonds are requested by the Purchaser.] Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1, 2016, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 459994v1 JAE LN140-115 4 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes and payments so made to registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds, sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver any new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for a Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it 459994v1 JAE LN140-115 5 and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Registrar. The City appoints U.S. Bank National Association, Saint Paul, Minnesota, as the initial Registrar. The Mayor and the City Administrator are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Administrator must transmit to the Registrar monies sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Administrator and executed on behalf of the City by the signatures of the Mayor and the City Administrator, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City Administrator will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in EXHIBIT B attached hereto, with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. 459994v1 JAE LN140-115 6 Section 3. Form of Bond. 3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form as attached hereto as EXHIBIT B. 3.02. Approving Legal Opinion. The City Administrator is directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and to cause the opinion to be printed on or accompany each Bond. Section 4. Payment; Security; Pledges and Covenants. 4.01. Debt Service Fund. The Bonds are payable from the General Obligation Bonds, Series 2015A Debt Service Fund (the "Debt Service Fund") hereby created. The Debt Service Fund shall be administered by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The City will maintain the following accounts in the Debt Service Fund: the "Street Reconstruction Bonds Account" and the "Abatement Bonds Account." Amounts in the Street Reconstruction Bonds Account are irrevocably pledged to the Street Reconstruction Bonds, and amounts in the Abatement Bonds Account are irrevocably pledged to the Abatement Bonds. (a) Street Reconstruction Bonds Account. Ad valorem taxes (the "Taxes") herein levied for the Street Reconstruction are hereby pledged to the Street Reconstruction Bonds Account of the Debt Service Fund. There is appropriated to the Street Reconstruction Bonds Account a pro rata portion of (i) capitalized interest financed from Bond proceeds, if any; and (ii) amounts over the minimum purchase price of the Bonds paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof. (b) Abatement Bonds Account. The Abatements for the Abatement Parcels are hereby pledged to the Abatement Bonds Account of the Debt Service Fund. There is appropriated to the Abatement Bonds Account a pro rata portion of (i) capitalized interest financed from Bond proceeds, if any; and (ii) amounts over the minimum purchase price of the Bonds paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof. 4.02. Construction Fund. The City hereby creates the General Obligation Bonds, Series 2015A Construction Fund (the "Construction Fund"). The City will maintain the following accounts in the Construction Fund: the "Street Reconstruction Bonds Account" and the "Abatement Bonds Account." Amounts in the Street Reconstruction Bonds Account are irrevocably pledged to the Street Reconstruction Bonds, and amounts in the Abatement Bonds Account are irrevocably pledged to the Abatement Bonds. (a) Street Reconstruction Bonds Account. Proceeds of the Street Reconstruction Bonds, less the appropriations made in Section 4.01(a), together with any other funds appropriated for the Street Reconstruction and Taxes collected during the construction of the Street Reconstruction, will be deposited in the Street Reconstruction Bonds Account of the Construction Fund to be used solely to defray expenses of the Street Reconstruction. When the Street Reconstruction is completed and the cost thereof paid, the Street Reconstruction Bonds Account of the Construction Fund is to be closed and subsequent collections of Taxes for the Street Reconstruction are to be deposited in the Street Reconstruction Bonds Account of the Debt Service Fund. 459994v1 JAE LN140-115 7 (b) Abatement Bonds Account. Proceeds of the Abatement Bonds, less the appropriations made in Section 4.01(b) hereof, will be deposited in the Abatement Bonds Account of the Construction Fund to be used solely to defray expenses of the Project described herein and in the Abatement Resolution. When the Project is completed and the cost thereof paid, the Abatement Bonds Account of the Construction Fund is to be closed and any funds remaining may be deposited in the Abatement Bonds Account of the Debt Service Fund. 4.03. General Obligation Pledge. For the prompt and full payment of the principal of and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City will be and are hereby irrevocably pledged. If the balance in the Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Debt Service Fund when a sufficient balance is available therein. 4.04. Pledge of Tax Levy. For the purpose of paying the principal of and interest on the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City. The Taxes will be credited to the Street Reconstruction Bonds Account of the Debt Service Fund above provided and will be in the years and amounts as attached hereto as EXHIBIT C. 4.05. Certification to Manager of Property Records and Taxation as to Debt Service Fund Amount. It is hereby determined that the estimated collections of Taxes and Abatements will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levy herein provided for the Bonds is irrepealable until all of the Bonds are paid, provided that at the time the City makes its annual tax levies the Finance Director may certify to the Manager of Property Records and Taxation of Anoka County, Minnesota (the "Manager of Property Records and Taxation") the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the Manager of Property Records and Taxation will thereupon reduce the levy collectible during such year by the amount so certified. 4.06. Filing of Resolution. The City Administrator is authorized and directed to file a certified copy of this resolution with the Manager of Property Records and Taxation and to obtain the certificate required by Section 475.63 of the Act. Section 6. Authentication of Transcript. 6.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, may be deemed representations of the City as to the facts stated therein. 6.02. Certification as to Official Statement. The Mayor, City Administrator, and Finance Director are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 459994v1 JAE LN140-115 8 6.03. Other Certificates. The Mayor, City Administrator, and Finance Director are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the City or incumbency of its officers, at the closing the Mayor, City Administrator, and Finance Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Finance Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds. Section 7. Tax Covenants. 7.01. Tax -Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 7.02. Rebate. The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States. 7.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 7.04. Qualified Tax -Exempt Obligations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than any private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2015 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2015 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. 459994v1 JAE LN140-115 9 Section 8. Book -Entry System; Limited Obligation of City. 8.01. The Depository Trust Company. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 8.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the "Participants") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar) of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Administrator of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co." will refer to such new nominee of DTC; and upon receipt of such a notice, the City Administrator will promptly deliver a copy of the same to the Registrar and Paying Agent. 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Representation Letter") which shall govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 8.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in 459994v1 JAE LN140-115 10 accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 9. Continuing Disclosure. 9.01. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Administrator and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 9.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 10. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. 459994v1 JAE LN140-115 11 Adopted by the Council of the City of Lino Lakes this day of , 2015. The motion for the adoption of the foregoing resolution was introduced by Council Member and was duly seconded by Council Member and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: ATTEST: Julianne Bartell, City Clerk 459994v1 JAE LN140-115 12 Jeff Reinert, Mayor 459994v1 JAE LN140-115 EXHIBIT A PROPOSALS A-1 EXHIBIT B FORM OF BOND No. R- $ UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA CITY OF LINO LAKES GENERAL OBLIGATION BOND SERIES 2015A Date of Rate Maturity Original Issue February 1, 20_ May 28, 2015 Registered Owner: CEDE & CO. CUSIP The City of Lino Lakes, Minnesota, a duly organized and existing municipal corporation in Anoka County, Minnesota (the "City"), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered Owner specified above or registered assigns, the principal sum of $ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing February 1, 2016, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, Saint Paul, Minnesota, as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1, 2023, and on any day thereafter to prepay Bonds due on or after February 1, 2024. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company ("DTC") of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. This Bond is one of an issue in the aggregate principal amount of $3,645,000 all of like original issue date and tenor, except as to number, maturity date, interest rate, and redemption privilege, all issued pursuant to a resolution adopted by the City Council on April 27, 2015 (the "Resolution"), for the purpose of providing money to defray the expenses incurred and to be incurred in financing certain street reconstruction and the acquisition, construction, and equipping of a fire hall, including the construction of necessary public infrastructure, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapter 475, as 459994v1 JAE LN140-115 B-1 amended, and Minnesota Statutes, Sections 469.1812 through 469.1815, as amended, and authority granted by the voters of the City at a duly called special election held on November 4, 2014. The principal hereof and interest hereon are payable in part from ad valorem taxes and in part from abatements collected from certain property in the City, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency in taxes and abatements pledged, which additional taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter and Constitution and laws of the State of Minnesota, to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, charter, or statutory limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its authorized representatives. 459994v1 JAE LN140-115 B-2 IN WITNESS WHEREOF, the City of Lino Lakes, Anoka County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Administrator and has caused this Bond to be dated as of the date set forth below. Dated: May 28, 2015 CITY OF LINO LAKES, MINNESOTA (Facsimile) (Facsimile) Mayor City Administrator CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION By Authorized Representative ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common TEN ENT -- as tenants by entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT Custodian (Cult) (Minor) under Uniform Gifts or Transfers to Minors Act, State of Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. 459994v1 JAE LN140-115 B-3 Dated: Notice: Signature Guaranteed: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion Signatures Program ("MSP") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Bond Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration 459994v1 JAE LN140-115 Signature of Registered Owner Officer of Registrar Cede & Co. Federal ID #13-2555119 B-4 EXHIBIT C TAX LEVY SCHEDULE YEAR * TAX LEVY 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 * Year tax levy collected. 459994v1 JAE LN140-115 C-1 STATE OF MINNESOTA COUNTY OF ANOKA CITY OF LINO LAKES ) SS. I, the undersigned, being the duly qualified and acting City Clerk of the City of Lino Lakes, Minnesota (the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on April 27, 2015, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City's General Obligation Bonds, Series 2015A, in the original aggregate principal amount of $3,645,000. WITNESS My hand officially as such City Clerk and the corporate seal of the City this day of , 2015. City Clerk City of Lino Lakes, Minnesota (SEAL) 459994v1 JAE LN140-115 STATE OF MINNESOTA COUNTY OF ANOKA CERTIFICATE OF MANAGER OF PROPERTY RECORDS AND TAXATION AS TO TAX LEVY AND REGISTRATION I, the undersigned Manager of Property Records and Taxation of Anoka County, Minnesota, hereby certify that a certified copy of a resolution adopted by the governing body of the City of Lino Lakes, Minnesota (the "City"), on April 27, 2015, levying taxes for the payment of the City's General Obligation Bonds, Series 2015A, issued in the original aggregate principal amount of $3,645,000, dated May 28, 2015, has been filed in my office and said bonds have been entered on the register of obligations in my office and that such tax has been levied as required by law. WITNESS My hand and official seal this day of , 2015. (SEAL) 459994v1 JAE LN140-115 MANAGER OF PROPERTY RECORDS AND TAXATION, ANOKA COUNTY, MINNESOTA By Its PRELIMINARY OFFICIAL STATEMENT DATED APRIL 6, 2015 o NEW ISSUE Standard & Poor's Rating: Requested F BANK QUALIFIED In the opinion of Kennedy & Graven, Chartered, Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decisions (which excludes any pending O : legislation which may have a retroactive effect) and, assuming compliance with certain covenants, interest to be paid on the Bonds is excluded from gross income for federal income otax purposes and, to the same extent, is excluded from taxable net income of individuals, estates, or trusts for Minnesota income tax purposes, and is not a preference item for [ purposes of computing the federal alternative minimum tax or the Minnesota alternative minimum tax imposed an individuals, trusts, and estates. Such interest is taken into account o in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations and is subject to Minnesota franchise O o taxes on certain corporations (including financial institutions) measured by income. No opinion will be expressed by Bond Counsel regarding the other state or federal tax Qo'r=1 consequences caused by the receipt or accrual of interest on the Bonds or arising with respect to ownership of the Bonds. See "TAX EXEMPTION" herein. $3,645,000* .5 : City of Lino Lakes, Minnesota E U General Obligation Bonds, Series 2015A (the "Bonds") (Book Entry Only) C9 . Dated Date: Date of Delivery Interest Due: Each February 1 and August 1, to 2 commencing February 1, 2016 U.) The Bonds will mature February 1 in the years and amounts* as follows: 2017 $230,000 2020 $240,000 2023 $255,000 2026 $270,000 2029 $235,000 2018 $235,000 2021 $245,000 2024 $255,000 2027 $220,000 2030 $240,000 o 0 2019 $235,000 2022 $250,000 2025 $265,000 2028 $225,000 2031 $245,000 8 O O U w 2 Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term OA . bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest `° t - to the date of redemption scheduled to conform to the maturity schedule set forth above. o� o The City may elect on February 1, 2023, and on any day thereafter, to prepay Bonds due on or after February 1, 0 2024 at a price of par plus accrued interest. The Bonds are general obligations of the City for which the City pledges its full faith and credit and power to levy A ° direct general ad valorem taxes. In addition, the City will pledge abatement revenues from identified properties for g repayment of the Bonds. The proceeds will be used to finance (i) various street reconstruction projects as identified in the City's 2015-2019 Street Reconstruction Plan, and (ii) public infrastructure improvements within the City related to the construction of the new municipal fire hall. .� Proposals shall be for not less than $3,608,550 plus accrued interest, if any, on the total principal amount of the 0 Bonds. Proposals shall specify rates in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for .4 8 w each maturity must be 98.0% or greater. Following receipt of proposals, a good faith deposit will be required to be 5 delivered to the City by the lowest bidder as described in the "Terms of Proposal" herein. Award of the Bonds will g o be made on the basis of True Interest Cost (TIC). r/ C.1) O .� The City will designate the Bonds as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the w w Internal Revenue Code of 1986, as amended, and the Bonds will not be subject to the alternative minimum tax for 0 0 individuals. The Bonds will be issued as fully registered bonds without coupons and, when issued, will be registered in the P. a name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). DTC will act as securities g a depository for the Bonds. Individual purchases may be made in book entry form only, in the principal amount of 5 f, $5,000 and integral multiples thereof. Investors will not receive physical certificates representing their interest in y b the Bonds purchased. (See "Book Entry System" herein.) U.S. Bank National Association, St. Paul, Minnesota o will serve as registrar (the "Registrar") for the Bonds. The Bonds will be available for delivery at DTC on or about y 8 �� May 28, 2015. U os PROPOSALS RECEIVED: April 27, 2015 (Monday) until 10:00 A.M., Central Time AWARD: April 27, 2015 (Monday) at 6:30 P.M., Central Time 0 Springsted Preliminary; subject to change. Further information may be obtained from SPRINGSTED Incorporated, Municipal Advisor to the City, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101-2887 (651) 223-3000. CITY OF LINO LAKES, MINNESOTA CITY COUNCIL Jeff Reinert Mayor Dale Stoesz Councilmember William Kusterman Councilmember Rob Rafferty Councilmember Dave Roeser Councilmember CITY ADMINISTRATOR Jeffrey Karlson DIRECTOR OF FINANCE Alan Rolek MUNICIPAL ADVISOR Springsted Incorporated St. Paul, Minnesota BOND COUNSEL Kennedy & Graven, Chartered Minneapolis, Minnesota For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the City from time to time, may be treated as a Preliminary Official Statement with respect to the Bonds described herein that is deemed final as of the date hereof (or of any such supplement or correction) by the City. By awarding the Bonds to any underwriter or underwriting syndicate submitting a Proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded copies of the Final Official Statement in the amount specified in the Terms of Proposal. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Bonds, other than as contained in the Preliminary Official Statement or the Final Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the City. Certain information contained in the Preliminary Official Statement or the Final Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness or accuracy. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE PRELIMINARY OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE PRELIMINARY OFFICIAL STATEMENT NOR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE RESPECTIVE DATE THEREOF. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Preliminary Official Statement or the Final Official Statement, they will be furnished upon request. Any CUSIP numbers for the Bonds included in the Final Official Statement are provided for convenience of the owners and prospective investors. The CUSIP numbers for the Bonds are assigned by an organization unaffiliated with the City. The City is not responsible for the selection of the CUSIP numbers and makes no representation as to the accuracy thereof as printed on the Bonds or as set forth in the Final Official Statement. No assurance can be given by the City that the CUSIP numbers for the Bonds will remain the same after the delivery of the Final Official Statement or the date of issuance and delivery of the Bonds. TABLE OF CONTENTS Page(s) Terms of Proposal i -v Introductory Statement 1 Continuing Disclosure 1 The Bonds 2 Authority and Purpose 4 Sources and Uses of Funds 4 Security and Financing 5 Future Financing 5 Litigation 5 Legality 6 Tax Exemption 6 Bank -Qualified Tax -Exempt Obligations 7 Rating 7 Municipal Advisor 7 Certification 7 City Property Values 8 City Indebtedness 9 City Tax Rates, Levies and Collections 13 Funds on Hand 13 Investments 14 General Information Concerning the City 15 Governmental Organization and Services 20 Proposed Form of Legal Opinion Appendix I Continuing Disclosure Certificate Appendix II Summary of Tax Levies, Payment Provisions, and Minnesota Real Property Valuation Appendix III Excerpt of 2013 Comprehensive Annual Financial Report Appendix IV THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $3,645,000* CITY OF LINO LAKES, MINNESOTA GENERAL OBLIGATION BONDS, SERIES 2015A (BOOK ENTRY ONLY) Proposals for the Bonds will be received on Monday, April 27, 2015, until 10:00 A.M., Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at 6:30 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds regardless of the manner in which the proposal is submitted. (a) Sealed Bidding Proposals may be submitted in a sealed envelope or by fax (651) 223-3046 to Springsted. Signed proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final proposal price and coupons, by telephone (651) 223-3000 or fax (651) 223-3046 for inclusion in the submitted proposal. OR (b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via PARITY®. For purposes of the electronic bidding process, the time as maintained by PARITY® shall constitute the official time with respect to all proposals submitted to PARITY®. Each bidder shall be solely responsible for making necessary arrangements to access PARITY® for purposes of submitting its electronic proposal in a timely manner and in compliance with the requirements of the Terms of proposal. Neither the City, its agents nor PARITY® shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the City, its agents nor PARITY® shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or interruptions of or any damages caused by the services of PARITY®. The City is using the services of PARITY® solely as a communication mechanism to conduct the electronic bidding for the Bonds, and PARITY® is not an agent of the City. If any provisions of this Terms of proposal conflict with information provided by PARITY®, this Terms of proposal shall control. Further information about PARITY®, including any fee charged, may be obtained from: PARITY®, 1359 Broadway, 2nd Floor, New York, New York 10018 Customer Support: (212) 849-5000 Preliminary; subject to change. DETAILS OF THE BONDS The Bonds will be dated as of the date of delivery and will bear interest payable on February 1 and August 1 of each year, commencing February 1, 2016. Interest will be computed on the basis of a 360 -day year of twelve 30 -day months. The Bonds will mature February 1 in the years and amounts* as follows: 2017 $230,000 2020 $240,000 2023 $255,000 2026 $270,000 2029 $235,000 2018 $235,000 2021 $245,000 2024 $255,000 2027 $220,000 2030 $240,000 2019 $235,000 2022 $250,000 2025 $265,000 2028 $225,000 2031 $245,000 * The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds or the amount of any maturity in multiples of $5, 000. In the event the amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same gross spread per $1, 000 of Bonds as that of the original proposal. Gross spread is the differential between the price paid to the City for the new issue and the prices at which the securities are initially offered to the investing public. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth above. In order to designate term bonds, the proposal must specify "Years of Term Maturities" in the spaces provided on the proposal form. BOOK ENTRY SYSTEM The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The City may elect on February 1, 2023, and on any day thereafter, to prepay Bonds due on or after February 1, 2024. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. SECURITY AND PURPOSE The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge abatement revenues from identified properties for repayment of the Bonds. The proceeds will be used to finance (i) various street reconstruction projects as identified in the City's 2015-2019 Street Reconstruction Plan, and (ii) public infrastructure improvements within the City related to the construction of the new municipal fire hall. BIDDING PARAMETERS Proposals shall be for not less than $3,608,550 plus accrued interest, if any, on the total principal amount of the Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for each maturity must be 98.0% or greater. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will be accepted. GOOD FAITH DEPOSIT To have its proposal considered for award, the lowest bidder is required to submit a good faith deposit to the City in the amount of $36,450 (the "Deposit") no later than 1:00 P.M., Central Time on the day of sale. The Deposit may be delivered as described herein in the form of either (i) a certified or cashier's check payable to the City; or (ii) a wire transfer. The lowest bidder shall be solely responsible for the timely delivery of their Deposit whether by check or wire transfer. Neither the City nor Springsted Incorporated have any liability for delays in the receipt of the Deposit. If the Deposit is not received by the specified time, the City may, at its sole discretion, reject the proposal of the lowest bidder, direct the second lowest bidder to submit a Deposit, and thereafter award the sale to such bidder. Certified or Cashier's Check. A Deposit made by certified or cashier's check will be considered timely delivered to the City if it is made payable to the City and delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101 by the specified time. Wire Transfer. A Deposit made by wire will be considered timely delivered to the City upon submission of a federal wire reference number by the specified time. Wire transfer instructions will be available from Springsted Incorporated following the receipt and tabulation of proposals. The successful bidder must send an e-mail including the following information: (i) the federal reference number and time released; (ii) the amount of the wire transfer; and (iii) the issue to which it applies. Once an award has been made, the Deposit received from the lowest bidder (the "purchaser") will be retained by the City and no interest will accrue to the purchaser. The amount of the Deposit will be deducted at settlement from the purchase price. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. AWARD The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis calculated on the proposal prior to any adjustment made by the City. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non -substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the City determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION The City has not applied for or pre -approved a commitment for any policy of municipal bond insurance with respect to the Bonds. If the Bonds qualify for municipal bond insurance and a bidder desires to purchase a policy, such indication, the maturities to be insured, and the name of the desired insurer must be set forth on the bidder's proposal. The City specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the City. All costs associated with the issuance and administration of such policy and associated ratings and expenses (other than any independent rating requested by the City) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Bonds shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Bonds. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT On or about May 28, 2015, the Bonds will be delivered without cost to the purchaser through DTC in New York, New York. Delivery will be subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven, Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no -litigation certificate. On the date of settlement, payment for the Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Bonds has been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non-compliance with said terms for payment. CONTINUING DISCLOSURE In accordance with SEC Rule 15c2 -12(b)(5), the City will undertake, pursuant to the resolution awarding sale of the Bonds, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Official Statement. The purchaser's obligation to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Bonds. OFFICIAL STATEMENT The City has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Bonds, and said Preliminary Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Preliminary Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Municipal Advisor to the City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000. - iv - A Final Official Statement (as that term is defined in Rule 15c2-12) will be prepared, specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law. By awarding the Bonds to an underwriter or underwriting syndicate, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the sole underwriter or to the senior managing underwriter of the syndicate (the "Underwriter" for purposes of this paragraph) to which the Bonds are awarded up to 25 copies of the Final Official Statement. The City designates the Underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Such Underwriter agrees that if its proposal is accepted by the City, (i) it shall accept designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated March 23, 2015 BY ORDER OF THE CITY COUNCIL /s/ Julie Bartell City Clerk -v- OFFICIAL STATEMENT $3,645,000* CITY OF LINO LAKES, MINNESOTA GENERAL OBLIGATION BONDS, SERIES 2015A (BOOK ENTRY ONLY) INTRODUCTORY STATEMENT This Official Statement contains certain information relating to the City of Lino Lakes, Minnesota (the "City") and its issuance of $3,645,000* General Obligation Bonds, Series 2015A (the "Bonds"). The Bonds are general obligations of the City for which it pledges its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge abatement revenues from identified properties for repayment of the Bonds. Inquiries may be directed to Mr. Alan Rolek, Director of Finance, City of Lino Lakes, 600 Town Parkway, Lino Lakes, Minnesota 55014, by telephoning (651) 982-2410, or by e -mailing alan.rolek@ci.lino-lakes.mn.us. Inquiries may also be made to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101-2887, by telephoning (651) 223-3000, or by e -mailing bond services@springsted.com. CONTINUING DISCLOSURE In order to assist the Underwriters in complying with SEC Rule 15c2-12 promulgated by the Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934, as the same may be amended from time to time, and official interpretations thereof (the "Rule"), pursuant to the resolution awarding the sale of the Bonds (the "Resolution"), the City has entered into an undertaking (the "Undertaking") for the benefit of holders including beneficial owners of the Bonds to provide certain financial information and operating data relating to the City to the Electronic Municipal Market Access system ("EMMA") annually, and to provide notices of the occurrence of certain events enumerated in the Rule to EMMA or the Municipal Securities Rulemaking Board (the "MSRB"). The specific nature of the Undertaking, as well as the information to be contained in the annual report or the notices of material events, is set forth in the Undertaking to be executed and delivered at the time the Bonds are delivered in substantially the form attached hereto as Appendix II. To the best of its knowledge, the City has complied for the past five years in all material respects in accordance with the terms of its previous continuing disclosure undertakings entered into pursuant to the Rule. However, in the interest of full disclosure, the City notes the following: Within the past five years, Moody's Investors Service has changed the credit ratings of certain municipal bond insurance firms, which resulted in the change of the insured ratings of certain debt issues of the City. Material event notices regarding certain insurance rating changes have not been filed; however, the information was publicly available through other sources. The insured ratings are currently at a level below that of the underlying ratings of the City. A failure by the City to comply with the Undertaking will not constitute an event of default on the Bonds or under any provisions of the Resolution (although holders will have any other available remedy at law or in equity subject to certain limitations). Nevertheless, such a failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. * Preliminary; subject to change. -1- THE BONDS General Description The Bonds are dated as of the date of delivery and will mature annually on February 1 as set forth on the front cover of this Official Statement. The Bonds are issued in book entry form. Interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1, 2016. Interest will be payable to the holder (initially Cede & Co.) registered on the books of the Registrar as of the fifteenth day of the calendar month next preceding such interest payment date. Interest will be computed on the basis of a 360 -day year of twelve 30 -day months. Principal of and interest on the Bonds will be paid as described in the section herein entitled "Book Entry System." U.S. Bank National Association, St. Paul, Minnesota will serve as Registrar for the Bonds, and the City will pay for registrar services. Redemption Provisions Thirty days' written notice of redemption shall be given to the registered owner(s) of the Bonds. Failure to give such written notice to any registered owner of the Bonds or any defect therein shall not affect the validity of any proceedings for the redemption of the Bonds. All Obligations or portions thereof called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment. Optional Redemption The City may elect on February 1, 2023, and on any day thereafter, to prepay Bonds due on or after February 1, 2024. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all the Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. Book Entry System The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries)that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation all of which are registered clearing agencies. -2- DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's MMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or its agent on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may -3- be requested by an authorized representative of DTC) is the responsibility of the City or its agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to City or its agent. Under such circumstances, in the event that a successor depository is not obtained, certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. AUTHORITY AND PURPOSE The Bonds are being issued pursuant to Minnesota Statutes, Chapters 469 and 475, a special election on November 4, 2015, and the City's 2015-2019 Street Reconstruction Plan. The proceeds of the Bonds, along with available City funds, will be used to finance (i) various street reconstruction projects as identified in the City's 2015-2019 Street Reconstruction Plan (the "Street Reconstruction Portion"), and (ii) public infrastructure improvements within the City related to the construction of the new municipal fire hall (the "Abatement Portion"). SOURCES AND USES OF FUNDS The composition of the Bonds is estimated to be as follows: Street Reconstruction Abatement Portion Portion Total Sources of Funds: Principal Amount $3,150,000 $495,000 $3,645,000 Available City Funds 0 355,980 355,980 Total Sources of Funds $3,150,000 $850,980 $4,000,980 Uses of Funds: Deposit to Project Funds $3,024,357 $830,980 $3,855,337 Costs of Issuance 48,395 9,112 57,507 Capitalized Interest 45,748 5,938 51,686 Allowance for Discount Bidding 31,500 4,950 36,450 Total Uses of Funds $3,150,000 $850,980 $4,000,980 -4- SECURITY AND FINANCING Street Reconstruction Portion The Street Reconstruction Portion of the Bonds will be general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. The City will make its first levy for the Street Reconstruction Portion of the Bonds in 2015 for collection in 2016. Capitalized interest has been included in the par amount of the Street Reconstruction Portion of the Bonds to make the interest payment due on the Street Reconstruction Portion of the Bonds on February 1, 2016. Thereafter, each year's collection of taxes, if collected in full, will be sufficient to pay 105% of the interest payment due August 1 of the collection year and the principal and interest payment due February 1 of the following year for the Street Reconstruction Portion of the Bonds. Abatement Portion The Abatement Portion of the Bonds will be general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge tax abatement revenues derived from certain abated parcels within the City for repayment of the Abatement Portion of the Bonds. Capitalized interest has been included in the par amount of the Abatement Portion of the Bonds to make the interest payment due on the Abatement Portion of the Bonds on February 1, 2016. Thereafter, each year's collection of abatement revenues will be sufficient to pay 105% of the interest payment due August 1 of the collection year and the principal and interest payment due February 1 of the following year for the Abatement Portion of the Bonds. The City does not anticipate the need to levy taxes for repayment of the Abatement Portion of the Bonds. The annual maximum amount of abatement by the City cannot exceed the greater of (i) 10% of the City's adjusted taxable net tax capacity ($1,776,619, based on the City's 2013/14 adjusted taxable net tax capacity of $17,766,193), or (ii) $200,000. The maximum annual abatement for the City's outstanding tax abatement bonds, including an estimate for the Abatement Portion of the Bonds, is $635,440, which is within the statutory limit. FUTURE FINANCING The City does not anticipate issuing any additional long-term general obligation debt within the next 90 days. The Lino Lakes Economic DevelopmentAuthority will issue Lease Revenue Bonds to finance a new Fire Hall for the City and the City will agree to pay the debt service on those bonds as the lessee of the facility. The City's obligation to pay debt service on such bonds is subject to non -appropriation on an annual basis. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. -5- LEGALITY The Bonds are subject to approval as to certain matters by Kennedy & Graven, Chartered, of Minneapolis, Minnesota, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify any of the financial or statistical statements or data contained in this Official Statement and will express no opinion with respect thereto. A legal opinion in substantially the form set out in Appendix I herein will be delivered at closing. TAX EXEMPTION In the opinion of Kennedy & Graven, Chartered, Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decisions (which excludes any pending legislation which may have a retroactive effect), and assuming compliance with certain covenants set forth in the Resolution, the interest on the Bonds is excluded from gross income for federal income tax purposes and, to the same extent, from taxable net income of individuals, estates, and trusts for Minnesota income tax purposes, and is not a preference item for purposes of computing the federal alternative minimum tax or the Minnesota alternative minimum tax imposed on individuals, trusts, and estates. Such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income. Noncompliance following the issuance of the Bonds with certain requirements of the Internal Revenue Code of 1986, as amended, (the "Code") and covenants of the Resolution may result in the inclusion of interest on the Bonds in gross income of the owners thereof for federal income tax purposes and in net taxable income of individuals, estates, and trusts for Minnesota income tax purposes. No provision has been made for redemption of the Bonds, or for an increase in the interest rate on the Bonds, in the event that interest on the Bonds becomes subject to federal or State of Minnesota income taxation. The Code provides that in the case of an insurance company subject to the tax imposed by Section 831 of the Code, the amount which otherwise would be taken into account as "losses incurred" under Section 832(b)(5) shall be reduced by an amount equal to 15% of the interest on the Bonds that is received or accrued during the taxable year. Interest on the Bonds may be included in the income of a foreign corporation for purposes of the branch profits tax imposed by Section 884 of the Code. Under certain circumstances, interest on the Bonds may be subject to the tax on "excess net passive income" of Subchapter S corporations imposed by Section 1375 of the Code. The above is not a comprehensive list of all federal tax consequences which may arise from the receipt of interest on the Bonds. The receipt of interest on the Bonds may otherwise affect the federal or Minnesota income tax liability of the recipient based on the particular taxes to which the recipient is subject and the particular tax status of other items or deductions. Bond Counsel expresses no opinion regarding any such consequences. All prospective purchasers of the Bonds are advised to consult their own tax advisors as to the tax consequences of, or tax considerations for, purchasing or holding the Bonds. -6- BANK -QUALIFIED TAX-EXEMPT OBLIGATIONS The City will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code, relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. RATING Application for a rating of the Bonds has been made to Standard & Poor's Ratings Services ("Standard & Poor's"), 55 Water Street, New York, New York. If a rating is assigned, it will reflect only the opinion of Standard & Poor's. Any explanation of the significance of the rating may be obtained only from Standard & Poor's. There is no assurance that the rating, if assigned, will continue for any given period of time, or that such rating will not be revised, suspended or withdrawn, if, in the judgment of Standard & Poor's, circumstances so warrant. A revision, suspension or withdrawal of the rating may have an adverse effect on the market price of the Bonds. MUNICIPAL ADVISOR The City has retained Springsted Incorporated, Public Sector Advisors, of St. Paul, Minnesota ("Springsted"), as municipal advisor in connection with certain aspects of the issuance of the Bonds. In preparing this Official Statement, Springsted has relied upon governmental officials, and other sources, who have access to relevant data to provide accurate information for this Official Statement, and Springsted has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. Springsted is not a public accounting firm and has not been engaged by the City to compile, review, examine or audit any information in this Official Statement in accordance with accounting standards. Springsted is an independent advisory firm, registered as a municipal advisor, and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. CERTIFICATION The City has authorized the distribution of the Preliminary Official Statement for use in connection with the initial sale of the Bonds and a Final Official Statement following award of the Bonds. The Purchaser will be furnished with a certificate signed by the appropriate officers of the City stating that the City examined each document and that, as of the respective date of each and the date of such certificate, each document did not and does not contain any untrue statement of material fact or omit to state a material fact necessary, in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. -7- Trend of Values(a) Assessment/ Collection Year 2014/15 2013/14 2012/13 2011/12 2010/11 Assessor's Estimated Market Value $1,798,481,600 1,625,143,100 1,636,167,000 1,752,697,700 1,829,803,000 CITY PROPERTY VALUES Sales Ratio 0) N/A 91.9% 98.4 100.3 N/A Economic Market Value(t) N/A $1,766,853,912 1,633,430,925 1,748,980,302 N/A Market Value Homestead Exclusion $84,278,943 97,474,237 96,404,391 87,979,240 N/A (a) For a description of the Minnesota property tax system, see Appendix III. Taxable Market Value $1,694,366,064 1,509,921,169 1,519,857,242 1,640,455,854 1,804,121,500 Adjusted Taxable Net Tax Capacity $19,669,590 17,766,193 17,782,398 19,235,909 20,887,606 (l') Sales Ratio Study for the year of assessment as posted by the Minnesota Department of Revenue, http://www. revenue. state.mn.us/propertytax/Pages/statistics-imv.aspx. Prior to 2011/12, a different methodology was used to calculate sales ratios and the economic market value cannot be derived. Economic market values for the year of assessment as posted by the Minnesota Department of Revenue, http: //www. revenue. state. mn.us/propertytax/Pages/statistics-imv aspx. (c) Source: Anoka County, Minnesota, March 2015, except as otherwise noted. 2014/15 Adjusted Taxable Net Tax Capacity: $19,669,590* Real Estate: Residential Homestead Commercial/Industrial and Public Utility Residential Non -Homestead Agricultural Seasonal Recreational Personal Property 2014/15 Net Tax Capacity Less: Captured Tax Increment Contribution to Fiscal Disparities Plus: Distribution from Fiscal Disparities $13,858,064 75.6% 2,536,783 13.8 1,261,754 6.9 298,844 1.6 36,854 0.2 347,316 1.9 $18,339,615 100.0% (236,559) (1,072,910) 2,639,444 2014/15 Adjusted Taxable Net Tax Capacity $19,669,590 * Excludes mobile home valuation of $11,989. -8- Ten of the Largest Taxpayers in the City Taxpayer Target Corporation Xcel Energy Lino Lakes Realty LLC Molin Concrete Products Co. Taylor Corporation Kohl's Department Store Gargaro Properties Inc. Marmon/Keystone Corp. Minnegasco Inc. Lino Lakes Business Center LLC Total Type of Property Retail Utility Commercial/Industrial Concrete Products Promotional/Printing Products Retail Commercial/Industrial Commercial/Industrial Utility Industrial Represents 5.8% of the City's 2014/15 adjusted taxable net tax capacity. CITY INDEBTEDNESS Legal Debt Limit and Debt Margin* 2014/15 Net Tax Capacity $ 201,790 186,413 175,742 106,606 97,498 96,836 85,130 73,342 69,458 56,928 $1,149,743* Legal Debt Limit (3% of 2014/15 Estimated Market Value) $53,954,448 Less: Outstanding Debt Subject to Limit (6,466,000) Legal Debt Margin as of May 28, 2015 $47,488,448 * The legal debt margin is referred to statutorily as the "Net Debt Limit" and may be increased by debt service funds and current revenues which are applicable to the payment of debt in the current fiscal year. NOTES: Certain types of debt are not subject to the legal debt limit. See Appendix III — Debt Limitations. The 2013 Minnesota Legislature clarified the definition of estimated market value and established it as the basis for the calculation of the Net Debt Limit. A large contributing factor to the change was to offset the effect of the Market Value Homestead Exclusion implemented by the 2012 Minnesota Legislature, which had a significant impact on taxable market values. General Obligation Debt Supported Solely by Taxes* Date Original of Issue Amount Purpose 11-1-06 $2,990,000 2-1-12 150,000 11-15-12 1,580,000 2-1-13 193,000 2-15-14 495,000 5-28-15 3,150,000 Total CIP Refunding Equipment Certificates Improvements Equipment Certificates Equipment Certificates Street Reconstruction (the Street Reconstruction Portion) * These issues are subject to the legal debt limit. -9- Est. Principal Final Outstanding Maturity As of 5-28-15 2-1-2018 $1,210,000 12-31-2015 51,000 2-1-2024 1,430,000 12-31-2016 130,000 12-31-2017 495,000 2-1-2031 3,150,000 $6,466,000 General Obligation Special Assessment Debt Date Original of Issue Amount Purpose 11-1-05 $5,550,000 12-9-09 4,260,000 6-1-10 465,000 11-15-12 435,000 7-15-13 615,000 11-20-14 1,510,000 Total Taxable Improvements Improvements Improvement Refunding Improvement Refunding Taxable Improvements Improvements Final Maturity 2-1-2021 2-1-2025 2-1-2020 2-1-2019 2-1-2024 2-1-2026 Est. Principal Outstanding As of 5-28-15 $2,760,000 3,695,000* 245,000 295,000 555,000 1,510,000 $9,060,000 Anoka County (the "County') issued $6,680,000 General Obligation Bonds, Series 2009F to finance a portion of the construction of an interchange at I -35E and County State Highway 14 (Main Street) and a bridge on I -35E. The City is responsible for a portion of the debt service on this issue pursuant to a joint powers agreement between the County and the City. The principal shown represents only the City's portion of the issue. General Obligation Tax Increment Debt Date Original Final of Issue Amount Purpose Maturity 7-15-07 $4,215,000 Tax Increment 2-1-2024 General Obligation Tax Abatement Debt Date Original of Issue Amount 8-15-06 $2,460,000 5-28-15 495,000 Total Purpose Tax Abatement Tax Abatement (the Abatement Portion) General Obligation Utility Revenue Debt Date Original of Issue Amount Purpose 8-15-06 $ 570,000 6-1-10 535,000 11-20-14 1,135,000 Water and Sewer Revenue Water Revenue Refunding Water Revenue Final Maturity 2-1-2023 2-1-2026 Final Maturity 2-1-2017 2-1-2020 2-1-2025 Est. Principal Outstanding As of 5-28-15 $2,405,000 Est. Principal Outstanding As of 5-28-15 $1,925,000 495,000 $2,420,000 Est. Principal Outstanding As of 5-28-15 $ 135,000 280,000 1,135,000 Total $1,550,000 - 10 - Estimated Calendar Year Debt Service Payments Including the Bonds G.O. Debt Supported G.O. Special Solely by Taxes Assessment Debt Principal Principal Year Principal & Interest(') Principal & Interest 2015 (at 5-28) $ 276,000 $ 319,504 $ 360,000 $ 521,146 2016 767,000 907,061 960,000 1,249,570 2017 913,000 1,021,503 1,250,000 1,500,290 2018 770,000 857,220 1,295,000 1,502,848 2019 345,000 419,950 1,345,000 1,511,278 2020 350,000 420,500 1,305,000 1,426,524 2021 355,000 420,361 1,305,000 1,379,400 2022 360,000 419,645 560,000 600,814 2023 370,000 423,346 510,000 531,466 2024 370,000 416,453 100,000 103,286 2025 210,000 250,420 35,000 36,208 2026 215,000 250,319 35,000 35,403 2027 220,000 249,825 2028 225,000 248,928 2029 235,000 252,600 2030 240,000 250,830 2031 245,000 248,675 Total $6,466,0000) $7,377,140 $9,060,000(C) $10,398,233 G.O. Tax Increment Debt G.O. Tax Abatement Debt Principal Principal Year Principal & Interest Principal & Interest(d) 2015 (at 5-28) (Paid) $ 48,563 (Paid) $ 40,933 2016 $ 380,000 469,526 $ 170,000 258,717 2017 400,000 473,926 235,000 314,464 2018 190,000 252,126 250,000 320,620 2019 200,000 254,326 270,000 330,920 2020 215,000 261,026 300,000 350,135 2021 230,000 267,126 320,000 358,260 2022 245,000 272,504 345,000 270,280 2023 265,000 282,016 370,000 381,095 2024 280,000 285,775 50,000 53,178 2025 55,000 56,994 2026 55,000 55,674 Total $2,405,000 $2,866,914 $2,420,000(e) $2,791,270 (a) Includes the Street Reconstruction Portion of the Bonds at an assumed average annual interest rate of 2.46%. (b) 75.4% of this debt will be retired within ten years. (00 99.2% of this debt will be retired within ten years. (d) Includes the Abatement Portion of the Bonds at an assumed average annual interest rate of 2.00%. (e) 97.7% of this debt will be retired within ten years. - 11 - Estimated Calendar Year Debt Service Payments Including the Bonds (Contiunued) Year 2015 (at 5-28) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total Overlapping Debt Taxing Unit(a) Anoka County Anoka County Library ISD No. 12 (Centennial) ISD No. 624 (White Bear Lake) ISD No. 831 (Forest Lake) Metropolitan Council Metropolitan Transit G.O. Utility Revenue Debt Principal (Paid) $ 220,000 235,000 165,000 165,000 175,000 115,000 115,000 115,000 120,000 125,000 $1,550,000 2014/15 Adjusted Taxable Net Tax Capacity Total (a) (b) (c) (d) (e) $ 304,499,149 293,802,109 29,814,881 69,100,459 48,947,058 3,284,416,937 2,898,971,460 Est. G.O. Debt As of 5-28-15(b) Principal & Interest $ 18,145 247,676 257,760 183,888 181,220 188,155 125,601 123,704 121,576 124,165 126,438 $1,698,328 Debt Applicable to Tax Capacity in City Percent Amount $114,030,000(C) 6.5% 650,000 6.7 96,176,685 45.8 84,050,000 3.4 22,920,000 7.4 15,195,000(d) 0.6 247,215,000(e) 0.7 $ 7,411,950 43,550 44,048,922 2,857,700 1,696,080 91,170 1,730,505 $57,879,877 Only those units with outstanding general obligation debt are shown here. Excludes general obligation tax and aid anticipation certificates and revenue -supported debt. Anoka County (the "County') issued $6,680,000 General Obligation Bonds, Series 2009F to finance a portion of the construction of an interchange at I -35E and County State Highway 14 (Main Street) and a bridge on I -35E. The City is currently responsible for $3,695,000 of the debt service on this issue pursuant to a joint powers agreement between the County and the City. Excludes general obligation debt supported by wastewater revenues and housing rental payments. Includes certificates of participation. Includes general obligation grant anticipation notes. Debt Ratios" To 2014/15 Estimated Market Value ($1,798,481,600) Per Capita - (20,833 - 2013 MN Demographer Estimate) Excludes general obligation utility revenue debt. - 12 - G.O. Direct Debt 1.13% $977 G.O. Direct & Overlapping Debt 4.35% $3,755 CITY TAX RATES, LEVIES AND COLLECTIONS Tax Capacity Rates for a City Resident in Independent School District No. 12 (Centennial) 2014/15 For 2010/11 2011/12 2012/13 2013/14 Total Debt Only Anoka County(a) 40.376% 41.615% 44.761% 43.613% 38.443% 4.953% City of Lino Lakes 42.041 42.894 46.774 46.683 43.770 5.951 ISD No. 12 (Centennial)0) 43.695 40.010 43.681 46.186 36.562 23.918 Special Districts(') 5.494 6.222 6.590 6.338 5.701 2.202 Total 131.606% 130.741% 141.806% 142.820% 124.476% 37.024% (a) Includes Anoka County Library and County/City Radio. (b) Independent School District No. 12 (Centennial) also has a 2014/15 tax rate of 0.16627% spread on the market value of property in support of an excess operating levy. Special districts include Metropolitan Council, Metropolitan Transit District, Metropolitan Mosquito Control, Rice Creek Watershed, and Anoka County Railroad Authority. (c) NOTE: Taxes are determined by multiplying the net tax capacity by the tax capacity rate, plus multiplying the referendum market value by the market value rate. This table does not include the market value based rates. See Appendix III. Tax Levies and Collections Collected During Collected and/or Abated Net Collection Year As of 12-31-14 Levy/Collect Levy* Amount Percent Amount Percent 2014/15 $8,680,907 (In Process of Collection) 2013/14 8,292,159 $8,225,357 99.2% $8,234,201 99.3% 2012/13 8,211,868 8,109,317 98.8 8,188,529 99.7 2011/12 8,223,605 8,088,787 98.4 8,203,039 99.7 2010/11 8,368,125 8,172,242 97.7 8,351,346 99.8 The net levy excludes state aid for property tax relief and fiscal disparities, if applicable. The net levy is the basis for computing tax capacity rates. See Appendix III. FUNDS ON HAND As of February 28, 2015 General Fund $ 4,265,901 Special Revenue Funds 266,414 Capital Project Funds 13,768,969 Enterprise Fund 13,097,984 Debt Service Funds 1,122,961 Agency Funds 1,134,776 Total Cash and Investments $33,657,005 - 13 - INVESTMENTS As of February 28, 2015, the City had total investments of $33,657,005, invested in the following manner: Percent of Portfolio Checking/CDs/money market $19,322,772 57.5% U.S. treasuries and agencies 3,177,479 9.4 Government mutual funds 1,786,035 5.3 Bonds 9,370,719 27.8 Total $33,657,005 100.0% In October 1997, the City adopted an investment policy that is in accordance with Minnesota Statutes 118A. Some highlights of the City's investment policy are as follows: 1. The primary objective is the safety of the principal. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risks and interest rate risk. a. Investments will be limited to those investments specified in Minnesota Statutes 118A. b. Annually appointing the financial institutions, brokers/dealers, intermediaries and advisors. c. Diversifying the investment portfolio so that potential losses on individual securities will be minimized d. Investing funds in primarily shorter -term securities. 2. The secondary objective is to have the portfolio remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. 3. The third objective is to attain a market rate of return through budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. 4. The Director of Finance and his/her appointed employees in case of unavailability are authorized to manage the investment program. A system of internal controls shall be followed and shall be designed to prevent losses from theft or misuse to provide reasonable assurance that the objectives are met. 5. The Director of Finance will prepare an investment report monthly for the City Administrator. 6. All City Funds must be invested with financial institutions authorized to provide investment services per statute 118A.06, with representatives who are licensed and with institutions which have a minimum capital requirement of $5 million and at least five years of operation. - 14 - GENERAL INFORMATION CONCERNING THE CITY The City is located in southeast Anoka County, approximately 20 miles north of the City of St. Paul. The City is part of the Minneapolis/St. Paul Metropolitan Area and covers an area of approximately 33 square miles (21,120 acres). Population The City's population trend is shown below. 2013 MN Demographer Estimate 2010 U.S. Census 2000 U.S. Census 1990 U.S. Census 1980 U.S. Census Population 20,833 20,216 16,791 8,807 4,966 Sources: Minnesota State Demographic Center, http://www.demography.state.mn.us/and United States Census Bureau, http://www.census.gov/. The City's population by age group for the past three years is as follows: Data Year/ Report Year 2014/15 2013/14 2012/13 Source: Claritas, Inc. Transportation 0-17 18-34 5,320 5,373 5,626 4,676 4,461 4,039 35-64 65 and Over 9,981 1,451 9,881 1,327 9,695 1,214 Interstate 35E, Interstate 35W, and Minnesota Highway 49 traverse the community Major Employers Employer State of Minnesota Correctional Facility Taylor Corporation Target Corporation Anoka County Juvenile Center Molin Concrete Products Co. Rehbein Transit Inc. Nol-Tec Systems, Inc. City of Lino Lakes Product/Service Medium security prison Promotional/printing products Retail Juvenile detention center Concrete products Bus transportation Pneumatic conveyors Government Percent Change 3.1% 20.4 90.7 77.3 Approximate Number of Employees 450 160(a) 150(a) 130 123 100 78 64(1') (a) As of June 2013; most recent information available. (b) Includes full- and part-time employees. Source: This does not purport to be a comprehensive list and is based on a September 2014 best efforts telephone survey of individual employers. Some employers do not respond to inquiries. - 15 - Labor Force Data Labor Force: Anoka County Minneapolis/St. Paul MSA State of Minnesota Unemployment Rate: Anoka County Minneapolis/St. Paul MSA State of Minnesota Annual Average February 2011 2012 2013 2014 2015 186,508 187,350 188,407 189,347 190,915 1,876,232 1,887,273 1,902,401 1,913,898 1,928,349 2,944,331 2,954,948 2,967,098 2,974,102 2,996,671 6.8% 5.9% 5.0% 4.1% 4.2% 6.3 5.5 4.8 3.9 4.0 6.5 5.6 5.0 4.1 4.4 Source: Minnesota Department of Employment and Economic Development, http://www.positivelyminnesota.com. 2014 data are preliminary. Retail Sales and Effective Buying Income (EBI) City of Lino Lakes Data Year/ Report Year 2014/15 2013/14 2012/13 2011/12 2010/11 Anoka County Data Year/ Report Year 2014/15 2013/14 2012/13 2011/12 2010/11 Total Retail Sales ($000) $153,754 171,931 182,474 238,304 238,339 Total Retail Sales ($000) $4,175,734 4,005,487 3,865,879 4,354,918 4,356,192 The 2014/15 Median Household EBI for the State Household EBI for the United States was $45,448. Source: Claritas, Inc. Total EBI ($000) $592,415 506,632 525,345 510,912 526,040 Total EBI ($000) $8,685,587 7,741,875 7,544,008 7,472,110 7,502,085 Median Household EBI $77,538 69,507 70,098 69,035 69,863 Median Household EBI $58,438 53,659 52,310 53,022 53,213 of Minnesota was $50,560. The 2014/15 Median - 16 - Permits Issued by the City New Single New Total Value* Family Residential Commercial/Industrial (All Permits) Year Number Value Number Value 2015 (to 5-28) 4 $ 1,190,548 1 $ 2,349,000 $ 4,067,616 2014 33 9,046,060 2 1,111,000 13,812,706 2013 30 7,666,210 5 4,505,422 18,337,053 2012 26 6,366,995 0 0 10,751,626 2011 34 8,511,974 0 0 11,192,264 2010 31 7,461,225 0 0 11,295,493 2009 28 6,000,984 0 0 9,586,160 2008 29 6,514,509 2 1,506,213 15,852,780 2007 92 17,421,761 3 9,467,625 30,539,559 2006 91 15,910,108 6 21,156,200 42,078,007 In addition to building permits, the total value includes all other permits issued by the City (ie. heating, lighting, plumbing, roof replacement, etc.). Source: City of Lino Lakes. Recent Development Economic Development The economic development effort established in 1993 by the City Council has begun to have an impact in the diversity of the City's tax base. Since 2001, three industrial parks have been established, and the Apollo Business Park on I -35W has been occupied. Marshan Industrial Park on Lake Drive and Clearwater Creek Development Center on Interstate 35E have also brought new industrial users to the City. Lino Lakes Marketplace, located at Lake Drive and Apollo Drive in the Town Center area, has continued to develop. The commercial retail center includes Target; Kohl's Department Store; Dairy Queen Grill 'n Chill; Discount Tire; a branch of Wells Fargo Bank, National Association; and SMW Credit Union. Three retail buildings of approximately 6,000 square feet each have been added to the area. The City initiated an Alternative Urban Areawide Review (AUAR) in 2005 of more than 4,000 acres in the northeast quadrant of the City, including the property in the I -35E corridor, to assess the impact of future development scenarios in this area. The AUAR provides clear direction for future development regarding environmental and transportation improvements that will be needed, relieving development interests of project -by -project environmental assessments. The City and Anoka County, with financial assistance from the American Recovery and Reinvestment Act, reconstructed the I-35E/County Road 14 interchange in 2010-2011. Recent project approvals include an 8,000 square -foot convenience store, a 13,000 square -foot liquor store, and a new McDonald's restaurant located along the I -35E corridor. The City entered into an agreement with a master developer in 2004 to complete development of 40 acres in the southeast quadrant of I-35W/Lake Drive known as "Legacy at Woods Edge". The mixed-use development is intended to include diverse opportunities for housing, retail and office uses. To -date, the development includes the Lino Lakes Civic Complex, which houses the City hall and police station; the Chain of Lakes YMCA; a 60 -unit workforce housing project; 13,000 square feet of leasable commercial space; and a facility initially developed as a hotel and later converted into an assisted living facility. The deep economic recession has stalled housing and commercial plans in the development and forced the remaining 22 acres into tax forfeiture. - 17 - The City is working with Anoka County, investors and developers to reinvigorate the development as the economy begins to show signs of recovery. To facilitate the Legacy at Woods Edge development, street, streetscape, water, sewer and storm water improvements have been installed, as well as the addition of a small community park. Improvements to Lake Drive and construction of a new interchange at I-35W/County Road 23 have also been completed. Because of the tax forfeiture mentioned above, special assessments in the principal amount of approximately $5 8 million were cancelled, subject to potential reimbursement in part from future sale of tax forfeited land and future reinstatement of assessments if the land returns to private ownership. In 2013, the State of Minnesota approved special legislation to allow conveyance of the property fee title from the State of Minnesota to the City. The City approved a 36 -unit memory care facility for development on this site, which was completed and occupied in 2014. Residential Development The following table shows projected lot development in existing subdivisions for single-family homes: As of February 2015 Subdivision Total Lots Lots Remaining Byrne Langer 2 2 Century Farm North 3rd Addition 52 4 Century Farm North 4th Addition 43 10 Foxborough 57 7 Highland Meadows East 2nd Addition 18 2 Marshan Estates 4 2 Marshan Meadows 2nd Addition 2 1 Northpointe 22 16 Northpointe 2nd Addition 40 40 Oakwood View Addition 10 1 Pine Glen 2nd Addition 37 1 Turnberry Crossing (Marshan Townhomes 2nd) 23 17 After several years of a slow economy, development activities continued to rebound in 2014. Both residential and commercial development showed signs of recovery as new construction activities and development planning emerged. The City approved preliminary plats for the 56 -lot Saddle Club development and the 315 -unit NorthPointe residential developments in 2014, and construction has started for each of these developments. Additionally, a new 21,000 -square -foot assisted living facility featuring 39 resident rooms was recently approved and is currently under construction. Financial Institutions* City residents are served by First Resource Bank, which had total deposits of $52,408,000 as of December 31, 2014. In addition, branch offices of Farmers & Merchants Savings Bank; Wells Fargo Bank, National Association; and U.S. Bank National Association are located throughout the City. * This does not purport to be a comprehensive list. Source: Federal Deposit Insurance Corporation, http://www2. dic.gov/idasp/main. asp. - 18 - Health Care Services The following is a summary of health care facilities located near the City: Facility Location No. of Beds St. John's Hospital — Health East Care System City of Maplewood 184 hospital beds 44 infant bassinets Ramsey County Care Center City of Maplewood 178 nursing home beds Good Samaritan Society City of Maplewood 96 nursing home beds Maplewood Care Center City of Maplewood 149 nursing home beds Source: Minnesota Department of Health, http://www.health.state.mn.us/. Education Public Education The following districts serve the residents of the City: 2014/15 School Grades Enrollment ISD No. 12 (Centennial) PK -12 6,582 ISD No. 624 (White Bear Lake) PK -12 8,220 ISD No. 831 (Forest Lake) PK -12 6,716 Non -Public Education City residents are also served by the following private schools: 2014/15 School Grades Enrollment Frassati Catholic Academy K-8 265 St. Peter K-6 235 Liberty Classical Academy K-5 147 Magnuson Christian K-8 100 White Bear Montessori K-3 30 Marantha School K-4 26 Source: Minnesota Department of Education, www.education.state.mn.us. - 19 - GOVERNMENTAL ORGANIZATION AND SERVICES Organization The City was incorporated as a village in 1955, became a statutory city on January 1, 1974, and is governed by a Home Rule Charter as adopted on January 12, 1982. The City is governed by a Mayor and four Council members. The Mayor is elected to a two-year term of office and Council members are elected to four-year terms. The following individuals comprise the current City Council: Expiration of Term Jeff Reinert Mayor December 31, 2015 Dale Stoesz Council Member December 31, 2015 William Kusterman Council Member December 31, 2017 Rob Rafferty Council Member December 31, 2017 Dave Roeser Council Member December 31, 2015 The City Administrator, Mr. Jeffrey Karlson, is the Chief Executive Officer of the City. Mr. Karlson has been with the City since August 2010. The City's Director of Finance is Mr. Alan Rolek, who has been with the City since April 2000. The City's Community Development Director is Mr. Michael Grochala, who has been with the City since June 2001. The City has 60 regular full-time and 4 regular part-time employees. Services Police protection is provided by 25 sworn police officers. Fire protection is provided by the Centennial Fire District, which is comprised of the cities of Lino Lakes, Circle Pines, and Centerville. The Fire District has a volunteer force of 53 members. The City has a class 5 insurance rating. The City has established a Comprehensive Plan to direct all areas of growth within the City. The plan was approved by the Metropolitan Council in 1981, and was amended in 1987, 1990, 1991, 1992, 2001, 2006, and 2011. Eighteen parks and playgrounds are maintained by the City and include ball fields, hockey and skating rinks, playground and picnic facilities, and 26 miles of trails. Anoka County owns a 5,500 -acre park and an 18 -hole golf course within the City. The City currently provides municipal sewer and water through the operation of five wells, two water towers, and 13 lift stations. The City currently has 4,685 users of its sewer system and 4,503 users of its water system. The City has established a policy that provides that municipal water services will be extended only to sewered areas. - 20 - Labor Contracts The status of labor contracts in the City is as follows: Bargaining Unit No. of Employees Expiration Date of Current Contract LELS -- Patrol 17 December 31, 2015 LELS -- Sargent 5 December 31, 2015 49ers — Public Works 15 December 31, 2015 AFSCME 17 December 31, 2015 Non -unionized employees 8 Total employees 62 Employee Pensions All full-time and certain part-time employees of the City are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing multiple -employer retirement plans. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. All police officers, fire fighters and peace officers who qualify for membership by statute are covered by the PEPFF. The City's contributions to GERF and PEPFF are equal to the contractually required contributions for each year as set by State Statute, and are as follows for the past five years: GERF PEPFF 2014 (unaudited) $162,934 $314,426 2013 160,392 290,737 2012 164,317 315,541 2011 187,186 285,356 2010 177,081 280,046 For more information regarding the liability of the City with respect to its employees, please reference "Note 6, Defined Benefit Pension Plans -- Statewide" of the City's Comprehensive Annual Financial Report for fiscal year ended December 31, 2013, an excerpt of which is included as Appendix IV of this Official Statement. (The City's Comprehensive Annual Financial Report for the fiscal year ended December 31, 2014 is not yet available.) Sources: City's Comprehensive Annual Financial Reports. Other Post -Employment Benefits The Governmental Accounting Standards Board (GASB) has issued Statement No. 45, Accounting and Financial Reporting by Employers for Post -employment Benefits Other Than Pensions (GASB 45), which addresses how state and local governments must account for and report their obligations related to post - employment healthcare and other non -pension benefits (referred to as Other Post Employment Benefits or "OPEB"). The City provides benefits for retirees as required by Minnesota Statutes. Active employees who retire from the City when over age 50 and with 20 years of service may continue coverage for both themselves and their eligible dependent(s) under the City's health benefits program until age 65. Pursuant to the -21 - provisions of the plan, retirees are responsible for the total premium cost. As of December 31, 2014, there were approximately 48 active participants and 6 retired participants receiving benefits from the City's health plans. The City's greatest liability under GASB 45 comes through an implicit rate subsidy, which is the additional cost of health insurance to current employees and the City as a result of the higher cost of providing health insurance to retirees. The City funds its OPEB obligation on a pay-as-you-go basis. For fiscal year ended December 31, 2014, the City contributed $21,494 to the plan. Components of the City's annual OPEB cost for the year ended December 31, 2014, the amount actually contributed to the plan, and changes in the City's net OPEB obligation to the plan are as follows: Annual required contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost (expense) Contributions made Increase in net OPEB obligation Net OPEB obligation — beginning of year Net OPEB obligation — end of year $ 31,590 840 (3,238) $ 29,192 (21,494) $7,698 83,969 91 667 Funded status of the City's OPEB as reported in the actuarial reports received to -date: Actuarial Valuation Date January 1, 2014 January 1, 2011 January 1, 2008 Required contributions Fiscal Year Ended December 31, 2014 December 31, 2013 December 31, 2012 December 31, 2011 December 31, 2010 Actuarial Value of Assets - 0- - 0- - 0- Actuarial Accrued Liability $547,626 474,770 329,191 Unfunded Actuarial Accrued Liability (UAAL) $547,626 474,770 329,191 as reported in the actuarial reports received to -date: OPEB Cost $29,192 27,437 29,610 27,917 40,404 % of Annual OPEB OPEB Cost Contributed Obligation 73.6% $91,667 77.6 83,969 65.2 77,821 65.9 72,808 51.1 63,237 UAAL as a percentage of Annual Covered Payroll N/A 9.7% 6.8 For more information regarding the City's OPEB plan with respect to its employees, please reference "Note 18, Other Postemployment Benefit Plan" of the City's Comprehensive Annual Financial Report for fiscal year ended December 31, 2013, an excerpt of which is included as Appendix IV of this Official Statement. (The City's Comprehensive Annual Financial Report for the fiscal year ended December 31, 2014 is not yet available.) Sources: City's Comprehensive Annual Financial Reports. - 22 - General Fund Budget Summary 2014 Budget 2014 Actual 2015 Budget Taxes $7,233,922 $7,147,978 $7,595,578 Licenses and Permits 418,150 414,842 439,100 Intergovernmental 465,000 583,079 490,000 Charges for Services 171,600 253,283 229,550 Fines and Forfeits 140,500 112,555 130,500 Investment Earnings 30,000 48,009 30,000 Administrative Charges 60,000 83,815 65,000 Miscellaneous 111,000 95,033 170,500 Total Revenues $8,630,172 $8,738,594 $9,150,228 Expenditures: Administration $1,143,499 $1,168,986 $1,228,424 Community Development 670,461 646,451 682,988 Public Safety 3,881,274 3,878,718 4,556,944 Public Services 2,607,541 2,557,500 2,693,266 Contingency/Other 615,000 565,196 639,500 Total Expenditures $8,917,775 $8,816,851 $9,801,122 Revenues Over (Under) Expenditures $ (287,603) $ (78,257) $ (650,894) Transfers In 121,656 0 480,894 Transfers Out 0 0 0 Net Increase (Decrease) in Fund Balance $ (165,947) $ (78,257) $ (170,000) Fund Balance - Beginning of Year $5,386,058 $5,386,058 $5,307,801 Fund Balance - December 31 $5,220,111 $5,307,801 $5,137,801 Sources: City's Comprehensive Annual Financial Reports and 2015 Budget. Major General Fund Revenue Sources Revenue 2010 2011 2012 2013 2014 Taxes $7,576,271 $7,520,922 $7,216,802 $7,233,922 $7,147,978 Intergovernmental 609,781 590,392 462,023 465,000 583,079 Licenses and Permits 330,138 322,030 319,172 418,150 414,842 Charges for Services 364,605 367,037 309,777 231,600 253,283 Fines and Forfeits 127,203 154,020 155,956 140,500 112,555 Sources: City's Comprehensive Annual Financial Reports. - 23 - PROPOSED FORM OF LEGAL OPINION Kennedy CHARTERED Offices in 470 U.S. Bank Plaza Minneapolis 200 South Sixth Street Minneapolis MN 55402-1458 Saint Paul (612)337-9300 telephone (612)337-9310 fax St. Cloud www.kennedy-graven.com Affirmative Action, Equal Opportunity Employer $ General Obligation Bonds Series 2015A City of Lino Lakes Anoka County, Minnesota APPENDIX I We have acted as bond counsel to the City of Lino Lakes, Anoka County, Minnesota (the "Issuer") in connection with the issuance by the Issuer of its General Obligation Bonds, Series 2015A (the "Bonds"), originally dated May 28, 2015, and issued in the original aggregate principal amount of $ . In such capacity and for the purpose of rendering this opinion we have examined certified copies of certain proceedings, certifications and other documents, and applicable laws as we have deemed necessary. Regarding questions of fact material to this opinion, we have relied on certified proceedings and other certifications of public officials and other documents furnished to us without undertaking to verify the same by independent investigation. Under existing laws, regulations, rulings and decisions in effect on the date hereof, and based on the foregoing we are of the opinion that: 1. The Bonds have been duly authorized and executed, and are valid and binding general obligations of the Issuer, enforceable in accordance with their terms. 2. The principal of and interest on the Bonds are payable from tax abatement revenues and ad valorem taxes, but if necessary for the payment thereof additional ad valorem taxes are required by law to be levied on all taxable property of the Issuer, which taxes are not subject to any limitation as to rate or amount. 3. Interest on the Bonds is excludable from gross income of the recipient for federal income tax purposes and, to the same extent, is excludable from taxable net income of individuals, trusts, and estates for Minnesota income tax purposes, and is not a preference item for purposes of the computation of the federal alternative minimum tax, or the computation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates. However, such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income. The opinion set forth in this paragraph is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes and from taxable net income for Minnesota income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes and taxable net income for Minnesota income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. 4. The rights of the owners of the Bonds and the enforceability of the Bonds may be limited I-1 by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditor's rights generally and by equitable principles, whether considered at law or in equity. We have not been asked and have not undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, and accordingly we express no opinion with respect thereto. This opinion is given as of the date hereof and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Dated May _, 2015 at Minneapolis, Minnesota. I-2 APPENDIX II CONTINUING DISCLOSURE CERTIFICATE City of Lino Lakes, Minnesota General Obligation Bonds Series 2015A CONTINUING DISCLOSURE CERTIFICATE May _, 2015 This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Lino Lakes, Minnesota (the "Issuer") in connection with the issuance of its General Obligation Bonds, Series 2015A (the `Bonds") in the original aggregate principal amount of $ . The Bonds are being issued pursuant to resolutions adopted by the City Council of the Issuer (the "Resolutions"). The Bonds are being delivered to (the "Purchaser") on the date hereof. Pursuant to the Resolutions, the Issuer has covenanted and agreed to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events. The Issuer hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders (as defined herein) of the Bonds in order to provide for the public availability of such information and assist the Participating Underwriter(s) (as defined herein) in complying with the Rule (as defined herein). This Disclosure Certificate, together with the Resolutions, constitutes the written agreement or contract for the benefit of the Holders of the Bonds that is required by the Rule. Section 2. Definitions. In addition to the defined terms set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any annual report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Audited Financial Statements" means annual financial statements of the Issuer, prepared in accordance with generally accepted accounting principles for governmental units ("GAAP") as prescribed by the Governmental Accounting Standards Board ("GASB"). "Bonds" means the General Obligation Bonds, Series 2015A, issued by the Issuer in the original aggregate principal amount of $ "Disclosure Certificate" means this Continuing Disclosure Certificate. "EMMA" means the Electronic Municipal Market Access system operated by the MSRB and designated as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. "Final Official Statement" means the deemed Final Official Statement, dated , 2015, which constitutes the final official statement delivered in connection with the Bonds, which is available from the MSRB. Bonds. "Fiscal Year" means the fiscal year of the Issuer. "Holder" means the person in whose name a Bond is registered or a beneficial owner of such a Bond. "Issuer" means the City of Lino Lakes, Minnesota, which is the obligated person with respect to the "Material Event" means any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" means the Municipal Securities Rulemaking Board located at 1900 Duke Street, Suite 600, Alexandria, VA 22314. "Participating Underwriter" means any of the original underwriter(s) of the Bonds (including the Purchaser) required to comply with the Rule in connection with the offering of the Bonds. "Purchaser" means "Repository" means EMMA, or any successor thereto designated by the SEC. "Rule" means SEC Rule 15c2 -12(b)(5) promulgated by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time, and including written interpretations thereof by the SEC. "SEC" means Securities and Exchange Commission, and any successor thereto. Section 3. Provision of Annual Financial Information and Audited Financial Statements. (a) The Issuer shall provide to the Repository, as soon as available, but not later than twelve (12) months after the end of the Fiscal Year commencing with the year that ends December 31, 2014, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the Audited Financial Statements of the Issuer may be submitted separately from the balance of the Annual Report and will be submitted as soon as available. (b) If the Issuer is unable or fails to provide to the Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice of that fact to the Repository and the MSRB. (c) The Issuer shall determine each year prior to the date for providing the Annual Report the name and address of each Repository. Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the following sections of the Final Official Statement: 1. City Property Values 2. City Indebtedness 3. City Tax Rates, Levies and Collections In addition to the items listed above, the Annual Report shall include Audited Financial Statements submitted in accordance with Section 3 of this Disclosure Certificate. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted II -2 to the Repository or the SEC. If the document incorporated by reference is a final official statement, it must also be available from the MSRB. The Issuer shall clearly identify each such other document so incorporated by reference. Section 5. Reporting of Material Events. (a) This Section 5 shall govern the giving of notice of the occurrence of any of the following events ("Material Events") with respect to the Bonds: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701—TEB), or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; 7. Modifications to rights of security holders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities, if material; 11. Rating changes; 12. Bankruptcy, insolvency, receivership or similar event of the obligated person; 13. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. (b) The Issuer shall file a notice of such occurrence with the Repository or with the MSRB within ten (10) business days of the occurrence of the Material Event. (c) Unless otherwise required by law and subject to technical and economic feasibility, the Issuer shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the Issuer's information. II -3 Section 6. EMMA. The SEC has designated EMMA as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. Until the EMMA system is amended or altered by the MSRB and the SEC, the Issuer shall make all filings required under this Disclosure Certificate solely with EMMA. Section 7. Termination of Reporting Obligation. The Issuer's obligations under the Resolutions and this Disclosure Certificate shall terminate upon the legal defeasance, the redemption in full of all Bonds or payment in full of all Bonds. Section 8. Agent. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under the Resolutions and this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent. Section 9. Amendment; Waiver. Notwithstanding any other provision of the Resolutions or this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not, in and of itself, cause a violation of the Rule. The provisions of the Resolutions requiring continuing disclosure pursuant to the Rule and this Disclosure Certificate, or any provision hereof, shall be null and void in the event that the Issuer delivers to the Repository an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which impose the continuing disclosure requirements of the Resolutions and the execution and delivery of this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply to the Bonds. The provisions of the Resolutions requiring continuing disclosure pursuant to the Rule and this Disclosure Certificate may be amended without the consent of the Holders of the Bonds, but only upon the delivery by the Issuer to the Repository of the proposed amendment and an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance with the Rule. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Holder of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under the Resolutions and this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Participating Underwriters, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity. II -4 IN WITNESS WHEREOF, we have executed this Disclosure Certificate in our official capacities effective as of the date and year first written above. CITY OF LINO LAKES, NIINNESOTA Mayor City Administrator II -5 APPENDIX III SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND MINNESOTA REAL PROPERTY VALUATION Following is a summary of certain statutory provisions relative to tax levy procedures, tax payment and credit procedures, and the mechanics of real property valuation. The summary does not purport to be inclusive of all such provisions or of the specific provisions discussed, and is qualified by reference to the complete text of applicable statutes, rules and regulations of the State of Minnesota. Property Valuations (Chapter 273, Minnesota Statutes) Assessor's Estimated Market Value. Each parcel of real property subject to taxation must, by statute, be appraised at least once every five years as of January 2 of the year of appraisal. With certain exceptions, all property is valued at its market value, which is the value the assessor determines to be the price the property to be fairly worth, and which is referred to as the "Estimated Market Value." The 2013 Minnesota Legislature established the Estimated Market Value as the value used to calculate a municipality's legal debt limit. Economic Market Value. The Economic Market Value is the value of locally assessed real property (Assessor's Estimated Market Value) divided by the sales ratio as provided by the State of Minnesota Department of Revenue plus the estimated market value of personal property, utilities, railroad, and minerals. Taxable Market Value. The Taxable Market Value is the value that Net Tax Capacity is based on, after all reductions, limitations, exemptions and deferrals. Net Tax Capacity. The Net Tax Capacity is the value upon which net taxes are levied, extended and collected. The Net Tax Capacity is computed by applying the class rate percentages specific to each type of property classification against the Taxable Market Value. Class rate percentages vary depending on the type of property as shown on the last page of this Appendix. The formulas and class rates for converting Taxable Market Value to Net Tax Capacity represent a basic element of the State's property tax relief system and are subject to annual revisions by the State Legislature. Property taxes are the sum of the amounts determined by (i) multiplying the Net Tax Capacity by the tax capacity rate, and (ii) multiplying the referendum market value by the market value rate. Market Value Homestead Exclusion. In 2011, the Market Value Homestead Exclusion Program (MVHE) was implemented to offset the elimination of the Market Value Homestead Credit Program that provided relief to certain homesteads. The MVHE reduces the taxable market value of a homestead with an Assessor's Estimated Market Value up to $413,800 in an attempt to result in a property tax similar to the effective property tax prior to the elimination of the homestead credit. The MVHE applies to property classified as Class la or lb and Class 2a, and causes a decrease in the City's aggregate Taxable Market Value, even if the Assessor's Estimated Market Value on the same properties did not decline. Property Tax Payments and Delinquencies (Chapters 275, 276, 277, 279-282 and 549, Minnesota Statutes) Ad valorem property taxes levied by local governments in Minnesota are extended and collected by the various counties within the State. Each taxing jurisdiction is required to certify the annual tax levy to the county auditor within five (5) working days after December 20 of the year preceding the collection year. A listing of property taxes due is prepared by the county auditor and turned over to the county treasurer on or before the first business day in March. The county treasurer is responsible for collecting all property taxes within the county. Real estate and personal property tax statements are mailed out by March 31. One-half (1/2) of the taxes on real property is due on or before May 15. The remainder is due on or before October 15. Real property taxes not paid by their due date are assessed a penalty on homestead property of 2% until May 31 and increased to 4% on June 1. The penalty on nonhomestead property is assessed at a rate of 4% until May 31 and increased to 8% on June 1. Thereafter, an additional 1% penalty shall accrue each month through October 1 of the collection year for unpaid real property taxes. In the case of the second installment of real property taxes due October 15, a penalty of 2% on homestead property and 4% on nonhomestead property is assessed. The penalty for homestead property increases to 6% on November 1 and again to 8% on December 1. The penalty for nonhomestead property increases to 8% on November 1 and again to 12% on December 1. Personal property taxes remaining unpaid on May 16 are deemed to be delinquent and a penalty of 8% attaches to the unpaid tax. However, personal property that is owned by a tax-exempt entity, but is treated as taxable by virtue of a lease agreement, is subject to the same delinquent property tax penalties as real property. On the first business day of January of the year following collection all delinquencies are subject to an additional 2% penalty, and those delinquencies outstanding as of February 15 are filed for a tax lien judgment with the district court. By March 20 the county auditor files a publication of legal action and a mailing of notice of action to delinquent parties. Those property interests not responding to this notice have judgment entered for the amount of the delinquency and associated penalties. The amount of the judgment is subject to a variable interest determined annually by the Department of Revenue, and equal to the adjusted prime rate charged by banks but in no event is the rate less than 10% or more than 14%. Property owners subject to a tax lien judgment generally have three years (3) to redeem the property. After expiration of the redemption period, unredeemed properties are declared tax forfeit with title held in trust by the State of Minnesota for the respective taxing districts. The county auditor, or equivalent thereof, then sells those properties not claimed for a public purpose at auction. The net proceeds of the sale are first dedicated to the satisfaction of outstanding special assessments on the parcel, with any remaining balance in most cases being divided on the following basis: county - 40%; town or city - 20%; and school district - 40%. Property Tax Credits (Chapter 273, Minnesota Statutes) In addition to adjusting the taxable value for various property types, primary elements of Minnesota's property tax relief system are: property tax levy reduction aids; the homestead credit refund and the renter's property tax refund, which relate property taxes to income and provide relief on a sliding income scale; and targeted tax relief, which is aimed primarily at easing the effect of significant tax increases. The homestead credit refund, the renter's property tax refund, and targeted credits are reimbursed to the taxpayer upon application by the taxpayer. Property tax levy reduction aid includes educational aids, local governmental aid, equalization aid, county program aid and disparity reduction aid. Debt Limitations All Minnesota municipalities (counties, cities, towns and school districts) are subject to statutory "net debt" limitations under the provisions of Minnesota Statutes, Section 475.53. Net debt is defined as the amount remaining after deducting from gross debt the amount of current revenues that are applicable within the current fiscal year to the payment of any debt and the aggregate of the principal of the following: 1. Obligations issued for improvements that are payable wholly or partially from the proceeds of special assessments levied upon benefited property. 2. Warrants or orders having no definite or fixed maturity. 3. Obligations payable wholly from the income from revenue producing conveniences. III -2 4. Obligations issued to create or maintain a permanent improvement revolving fund. 5. Obligations issued for the acquisition and betterment of public waterworks systems, and public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which revenue is or may be derived. 6. Certain debt service loans and capital loans made to school districts. 7. Certain obligations to repay loans. 8. Obligations specifically excluded under the provisions of law authorizing their issuance. 9. Certain obligations to pay pension fund liabilities. 10. Debt service funds for the payment of principal and interest on obligations other than those described above. 11. Obligations issued to pay judgments against the municipality. Levies for General Obligation Debt (Sections 475.61 and 475.74, Minnesota Statutes) Any municipality that issues general obligation debt must, at the time of issuance, certify levies to the county auditor of the county(ies) within which the municipality is situated. Such levies shall be in an amount that if collected in full will, together with estimates of other revenues pledged for payment of the obligations, produce at least five percent in excess of the amount needed to pay principal and interest when due. Notwithstanding any other limitations upon the ability of a taxing unit to levy taxes, its ability to levy taxes for a deficiency in prior levies for payment of general obligation indebtedness is without limitation as to rate or amount. Metropolitan Revenue Distribution (Chapter 473F, Minnesota Statutes) "Fiscal Disparities Law" The Charles R. Weaver Metropolitan Revenue Distribution Act, more commonly known as "Fiscal Disparities," was first implemented for taxes payable in 1975. Forty percent of the increase in commercial -industrial (including public utility and railroad) net tax capacity valuation since 1971 in each assessment district in the Minneapolis/St. Paul seven -county metropolitan area (Anoka, Carver, Dakota, excluding the City of Northfield, Hennepin, Ramsey, Scott, excluding the City of New Prague, and Washington Counties) is contributed to an area -wide tax base. A distribution index, based on the factors of population and real property market value per capita, is employed in determining what proportion of the net tax capacity value in the area -wide tax base shall be distributed back to each assessment district. II1-3 (a) (b) (c) STATUTORY FORMULAE: CONVERSION OF TAXABLE MARKET VALUE (TMV) TO NET TAX CAPACITY FOR MAJOR PROPERTY CLASSIFICATIONS Property Type Residential Homestead (la) Up to $500,000 Over $500,000 Residential Non -homestead Single Unit (4bb1) Up to $500,000 Over $500,000 1-3 unit and undeveloped land (4b1) Market Rate Apartments Regular (4a) Low -Income (4d) Up to $100,000 Over $100,000 Commercial/Industrial/Public Utility (3a) Up to $150,000 Over $150,000 Electric Generation Machinery Commercial Seasonal Residential Homestead Resorts (lc) Up to $600,000 $600,000 - $2,300,000 Over $2,300,000 Seasonal Resorts (4c) Up to $500,000 Over $500,000 Non -Commercial (4c12) Up to $500,000 Over $500,000 Disabled Homestead (lb) Up to $50,000 Agricultural Land & Buildings Homestead (2a) Up to $500,000 Over $500,000 Remainder of Farm Up to $1,900,000(°) Over $1,900,000(°) Non -homestead (2b) Local Tax Local Tax Payable Payable 2011-2014 2015 1.00% 1.00% 1.25% 1.25% 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 0.75% 0.75% 0.25% 1.50%° 1.50%° 2.00%(°) 2.00%(°) 2.00% 2.00% 0.55% 0.55% 1.00% 1.00% 1.25%(°) 1.25%° 1.00%( 1.00%(°) 1.25%(°) 1.25%(°) 1.00%(°)@) 1.00° (° (b) 1.25%(°)(") 1.25%°(b) 0.45% 0.45% 1.00% 1.00% 1.25% 1.25% 0.50%(b) 0.50%(b) 1.00%(b) 1.00%(b) 1.00%(b) 1.00%(b) State tax is applicable to these classifications. Exempt from referendum market value based taxes. Legislative increases, payable 2015. Historical valuations are: Payable 2014 - $1,500,000; Payable 2013 - $1,290,000; Payable 2012 - $1,210,000; and Payable 2011 - $1,140,000. NOTE: For purposes of the State general property tax only, the net tax capacity of non-commercial class 4c(1) seasonal residential recreational property has the following class rate structure: First $76,000 — 0.40%; $76,000 to $500,000 — 1.00%; and over $500,000 — 1.25%. In addition to the State tax base exemptions referenced by property classification, airport property exempt from city and school district property taxes under M.S. 473.625 is exempt from the State general property tax (MSP International Airport and Holman Field in St. Paul are exempt under this provision). II1-4 APPENDIX IV EXCERPT OF 2013 COMPREHENSIVE ANNUAL FINANCIAL REPORT Data on the following pages was extracted from the City's Comprehensive Annual Financial Report for fiscal year ended December 31, 2013. (The City's Comprehensive Annual Financial Report for fiscal year ended December 31, 2014 is not yet available.) The reader should be aware that the complete financial statements may contain additional information which may interpret, explain or modify the data presented here. The City's comprehensive annual financial reports for the years ending 1996 through 2013 were awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA). The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report (CAFR), whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. IV -1 II. FINANCIAL SECTION IV -2 INDEPENDENT AUDITORS' REPORT Honorable Mayor and Members of the City Council City of Lino Lakes, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the govemmental activities, the business type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes, as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of intemal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers intemal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's intemal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in at material respects, the respective financial position of the govemmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Lino Lakes as of December 31, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison information, and schedule of funding progress to postemployment benefit plan, as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Govemmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Lino Lakes' basic financial statements. The combining fund financial statements and other supplementary financial and other information, the introductory section, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining fund statements, the combining schedule of indebtedness, and the debt service payments to maturity - all bonds schedule are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining fund statements, the combining schedule of indebtedness, and the debt service payments to maturity - all bonds schedule are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section, schedule of deferred tax levies, schedule of insurance in force, schedule of taxable valuations, tax levies, and tax rates, and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Govemment Auditing Standards In accordance with Govemment Auditing Standards, we have also issued our report dated May 28, 2014, on our consideration of the City of Lino Lakes' internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Govemment Auditing Standards in considering City of Lino Lakes' internal control over financial reporting and compliance. ClikonLarsonAllen LLP Minneapolis, Minnesota May 28, 2014 IV -3 CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 As management of the City of Lino Lakes, Minnesota, we offer readers of the City of Lino Lakes' financial statements this narrative overview and analysis of the financial activities of the City of Lino Lakes for the fiscal year ended December 31, 2013. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3-7 of this report. FINANCIAL HIGHLIGHTS • The assets of the City of Lino Lakes exceeded its liabilities at the close of the most recent fiscal year by $91,513,956 (net position). Of this amount $29,848,818 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. • The City's total net position decreased by $786,644 primarily due to annual depreciation of capital assets and the use of municipal state aid funds that were advanced during 2012 for infrastructure construction. • As of the close of the current fiscal year, the City of Lino Lakes' governmental funds reported combined ending fund balance of $21,577,573, an increase of $53,472 in comparison with the prior year primarily due to the prepayment of special assessments for the 135-E/CSAH 14 interchange (Improvement Note 2009F). Approximately 8% of this amount, or $1,815,739, is available for spending at the City's discretion (unassigned fund balance). • At the end of the current fiscal year, unassigned fund balance for the general fund was $5209,286, or 61% of total general fund expenditures and other financing uses. • The City's total bonded debt decreased by $1,841,000 (8.7%) during the current fiscal period. The City issued 2013A Equipment Certificates of $193,000 and a general obligation bond in the amount $615,000 to finance the Otter Lake Road Extension project. Principal in the amount of $2,649,000 was retired during the year. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City of Lino Lakes' basic financial statements. The City of Lino Lakes' basic financial statements comprise three components: 1. Government -wide financial statements 2. Fund financial statements 3. Notes to the financial statements This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide financial statements The government -wide financial statements are designed to provide readers with a broad overview of the City of Lino Lakes' finances, in a manner similar to private - sector business. The statement of net position presents information on all of the City of Lino Lakes' assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Lino Lakes is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences and OPEB liabilities). CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUEDI Government -wide financial statements (Continued1 Both of the government -wide financial statements distinguish functions of the City of Lino Lakes that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Lino Lakes include general government, public safety, public services, parks, recreation and forestry, conservation of natural resources and community development. The business -type activities of the City of Lino Lakes include a water utility and sewer utility. The government -wide financial statements can be found on pages 22-24 of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Lino Lakes, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of Lino Lakes can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds — Govemmentai funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the govemment-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 govemmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between govemmental functions and governmental activities. The City of Lino Lakes maintains forty individual govemmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General fund, G.O. Improvement Bonds 2005A fund, Improvement Note 2009F fund, Municipal State Aid fund and Area and Unit Charge fund all of which are considered to be major funds. Data from the other thirty-four governmental funds are combined into a single, aggregate presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City of Lino Lakes adopts an annual appropriated budget for its general and program recreation special revenue funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 25 through 30 of this report. Proprietary funds — The City of Lino Lakes maintains two proprietary type funds. Enterprise funds are used to report the same functions presented as business -type activities in the govemment-wide financial statements. The City of Lino Lakes uses enterprise funds to account for its sewer and water utilities. The proprietary fund statements provide the same type of information as the govemment-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the sewer fund and the water fund, which are considered to be major funds of the City of Lino Lakes. The basic proprietary fund financial statements can be found on pages 31 through 33 of this report. CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUEDI Fiduciary funds Fiduciary funds are used to account for assets held by the City as an agent for individuals, private organizations, or other governments. Notes to the financial statements - The notes provide additional information that is essential to a full understanding of the data provided in the govemment-wide and fund financial statements. The notes to the financial statements can be found on pages 35-59 of this report. Other Information - The combining statements and schedules referred to earlier in conjunction with nonmajor govemmental funds can be found on pages 68-81 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of a government's financial position. The City of Lino Lakes' assets exceeded liabilities by $91513,956 at the close of the most recent fiscal year, an decrease of $786,644 from the previous year. This decrease is primarily due annual depreciation of capital assets and the use of municipal state aid that was advanced to the City during 2012. By far the largest portion of the City of Lino Lakes' net position (55%) reflects its net investment in capital assets (e.g. land, buildings, machinery, equipment, and infrastructure). The City of Lino Lakes uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Lino Lakes' investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Condensed versions of the statements of net position at December 31, 2013 and 2012 are as follows: Current and Other Assets Capital Assets Total Assets Noncurrent Liabilities Outstanding Other Liabilities Total Liabilities Net Position: Net Investment in Capital Assets Restricted Unrestricted Total Net Position Governmental Activities 2013 2012 $ 33.326,625 $ 34,456,692 37.854.973 39.634,563 71,181,598 74.091,255 20,006,657 21,875,614 1,083.451 815,149 21,090,108 22,690,763 22,241,821 22,166,342 11,000,033 11,595,112 16.849,636 17,639.038 Business -Type Activities 2013 2012 $ 13,092,332 $ 12.194.619 28,423,284 28,798,095 41,515,616 40992714 Total 2013 $ 46,418.957 66,278,257 112,697.214 2012 $ 46,651,311 68,432.658 115,083,969 54,182 43,410 20,060,839 21,919,024 38,968 49,196 1,122,419 864,345 93,150 92.606 21,183.258 22,783.369 28,423,284 28,798,095 50,665,105 50,964,437 11,000.033 11,595,112 12.999,182 12,102.013 29,848,818 29.741.051 $ 50,091.490 $ 51,400,49241 ,422,46640.900,108 $ 91,513,95692,300,600 Of the remaining balance of the City of Lino Lakes' net position, restricted net position (12%) are to be used for debt service requirements and a nonexpendable environmental fund. Unrestricted net position (33%) may be used to meet the government's ongoing obligations to citizens and creditors. CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUEDI At the end of the current fiscal year, the City of Lino Lakes is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business -type activities. Governmental activities Governmental activities decreased the City of Lino Lakes' net position by $1,309,002. Reductions in Capital Grants and Contributions and in the fair value of investments, interest on long-term debt service and property tax delinquencies account for this reduction for 2013. Business-tvpe activities Business -type activities increased the City of Lino Lakes' net position by $522,358. Revenue from Charges for Services and transfers in provided directly for this increase. Condensed statements of revenues, expenses, and changes in net position highlights are as follows for the years ended December 31, 2013 and 2012: REVENUES Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions General Revenues: Property Taxes Franchise Taxes Other Taxes Contributions Not Restncted to Specific Programs Unrestricted Investment Eamings Change In Market Value Gain on Disposal of Capital Assets Total Revenues EXPENSES General Govemment Public Safety Public Service Parks, Recreation and Forestry Conservation of Natural Resources Community Development Interest on Long -Term Debt Water Sewer Total Expenses Governmental Activities Business -Type Activities Total 2013 20 $ 1,452,169 $ 1.476,261 $ 527,368 450,179 941,960 5,125,693 8,392,601 8,461,621 109,438 95,003 61,556 54.085 4,442 4,941 216,488 202.828 (270.692) - 4,175 11,435,330 15,874,786 2013 2012 2,725,139 $ 2,877,590 $ 4,177,308 527,368 883 20,018 942,843 113,402 (158,175) 102,073 8,392,601 109,438 61,556 4,442 329,890 (428,867) $ 4,353.851 450,179 5,145,711 8,481,621 95,003 54.085 4,941 304,901 4,175 2,681,249 2,999,681 14,116,579 18,874,467 1,566,388 1,883,961 - 3,950,197 4,046,415 - 4,540,888 5,584,283 - 835.783 1.210,867 - 141.204 184,051 404,726 430,121 951,842 837,755 927,800 949,121 1,584,395 1,527,637 1,566,388 1,883,961 3,950,197 4,046,415 4,540,888 5,584,283 835,783 1,210,867 141,204 184,051 404,726 430,121 951,842 837,755 927,800 949,121 1,584,395 1,527,637 12,391,028 14,177,453 2,512,1 5 2,476,758 14,903,223 11,654211 CHANGE IN NET POSrnON BEFORE TRANSFERS (955,698) 1,697,333 169,054 522,923 (786,644) 2,220,256 Transfers (353,304) 41,043 353,304 (41,043) - CHANGE 19 NET POSITION (1,309,002) 1,738.3/6 524,358 481,880 (786,644) 2,220,256 Net Position - Beginning of Year 51,400,492 49.662.116 40,900,108 40,418,228 92.300,600 90,080,344 NET POSITMON-END OF YEAR $ 50,091,490 $ 51,400,492 $ 41,422,466 $ 40,900,108 $ 91,513,956 $ 92,300,600 CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED) Below are specific graphs that provide comparisons of the government activities' direct program revenues with their expenditures. Any shortfalls in direct revenues are primarily supported by property tax levy or general state aid. Expenses and Program Revenues — Governmental Activities $5,000,000 $4.500,000 $4,000,000 $3,500,000 $3,000,000 $2,500.000 $2,000,000 $1,500.000 51,000.000 5500,000 $- �sglec! \\S'ttG� Moet`\ Oe" te Get \ Cf"?�°\ Ps) ,�e e ek o\ait, VI `d \oto PSS to sere \�et�OcP Revenues by Source — Govemmental Activities • Expenses B Revenues Unrestricted grants and contributions 0% Franchise taxes 1% Property taxes 73% Unrestricted investment earnings 0% Other 0% Charges for services 13% Operating grants and contributions 5% #Capital grants and contributions 8% CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED) Below are specific graphs that provide comparisons of the business -type activities' direct program revenues with their expenditures. Excess revenues are retained within each fund until such time that capital replacement is needed. Expenses and Program Revenues — Business -type Activities $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- Water Sewer Revenues by Source — Business -type Activities Capital grants and contributions Operating grants and 0% contributions 0% Other 5% D Expenses ■ Revenues CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted earlier, the City of Lino Lakes uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds - The focus of the City of Lino Lakes' governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Lino Lakes' financing requirements. GASB Statement 54, divides fund balances into five categories: nonspendable, restricted, committed, assigned and unassigned. Definitions of these categories can be found in Note 1.0 in the Notes to the Financial Statements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for unrestricted spending at the end of the fiscal year. Approximately 8% of the total fund balance amount, or $1,815,739, constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance is not available for new spending because it is restricted or has already been committed or assigned for other purposes. As of the end of the current fiscal year, the City of Lino Lakes' governmental funds reported combined ending fund balances of $21,577,573, an increase of $53,472, or 0.2%, from the previous year. This increase is primarily due to the receipt of special assessment prepayments for the Improvement Note 2009F fund. The general fund is the primary operating fund of the City of Lino Lakes. At the end of the current fiscal year, unassigned fund balance of the general fund stood at $5,209,286, while the total fund balance was $5,386,083. As a measure of the general fund's liquidity, it may be useful to compare unassigned fund balance and total fund balance to total fund expenditures and financing uses. Unassigned fund balance represents 61% of total general fund expenditures and financing uses, while total fund balance represents 63% of that same amount. The fund balance of the City of Lino Lakes' general fund increased by $152,266 during the current fiscal year, while the city budget anticipated the use of up to $129,947 of the general fund balance. Overall, the continued soft real estate market again resulted in reduced building activities this year which decreased permit revenue. Even as signs of economic recovery were being seen, the remaining effects of the recession also had an impact on property tax delinquencies. In addition, reduced expenditures, primarily for personal services through vacant positions, and contractual services helped to offset the reduced revenues. Overall, the general fund's revenues were within approximately 2% of the amended budget, while expenditures and transfers were 4% below budgeted levels. The G.O. improvement bonds 2005A fund has a total fund deficit of ($2,101,738). This fund is related to the bonds issued for the Legacy Woods Edge improvement project. The payment of debt service and delinquency in the collection of special assessments dedicated to this issue caused a significant decrease in this fund. An interfund loan from the Capital Improvements fund has aided in the payment of debt service for this issue. The Improvement Note 2009F fund, to service the debt issued to Anoka County as the City's financial commitment for the I -35E interchange project, ended the year with a fund balance of $996,291, an increase of $995,800. The increase was directly due to the prepayment of a special assessment in 2013 for this project. This note, which was originally in the amount of $4,260,000, was reduced in 2011 to the current amount of $3,695,000 to reflect cost savings during the contruction of this project. The Municipal State Aid fund, a capital projects fund used to finance reconstruction of state aid eligible streets, ended the year with a fund balance of $4,595,797. This fund received a large advance from the Minnesota Municipal State Aid in 2012 equal to the next five annual construction installments. These funds will be used over the next several years to pay debt service on the Tax Increment Bonds 2007A and the Improvement Notes 2009F, and for future MSA projects. The area and unit charge fund has a total fund balance of $4,170,051, all of which is assigned for financing capital improvements. The fund balance during the current year increased by $197,335, due in large part to the partial repayment of an interfund loan from the Dedicated Parks fund. CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS (CONTINUEDI Proprietary funds - The City of Lino Lakes' proprietary funds provide the same type of information found in the govemment-wide financial statements, but in more detail. The water fund has total net position at year-end of $18,833,063, of which $4,972,620 is unrestricted. The increase in net position of $519,918 was primarily due to operating income and capital contributions from governmental activities. Total net position in the sewer fund at the end of 2013 was $22,589,403, of which $8,026,562 was unrestricted. The increase in net position of $2,440 was primarily due to capital contributions from govemmental activities. The water rates, which reflect water conservation efforts through a tiered rate structure, and sewer rates were unchanged in 2013. A review of utility rates was completed in 2013. A 2% adjustment of water rates and 4% adjustment of sewer rates will go into effect in January, 2014. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget was amended several times during the year reflecting increases licences and permits, public safety charges for services, MSA maintenance aid and police aid; reductions in property tax revenue, fines revenue, interest earnings and other miscellaneous revenues; and reallocating resources within the original budget. The final amended budget is $36,000 less than the original adopted budget. Revenues were $64,908 under budget for the year. This is due primarily due to change in market value of investments which is not budgeted for and accounted for $50,343 of this variance, tax collections also came in under budget by 588,321. These two larger variances were offset by greater than anticipating planning and engineering fees and licenses due to increased construction activity and greater than anticipated public safety charges for services due to higher than anticipated traffic control contracts. Expenditures came in under budget by $337,910 due mainly to lower than expected personal services costs from vacant positions and unspent contingency budgets. Energy costs for fuels and electricity were higher than budgeted amounts, and supplies costs were generally lower than anticipated. Spending on contractual services was lower overall from budgeted levels. The contingency budget of $147,975 was unspent for the year, contributing 44% of the expenditure variance. There were also net transfers from the general fund of $565,789. This resulted in a net fund balance increase of $152,266 for the fiscal year, compared to the planned reduction of $129,947. CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 CAPITAL ASSET AND DEBT ADMINISTRATION Capital assets — The City of Lino Lakes' investment in capital assets for its governmental and business - type activities as of December 31, 2013, is $66,278,257. This investment in capital assets includes land, buildings, office equipment and fumiture, vehicles, machinery and equipment, other capital assets, and infrastructure. This represents a decrease in the City of Lino Lakes' investment in capital assets of approximately 3.1%. The extension of Otter Lake Road north of CSAH 14 was completed during the year by the City, adding to road and utility infrastructure. The only additions were from projects in progress. The decrease within the governmental activities is attributable to the depreciation of buildings, constructed streets, underground infrastructure and vehicles. Within the business -type activities decreases were also attributable to depreciation of existing assets of the water and sewer funds. Capital Assets at Year -End (Net of Accumulated Depreciation) Governmental Activities Business -Type Activities Total Land Buildings Office Equipment and Furniture Vehicles Machinery and Shop Equipment Other Equipment Infrastructure Capital Assets, Net 2013 $ 3,2/5,859 3,301,916 407.616 1,064.565 340.245 182,700 29.282,072 $ 3!.854,9/4 2012 2013 2012 5 $ 3,275,859 3,324,186 450,739 1,148,061 392.625 205.040 30.838,053 28,190,357 28,602.192 5 39,634,563 $ 28,423,284 5 28,798,095 232,927 195,903 2013 2012 $ 3.275,859 0 3,275.859 3.301,916 3,324,186 407,616 450,739 1,064,565 1.148,061 573,172 588,528 182,700 205,040 57,472,429 59,440,245 $ 68,278,257 $ 68,432,658 Additional information on the City's capital assets can be found in the notes to the financial statements on pages 46-47. Long-term debt — At the end of the current fiscal year, the City of Lino Lakes had total bonded debt outstanding of $15,585,000. Of this amount $9,865,000 comprises tax supported debt and $5,720,000 is special assessment debt. All outstanding debt carries the general obligation backing for which the City is liable in the event of default by the property owners subject to the specific taxes, special assessments or revenues pledged to the retirement of the debt. In addition, the City carries a note to Anoka County for its share of the cost of the I-35EJCounty Road 14 Interchange project in the amount of $3,695,000. G.O. Bonds G.O. Special Assessment Bonds Note Payable - Anoka County Total Outstanding Debt Outstanding Debt at Year -End Governmental Activities Business -Type Activities 2013 2012 2013 2012 $ 9,865,000 5 10,646,000 $ 5,720,000 6,780,000 3,695,000 3,695,000 $ 19,280,000 $ 21,121,000 $ Total 2013 2012 $ 9,865,000 $ 10,646,000 5,720,000 6,780,000 3,695,000 3,695,000 $ 19,280,000 $ 21,121,000 The City of Lino Lakes' total bonded debt decreased by $1,841,000 (10.6%) during the current fiscal year. The key factors for the change include the issuance of $193,000 in 2013A Equipment Certificates and the issuance of a general obligation bond in the amount $615,000 to finance the extension of Otter Lake Road. Principal in the amount of $2,649,000 was retired during the year. Additional information on the City's long-term debt can be found in the notes to the financial statements on pages 48-50. CITY OF LINO LAKES, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2013 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES • The unemployment rate for the City of Lino Lakes at year-end is 4.5%, which is a great improvement from a rate of 5.6% a year ago. This is slightly lower than the state's average unemployment rate of 4.6% and significantly lower than the national average of 6.5% at the end of 2013. • Residential growth in the City has continued to be significantly below the rates of the mid 2000's due to the general residential real estate market weakness, with about one-third the number of new home permits issued in 2013 as in 2007, and less than 84% of new home permits issued in 2005. This is an improvement over recent years. Recently increased building and development activities are signalling the beginning of a recovery of the housing market. Property values of the existing tax base are expected to firm will continue to have an impact on the City's tax base for 2014. • Energy costs are expected to continue to increase over the coming months. This will have an impact on the City's budget for the coming year and thereafter. • Property tax reforms and State budget deficits have significantly impacted state aid payments the City of Lino Lakes receives. Local govemment aid and market value homestead credit was reduced to zero for 2003 and 2004-2011. The City is exempted from local government aid and the state legislature has discontinued the market value homestead credit in favor of a new market value exclusion, which excludes a portion of residential homestead property value from property taxes. • The Federal Reserve Board has continued the federal funds rates at historical lows, currently to between 0.00% — 0.25%, which is expected to result in sizable decreases in the City's investment earnings. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City of Lino Lakes' finances for all of those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, City of Lino Lakes, 600 Town Center Parkway, Lino Lakes, Minnesota, 55014. BASIC FINANCIAL STATEMENTS IV -9 CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET POSITION December 31, 2013 Governmental Activities Business -type Activities Total ASSETS Cash and investments $ 22,028,036 $ 12,077,789 $ 34,105,825 Accrued interest receivable 71,531 - 71,531 Accounts receivable 112,717 415,086 527,803 Due from other governments 67,878 1,643 69,521 Internal balances (559,110) 559,110 Taxes receivable 301,342 - 301,342 Special assessments receivable 10,779,249 2,624 10,781,873 Long-term notes receivable 225,000 - 225,000 Prepaid items 178,507 21,396 199,903 Inventory - 14,684 14,684 Permanently restricted cash and investments 121,475 121,475 Capital assets: Land 3,275,859 - 3,275,859 Other capital assets, net of depreciation 34,579,114 28,423,284 63,002,398 Total assets 71,181,598 41,515,616 112,697,214 LIABILITIES Accounts payable Salaries payable Contracts and retainage payable Accrued interest payable Due to other governments Other accrued liabilities Non-current liabilities: Due within one year Due in more than one year Total liabilities NET POSITION Net Investment in Capital Assets Restricted for: Debt service - expendable Economic development Environmental improvements - expendable Environmental improvements - nonexpendable Unrestricted Total net position 398,205 243,829 143,141 295,994 517 1,765 23,951 14,720 297 422,156 258,549 143,141 295,994 517 2,062 3,426,332 34,824 3,461,156 16,580,325 19,358 16,599,683 21,090,108 22,241,821 10,653,558 225,000 21,475 100,000 16,849,636 93,150 21,183,258 28,423,284 12,999,182 50,665,105 10,653,558 225,000 21,475 100,000 29,848,818 $ 50,091,490 $ 41,422,466 $ 91,513,956 The accompanying notes are an integral part of these hasic.fnancial statements. Iv -10 CITY OF LINO LAKES, MINNESOTA STATEMENT OF ACTIVITIES Year Ended December 31, 2013 Functions/Programs Governmental activities: General government Public safety Public services Parks, recreation and forestry Conservation of natural resources Community development Interest on long-term debt Total governmental activities Business -type activities: Water Sewer Total business -type activities Total Expenses $ 1,566,388 3,950,197 4,540,888 835,783 141,204 404,726 951,842 12,391,028 Program Revenues Charges for Services $ 93,118 697,584 456,024 175,978 1,347 28,118 1,452,169 Capital Operating Grants Grants and and Contributions Contributions $ 24,197 $ 207,187 231,753 16,204 48,027 527,368 Net (Expense) Revenue and Changes in Net Position Governmental Activities Business -type Activities $ (1,449,073) $ (3,045,426) 941,960 (2,911,151) (643,601) (91,830) (376,608) (951,842) 941,960 (9,469,531) 927,800 1,208,742 442 1,584,395 1,516,397 441 2,512,195 2,725,139 883 $ 14,903,223 $ 4,177,308 $ 527,368 $ 942,843 General revenues: Taxes: Property taxes, levied for general purpose Franchise taxes Other taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Change in market value Transfers Total general revenues and transfers Change in net position Net position - beginning Net position - ending The accompanying notes are an integral part of these basic.rnancial statements. (9,469,531) 8,392,601 109,438 61,556 4,442 216,488 (270,692) (353,304) 281,384 (67,557) 213,827 213,827 113,402 (158,175) 353,304 Total $ (1,449,073) (3,045,426) (2,911,151) (643,601) (91,830) (376,608) (951,842) (9,469,531) 281,384 (67,557) 213,827 (9,255,704) 8,392,601 109,438 61,556 4,442 329,890 (428,867) 8,160,529 308,531 8,469,060 (1,309,002) 522,358 (786,644) 51,400,492 40,900,108 92,300,600 $ 50,091,490 $ 41,422,466 $ 91,513,956 CITY OF LINO LAKES, MINNESOTA BALANCE SHEET - GOVERNMENTAL FUNDS December 31, 2013 G.O. Improvement Municipal Area and Other Total Improvement Note State Unit Governmental Governmental Assets General Bonds 2005A 2009F Aid Charge Funds Funds Cash and investments $ 5,300,509 $ 157,905 $ 996,291 $ 4,595,797 $ 3,661,631 $ 7,315,903 $ 22,028,036 Accrued interest receivable 71,531 - - - 71,531 Accounts receivable 88,282 24,434 112,716 Due from other governmental units 66,378 - - 1,500 67,878 Interfund receivable 2,534,940 2,534,940 Taxes receivable: Delinquent 185,420 24,648 210,068 Due from county 79,849 11,127 90,976 Delinquent tax increment - 298 298 Special assessments receivable: Delinquent 515 34,776 22,580 57,871 Noncurrent 6,451 5,561,118 3,548,573 - 905,126 672,090 10,693,358 Due from county 23,189 4,831 28,020 Long-term notes receivable - 225,000 225,000 Prepaid items 176,797 1,710 178,507 Permanently restricted cash and investments - - 121,475 121,475 Advances to other funds 460,881 460,881 Total assets $ 5,975,217 $ 5,719,023 $ 4,545,379 $ 4,595,797 $ 5,110,037 $ 10,936,102 $ 36,881,555 Liabilities , Deferred Inflows of Resources and Fund Balances Liabilities: Interfund payable Accounts payable Salaries payable Contracts and retainage payable Due to other governmental units Advances from other funds Unearned revenue Total liabilities $ - $ 2,259,643 $ $ - $ $ 834,407 $ 3,094,050 153,157 84 244,963 398,204 243,589 240 243,829 143,141 143,141 517 - 517 460,881 460,881 I ,765 1,765 397,263 2,259,643 84 1,685,397 4,342,387 Deferred inflows of resources: Unavailable resources 191,871 5,561,118 3,549,088 939,902 719,616 10,961,595 Fund balances: Nonspendable 176,797 101,710 278,507 Restricted 996,291 2,655,259 3,651,550 Committed - - 121,075 121,075 Assigned 4,595,797 4,170,051 6,944,854 15,710,702 Unassigned 5,209,286 (2,101,738) - - (1,291,809) 1,815,739 Total fund balances 5,386,083 (2,101,738) 996,291 4,595,797 4,170,051 8,531,089 21,577,573 Total liabilities , deferred inflows of resources and fund balances $ 5,975,217 $ 5,719,023 $ 4,545,379 $ 4,595,797 $ 5,110,037 $ 10,936,102 $ 36,881,555 The accompanying notes are an integral part of these basic financial statements. CITY OF LINO LAKES, MINNESOTA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION December 31, 2013 Total Fund Balances for Governmental Funds Total net position reported for governmental activities in the statement of net position is different because: Capital assets used in governmental funds are not financial resources and, therefore, are not reported in the funds. Those assets consist of: Land Buildings, Net of Accumulated Depreciation Office Equipment and Furniture, Net of Accumulated Depreciation Vehicles, Net of Accumulated Depreciation Machinery and Shop Equipment, Net of Accumulated Depreciation Other Equipment, Net of Accumulated Depreciation Infrastructure, Net of Accumulated Depreciation Some of the City's property taxes and special assessments will be collected after year-end, but are not available soon enough to pay for the current period's expenditures and, therefore, are reported as a deferred inflow of resources in the governmental funds. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. Accrued interest for general obligation bonds is included in the statement of net position. Long-term liabilities that pertain to governmental funds, including bonds payable, are not due and payable in the current period and, therefore, are not reported as fund liabilities. All liabilities - both current and long-term - are reported in the statement of net position. Balances at year-end are: Bonds Payable Unamortized Premiums Unamortized Discounts Notes Payable Other Postemployment Benefits Compensated Absence Payable Total Net Position of Governmental Activities The accompanying notes are an integral part of these hasic financial statements. IV -13 $ 3,275,859 3,301,916 407,616 1,064,565 340,245 182,700 29,282,072 $ 21,577,573 37,854,973 10,961,595 (295,994) (15,585,000) (50,835) 22,683 (3,695,000) (83,969) (614,536) (20,006,657) $ 50,091,490 CITY OF LINO LAKES, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUNDS Year Ended December 31, 2013 G.O. Improvement Municipal Area and Other Total Improvement Note State Unit Governmental Governmental Revenue: General Bonds 2005A 2009F Aid Charge Funds Funds General property taxes $ 7,187,801 $ - $ $ $ $ 1,021,594 $ 8,209,395 Tax increments - 265,819 265,819 Licenses and permits 431,654 - 431,654 Intergovernmental 500,963 - - - 500,963 Special assessments 20,616 290,500 1,037,820 486,434 295,149 2,130,519 Charges for services 296,185 - - 244,481 176,634 717,300 Fines and forfeits 119,079 - - - - 119,079 Investment earnings 38,093 324 49,950 51,435 83,008 222,810 Net increase (decrease) in fair value of investments (50,343) (14) (70,035) (43,232) (112,652) (276,276) Refunds 38,092 - - 17,238 55,330 Miscellaneous 114,390 - 215,029 329,419 Total revenue 8,696,530 290,500 1,038,130 (20,085) 739,118 1,961,819 12,706,012 Expenditures: Current: General govemment 1,535,416 34,306 1,569,722 Public safety 3,744,957 - - 3,744,957 Public works 1,281,135 64,545 1,608,289 2,953,969 Parks, recreation and forestry 842,253 - 160,544 1,002,797 Conservation of natural resources 134,127 134,127 Community development 409,487 9,046 418,533 Capital outlay: General government 3,206 6,053 9,259 Public safety 32,008 - 192,782 224,790 Public works - - 51,200 - 51,200 Conservation of natural resources 5,886 - 5,886 Debt service: Principal 345,000 - - 1,869,000 2,214,000 Interest and fiscal charges 186,713 132,558 454,901 774,172 Bond issuance costs - - 17,137 17,137 Total expenditures 7,988,475 531,713 132,558 115,745 4,352,058 13,120,549 Revenue over (under) expenditures 708,055 (241,213) 905,572 (20,085) 623,373 (2,390,239) (414,537) Other financing sources (uses): Transfer in Transfer out Sale of property Issuance of debt Premium on bonds issued Payment on refunding bonds Total other financing sources (uses) Net increase (decrease) in fund balance Fund balance - beginning of year Fund balance - December 31 10,000 142,736 90,228 - 1,479,577 1,722,541 (565,789) - - (421,254) (426,038) (237,736) (1,650,817) - - 16,727 16,727 808,000 808,000 6,558 6,558 (435,000) (435,000) (555,789) 142,736 90,228 (421,254) (426,038) 1,638,126 468,009 152,266 (98,477) 995,800 (441,339) 197,335 (752,113) 53,472 5.233,817 (2,003.261) 491 5,037,136 3,972,716 9,283,202 21,524,101 $ 5,386,083 $ (2,101,738) $ 996,291 $ 4,595,797 $ 4,170,051 $ 8,531,089 $ 21,577,573 CITY OF LINO LAKES, MINNESOTA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES Year Ended December 31, 2013 Net Change in Fund Balances -Total Governmental Funds Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, assets are capitalized and the cost is allocated over their estimated useful lives and reported as depreciation expense. Capital outlays Loss on disposal of capital assets Proceeds from sales of capital assets Depreciation expense The governmental funds report bond proceeds as financing sources, while repayment of bond principal is reported as an expenditure. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities and repayment of principal reduces the liability. Also, governmental funds report the effect of premiums and discounts when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Interest is recognized as an expenditure in the governmental funds when it is due. In the statement of activities, however, interest expense is recognized as it accrues, regardless of when it is due. The net effect of these differences in the treatment of general obligation bonds and related items is as follows: Issuance of bonds Issuance of equipment certificates Bond premium Repayment of bond principal Change in accrued interest expense for general obligation bonds Write-off of bond issuance costs Amortization of bond premium Amortization of bond discount Delinquent and noncurrent property taxes and special assessments receivable will be collected subsequent to year-end, but are not available soon enough to pay for the current period's expenditures and, therefore, are not available in the governmental funds. Unavailable resources - December 31, 2012 Unavailable resources - December 31, 2013 In the statement of activities, compensated absences and other post employment benefits are measured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially, the amounts actually paid). During fiscal year 2013, compensated absence payable and other post employment benefits payable decreased. Change in Net Position of Governmental Activities The accompanying notes are an integral part of these basic.fnancial statements. IV -15 $ 1,306,334 (159,650) (16,727) (2,909,547) (615,000) (193,000) (6,558) 2,649,000 38,046 (219,206) 23,096 (2,469) 12,232,276 10,961,595 $ 53,472 (1,779,590) 1,673,909 (1,270,681) 13,888 $ (1,309,002) CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET POSITION - PROPRIETARY FUNDS December 31, 2013 Assets Current assets: Cash and cash equivalents Accounts receivable Due from other governmental units Interfund receivable Due from county - special assessments Prepaid items Total current assets Non-current assets: Inventory Capital assets being depreciated: Buildings Equipment Water and sewer systems Total capital assets Less: allowance for depreciation Net capital assets Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Salaries payable Other accrued liabilities Compensated absences payable - current portion Total current liabilities Non-current liabilities: Compensated absences payable - long term Total liabilities Net position Investment in capital assets Unrestricted Total net position Water $ 4,791,243 207,315 1,312 6,877 5,006,747 14,684 48,690 155,276 20,088,392 20,292,358 (6,431,915) Sewer $ 7,286,546 207,771 1,643 559,110 1,312 14,519 8,070,901 390,235 21,406,972 21,797,207 (7,234,366) 13,860,443 14,562, 841 13,875,127 14,562,841 Total 2013 $ 12,077,789 415,086 1,643 559,110 2,624 21,396 13,077,648 14,684 48,690 545,511 41,495,364 42,089,565 (13,666,281) 28,423,284 28,437,968 18,881,874 22,633,742 41,515,616 14,064 7,359 297 17,412 39,132 9,679 48,811 9,887 7,361 17,412 34,660 9,679 44,339 23,951 14,720 297 34,824 73,792 19,358 93,150 13,860,443 14,562,841 28,423,284 4,972,620 8,026,562 12,999,182 $ 18,833,063 $ 22,589,403 $ 41,422,466 The accompanying notes are an integral part of these hasic financial statements. IV -16 CITY OF LINO LAKES, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - PROPRIETARY FUNDS Year Ended December 31, 2013 Operating revenue: Charges for services Hook-up charges Water meter sales Other operating revenue Total operating revenue Operating expenses: Personal services Materials and supplies Contractual services MCES sewer charges Depreciation Utilities Other Total operating expenses Net income (loss) from operations Other income (expense): Investment earnings Net increase (decrease) in fair value of investments Special assessments Total other expense Net income before contributions and transfers Capital contributions and transfers: Capital contributions from primary government Transfer out Total contributions and transfers Change in net position Net position - January 1 Net position - December 31 Water $ 1,176,917 8,750 12,332 10,743 1,208,742 187,942 148,516 58,886 416,468 96,850 19,138 927,800 280,942 43,075 (60,082) 442 (16,565) 264,377 291,403 (35,862) 255,541 519,918 Sewer $ 1,508,997 7,400 1,516,397 192,292 65,547 80,653 747,199 437,725 45,123 15,856 1,584,395 (67,998) 70,327 (98,093) 441 (27,325) (95,323) 133,625 (35,862) 97,763 2,440 18,313,145 22,586,963 $ 18,833,063 $ 22,589,403 The accompanying notes are an integral part of these basic financial statements. IV -17 Total 2013 $ 2,685,914 16,150 12,332 10,743 2,725,139 380,234 214,063 139,539 747,199 854,193 141,973 34,994 2,512,195 212,944 113,402 (158,175) 883 (43,890) 169,054 425,028 (71,724) 353,304 522,358 40,900,108 $ 41,422,466 CITY OF LINO LAKES, MINNESOTA STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS Year Ended December 31, 2013 Water Total Sewer 2013 Cash flows from operating activities: Cash receipts from customers $ 1,222,831 $ 1,520,747 $ 2,743,578 Cash paid to suppliers (304,250) (962,241) (1,266,491) Cash paid to employees (180,975) (185,675) (366,650) Net cash flows from operating activities 737,606 372,831 1,110,437 Cash flows from noncapital financing activities: Net transfers (35,862) (35,862) (71,724) Cash flows from capital and related financing activities: Collection of special assessments (835) 682 (153) Acquisition of capital assets (3,000) (51,353) (54,353) Net cash flows used by capital and related financing activities (3,835) (50,671) (54,506) Cash flows from investing activities: Interest on investments (17,007) (27,766) (44,773) Net increase in cash and cash equivalents 680,902 258,532 939,434 Cash and cash equivalents - January 1 4,110,341 7,028,014 11,138,355 Cash and cash equivalents - December 31 $ 4,791,243 $ 7,286,546 $ 12,077,789 Reconciliation of operating income to net cash from operating activities: Operating income (loss) $ 280,942 $ (67,998) $ 212,944 Adjustments to reconcile operating income to net cash flows from operating activities: Depreciation 416,468 437,725 854,193 Change in assets and liabilities: Increase in receivables 14,089 4,350 18,439 (Increase) decrease in prepaid items 2,660 (2,957) (297) Increase in inventory 24,614 24,614 Increase (decrease) in payables (1,167) 1,711 544 Net cash flows from operating activities $ 737,606 $ 372,831 $ 1,110,437 Noncash investing, capital, and financing activities: Capital asset contributions from government $ 291,403 $ 133,625 $ 425,028 The accompanying notes are an integral part of these hasic.fnancial statentents. IV -18 CITY OF LINO LAKES, MINNESOTA STATEMENT OF NET POSITION - FIDUCIARY FUNDS - AGENCY FUNDS December 31, 2013 2013 Assets Cash and investments $ 669,478 Liabilities Deposits payable $ 669,478 The accompanying notes are an integral part of these financial statements. IV -19 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Lino Lakes is a public corporation formed under Minnesota Statute 410. As such, the City is under home rule charter regulations and applicable statutory guidelines. The basic financial statements of the City of Lino Lakes have been prepared in conformity with U.S. generally accepted accounting principles as applied to govemmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies: A. FINANCIAL REPORTING ENTITY As required by U.S. generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Lino Lakes and its component units. A component unit is a legally separate entity for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component unit include whether or not the primary government appoints the voting majority of the potential component unit's board, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. COMPONENT UNITS In conformity with U.S. generally accepted accounting principles, the financial statements of component units have been included in the financial reporting entity either as blended component units or as discretely presented component units. Blended Component Units The Economic Development Authority (EDA) of Lino Lakes is an entity legally separate from the City. However, for financial reporting purposes, the EDA is reported as if it were part of the City's operations because the members of the City Council serve as commission members. The EDA does not issue separate financial statements. The Housing and Redevelopment Authority (HRA) of Lino Lakes is an entity legally separate from the City. However, for financial reporting purposes, the HRA is reported as if it were part of the City's operations because the members of the City Council serve as commission members. The HRA has not yet incurred any financial activity. B. BASIC FINANCIAL STATEMENTS 1. Government -Wide Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) display information about the primary government and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Govemmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges to external parties for support. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City's enterprise funds and various other functions of government. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. BASIC FINANCIAL STATEMENTS (CONTINUED) 1. Government -Wide Statements (Continued) In the government -wide statement of net position, both the governmental and business -type activities columns: (a) are presented on a consolidated basis by column; and (b) are reported on a full accrual, economic resource basis, which recognizes all Tong -term assets and receivables as well as long-term debt and obligations. The City's net position is reported in three parts: (1) net investment in capital assets; (2) restricted net position; and (3) unrestricted net position. The City first utilizes restricted resources to finance qualifying activities. The statement of activities demonstrates the degree to which the direct expenses of each function of the City's governmental activities and different business -type activities are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity. Program revenues include: ( I ) fees, fines, and charges paid by the recipients of goods, services, or privileges provided by a given function or activity; and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or activity. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 2. Fund Financial Statements The fund financial statements provide information about the City's funds, including its fiduciary funds and blended component unit. Separate statements for each fund category (governmental, proprietary, and fiduciary) are presented. The emphasis of govemmental and proprietary fund financial statements is on major individual governmental and enterprise funds, with each displayed as separate columns in the fund financial statements. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or incidental activities. The City reports the following major governmental funds: General Fund The general fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. General Obligation Improvement Bonds 2005A Fund The general obligation improvement bonds 2005A fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on general long-term debt. Improvement Note 2009F Fund The improvement note 2009F fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on general long-term debt. Municipal State Aid Fund The Municipal State Aid fund accounts for the collection of assessments on municipal state aid projects. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. BASIC FINANCIAL STATEMENTS (CONTINUED) 2. Fund Financial Statements (Continued) Area and Unit Charge Fund The area and unit charge fund accounts for the collection of water and sewer unit charges to be used for debt payments and construction of governmental infrastructure. The City reports the following major proprietary funds: Water Fund The water fund accounts for customer water service charges that are used to finance water operating expenses. Sewer Fund The sewer fund accounts for customer water service charges that are used to finance water operating expenses. Additionally, the City reports the following fiduciary funds: Agency Funds - to account for assets held as an agent for individuals, private organizations, other governmental units, and/or other funds. The City's agency fund accounts for pass-through contractor's deposits relating to prospective developments. C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The government -wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Agency funds, which are included in the Fiduciary Funds, do not have a measurement focus. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. The City considers all revenues to be available if they are collected within 60 days after the end of the current period. Property and other taxes, licenses, and interest are all considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred. except for principal and interest on general long-term debt, compensated absences, and claims and judgments, which are recognized as expenditures to the extent that they have matured. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (CONTINUED) Amounts reported as program revenues include: I. Charges to customers or applicants for goods, services, or privleges provided, 2. operating grants and contributions, and 3. capital grants and contributions, including special assessments. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenue of the City's enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. BUDGETS Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Annual appropriated budgets are adopted for the General Fund and the Program Recreation Special Revenue Fund. Budgeted expenditure appropriations lapse at year-end. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed by the City because it is not presently considered necessary to assure effective budgetary control or to facilitate effective cash management. E. LEGAL COMPLIANCE — BUDGETS The City follows these procedures in establishing the budgetary data reflected in the financial statements: The City Administrator submits to the City Council a proposed operating budget (including the General Fund and Program Recreation Special Revenue Fund) for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution on a departmental basis and can be expended by each department based upon detailed budget estimates for individual expenditure accounts. 4. The City Administrator is authorized to transfer appropriations within any department budget. Additional interdepartmental or interfund appropriations and deletions are or may by authorized by the City Council with fund (contingency) reserves or additional revenues. 5. Formal budgetary integration is employed as a management control device during the year for the General Fund. 6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and calculate user charges. These debt service and budget amounts represent general obligation bond indenture provisions and net income for operation and capital maintenance and are not reflected in the financial statements. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED2 E. LEGAL COMPLIANCE — BUDGETS (CONTINUED) 7. A capital improvement program is reviewed periodically by the City Council for the Capital Project Funds. However, appropriations for major projects are not adopted until the actual bid award of the improvement. The appropriations are not reflected in the financial statements. 8. Expenditures may not legally exceed budgeted appropriations at the department level unless approved by the City Council. Therefore, the legal level of budgetary control is at the department level (i.e. administration, community development, public safety, public services, and other). 9, The City Council may authorize transfers of budgeted amounts between City funds. F. CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in investments authorized by Minnesota Statutes. Earnings from investments are allocated to individual funds on the basis of the fund's equity in the cash and investment pool. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advancing fund in the governmental fund financial statements, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund payables are eliminated for statement of Net position presentation. Investments are stated at fair value and interest earnings are accrued at year-end. For purposes of the statement of cash flows the Proprietary Fund considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the proprietary fund types have original maturities of 90 days or less. Therefore, the entire balance in such fund types is considered cash equivalents. Permanently restricted cash and investments represents the principal portion of resources received that must be retained in a permanent fund. Only earnings from these funds may be used for purposes that support environmental maintenance and improvements. G. PROPERTY TAX CREDITS Property taxes on homestead property (as defined by State Statutes) are partially reduced by property tax credits. These credits are paid to the City by the State in lieu of taxes levied against homestead property. The State remits these credits through installments each year. These credits are recognized as revenue by the City at the time of collection. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUEDZ H. PROPERTY TAX REVENUE RECOGNITION The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 15 and December 15 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. Within the governmental fund financial statements, the City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current period. In practice, current and delinquent taxes and State credits received by the City in July, December and the following January are recognized as revenue for the current year. Taxes and credits not received at the year-end are classified as delinquent and due from County taxes receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred inflows of resources because it is not available to finance current expenditures. Deferred inflows of resources in governmental fund are susceptible to full accrual on the govemment-wide statements. The City's property tax revenue includes payments from the Metropolitan Revenue Distribution (Fiscal Disparities Formula) per State Statute 473F. This statute provides a means of spreading a portion of the taxable valuation of commercial/industrial real property to various taxing authorities within the defined metropolitan area. The valuation "shared" is a portion of commercial/industrial property valuation growth since 1971. Property taxes paid to the City through this formula for 2013 totaled $1,094,578. Receipt of property taxes from this "fiscal disparities pool" does not increase or decrease total tax revenue. 1. SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Within the fund financial statements, the revenue from special assessments is recognized by the City when it becomes measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as revenue for the current year. Special assessments are collected by the County and remitted by December 3l (remitted to the City the following January) and are also recognized as revenue for the current year. All remaining delinquent, noncurrent and special assessments receivable in governmental funds are completely offset by deferred inflow of resources. Deferred inflows of resources in governmental funds are susceptible to full accrual on the government -wide statements. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. SPECIAL ASSESSMENT REVENUE RECOGNITION (CONTINUED) Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the City in payment of delinquent special assessments. Generally, the City will collect the full amount of its special assessments not adjusted by City Council or court action. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject to such sale after five years. J. INVENTORIES AND PREPAIDS The original cost of materials and supplies has been recorded as expenditures/expenses at the time of purchase in both the Governmental and Proprietary Funds. These funds do not maintain material amounts of materials and supplies. Certain payments to vendors reflect costs applicable to future accounting periods and are reported as prepaid items under the purchases method in both government -wide and fund financial statements. K. INTERFUND RECEIVABLES/PAYABLES During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. The year-end balances are classified as interfund receivables and payables on the governmental fund balance sheets. The non-current portion of interfund loans are reported as "advances to/from other funds." Advances between funds are offset by a nonspendable fund balance account in applicable governmental funds to indicate they are not available for appropriation and are not expendable from available financial resources. L. CAPITAL ASSETS Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads, sidewalks, street lights, and similar items) are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets exceeding the City's capitalization threshold of 52,500 are recorded at historical cost or estimated historical cost if purchased or constructed. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. All existing City infrastructure has been capitalized regardless of date placed in service. Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with accumulated depreciation reflected in the Statement of Net position. Capital assets are depreciated using the straight-line method over their estimated useful lives. Since surplus assets are sold for an immaterial amount when declared as no longer needed for City purposes, no salvage value is taken into consideration for depreciation purposes. Useful lives vary from 3 to 30 years for Buildings, Office Furniture and Equipment, Vehicles, Machine Shop and Equipment and Other assets, and 25 to 50 years for Infrastructure. Capital assets not being depreciated include land and construction in progress. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3I, 2013 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) M. COMPENSATED ABSENCES It is the City's policy to permit employees to accumulate earned but unused vacation, PTO (Personal Time Off), extended leave and sick pay benefits. All vacation pay and PTO and the portion of sick pay allowable as severance pay is accrued in the government -wide and proprietary fund financial statements. The current portion is calculated based on historical trends. N. LONG-TERM OBLIGATIONS In the entity -wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bond issue costs, if material. are amortized over the term of the related debt using the straight-line method. In the governmental fund financial statements, bond premiums and discounts, as well as bond issue costs are recognized during the current period. The face amount of the debt issue is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts are reported as other financing uses. Issue costs are reported as debt service expenditures. O. FUND EQUITY In the fund financial statements, governmental funds report fund balances in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: Nonspendable — portions of fund balance related to prepaids, inventories, long-term receivables, and corpus on any permanent fund. Restricted — funds are constrained by external parties (statute, grantors, bond agreements, etc). Committed — funds are established and modified by a resolution approved by the City Council. Assigned — consists of internally imposed constraints. These constraints are established by the City Council and/or management. The City Council also delegates the authority to assign fund balance to the Finance Director. Unassigned — is the residual classification for the General Fund and also reflects negative residual amounts in other funds. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, it is the City's policy to use restricted first, then unrestricted fund balance. When an expenditure is incurred for purposes for which committed, assigned, and unassigned amounts are available, it is the City's policy to use committed first, then assigned, and finally unassigned amounts. The City formally adopted a fund balance policy for the General Fund. The policy establishes an unassigned fund balance range of 40% - 50% of General Fund operating expenditures. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. FUND EQUITY (CONTINUED) The fund equity balances in the proprietary funds have been classified into two broad categories: • Net position — net investment in capital assets • Unrestricted net position Net position represents the differences between assets and liabilities in the government -wide financial statements. Net position — net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the ouststanding balance of any long-term debt used to build or acquire capital assets. Net position is reported as restricted in government -wide financial statements when there are limitations on their use thorugh external restrictions imposed by creditors, grantors, or laws or regulations of other governments. P. INTERFUND TRANSACTIONS Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures or expenses in the fund that is reimbursed. All other interfund transactions are reported as transfers. All Interfund transactions are eliminated except for activity between governmental activities and business - type activities for presentation in the entity -wide statements of Net position and statements of activities. Note 2 DEPOSITS AND INVESTMENTS Components of Cash and Investments Cash and investments at year-end consists of the following: Deposits Investments Cash on Hand Total Cash and investments are presented in the financial statements as follows: Cash and Investments - Statement of Net Position Permanent restricted Cash and Investments - Statement of Net Position Cash and Investments - Statement of Net Position - Fiduciary Funds Total A. DEPOSITS $ 3,252,636 31,643,322 820 $ 34,896,778 $ 34,105,825 121,475 669,478 $ 34,896,778 The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the statement of net position and the balance sheet as "Cash and Investments." In accordance with Minnesota Statutes, the City maintains deposits at financial institutions which are authorized by the City Council. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) A. DEPOSITS (CONTINUED) Custodial Credit Risk — Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City does not have a specific deposit policy for custodial credit risk but rather follows Minnesota Statutes for deposits. Minnesota Statutes require that all deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or corporate surety bonds. Authorized collateral include: U.S. government treasury bills, notes, or bonds; issues of a U.S. government agency; general obligations of a state or local government rated "A" or better; revenue obligations of a state or local government rated "AA" or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by a federal agency. Minnesota Statutes require securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust department of a commercial bank or other financial institution not owned or controlled by the depository. The City's deposits in banks at December 31, 2013 were entirely covered by federal depository insurance or by surety bonds and collateral in accordance with Minnesota Statutes. B. INVESTMENTS The City may also invest idle funds as authorized by Minnesota Statutes as follows: • Direct obligations or obligations guaranteed by the United States or its agencies • Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest credit rating, is rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of thirteen months or less • General obligations rated "A" or better; revenue obligations rated "AA" or better • General obligations of the Minnesota Housing Finance Agency rated "A" or better • Banker's acceptances of United States banks eligible for purchase by the Federal Reserve System • Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality category by a least two nationally recognized rating agencies, and maturing in 270 days or less • Guaranteed investment contracts 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 • Repurchase or reverse purchase agreements and securities lending agreements financial institutions qualified as a "depository" by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers • Any security which is an obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest category by a national bond rating service or (ii) enrolled in the credit enhancement program pursuant to section 126C.55. Investments Held with Broker — Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City's policy to minimize interest rate risk includes investing primarily in short-term securities and structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations. Information about the sensitivity of the fair values of the City's investments to market interest rate risk fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31. 2013 Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) B. INVESTMENTS (CONTINUED) 12 Months 13 to 24 25 to 60 More than Type Total or Less Months Months 60 Months Minnesota Municipal Money Market Trust Fund $ 944.001 S 944.001 S $ - $ - Federal Home Loan Bank 2.434.579 - - 2.434.579 Federal Home Loan Mortgage Corp. 348,593 - - 348.593 - Federal National Mortgage Assn. 2.543,496 - - 597,449 1,946.047 Negotiable CDs 12.899.752 6.410,000 4,057.457 2.432.295 - Municipal Bonds 10.953,310 1,145,804 2.135.439 5,704.334 1,967,733 Mutual Fund 1.519,591 1.519.591 - - Total $ 31.643,322 $ 10,019.396 S 6,192.896 S 9,082.671 $ 6.348,359 Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. The City's policy to minimize credit risk includes limiting investing funds to those allowable under Minnesota Statute 1 I8A, annually appointing all financial institutions where investments are held, and diversifying the investment portfolio. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The following chart summarizes year-end ratings for the City's investments as rated by Moody's Investors Service: Type Minnesota Municipal Money Market Trust Fund Federal Home Loan Bank Federal Home Loan Mortgage Corp. Federal National Mortgage Assn. Negotiable CDs Municipal Bonds Mutual Fund Total Credit Quality Rating Amount Aa2 5 944,001 Aaa/AA+ 2,434,579 Aaa/AA+ 348,593 Aaa/AA+ 2,543,496 Not Rated 12,899,752 A-Aaa 10,953,310 Not Rated 1.519,591 5 31,643.322 The Minnesota Municipal Money Market Fund Trust is a common law trust organized in accordance with the Minnesota Joint Powers Act, which invests only in investment instruments allowable under Minnesota statutes as described on the previous page. Its investments are valued at amortized cost, which approximates market value in accordance with Rule 2a-7 of the Investment Company Act of 1940. The amortized cost method of valuation values a security at its cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium. regardless of the impact of fluctuating interest rates on the fair value of instruments. The Minnesota Municipal Money Market Trust Fund does not have its own credit rating. MBIA, Inc., who administers the Minnesota Municipal Money Market Fund Trust holds an organization credit rating of Aa2. For an investment, custodial credit risk is the risk that, in the event of failure of the counterparty, the City will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The City's investment policy doesn't specifically address custodial credit risk. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) B. INVESTMENTS (CONTINUED) Concentration 0! Credit Risk The City places no limit on the amount that it may invest in any one issuer. The following is a list of investments which individually comprise more than 5% of the City's total investments: Type Federal National Mortgage Assn. Federal Home Loan Bank Note 3 CAPITAL ASSETS Amount $ 2,543,496 2,434,579 Capital asset activity for the year ended December 31, 2013 was as follows: Governmental Activities: Capital Assets, Not Being Depreciated: Land Capital Assets. Being Depreciated: Buildings Office Equipment and Furniture Vehicles Machinery and Shop Equipment Other Equipment Infrastructure Total Capital Assets, Being Depreciated Accumulated Depreciation for: Buildings Office Equipment and Furniture Vehicles Machinery and Shop Equipment Other Equipment Infrastructure Total Accumulated Depreciation Total Capital Assets, Being Depreciated. Net Governmental Activities Capital Assets, Net Beginning Balance Increases $ 3,275,859 $ Percentage Decreases 8.04% 7.69% Ending Balance $ 3,275,859 6,530,334 195,783 - 6,726,117 1,372,230 36,904 (26,102) 1,383,032 2,514,738 159,041 (130,829) 2,542,950 923,595 (3,000) 920,595 952,447 952,447 77,876,924 914,606 (183,726) 78,607,804 90,170,268 1,306,334 (343,657) 91,132,945 (3,206,148) (218,053) - (3,424,201) (921,491) (80,027) 26,102 (975,416) (1,366,677) (242,537) 130,829 (1,478,385) (530,970) (52,380) 3,000 (580,350) (747,408) (22,339) - (769,747) (47,038,870) (2,294,211) 7,349 (49,325,732) (53.811,564) (2,909,547) 167,280 (56,553,831) 36,358,704 11,603,213) (176.377) 34,579.114 $ 39.634,563 $ (1,603,213) $ (176,377) $ 37,854,973 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 3 CAPITAL ASSETS (CONTINUED) Business -Type Activities: Capital Assets. Being Depreciated: Buildings Machinery and Shop Equipment Water and Sewer Lines Total Capital Assets, Being Depreciated Accumulated Depreciation for: Buildings Machinery and Shop Equipment Water and Sewer Lines Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Business -Type Capital Assets, Net Beginning Balance Increases Decreases Ending Balance $ 48,690 $ - 5 - S 48.690 503.871 54.354 (12,714) 545,511 41,070,336 425,028 - 41,495,364 41.622.897 479.382 (12,714) 42.089,565 (48.690) - - (48,690) (307,968) (17,330) 12,714 (312.584) (12.468,144) (836,863) - (13,305,007) (12,824,802) (854,193) 12,714 (13,666,281) 28,798,095 (374.811) - 28,423,284 S 28,798.095 $ (374,811) $ 5 28,423,284 Depreciation expense charged to functions/programs of the primary government as follows: Governmental Activities: General Government Public Safety Public Services Parks, Recreation and Forestry Community Development Total Depreciation Expense, Governmental Activities $ 238,194 114,976 2,413,609 142.268 500 $ 2.909.547 Business -type Activities: Water Sewer Total Depreciation Expense, Governmental Activities $ 416,468 437,725 $ 854,193 The City contributed 5425,028 of capital assets from the governmental activities to the business -type activities. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 4 CITY INDEBTEDNESS City indebtedness at December 31, 2013 is composed of the following: Governmental Activities: General Obligation Bonds: 201(A Equipment Certificates 2012A Equipment Certificates 2013A Equipment Certificates G.O. Tax Abatement Bonds, Series 2006C G.O. Utility Revenue Bonds, Series 200613 G.O. CIP Refunding Bonds, Series 2006E G.O. Tax Increment Financing Bonds, Series 2007A G.O. Refunding Bonds, Series 2012A Total General Obligation Bonds Special Assessment Bonds: G.O. Improvement Bonds, Series 2003B G.O. Improvement Bonds. Series 2005A G.O. Improvement Refunding Bonds, Series 2005B G.O. Improvement & Utility Revenue Refunding Bonds. Series 2010A G.O. Improvement Bonds. Series 2013A Total Special Assessment Bands Total Bonds Note Payable - Anoka County - 2009A Unamortized Bond Discounts Unamortized Bond Premium Compensated Absences Payable Other Post Employment Benefit Plan Total Governmental Activities Business -Type Activities: Revenue Bonds: Compensated Absences Payable Final Issue Maturity Interest Original Payable Date Date Rate Issue 12/31/2013 2/14/2011 12/31/2014 1.00% 120.000 0 41,000 2/1/2012 12/31/2014 1.00% 150000 101.000 2/1/2013 12/31/2015 100°% 193.000 193.000 8/15/2006 2/1/2023 4.00%4.30% 2.460.000 2,220,000 8/152006 2/1/2017 4.00%-4.15% 570.000 255,000 11/1/2006 2/1/2018 4.00% 2,990,001) 1.930.000 7/15/2007 2/1/2024 4.00%4.125% 4.215.000 3.110000 11/15/2012 2/1/2024 1.00%-2.00% 2,015.000 2,015,000 12,713,000 9.865.000 12/1/2003 2/1/2014 3.20%-5.60% 250,000 35.000 11/1/2005 2/1/2021 4.35%-5.15% 5,550,000 3,505,000 11/1/2005 2/12015 3.75%-5.00% 3.755.000 845.000 7/9/2010 2/1/2020 2.00%-3.00% 1.000,000 720,000 7/15/2013 2/1/2024 1.25%4.00% 615,1810 615.000 11.170,1(00 5.720,1810 23,883.(100 15,585,(00 8/1/2009 8/1/2024 4 00%-3.70% 4.260,000 3,695,000 (45,490) 122,683) 202.370 50,835 N/A 614,536 N/A 83,969 $ 28.299.880 $ 20.006.657 alsammornaime N/A 0 54.182 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 3I, 2013 Note 4 CITY INDEBTEDNESS (CONTINUED) The following is a schedule of changes in City indebtedness for the year ended December 31, 2013: Payable Payable Due Within 12/31/2012 Issues Payments 12/3I'2013 One Year Govemmental activities: Bonded debt: General Obligation $ 10,646,000 $ 193.000 5 974,000 $ 9.865,000 $ 1,129.000 Special Assessment 6,780,000 615.000 1,675.000 5.720,000 920.000 Unamonized Bond Discounts (25,152) - (2,469) 122.683) Unamonized Bond Premiums 67,373 6,558 23.096 50.835 Note Payable - Anoka County 3.695,000 - - 3,695,000 995.000 Compensated Absences Payable 634,572 528,925 548,961 614.536 382,332 Other Post Employment Benefit Plan 77.821 6.148 - 83,969 - Total Govemmental Activities 21.875,614 1.349.631 3.218,588 20,006.657 3.426,332 Business -Type Activities: Compensated Absences Payable 43.410 43.197 32,425 54,182 34.824 Total $ 21,919.024 $ 1,392,828 $ 3,251,013 $ 20.060,839 $ 3,461.156 All long-term bonded indebtedness outstanding at December 31, 2013 is backed by the full faith and credit of the City, including special assessment bond issues. Minimum annual principal and interest payments required to retire long-term debt, not including compensated absences payable are as follows. Years Ending December 31 2014 2015 2016 2017 2018 2019-2023 2024-2026 Total Bonded Debt Notes Payable Total Principal Interest Principal Interest Principal Interest $ 2.049,001 S 552,473 S 995,000 $ 114.951 S 3,0144,00 $ 667.424 2231,0(0 467,294 360.000 100,345 2,591.000 567,639 1,850.000 392.528 375.000 91045 2,225,000 483,473 1.875.000 324.288 3901,000 80.945 2_65,000 405.233 1,660,000 258.245 405,000 70,345 2,05,00) 328.590 5.410.000 547,878 1,170,000 154,314 6,580,000 702.192 510,000 8,436 - - 510.0001 8.436 5 15.585,000 S 2,551.141 5 3.695000 $ 611.045 S 19.280,000 $ 3.16. 986 Description and Restrictions of Long -Term Debt General Obligation Bonds — The bonds were issued for improvements or projects which benefited the City as a whole and are, therefore, repaid from ad valorem levies. Special Assessment Bonds — These bonds were issued to finance various improvements and will be repaid primarily from special assessments levied on the properties benefiting from the improvements. However, some issues are partly financed by ad valorem levies. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 4 CITY INDEBTEDNESS (CONTINUED) Description and Restrictions of Long -Term Debt (Continued) Revenue Bonds — These bonds were issued to finance various improvements in the water fund and will be repaid primarily from pledged revenues derived from the constructed assets. h1 July 2013, the City issued General Obligation Improvement Bonds of $615,000 to fund the Otter Lake Extension project. The 5615,000 is being funded by special assessments related to the improvement project that the City has collected. The bond was issued at a rate of 1.25% . The bonds will be called in 2024. Liability for Compensated Absences — This liability represents vested benefits earned by governmental fund employees through the end of the year which will be paid or used in future periods. For the governmental activities, compensated absences and other postemployment benefit liability are generally liquidated by the general fund. The liability for Proprietary Fund employees is included in the accrued liabilities of those funds. Note S LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes. The City of Lino Lakes' legal debt margin for 2013 is computed as follows: Market value Applicable percentage Debt Limit Amount of debt applicable to debt limit: Total bonded debt Less: Special assessment bonds Tax abatement bonds Utility revenue bonds Tax increment financing bonds Total debt applicable to debt limit Legal debt margin 12/31/2013 $ 1,519,857,242 3.0% 45,595,717 15,585,000 (5,720,000) (2,220,000) (255,000) (3,110,000) 4,280,000 S 41,315,717 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 6 DEFINED BENEFIT PENSION PLANS — STATEWIDE A. PLAN DESCRIPTION All full-time and certain part-time employees of the City of Lino Lakes are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF) which are a cost-sharing, multiple -employer retirement plan. This plan is established and administered in accordance with Minnesota Statutes, Chapter 353 and 356. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State 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% of average salary for each of the first 10 years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0% for each year of service. For GERF and PEPFF members hired prior to July 1, 1989 whose annuity is calculated using Method I, a full annuity is available when age plus years of service equal 90. Normal retirement age is 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for coordinated members hired on or after July 1, 1989. 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 the 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 GERF and PEPFF. That report may be obtained on the Internet at www.mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651) 296-7460 or 1-800-652-9026. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 6 DEFINED BENEFIT PENSION PLANS — STATEWIDE (CONTINUEDZ 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 City makes annual contributions to the pension plans equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan members are required to contribute 9.10% and 6.25% respectively, of their annual covered salary. PEPFF members were required to contribute 9.6% of their annual covered salary in 2012. The City is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan members, 7.25% for Coordinated Plan members, and 14.4% for PEPFF members. The City's contributions to the General Employees Retirement Fund for the years ended December 31, 2013, 2012, and 2011 were $160,392, $164,317, and $187,186, respectively. The City's contributions to the Public Employees Police & Fire Fund for the years ended December 31, 2013, 2012, and 2011 were $290,737, $315,541, and $285,356, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. Note 7 METROPOLITAN COUNCIL ENVIRONMENTAL SERVICES During 1971, the Metropolitan Waste Control Commission (MWCC) was organized to provide for consolidation of the sanitary sewer collection, treatment and disposal in the seven county metropolitan area surrounding Minneapolis and St. Paul. Previously, these operations were maintained by the city governments on an individual or collective basis. The MWCC merged with the Metropolitan Council during 1994 to form Metropolitan Council Wastewater Services (MCWS) and is now called the Metropolitan Council Environmental Services (MCES). The MCES bills the City annually based upon estimated volume and budgeted costs. The City follows the accounting policy of recognizing these charges as an expense of the sewer utility operation in the year for which they are billed. Note 8 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY A. DEFICIT FUND BALANCES The City has deficit fund balances at December 31, 2013 as follows: Dedicated Parks 2Ist Ave. Extension 1-13 Tax Increment Financing 1-11 Improvement and Utility Revenue Refunding Bonds 2010 G.Q. Improvement Bonds 2005A Fund Balance Deficit $ (444,279) (29,455) (770,196) (47,879) (2,101,738) The City intends to fund these deficits through future tax levies, special assessment levies, tax increments, transfers from other funds, and various other sources. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 8 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (CONTINUEDZ B. EXPENDITURES IN EXCESS OF BUDGET The following is a listing of expenditure categories that exceed budget appropriations for non -major funds: Budget Actual Excess Program Recreation Special Revenue Fund: Supplies $ 51,675 $ 73,185 $ (21,510) Note 9 CONTINGENCIES Tax Increment Districts — The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which could have a material effect on the financial statements. Federal and State Funds — The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2013. Litigation — The City, in connection with the normal conduct of its affairs, is involved in various claims, judgments, and litigation. As of December 31. 2013 any potential affect this may have on the City is not estimable, however it is not expected to have a material effect on the financial statements of the City. Note 10 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax levies is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject to cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy any additional taxes found necessary for full payment of principal and interest. These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2013. Future scheduled tax levies for all bonds outstanding at December 31, 2013 totaled $16,589,767. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 11 FUND BALANCE At December 31, 2013, the City had various fund balances restricted, committed, or assigned through legal restriction and City Council authorization. Major fund balance appropriations at December 31, 2013 are shown on the various balance sheets as segregations of the fund balance. The fund balances are as follows: Total Nonspendable Restricted Committed General Fund: S 5.209.286 S - 5 - S - S 5 5.209.286 Prepaid Items 176.797 176.797 - - Total General Fund 5.386.083 176,797 - - - 5.209.286 G.O. Improvement Bonds 2005A: Deficit Fund Balance (2.101.738) - - (2,101.738) Improvement Bonds 2009E Debt Service 996.291 - 996,291 - - Municipal Slate Aid: Construction Projects 4,595.797 - - - 4595,797 Area and Unit Charge: Advances to Other Funds 460.881 - - - 46(1.881 Construction Projects 3.709.170 - - 3.709.170 - Total Area and Unit Charge 4,170,051 - - - 4,170.051 - Nonmajor Governmental Funds: Prepaid lams 1.710 1,710 - - Economic Development - Loan Receivable 225,000 - 225.000 Corpus of Permanent Fund 100,000 100,0001 - - Program Recreation 110.457 - 110.457 - Cable TV Fund 10.618 - - 10,618 Environmental Improvements 21,475 - 21,475 Debt Service 2.408.784 - 2,408.784 Construction Projects 6,944,854 - - 6.944.854 Deficit Fund Balance (1.291.809) - - (1.291.809) Total Nonmajor Funds 8.531.089 101.710 2.655.259 121.075 6.944.854 (1291.819) Total Fund Balances S 21.577.573 5 278,507 S 3.651,550 5 121,075 S 15.710.702 S 1.815.739 Assigned Unassigned Note 12 SHARE IN GAS FRANCHISE PROFITS The City receives a share of the gross billing for natural gas sales by a neighboring City, which provides service within the City of Lino Lakes. The amount reported as revenue in the General Fund during fiscal year 2013 was $61,280. Note 13 INTERFUND RECEIVABLE AND PAYABLES The purpose of the interfund receivable and payable balances is for the elimination of negative cash between funds and at December 31, 2013 are as follows: Governmental Activity: G.O. Improvement Bonds 2005A Other Nonmajor Governmental Funds Business -Type Activity: Sewer Fund Receivable Payable $ 2,534,940 559,110 $ 2,259,643 834,407 3,094,050 $ 3,094,050 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 13 INTERFUND RECEIVABLE AND PAYABLES (CONTINUED) Interfund receivable and payable balances not expected to be repaid within one year are reported as advances to and from other fund and at December 31, 2013 are as follows: Governmental Activity: Area and Unit Charge Other Nonmajor Governmental Funds Receivable Payable $ 460,881 $ 460,881 460,881 $ 460,881 The purpose of the advance from the Area and Unit Charge Fund is to temporarily finance projects in the Dedicated Parks Fund. Note 14 INTERFUND TRANSFERS Individual fund transfers for fiscal year 2013 are as follows: Governmental Activity: General Fund G.O. Improvement Note 2009A Improvement Bonds of 2009F Area and Unit Charge Municipal State Aid Other Nonmajor Governmental Funds Total Governmental Activity Business -Type Activity: Water Fund Sewer Fund Total Business -Type Activity Total Transfer In Transfer Out $ 10,000 $ (565,789) 142,736 - 90,228 - (426.038) (421,254) 1,479,577 (237,736) 1,722,541 (1,650,817) (35,862) (35,862) (71,724) $ 1,722,541 $ (1.722,541) Interfund transfers are other financing sources and uses within the fund financial statements. The purpose of the transfers is to provide funding for capital improvement projects, capital outlay, and debt service as well as to open and close funds. Note 15 RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Workers compensation coverage is provided through a pooled self-insurance program through the League of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject 10 supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is not subject to a deductible. The City's workers compensation coverage is retrospectively rated. With this type of coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 15 RISK MANAGEMENT (CONTINUED) Property and casualty insurance is provided through a pooled self-insurance program through the LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various amounts. The City retains risk for the deductible portion of the insurance policies and for any exclusions from the insurance policies. These amounts are considered immaterial to the financial statements. The City continues to carry commercial insurance for all other risks of loss, including disability and employee health insurance. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. Note 16 CONDUIT DEBT OBLIGATIONS The City has issued Industrial Development Revenue Bonds and Commercial Revenue Notes to provide financial assistance to private -sector entities for the acquisition and construction of industrial and commercial facilities which are deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issue. The City is not obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2013, one series of Industrial Revenue Bonds was outstanding with an aggregate remaining principal balance of $540,000, and one series of Commercial Revenue Notes was outstanding with an aggregate remaining principal balance of $2,152,037. Note 17 JOINT VENTURES Fire The Centennial Fire District (the District) was established under a joint powers agreement between the City of Lino Lakes and two other cities. The general purpose of the District is to provide fire protection services including, but not limited to, fire prevention, firefighting and rescue service. Each member city is entitled to appoint two commissioners to the District's Board. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December3l, 2013 Note 17 JOINT VENTURES (CONTINUED) Fire (Continued) Each calendar year, participating cities are to pay the District its share of the total operating and capital budget in accordance with a funding formula contained in Section VII of the joint powers agreement. The funding formula takes into account each city's average number of calls, population, and total market value. During 2013, the City of Lino Lakes' contributions to the District were as follows: Operating Capital Total $ 511,770 85,250 $ 597,020 The audited financial statements of the District as of December 31, 2012 can be reviewed upon request of the Centennial Fire District. In January 2014 the City Council voted to start the process to withdraw from the District which will be effective January 27, 2016. The City is currently exploring options for fire protection starting in January 2016. Anoka County The City of Lino Lakes has a joint powers agreement with Anoka County for the reconstruction of County State Aid Highway 14 (Main Street) and 1-35E Interchange County Project. Note 18 OTHER POSTEMPLOYMENT BENEFIT PLAN At December 31, 2008, the City adopted Govemmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Man Pensions. The City engaged an actuary to determine the City's liability for postemployment healthcare benefits other than pensions as of January 1, 2011. A. PLAN DESCRIPTION The City provides benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b. Active employees, who retire from the City when over age 50 and with 20 years of service, may continue coverage with respect to both themselves and their eligible dependent(s) under the City's health benefits program until age 65. Pursuant to the provisions of the plan, retirees are required to pay the total premium cost. As of December 31, 2013 there were approximately 49 active participants and 7 retired participants receiving benefits from the City's health plans. B. FUNDING POLICY The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2013, the City contributed 521.289 to the plan. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 18 OTHER POSTEMPLOYMENT BENEFIT PLAN (CONTINUED) C. ANNUAL OPEB COST AND NET OPEB OBLIGATION The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any un -funded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually paid from the plan, and changes in the City's net OPEB obligation. Annual Required Contribution Interest on Net OPEB Obligation Adjustment to Annual Required Contribution Annual OPEB Cost (Expense) Contributions Made Increase in Net OPEB Obligation Net OPER Obligation- Beginning of Year Net OPEB Obligation- End of Year $ 29,449 1,663 (3,675) 27,437 (21,289) 6,148 77,821 $ 83,969 The City's annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPER obligation for 2013 and the two preceding years: Percentage Fiscal Annual of Annual Net Year OPEB OPEB Cost OPEB Ended Cost Contributed Obligation 12/31/2011 $ 27,917 65.9% $ 72,808 12/31/2012 29,610 65.2% 77,821 12/31/2013 27,437 77.6% 83,969 D. FUNDED STATUS AND FUNDING PROGRESS As of January 1, 2011, the most recent actuarial valuation date, the City's unfunded actuarial accrued liability (UAAL) was $474,770. The annual payroll for active employees covered by the plan in the actuarial valuation was $4,953,560 for a ratio of UAAL to covered payroll of 9.6%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2013 Note 18 OTHER POSTEMPLOYMENT BENEFIT PLAN (CONTINUED] E. ACTUARIAL METHODS AND ASSUMPTIONS Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -tens perspective of the calculations. In the January 1, 2011 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 2% inflation rate, a 2% investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date. The initial healthcare trend rate was 0%, increasing to an ultimate rate of 4% after three years. The UAAL is being amortized as a level percentage of projected payrolls on an open basis. The remaining amortization period at December 31, 2013 was not to exceed 30 years. REQUIRED SUPPLEMENTARY INFORMATION CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2013 Revenue: General property taxes: Current and delinquent Fiscal disparities Excess tax increments Total general property taxes Licenses and permits: Business Non -business Total licenses and permits Intergovernmental: State: Market value credit Police state aid MSA maintenance Other County/Regional: Solid waste Other Total intergovernmental Special assessments: Penalties and Interest Charges for services: General government Planning/engineering Fees retained from collection for other governments - SAC/surcharge Administrative charge - other funds Aerial map charge - other funds Public safety Total charges for services Fines and forfeits Investment earnings Change in market value Refunds Miscellaneous: Gas franchise fees Cable TV Donations Other Total miscellaneous Total revenue 2013 Original Budget Final Budget Variance with Final Budget Positive Actual (Negative) $ 7,330,538 $ 6,306,938 $ 6,218,617 5 (88,321) - 983,600 958,004 (25,596) - - 11,180 11,180 7,330,538 7,290,538 7,187,801 (102,737) 80,300 97,800 100,685 2,885 269,000 304.000 330,969 26,969 349,300 401,800 431,654 29,854 3,988 3,988 165,000 199,000 199,076 76 200,000 231,000 231,753 753 35,000 35,000 18,968 (16,032) 35,000 35,000 45,831 10.831 4,000 4,000 1,347 (2,653) 439,000 504,000 500,963 (3,037) 15,000 15,000 20,616 5,616 17,600 3,600 5,446 1,846 8,000 8,000 24.968 16,968 1,000 1,000 1,822 822 50,000 50.000 50,100 100 5,000 5,000 3,150 (1,850) 151,500 186,500 210,699 24,199 233,100 254,100 296,185 42,085 140,000 118,000 119.079 1,079 40,000 28,000 38,093 10,093 - - (50,343) (50,343) 25,000 37,000 38,092 1,092 50.000 50,000 61,280 11,280 37,500 37,500 37,500 5,000 5,000 (5,000) 11,000 20,500 15,610 (4,890) 103,500 113,000 114,390 1,390 8,675,438 8,761,438 8,696,530 (64,908) CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2013 Expenditures: General government: Mayor and council: Current: Personal services Other services and charges Contractual services Total mayor and council Elections: Current: Personal services Supplies Other services and charges Contractual services Capital outlay Total elections Administration: Current: Personal services Other services and charges Contractual services Total administration Finance: Current: Personal services Supplies Other services and charges Contractual services Total finance Cable TV: Current: Personal services Supplies Capital outlay Total cable TV Consultants: Current: Legal 2013 Original Budget Final Budget $ 40,581 $ 25,000 15,270 80,851 7,025 100 2,500 500 3,000 13,125 350,592 20,360 6,100 377.052 32,481 20,800 15,270 68.551 7,025 100 2,500 500 3,000 13,125 350,592 16,360 6,100 373,052 Actual $ 31,511 14,997 15,429 61,937 7,610 98 2,147 2,940 12,795 315,260 14,817 4,116 334.193 293,053 288,053 289,397 1,200 1,200 1,117 114,600 114,600 104,677 100,900 100,900 99,005 509.753 504,753 494,196 2,167 50 500 2,717 2,167 50 500 2,717 1,556 266 1,822 Variance with Final Budget Positive (Negative) $ 970 5,803 (159) 6,614 (585) 2 353 500 60 330 35,332 1,543 1,984 38,859 (1,344) 83 9,923 1,895 10,557 611 50 234 895 140,000 140,000 123,111 16,889 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2013 General government (continued): Engineering/planning: Current: Contractual services Charter commission: Current: Other services and charges General government buildings: Current: Personal services Supplies Other services and charges Contractual services Total general government buildings Total general government Public safety: Police: Current: Personal services Supplies Other services and charges Contractual services Capital outlay Total police Fire protection: Current: Contractual services Building inspection: Current: Personal services Supplies Other services and charges Contractual services Total building inspection Total public safety 2013 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) $ 106,400 $ 106,400 $ 108,700 $ (2,300) 1,500 1,500 818 2,174 2,174 2.128 27,000 35,000 34,024 292,380 322,880 300,651 68,000 68,000 64,247 389,554 428.054 401.050 1,620,952 _ 1,638,152 1,538,622 2,867,445 2,875,445 2,887,198 35,000 35,000 30,299 88,760 78,760 71,176 41,220 41,220 35,210 30,000 30,000 32,008 3,062,425 3,060,425 3,055,891 533,673 533,673 511,770 199,866 201,366 201,560 1,050 1,050 417 7,320 7,320 6,240 500 1.500 1,087 208,736 211,236 209,304 3,804,834 3,805,334 3,776,965 682 46 976 22,229 3,753 27,004 99,530 (11,753) 4,701 7,584 6,010 (2,008) 4,534 21,903 (194) 633 1,080 413 1.932 28,369 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2013 Public works: Streets: Current: Personal services Supplies Other services and charges Contractual services Total streets Fleet: Current: Personal services Supplies Other services and charges Contractual services Total fleet Total public works Parks and recreation: Parks: Current: Personal services Supplies Other services and charges Contractual services Total parks Recreation: Current: Personal services Supplies Other services and charges Contractual services Total recreation Total parks and recreation 2013 Original Final Budget Budget $ 544,399 $ 115,000 109,060 172,275 940,734 551,399 107,500 109,060 172,275 940,234 Variance with Final Budget Positive Actual (Negative) $ 522,512 114,084 105,289 152,909 894,794 101,689 100,689 101,548 201,000 201,000 229,661 52,880 48,880 53,034 2,700 2,700 2,098 358,269 353.269 386,341 1,299,003 1,293,503 1.281,135 442,618 26,500 48,400 35,800 553,318 448,718 26,500 55,400 35,800 566,418 450,592 24,964 54,840 15,737 546,133 272,714 277,014 277,151 2,500 2,500 2,685 14,750 14,750 15,047 400 400 1,237 290,364 294,664 296,120 843,682 861,082 842,253 $ 28,887 (6,584) 3,771 19,366 45,440 (859) (28,661) (4,154) 602 (33,072) 12,368 (1,874) 1,536 560 20,063 20,285 (137) (185) (297) (837) (1.456) 18,829 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December31, 2013 Conservation of natural resources: Forestry: Current: Personal services Supplies Other services and charges Contractual services Capital outlay Total forestry Environmental: Current: Personal services Supplies Other services and charges Contractual services Total environmental Solid waste abatement: Current: Personal services Supplies Other services and charges Contractual services Total solid waste abatement Total conservation of natural resources 2013 Original Budget Final Budget Variance with Final Budget Positive Actual (Negative) $ 33,753 $ 33,753 $ 33,775 $ (22) 1,250 1,250 897 353 400 400 355 45 5,500 5,500 305 5,195 5,000 5,000 5,886 (886) 45,903 45,903 41,218 4,685 50,322 1,400 8,550 1,300 61,572 50,322 1,400 8,550 1,300 61,572 50,906 333 4,322 130 55,691 29,399 29,399 29,889 - - 396 550 550 350 6,000 12,000 12,469 35,949 41,949 43,104 143,424 149,424 140,013 (584) 1,067 4,228 1,170 5,881 (490) (396) 200 (469) (1,155) 9,411 CITY OF LINO LAKES, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2013 Community development: Community development: Current: 2013 Original Final Budget Budget Personal services $ 191,352 Supplies 100 Other services and charges 8,500 Contractual services 1,400 Total community development 201,352 Economic development: Current: Personal services 91,388 Supplies 150 Other services and charges 53,750 Contractual services 400 Total economic development 145,688 Planning and zoning commission: Current: Personal services 81,275 78,275 Supplies 200 200 Other services and charges 16,900 11,900 Contractual services 24,000 19,000 Total planning and zoning commission 122,375 109,375 Total community development 469,415 430,915 $ 192,852 100 8,500 1,400 202,852 49,388 150 68,750 400 118,688 Other : Contingency Total expenditures 145,075 147,975 Variance with Final Budget Positive Actual (Negative) $ 194,283 54 1,803 267 196,407 49,313 64,666 250 114,229 70,713 7,343 20,795 98,851 409,487 8,326,385 8,326,385 7,988,475 Revenue over expenditures 349,053 435,053 708,055 Other financing sources (uses): Transfer in - 10,000 Transfer out (515,000) (565,000) (565,789) $ (1,431) 46 6,697 1,133 6,445 75 150 4,084 150 4,459 7,562 200 4,557 (1,795) 10,524 21,428 147,975 337.910 273.002 10,000 (789) Net increase (decrease) in fund balance $ (165,947) $ (129,947) 152,266 $ 282,213 Fund Balance - January 1 5,233,817 Fund balance - December 31 $ 5,386,083 CITY OF LINO LAKES, MINNESOTA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION December 31, 2012 CITY OF LINO LAKES, MINNESOTA SCHEDULE OF FUNDING PROGRESS FOR POSTEMPLOYMENT BENEFIT PLAN December 31, 2013 Actuarial UAAL as a Note 1 BUDGETS Actuarial Accrued Percentage Actuarial Value of Liability Unfunded Funded Covered of Covered The General Fund budget is legally adopted on a basis consistent with U.S. Generally Accepted Accounting Principles. Valuation Assets (AAL) AAL Ratio Payroll Payroll The legal level of budgetary control is at the department level. The following is a listing of expenditures that exceeded Date (a) (b) (b -a) (a/b) (c) ((b-a)/c) budget appropriations. 1/1/2008 $ - $ 329,191 $ 329,191 - $ 4,859,980 6.8% 1/1/2011 - 474,770 474,770 - 4,888,702 9.7% Final Budget Actual Actual in Excess of Budget General Fund: General government: Engineering/planning $ 106,400 $ 108,700 $ (2,300) Public works: Fleet 353,269 386,341 (33,072) Parks and recreation: Recreation: 294,664 296,120 (1,456) Conservation of natural resources: Solid waste abatement 41,949 43,104 (1,155) The excess expenditures were covered by more than anticipated revenues during 2013. Nonmaior Governmental Funds Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for particular purposes. The City maintained the following nonmajor Special Revenue Funds during the year. Economic Development Authority - established to account for the receipt and uses of funds for economic purposes. Cable TV Fund - established to account for activities relating to their Cable TV. Program Recreation - established to account for various self-supporting recreational programs. Debt Service Funds The Debt Service Funds account for the accumulation of resources for, and the payment of, interest, principal and related costs on general long-term debt. The City's Debt Service Funds account for four types of bonded indebtedness: General Debt Bonds - are repaid primarily from property taxes. Improvement Bonds - are repaid primarily from special assessments. Public Facility Lease Revenue Bonds - are repaid primarily from lease revenues received from the EDA leasing the buildings to the City of Lino Lakes and other tenants. Revenue Bonds - These bonds were issued to finance various improvements and will be repaid primarily from pledged revenues derived from the constructed assets. Capital Project Funds Capital Project Funds account for the acquisition or construction of major capital facilities other than those financed by Proprietary Funds and Trust Funds. The City maintained the following nonmajor Capital Project Funds during the year: Capital Improvement Projects - to account for the proceeds from Equipment Certificates. Capital Equipment Revolving Fund - to account for funds held to purchase capital equipment. Closed Bond Fund - to account for excess funds from matured bond issues. Street Reconstruction - to account for the financing of future reconstruction of City streets. Sealcoating - to account for money received from assessments and developer deposits for future street sealcoating projects. Surface Water Management - to account for the financing of surface water management and storm water improvements. Birch Street Hodgson Road Improvement Fund - to account for costs to improve the intersection at Birch Street and Hodgson Road. Tax Increment Funds - to account for development projects financed with tax increments. Nonmaior Governmental Funds (Continued) Capital Project Funds (Continued) Dedicated Parks - to account for the receipts and use of monies collected from dedicated parks fees. I35E Interschange Fund - to account for activity related to the 135E/CSAH 14 Interchange Reconstruction Project. Office Equipment Revolving Fund - to account for the receipt and use of funds for office equipment purchases. Legacy Woods Edge Improvement Fund - the Legacy Woods Edge Improvement fund accounts for construction costs related to infrastructure improvements in the Legacy Woods Edge development. Traffic Signal Fund - the Legacy traffic signal charge fund accounts for costs associated with construction of traffic signals in the City. Otter Lake Road Exension Fund - this fund accounts for activities relating to the construction performed in the extension of the Otter Lake Road. 21' Ave Extension Fund - this fund accounts for activities relating to the construction performed in the extension of 21' Avenue within the City. Permanent Funds Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the City's programs. The City maintained the following nonmajor Permanent Fund during the year. Foxborough Environment Fund - established to account for the use of funds received for environmental maintenance and improvements in the Foxborough area. CITY OF LINO LAKES, MINNESOTA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31. 2013 Special Revenue Debt Service Debt Service (Continued) Improvement Tax Utility CIP Economic Special Certificates Improvement Improvement Refunding Impmvement Improvement Abatement Revenue Refunding Development Cable TV Program Revenue of Bonds of Bonds of Bonds of Bonds of Bonds of Bonds Bonds Bonds Authority Fund Recreation Subtotal Indebtedness 2002A 2002B 2003A 2003B 2005B 2006C 2006D 2006E Assets Cash and investments $ - 5 10,618 5 119,605 $ 130,223 $ 151.341 $ 187.564 $ 69,932 129.030 $ 53.358 $ 462,017 $ 206.347 $ 95.579 $ 828.858 Taxes receivable: Delinquent - - - 5.001 - 579 3.368 5.399 - 10.301 Due from county - - - - 1,923 - - - 258 1.476 2.575 4.847 Special assessments receivable: Delinquent - - - - - - - - 6.183 - - 8.287 - Noncurrent - - - - - 39,136 - 87022 24,061 81,067 - 11(1,495 - Due from county - - - - - - - 354 - - Long-term noar receivable 225,000 - 225,000 - - - - - Prepaid items - - 1.710 1.710 Total assets 5 225.00 5 10,618 $ 121.315 S 356.933 5 158.265 I 226.70 5 69.932_ S 216.052 $ 84.439 $ 548.282 $ 214.321 $ 214.361 $ 844.06 Liabilities, Deferred Inflows of Resources and Fund Balance (Deficit) Liabilities: Accounts payable Salaries payable Unearned revenue Total liabilities Deferred inflows of resources: Unavailable resources 7.143 S 7.143 S 240 240 1,765 1,765 9.148 9.148 5.001 39.136 2.750 5 $ S - - $ 2.750 87,021 30.825 84,435 5.399 118.782 10,301 I -ti Fund balance (deficit): CNonspendable - - 1,7(0 1.710 - - - - - - . - - 1 Restricted 225.00 - - 225.00 153,264 187,564 69.932 126,281 53.6(4 463.847 208.922 95.579 833,705 (� Committed - 10.618 110.457 121.075 - - - - - - - Assigned - - - - .- Unassigned - - - - - Total fund balance (deficit) 225.1861 16.618 112.167 347.785 153.264 187.564 69.932 126.281 53,614 463.847 208.922 95,579 833,705 Total liabiliries. deferred inflows of resources and fund balance (deficit) $ 225.000 5 10.618 S 121,315 $ 356.933 S 158.265 $ 226.700 $ 69.932 $ 216,052 5 84.439 $ 548.282 S 214,321 $ 214.361 $ 844.006 CITY OF LINO LAKES. MINNESOTA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 3 L 2013 Asuts Cash and investments Due from other governmental units Inlerfund receivable Taxes receivable: Delinquent Due from c0unry Delinquent tax increment Special assessments receivable: Delinquent Non Dent Doe from county Total assets Liabilities. Deferred Inflows of Resources and Fund Balance (Deficit) Liabilities: lnterfund payable Accounts payable Total liabilities Debt Service (Continued) Capital Projects Capital Projects (Continued) Improvement and Tns TIF Utility Revenue Improvement Improvement Debt Capital Capital Closed Surface Birch Street Increment Bonds Refunding Bonds Bonds of Bonds of - Service Improvement Equipment Bond Street Water Hodgson Road Financing 2007A 2010 22012A 2013A Subtotal Projects Revolving Fund Fund Reconstruction Sealcoating Management Improvement 1-5 $ 149.897 9 8.249 S 63.763 S 2.416 S 2.408,351 S 601.128 5 105.370 - - 1,700.533 24.648 11.079 564.295 $ 620,865 5 529.065 S 518.189 S 15.677 $ 135.688 1,500 - 834.407 - - - - - 48 298 14.470 - _ 492 - - 7.618 81.513 - - 423.294 - - 818 119.764 - 128.214 754 - - - 4.477 S 149,897 $ 89.762 S 63.763 S 2.416 9 2.882.196 5 2.301.661 $ 105,370 $ 1,400,358 $ 760-629 $ 529,065 $ 659,998 $ 15,677 S 135,688 5 56,128 $ 56.128 S - $ 56,128 $ - 5 2,750 143.429 58.878 143.429 $ - S 8.379 8.379 - $ - 5 34,384 34.384 Deferred inflows of resources: Unavailable Resources 81.513 462,413 - - 1.607 119.764 - 135.832 Fund balance (deficit): Restricted 149.897 63.763 2.416 2.408.784 - - - - - - I^ Assigned - - - - - 2.158.232 105.370 1.398.751 620,865 520.686 489.782 15.677 135,688 C Unassigned (47.879) (47.879) - - - - - - - - 1 Total fund balance (4e00i3) 149.897 (47.879) 63.763 2.416 2.360.909 2,158.232 105.370 1.394.751 620.865 520.686 489.782 15.677 135.688 W h -C Taal liabilities, deferred inflows of resources and fund balance (deficit) S 149.897 5 89.762 5 63.763 $ 2.416 S 2.882,196 9 2,301.661 S 105.370 5 1,400.358 5 740.629 5 529,065 $ 659.998 $ 15.077 8 135.688 CITY OF LINO LAKES, MINNESOTA COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31.2013 Assets Pemunent Capital Pr jests (Continued) Capital Projects (Continued) Fund Tax Tax Office Increment Increment Equipment Legacy Woods Otter Lake 210 Ave Capital Foxborough Financing Financing Dedicated 135E Revolving Edge Traffic Road Ext Ext Projects Environment 1-10 1-11 Parks Interchange Fund Improvement Signal 1-13 _ 1-13 Subtotal Fund Total 2013 Cash and investments 5 187,194 5 - 5 16.602 $ 226.347 $ 269.578 S 527.265 $ 166,105 $ 293.961 $ - $ 4,777,329 S 121.475 $ 7.437.378 Due from other governmental units - - - - - - - - - 1.500 - 1.500 Interfund receivable - - - - - - - 2.534,940 - 2,534940 Taxes receivable: Delinquent - - - - - - - - - - 24.648 Due from county - - - - - - - - - 48 - 11.127 Delinquent tax increment - - - - - - - - - 298 - 298 Special assessments receivable: Delinquent - - - - - - - - 8,110 - 22.580 Noncurrent - - - - - - - - - 248.796 - 672.090 Due from county - - - - - - - - - 4.477 - 4,831 Long-term notes receivable - - - - - - - - - 225.000 Prepaid items - - - - 1.710 Total assets 5 187.194 $ $ 16.602 $ 226.347 $ 269.578 $ 527.265 $ 166,105 5 293,961 $ S 7.575.498 S 121.475 $ 10.936.102 Liabilities, Defend Inflows of Resources and Fund Balance (Deficit) Liabilities: Interfund payable S - $ 77(1,196 S S - S - 5 Accounts payable - - - 24.243 - Salaries payable - - - - - I -ti Contacts and retainage payable - - - - - CAdvances from other fund - - 460.881 - - 1 Unearned Revenue - - - Total liabilities - 770.196 460.881 24.243 633 79.638 00,271 - $ 8,083 S 778,279 $ S 834.407 2,630 21-372 235.070 - 244.963 240 63.503 - 143,141 - 143.141 - - 460.881 - 460.881 1.765 66333 29.455 1.617.371 - 3695,397 Def d inflows ofresoun:ee: Unavailable Resources - - - - - - - - - 257.203 - 719.616 Fund balance (deficit): Nonspendable Restricted Committed - - - - - - - - - - Assigned 187.194 - - 2(12.1(14 269,578 527.265 85.834 227,828 - 6.944.854 Unassigned - (770,196) (444.279) - - - - - (29.455) (1,243.930) Total fund balance (deficit) 107.194 (770,196) (444.279) 202.161 269,570 527.265 85.834 227,820 (29.455) 5.700.924 Total liabilities, deferred inflows of resources and fund balance (deficit) $ 187.194 S S 16.614 S 226.347 $ 269.578 $ 527.265 5 166.1(15 1(10.000 21,475 121,475 101,710 2,655.2_59 121.075 6,944,854 (1,291.009) 8,531,089 $ 293.961 $ S 7,575.490 $ 121,475 $ 10,936.1112 CITY OF LINO LAKES, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2013 Special Revenue Debt Service Economic Special Certificates Improvement Improvement Development Cable TV Program Revenue of Bonds of Bonds of Authority Fund Recreation Subtotal Indebtedness 2002A 2002B Revenue: General property taxes 5 - - S - S - 5 162.540 5 - $ - Special assessments - - - 454 9,559 Charges for services - 10.659 165,975 176.634 - Investment earnings - 93 1.480 1.573 1.933 1.825 983 Net increase (decrease) in fair value of investments - (134) (2.053) (2.187) (2.659) 12.535) (1.278) Taal revenue - 10.618 165.402 176.020 162.268 8.849 (295) Expenditures: Current: General government 789 - - 789 - - - Parks. recreation and forestry - - 160.544 160.544 Debt service: Principal - - - - 149.000 30,000 265,000 Interest and fiscal charges - - - 5.485 4.465 7,354 Bond issuance costs - - - - - Total expenditures 789 169.344 161.333 154.485 34.465 272.354 Revenue over (under)expenditures (789) 111,618 4,858 14.687 7.783 (25.6161 (272.649) Other financing sources (uses): Transfer in 789 - - 789 - - Transfer out - - (10.000) ((0.000) - - Payment on refunding bond - - - - Totalotherfinancing sources(uses) 789 - ((0,000) (9.211) - - - ..< Net increase (decrease) in fund balance 10.618 (5.142) 5.476 7,783 (25.616) (272.649) 1 Fundbalance(deficit)- F Beginning of year 225.001 117.309 342.309 145.481 213.180 342.581 Fund balance (deficit) - December 31 225.000 S 10,618 $ 112,167 $ 347.785 $ 15.3.264 5 187.564 S 69,932 Debt Service (Continued) Improvement Tax Utility CIP Refunding Improvement Impmvement Abatement Revenue Refunding Bonds of Bonds of Bonds of Bonds Bonds Bonds 2003A 2003B 20058 2006C 2006D 2006E S - 5 23.705 5 134,176 S 244.269 S - S 456.904 28,356 5,918 52,126 429 15.648 832 1.614 367 786 867 314 5.775 (2,075) (496) (874) (1,108) (409) (7.825) 27.895 29.494 186.214 244,457 15,553 455,686 50.000 30.000 425.000 125,000 60.000 355.000 9.744 2.778 53.478 99,701 15,103 84,931 2.750 - - - - - 62,494 32.778 478,478 224.701 75.103 439,931 (34,599) (3.284) (292,264) 19.756 (59,550) 15.755 347.600 - 71,724 (435,000) - - - (435.000) 347.600 71.724 (469.599) (3,2841 55.336 19.756 12.174 15.755 595.880 56.898 408.511 189.166 83.405 817.950 S 126281 5 53,614 5 463,847 $ 208,922 S 95.579 S 833,705 CITY OF LINO LAKES, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2013 Debt Service (Continued) Capital Projects Capital Projects (Continued) Improvement and TIF Utility Revenue Improvement Improvement Debt Capital Capital Closed Surface Birch Street Tax Increment Bonds Refunding Bonds Bonds of Bonds of Service Improvement Equipment Bond Street Water Hodgson Road Financing 20074 2010 20124 2013A Subtotal Projects Revolving Fund Fund Reconstruction Sealcoating Management Improvement 1-5 Revenue: General property taxes S 5 S - 5 1.021,594 5 5 - S - 8 - - S - S - S Tax increments - - - - - - - - - - 37.254 Special assessments - 45.529 - - 158.851 - - 1,172 15.116 - 120,010 Chargesforservices - - - - - - - - - - Investment =slings - - - 760 15.224 6.642 1.325 13.588 6.031 8.205 9.969 155 1.087 Net increase (decrease) in fair value of investments - - (6) (17) (19,282) (9.283) (1,940) ((9,541) (8,4)7) (11,689) (11,689) (2(6) (1,509) Refunds7238 - - - - - - - - Miscellaneous - - - 186,751 674 - Total revenue - 45,529 (6) 743 1,176.387 184.110 59 (4,781) 12,730 17,754 118,290 (611 36,832 Expenditures: Current General government - - - - 7,044 - Public works - - - - 216,146 - 26,473 - - - - Community development - - - _ _ - 38 457,715 40,987 - - Capital outlay: - - - - 600 Public sufety - - 72 192.710 Debt service: - - Principal 285,000 95,000 - 1.869.000 - - Interest and fiscal charges 134,757 22,225 . - 440,021 - - - - - - Bond issuance costs - - 14,387 - 17,137 Total expenditures 419,757 117,225 14.387 2,326,150 223.262 192,7)0 - 26,473 38 457,715 40,987 - 600 Revenue over (under) expenditures (419,757) (71.696) (14.393) 743 (1,149,771) (39,152) (192.6511 (31254) 12,692 (443.961) 77.303 (61) 36.232 Other financing sources (uses): C Transfer in 416.026 - 78.438 913,788 - - Transfer out - - - - - - - - - 490,000 - - - NSale of property - - - - - - 16.727 - - - - Issuanceofdebt - - - 1.673 1.673 - 193.000 - - - - Payment on refunding bond - - - (435,000) - - - - - Total other financing - - - - sources(uses) 416,026 - 78.438 1.673 480,461 209,727 Net increase (decrease) in fund balance (3.731) (71.696) 64,045 2_416 (669,310) (39,152) 17,076 - 490,000 Fund balance (deficit) - Beginning of year 153.628 23.817 (2821 - 3.030,215 2.197.384 88.294 Fwd balance (deficit) - December 31 S 149,897 S (47,879) S 63.763 S 2.416 S 2.360.905 S 2.158.232 S 105,370 (31.254) 12.692 46,039 77.303 (61) 36.232 1.430,005 608,173 474.647 412,479 15,738 99,456 S 1398.751 S 620.865 S 520,686 6 489.782 5 15.677 S 135.688 CITY OF LINO LAKES, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2013 Capital Projects (Continued) Office Tax Increment Tax Increment Equipment Legacy Woods Financing Financing Dedicated 135E Revolving Edge 1-10 1-11 Parks Interchange Fund Improvement Revenue: General property taxes S - $ - $ - $ - $ - S Tax increments 142.736 85,829 - - - Special assessments - - - - - Charges for services - - - - - - Investment eamings 2,461 - 32 2,437 2,658 5,302 Net increase (decrease) in fair value of investments (3,527) - (43) (3.430) (3.716) (7.409) Refunds - - - Miscellaneous 16.204 Total revenue 141.670 85,829 16,193 (993) 11.058) (2.107) Expenditures: Current: General government: - - - - - Public works - - 71,428 - 25,044 Parks, recreation and forestry - - - - Community development 1,014 7,432 - - Capital outlay: General government - - - - 6,053 - Public safety - - - Debt service: I-� Principal - - - CInterest and fiscal charges - - 14,880 - - I Bond issuance costs • Total expenditures 1,014 7,432 14,880 71,428 6.053 25.044 (-k) Revenue over (under) expenditures 140,656 70,397 1,3(3 (72,421) (7.111) (27,(5)) Other financing sources (uses): Transfer in - - 50,000 - 25.000 Transfer out (142,736) (85:000) - - - Sale of property Issuance of deb - - Premium on bonds issued - - - - - Payment on refunding bond - Total other financing sources(uses) (142,736) (85,000) 50,000 25.000 Net increase (decrease) in fund balance (2,080) (6,603) 51,313 (72,421) 17,889 (27,151) Capital Projects (Continued) Permanent Fund Otter Lake 21st Ave Capital Foxborough Traffic Road Ext Extension Projects Environment Total Signal 1-13 1-13 Subtotal Fund 2013 $ - $ - $ - $ - S $ 1,021.594 265,819 - 265,819 136,298 - 295.149 - - - - - 176,634 3,360 1,784 - 65,036 1,175 83,008 (4,798) (2,340) - (89,547) (1,636) (112,652) 17,238 - 17,238 203,629 11,400 215,029 ((,438) (556) - 598,473 10,939 1,961,819 375.975 391,50) 33,517 29,455 1,608,289 9.046 6,053 192,782 14,880 34,306 1.608,289 160,544 9,046 6,053 192,782 1,869.000 454,901 17,137 375,975 391,501 29,455 1,864,567 - 4,352,058 (377,413) (392,057) (29,455) (1,266,094) 10,939 (2,390,239) 565,000 - 1,479,577 (227,736) (237,736) (6,727 - 16.727 613,327 806,327 808,000 6,558 - 6,558 - 6,558 (435,000) 619,885 1,166.876 - 1,638,126 Fund balance(deficit)- (377,413) 227,828 (29,455) (99,218) 10,939 (752.113) Beginning of year 189,274 (763.593) (495.592) 274,525 251689 554.416 Fund balance (deficit)- December31 $ 187,194 $ (770.196) $ (444.279) $ 202,104 $ 269.578 $ 527.265 463.247 5,800,142 110,536 9,283,202 5 85,834 $ 227,828 $ (29.455) $ 5,700,924 $ 121.475 $ 8,531.089 CITY OF LINO LAKES, MINNESOTA SPECIAL REVENUE FUND - PROGRAM RECREATION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended December 31, 2013 Revenue: Charges for services: Recreation fees Investment eamings Change in market value Total revenue Expenditures: Current: Personal services Supplies Other services and charges Contractual services Capital outlay Total expenditures Other financing sources (uses): Transers out 2013 Original Budget Final Budget Actual $ 198,125 $ 198,125 $ 198,125 71,180 51,675 5,000 43,150 8,000 179,005 198,125 71,180 51,675 5,000 43,150 8,000 179,005 Net increase (decrease) in fund balance $ 19,120 $ 19,120 Fund balance - January 1 165,975 1,480 (2,053) 165,402 Variance with Final Budget Positive (Negative) $ (32,150) 1,480 (2,053) (30,670) 52,218 18,962 73,185 (21,510) 348 4,652 34,793 8,357 8,000 160,544 18,461 (10,000) 10,000 (5,142) $ (12,209) 117,309 Fund balance - December 31 $ 112,167 Fiduciary Funds Agency Fund Agency Funds are used to account for assets held by the City as an agent for individuals, private organizations, or other governments. The City maintained the following Agency fund during the year: Contractor's Deposits - to account for pass-through costs relating to prospective developers. CITY OF LINO LAKES, MINNESOTA STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - FIDUCIARY FUNDS - AGENCY FUNDS December 31, 2013 Assets Cash and investments Liabilities Deposits payable Balance Balance January 1, December 31, 2013 Additions Deductions 2013 $ 510,181 $ 261,093 $ 101,796 $ 669,478 $ 510,181 $ 261,093 $ 101,796 $ 669,478 IV -45 PROPOSAL SALE DATE: April 27, 2015 City of Lino Lakes, Minnesota $3,645,000* General Obligation Bonds, Series 2015A For the Bonds of this Issue which shall mature and bear interest at the respective annual rates, as follow, we offer a price of $ (which may not be less than $3,608,550) plus accrued interest, if any, to the date of delivery. Interest Year Rate (%) Yield (%) 2017 2018 % 2019 2020 2021 2022 2023 2024 Years of Term Maturities Dollar Price % Interest Dollar Year Rate (%) Yield (%) Price 2025 % % % 2026 % % % 2027 % % % 2028 % % % 2029 % % % 2030 % % % 2031 % % % Designation of Term Maturities In making this offer on the sale date of April 27, 2015 we accept all of the terms and conditions of the Terms of Proposal published in the Preliminary Official Statement dated April 6, 2015 including the City's right to modify the principal amount of the Bonds. (See "Terms of Proposal" herein.) In the event of failure to deliver these Bonds in accordance with said Terms of Proposal, we reserve the right to withdraw our offer, whereupon the deposit accompanying it will be immediately returned. All blank spaces of this offer are intentional and are not to be construed as an omission. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: $ TRUE INTEREST RATE: The Bidder 0 will not 0 will purchase municipal bond insurance from Account Members Account Manager By: Phone: Attest: The foregoing proposal has been accepted by the City. Date: Wire Transfer Preliminary; subject to change. Springsted Good Faith Check Phone: 651-223-3000 Fax: 651-223-3046 Email: bond services@springsted.com Website: www.springsted.com Public Sector Advisors AGENDA ITEM 3A STAFF ORIGINATOR: Lisa Hogstad-Osterhues, Deputy Clerk MEETING DATE: April 26, 2015 TOPIC Consider Resolution 15-42, Approving On -Sale Wine and 3.2 Beer License with Sunday Sales for Elwoods VOTE REQUIRED: INTRODUCTION 3/5 Elwoods is a new restaurant that will be opening at 7997 Lake Drive, Suite 3. The restaurant owner is Clayton Gratz, who has applied for a license to serve wine and strong beer. BACKGROUND The application submitted to the City is complete, the related fees have been paid and insurance information has been provided to the City as required. In addition, the Lino Lakes Police Department has conducted the required background investigation on the applicants. In accordance with the Lino Lakes Code of Ordinances, Section 701 relating to Liquor Licensing, this application requires approval by the City Council. The code also requires that opportunity shall be given to any person to be heard for or against the granting of the license. The council may then, in its discretion, grant or refuse the application. If local approval is granted, Mr. Clayton Gratz's application for a wine license will be forwarded to the Minnesota Alcohol & Gambling Enforcement Division for review. The State of Minnesota is the licensing authority for wine and liquor licenses; the city can grant beer license. The applicant is aware that approval is subject to all the provisions and conditions of the laws of the city, state and federal government. RECOMMENDATION Staff recommends the approval of the On -Sale Wine and 3.2 Beer License with Sunday Sales for Elwoods. ATTACHMENTS Resolution No. 15-42 CITY OF LINO LAKES RESOLUTION NO. 15-42 APPROVING ISSUANCE OF NEW ON -SALE WINE AND BEER LICENSE FOR ELWOODS, 7997 LAKE DRIVE, SUITE 3 WHEREAS, the city has received an application for a wine and 3.2 beer license from Clayton Gratz, owner of Elwoods at 7997 Lake Drive, Suite 3; and WHEREAS, city staff has reviewed said application and determined that the request meets the requirements of the City Code and Minnesota State Statutes for the type of licenses requested; and WHEREAS, the Police Department of the City of Lino Lakes has conducted an investigation of the applicants, and; WHEREAS, the applicant has provided proof of insurance as required and paid the necessary fees; NOW, THEREFORE BE IT RESOLVED, that the City Council of the City of Lino Lakes hereby approves a new on -sale wine and beer license for Elwoods subject to all the fees, provisions and conditions of the laws of the city, state and federal government and the applicant will comply with all said laws. Adopted by the Lino Lakes City Council this 27th day of April 2015. The motion for the adoption of the foregoing resolution was introduced by Council Member and was duly seconded by Council Member and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: Jeff Reinert, Mayor ATTEST: Julianne Bartell, City Clerk CITY COUNCIL AGENDA ITEM 6A STAFF ORIGINATOR: Michael Grochala MEETING DATE: April 27, 2015 TOPIC: Resolution No. 15-45, Granting Wetland and Buffer Easement to RCWD and Approving Wetland Buffer Maintenance Agreement, Lino Lakes Fire Station VOTE REQUIRED: 3/5 INTRODUCTION Staff is requesting City Council approval to grant a wetland and buffer easement to the Rice Creek Watershed District along with authorization to enter into a wetland buffer maintenance agreement with the District. BACKGROUND The Lino Lakes Fire Station property includes wetlands located within a Wetland Management Corridor (WMC) as established in the Rice Creek Watershed District (RCWD) rules. The proposed project avoids wetland impacts with the exception of access points off of Centerville Road and Birch Street. The City has two permit applications currently being reviewed by the RCWD. The Final Site Drainage Permit was approved by the RCWD on Wednesday, April 22 with conditions. Staff is anticipating that the second permit, which is for the turn lane improvements and wetland alteration, will be considered by the RCWD board of Managers in May. The Wetland Alteration permit is necessary to connect the internal roadway to Birch Street and Centerville Road. Emergency vehicle access directly to Birch Street is provided by a third access. One of the conditions, in accordance with district rules, requires the dedication of an easement over the wetlands and surrounding buffer as well as execution of a buffer maintenance agreement. The easement preserves the wetland area and provides the RCWD with the right to enter the easement area to monitor, modify and maintain hydrological and vegetative conditions. The City has included a provision to allow roadway access across the western most wetland upon approval of the wetland alteration permit. The RCWD is reviewing this language and it is subject to modification. Any proposed changes will be addressed at the City Council meeting. The associated buffer maintenance agreement addresses ongoing maintenance requirements within the buffer area. Essentially, as is common practice, the buffer area will be maintained by the City in a natural state. RECOMMENDATION Staff recommends adoption of Resolution No. 15-45. ATTACHMENTS 1. Resolution No. 15-45 2. Draft Wetland and Buffer Easement 3. Draft Wetland Buffer Maintenance Agreement CITY OF LINO LAKES RESOLUTION NO. 15-45 RESOLUTION GRANTING WETLAND AND BUFFER EASEMENT TO RCWD AND APPROVING WETLAND BUFFER MAINTENANCE AGREEMENT LINO LAKES FIRE STATION WHEREAS, the Lino Lakes Fire Station project includes the construction of stormwater facilities and wetland alterations adjacent to a Wetland Management Corridor; and WHEREAS, such improvements are subject to the requirements of the Rice Creek Watershed District; and WHEREAS, the RCWD permit no. 15-021 requires the dedication of a wetland and buffer easement and execution of a buffer maintenance agreement. NOW, THEREFORE BE IT RESOLVED by The City Council of The City of Lino Lakes hereby grants the Wetland and Buffer easement to the Rice Creek Watershed District and approves the execution of a Wetland Buffer Maintenance Agreement between the Rice Creek Watershed District and City of Lino Lakes. Adopted by the Council of the City of Lino Lakes this 27111 day of April, 2015. The motion for the adoption of the foregoing resolution was introduced by Council Member and was duly seconded by Council Member and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: Jeff Reinert, Mayor ATTEST: Julianne Bartell, City Clerk (Above Space is Reserved for Recording Information) EASEMENT 1. For the sum of one dollar and other valuable consideration, and as a condition to the issuance of Rice Creek Watershed District ("District") permit number 1 5-021 issued pursuant to the duly adopted rules of the District, the City of Lino Lakes, a Minnesota municipal corporation, ("Grantor") hereby conveys to the District, a political subdivision of the State of Minnesota with powers and purposes set forth at Minnesota Statutes Chapters 1038 and 103D, and to its successors and assigns, an easement on and under the parcel lying in Anoka County, Minnesota, and legally described as follows: That part of the Northeast Quarter of the Southwest Quarter of Section 26, Township 31, Range 22, Anoka County, Minnesota lying northwesterly of a 50 foot strip of land the centerline of which is described as follows: Beginning at a point on the east line of said Section 26 distant 1 206 feet south of the northeast corner therof; thence southwesterly to a point on the west line of said Section 26 distant 84 feet north of the southwest corner thereof and there terminating. EXCEPT the west 760 feet of said Northeast Quarter of the Southwest Quarter lying northwesterly of the above described 50 foot strip and lying south of the north 569 feet thereof. Also EXCEPT the west 60 feet thereof. ("Burdened Property"). 2. Attachment A, appended hereto and incorporated herein, delineates the area subject to this easement ("Easement Area"). This easement grants the District and its authorized representatives the right in perpetuity to enter the Easement Area to monitor, modify and maintain hydrological and vegetative conditions, including the right to• a. Alter land contours and realign channels within the Easement Area. b. Direct and redirect surface water flows; flood or drain lands, wholly or partly; and otherwise preserve surface flows through the Easement Area. This does not include the right to increase flood elevation, or drain or redirect surface flows on or across any lands outside of the Easement Area. c. Install, operate, maintain and remove structures to manage water flow and water elevation. d. Plant, remove and otherwise manage vegetation through means including but not limited to mowing, weeding, use of approved herbicides and controlled burns. e. Install, maintain and remove sign or markers identifying Easement Area boundaries or describing terms applicable to the Easement Area. f. Install, operate, maintain and remove equipment to sample or monitor soils, surface water or groundwater, including appurtenances such as power supply for the equipment. g. Ingress and egress, equipment staging and use, material stockpiling and other actions as reasonably necessary or convenient for the work described above. 3. Grantor also conveys to the District and its authorized representatives the right to cross and recross the Burdened Property to reach the Easement Area. The route will be determined through mutual consultation, but will provide a reasonable means of access. If a route cannot be mutually determined after reasonable effort, the District may cross and recross in a manner that minimizes disruption and damage to the Burdened Property. The District will repair or compensate Grantor for any damage to the Burdened Property. 4. Grantor reserves all rights and privileges associated with ownership of the Burdened Property except as specifically provided in this easement. Grantor will not place any structure or improvement within, on or under the Easement Area; remove, destroy, cut, mow or otherwise alter vegetation within the Easement Area, or apply fertilizers, herbicides or pesticides on or to the Easement Area; fill, excavate or otherwise alter land contours within the Easement Area; or place waste material, including waste vegetation, permanently or temporarily within the Easement Area. Notwithstanding, Grantor may: a. With prior written approval of District staff, construct or install a structure or improvement for passive use of or recreation within the Easement Area; b. Build, maintain and replace typical agricultural fences on and over the Easement Area if surface flows are not restricted; c. Include the Easement Area or a part thereof within a subdivision as permitted by local ordinance for lot size or density purposes, provided that no alteration or development is permitted within the Easement Area except as elsewhere herein allowed, and no right conveyed to the District by this easement is diminished; d. With prior written approval of District staff, install utility system components including, without limitation, water, sewer, power, fuel, and communications lines and related facilities; e. With prior written approval of District staff, manage vegetation to prevent or control infestation, noxious weeds, disease, fire, personal injury or property damage, or to improve the hydrological function and value of the water resources within or associated with the Easement Area. 5. No one other than Grantor holds any right, title or interest in the Easement Area or any part thereof. 6. This easement extends only to the District, its successors and assigns, and their authorized representatives, and grants no right of access to the Burdened Property to any other party or member of the public. 7. This easement is unlimited in duration without being re-recorded, and will run with and burden the Burdened Property and bind Grantor, Grantor's successors and assigns, and all those who use the Burdened Property by right of the Grantor. This easement is appurtenant to the surface waters and related water resources lying on and proximate to the Burdened Property and the protection of which lies within the mandate and authority of the District pursuant to Minnesota state statutes. 8. The grant of this Easement is a condition of District Permit No. 15-021 issued to Grantor. The District and Grantor acknowledge that a second permit application from Grantor involving road access across the Easement Area is pending with the District (Permit 1 5-038). If Permit 1 5-038 is approved, this Easement may be amended or replaced. IN WITNESS WHEREOF, this day of , 20____. CITY OF LINO LAKES By Mayor By City Clerk State of Minnesota ) ) ss. County of Anoka ) This instrument was acknowledged before me on , 201 5, by Jeff Reinert as Mayor, and Julianne Bartell as City Clerk, of the City of Lino Lakes, Minnesota. Notary Public This Document was Drafted By: City of Lino Lakes 600 Town Center Parkway Lino Lakes, MN 55014 • BIRCH STREET (C.S.A.H. NO. 34) BIRCH STREET (C.S.A.H. NO. 34) — UHIIN FUTURE CSAR 34 RIGHT OF WAY — BIRCH STREET (C.S.A.H, 11,914t PROPOSED FIRE STATION #2 FFE = 914.30' —tau■■--- IMMINEMEM --:::--C I..■■=== N ♦ t 4 64 44 sk4 .4 ' .s I Iw ****** 44. .......ei::: 4 1:411: • III1 # 4. ••4 4 ,4 7, 44: 7° ' PROPOSED FUTURE ACCESS ROAD PER RCWD PERMIT 15-038 APPUCATION. m — DENOTES EASEMENT 0 90 Prepared by: - 701 Xenia Avenue South, Suite 300 Minneapolis, MN 55416 www.wsbeng.com WSB 765-541-4800 .Fax 755.541-1700 INFRASTRUCTURE 1 ENGINEERING 1 PLANNING CONSTRUCTION FIRE STATION SITE DEVELOPMENT CSAH 21 AND CSAH 34 TURN LANE IMPROVEMENTS ATTACHMENT A RCWD 15-021 WETLAND EASEMENT SHEET 1_ OF 4 SHEETS ■■■■■■i 'a 'MEMMM. IMMO MEW IMENEEN ■■■■■■■■■■■ MEWL 1.......... 21iiiiiii a....1■■■■■■■■■ IIIIIMMI 1■■■■■■■■■ , nes— ' N. , , , , 1 _ T. , _ 404 4, .4. - 4 4., ..„ FIRE STATION SITE DEVELOPMENT CSAH 21 AND CSAH 34 TURN LANE IMPROVEMENTS ATTACHMENT A RCWD 15-021 WETLAND EASEMENT SHEET 2 OF 4 SHEETS -1 m m BIRCH STREET (C.S.A.H. NO. 34) 01-11,A1 07w FUTURE CSAH 34 RIGHT OF WAY \ •• •♦♦ ♦♦ ► ♦ 1e'- I ♦� • II: 4fr ♦ ♦♦ Vt ♦ * ►4 t .♦ A /1 0 90 — DENOTES EASEMENT FIRE STATION SITE DEVELOPMENT CSAH 21 AND CSAH 34 TURN LANE IMPROVEMENTS ATTACHMENT A RCWD 15-021 WETLAND EASEMENT SHEET 3 OF 4 SHEETS BIRCH STREET (C.S.A.H. NO. 34) FUTURE CSAH 34 RIGHT OF WAY PROPOSED FUTURE ACCESS ROAD PER RCWD PERMIT 15-038 APPLICATION. FIRE STATION SITE DEVELOPMENT CSAH 21 AND CSAH 34 TURN LANE IMPROVEMENTS ATTACHMENT A RCWD 15-021 WETLAND EASEMENT SHEET 4 OF 4 SHEETS MAINTENANCE AGREEMENT Wetland Buffer Agreement Between the Rice Creek Watershed District and CITY OF LINO LAKES This Maintenance Agreement ("Agreement") is made by and between the Rice Creek Watershed District, a watershed district with purposes and powers set forth at Minnesota Statutes Chapters 1038 and 103D and a drainage authority pursuant to chapter 103E of the laws of the State of Minnesota, (RCWD), and the CITY OF LINO LAKES ("Permittee"). Recitals and Statement of Purpose WHEREAS pursuant to Minnesota Statutes § 1 03D.345, the RCWD has adopted and implements Rule F, Wetland Alteration; WHEREAS Rule F imposes certain requirements, which the Permittee will meet in this case by constructing and wetland buffers as identified on the site plan incorporated into this Agreement as Exhibit A; WHEREAS in accordance with Rule F and as a condition of Permit 1 5-021 , the Permittee's obligation to maintain these wetland buffer must be memorialized by a recorded maintenance declaration or, alternatively, a maintenance agreement establishing the Permittee's perpetual maintenance obligation; WHEREAS the Permittee and the RCWD execute this Agreement to fulfill the condition of Permit 15-021, and concur that it is binding and rests on mutual valuable consideration; THEREFORE: 1. The Permittee, at its cost, will inspect and maintain the wetland buffers delineated and labeled on Exhibit A. The Permittee will: a. Obtain certified as -built contours for all wetland buffer boundaries within the RCWD boundary. 1 b. The Permittee will vegetate the buffer with native vegetation and shall remain in a naturalized state except for periodic cutting and spraying to promote the health of the buffer, to address disease or invasive species, and for public safety. 2. If the Permittee conveys into private ownership a fee interest in all or any portion of the public property that is subject to this Agreement, it must require as a condition of sale, and enforce: (a) that the purchaser record a declaration on the property incorporating the wetland buffer maintenance requirements of this Agreement; and (b) that recordation occur either before any encumbrance is recorded on the property or, if after, only as accompanied by a subordination and consent executed by the encumbrance holder ensuring that the declaration will run with the land in perpetuity. If the Permittee conveys into public ownership a fee interest in all or any portion of the property that is subject to this Agreement, it must require as a condition of the purchase and sale agreement that the purchaser accept an assignment of all obligations vested under this Agreement. 3. This Agreement is in force for five years from the date on which it is fully executed and will renew automatically for five-year terms unless terminated by the parties. This Agreement may be amended only in a writing signed by the parties. 4. The recitals are incorporated as a part of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement. RICE CREEK WATERSHED DISTRICT By Date: RCWD Administrator CITY OF LINO LAKES By: Date: Its 2 Exhibit A - WETLAND BUFFER AREAS & VEGETATION MANAGEMENT PLAN 3 o 0 r, O + + + + + + — DENOTES 50 FT. WETLAND BUFFER AREA (49,838 SQ. FT.) — DENOTES 50 FT. AVERAGE WETLAND BUFFER AREA (49,894 SQ. FT.) — DENOTES WETLAND MITIGATION AREA (13,205 SQ. FT.) • — DENOTES WETLAND CONSERVATION BUFFER MARKER (200' MAX. SPACING) ALL BUFFER AREAS TO BE SEEDED WITH 35-241 SEED MIX I-•-1 WETTILAND B<JFF=R IiVO� MOWING ALLIOWED NDNDUErr CONSISTS Or A POST AND n WEMND BUFFER SIGH WETLAND BUFFER SIGNS BOUNTY. FLUSH wnw THE TTP OF THE POST FASTENED W I NON—REMOVABLE SCREWS OR ALUMINUM SHALL BE �Bz-H3e DR -,s .ALLOY. GAUGE SHALL BE 0.080 POST MATERIALS AT P. SQUARE TREATED WOOD OR OTHER CITY APPROVE° MATERIAL COLOR COLOR SHALL BE GREEN LEITERS ON POST INSIALLATON FENNGHANANN SPACING SOO MEET BETWEEN SIGNS ( IF NO BUFFERED REQUIR°IRE MONUMENT SHALL BE AT THE EDGE OF THE PLACE ADDITIONAL POSTS AS NECESSARY TO FOLLOVi RIMER CONTOUR LINE WETLAND BUFFER SIGNS LirT Kgs GEN -22 OSED FIRE STATION #2 FFE/ 914.30' BIRCH ST ET (C.S.A.H. NO. 34) — adimw_ - -� ---� - _ — 1 — I T 9i2 -- - 9'11 1 -'r 2 2 2 RCWD APPROVED WETLAND DELINEATION 977 77 \I 910-- 0 FT 20 40 LINO LAKES, MINNESOTA r Za En 3 C_ •i � so 0 2 LCI Q � BUFFER EXHIBIT TURN LANE AND BYPASS LANE SHEET D OF 3 SHEETS • r • MINIM Nlita • MORESAMI I - _ - -- • — - r -' • •w - F -_w t �' • •R.__� • �- • — - _— Milrff T.•l v VIIRWRIMINLOP i - �- —� D -•-� ® � w s74� 4111 ►- iv • w• 1 w • -wimpyr fi • _IM' • A • r O • • 0 0° r � MP a'0 r r 0,0n 0 0 E. WETLAND BI)FFER INOI MOWING ALUOWED • SPECIFICATIONS: MONUMENT CONSISTS OFA FUST ANDA WEITAND BUFFER SIGN WETWID BUFFER SIGNS MOUNTED FLUSH WITH E TOP OF Tv POST NON—REALMSHALL CR RIIETS�LBZE: I F EHER W9TN z_ , _TG . GOV SHALL BE' 0.080 POSIT MAMA. SQUARE (FATED WOOD OR OTHER CRY APPROVED MATERIAL COLOR COLOR SHALL BE ORE. LETTERS ON WHRE BACKGROUND. POST INSTALIABON MOUNTED INCHES IFIGHT OF FOUR FEET ABOVE N THE GROUND INSTALLED AT GWHLOT UNE WHINEITGROSSES A WEMND BUFFER WITH A ROOM. SPACIMO OF 300 FEET BETWEEN SONS (IF NO BUFFER IS REQUIRED THE MONUMENT SHALL BE AT THE EDGE OF THE vorruNo). PUCE ADDITONAL POSTS AS SARY TO FOLLOW HUFFER CONTOUR UNE EE WETLAND BUFFER SIGNS GEN -22 RCWD APPROVED WETLAND DELINEATION 0 n 0 C • • w • Mk •Vir • 0 0 ID 00n0o .4" • • n � n J_r • • TJ no�\n DENOTES 50 FT. WETLAND BUFFER AREA (62,293 SQ. FT.) PROPERTY LINE - DENOTES 50 FT. AVERAGE WETLAND BUFFER AREA (62,910 SQ. FT.) ■ - DENOTES WETLAND CONSERVATION BUFFER MARKER (200' MAX. SPACING) ALL BUFFER AREAS TO BE SEEDED WITH 35-241 SEED MIX RCWD APPROVED WETLAND DELINEATION XVM 1HOa tic HVS0 36n11-1� 0 FT 30 60 BUFFER EXHIBIT TURN LANE AND BYPASS LANE • Z W Q W U tn� >- • I— < Q N Z Z < y W Z W Q W • Z ce S 1- Uo �-' Z ma LINO LAKES, MINNESOTA SHEET 2 OF 3 SHEETS — —13/113M 13M 13D -- 13M -13M- ___ -Y3M ��L r CENTERVILLE ROAD (C.S.A.H NO 21) 13M WEi � i , 3M 13A\ RCWD APPROVED WETLAND DELINEATION CSAH 21 —RTGHT OF WAY9®9 RCWD APPROVED WETLAND DELINEATION CSAH 21 RIGHT OF WAY 00 r 0 O0 OD 0 Or 1 0 r -DC' 2 0 di 1 NI-] l�Jd,d02�d - DENOTES 50 FT. WETLAND BUFFER AREA (22,716 SQ. FT.) - DENOTES 50 FT. AVERAGE WETLAND BUFFER AREA (26,833 SQ. FT.) ■ - DENOTES WETLAND CONSERVATION BUFFER MARKER (200' MAX. SPACING) ALL BUFFER AREAS TO BE SEEDED WITH 35-241 SEED MIX WETLAND BL FFER NOI MOWING ALJOWED hooniumeir CONSISTS OF . Pon ANO . WETLAND BUFFER WION WETLAND BUFFER SONS MOUNTED FLUSH MTH THE ,OP OF THE POW, FASTENED wax NON -REMOVABLE SCREWS OR SHALL BE 000SHM.1 BE z 1S O EOE, -.S NCO.. GAUGE POST MATERIALS MEC. WOOD OR OTHER CRY APPROVED LUTER. COLOR COLOR SHALL BE OREM LVIERS ON WHITE BACKVIOUND. POST INSTALLATION MOUNTED TO A HEIGHT OF POUR FEET ABOVE GRADE SET LEAST 42 INCHES IN THE GROUND INSTALLED AT EACH LOT AT NE WHERE IT CROSSES A WETLAND BUFFER WITH A MAXIMUM NEQUWED F NoEENEM WENN NEMS IF NOSE of NNE WERANo1. PLACE ADDITIONAL POSTS AS NECESSARY TO FOLLOW BUFTFA CONTOUR LINE ACI WETLAND SUFFER SIGNS GEN -22 0 13 0 TI � mm \mv m\ M QD �m W N . C > 0 Z N 2 0 FT 20 40 BUFFER EXHIBIT TURN LANE AND BYPASS LANE W Q W U >--D < N z z0 < 0 U) W Z W J W • Z I— et • I- 11 - az ma LINO LAKES, MINNESOTA X ty 1 SHEET 3_ OF 3 SHEETS Wetland Buffer Vegetation Management Plan The City of Lino Lakes will establish a minimum 25 foot buffer around wetlands within the designated Wetland Management Corridor (WMC) and associated with the Fire Station and road. The development and maintenance of the buffer areas is described below. Ground Preparation & Seeding Grading within the proposed buffer area will be completed per the attached buffer exhibits. Once the area is graded to the proposed elevations, it will broadcast seeded with Seed Mix 35-241 at a rate of 36.50 lb/ac. If the soil within the proposed planting area is deemed too compact for to allow for water and roots to penetrate into the ground, then the area should be tilled to allow for penetration. Every effort shall be taken to obtain uniform distribution over the seeded area. To offset the fact that native seeds vary in size and weight, the seed mix will be mixed with an inert material for broadcasting. Slightly moistened sand, sawdust, or peat moss should be used as the inert material since they would stick to the seeds resulting in a more even spread, make the seeded area more visible, and help to extend small amounts of seed. Before broadcasting of the seed commences the seed will be divided into two parts. Once divided, the first half of the seed will be broadcast over the entire area while walking in one direction (e.g. north south). Once the first half is spread, the second half will be broadcast while walking perpendicular (e.g. east west) to the first pass. This method will ensure even coverage of the ground and will prevent running out of seed before the entire area is seeded. Seedbed Firming The City shall firm all seeded areas after seeding and prior to mulching. The soil firming shall be done with a roller, cultipacker or other approved soil firming equipment. On slopes too steep to operate mechanical equipment, the seed shall be covered by hand raking or other approved means prior to mulching. Soil firming or seed covering shall occur immediately after seeding. Mulching All buffer areas shall be mulched with Mn/DOT Type 3 MCIA certified mulch at an application rate of 1 ton/acre. The City shall spread by mechanical means (preferably a blower) to provide a uniform distribution at the target application rate specified. If poor mulch distribution occurs, the Contractor will be required to re - mulch areas where coverage is too light and remove the excess where coverage is too heavy as determined by the engineer. Mn/DOT Type 3 Mulch — Type 3 mulch shall consist of clean grain straw (i.e., oats, wheat) that is certified by the Minnesota Crop Improvement Association (MCIA) to be free of noxious weed seeds, seed bearing stalks, and/or other reproductive propagules as defined by rules and regulations of the Minnesota Department of Agriculture. Documentation verifying that the mulch has passed MCIA field inspection shall accompany the material upon delivery to the job site. At the time of delivery, all mulch shall be in air dried condition. Anchoring The contractor shall anchor Type 3 mulches with a disk, clod buster or other approved equipment. The mulch shall be anchored immediately after placement unless otherwise authorized by the engineer. Watering Spring and summer seedlings benefit from regular watering the 4-6 weeks. Watering should occur in the early morning, every other day, for half an hour. Erosion Control The city will use appropriate erosion control measures to prevent sedimentation and degradation of the undisturbed buffer areas during construction. Prior to construction, silt fence will be installed to intercept run-off. Immediately following grading of side slopes greater than 3:1, wood fiber blanket (or other slope stabilizing method approved by engineer) will be applied over approved seed mixture and a minimum 4" top -soil. Seed mix and mulch used on the project will be certified weed free. Erosion control installations will remain in place and be maintained in good condition by the contractor until the site has been re -vegetated. The contractor is to use best management practices with regards to erosion control — to include the following: • • • • Inspect silt fences immediately after each half inch rainfall at least daily during prolonged rainfall. Immediately repair failed or failing silt fence. Replacement — fabric shall be replaced promptly when it decomposes or becomes ineffective until the barrier is no longer necessary. Sediment removal — sediment deposits shall be removed after each storm event when deposits reach approximately one-half the height of the barrier. Sediment remaining in place after the silt fence is no longer required shall be dressed to conform to the existing grade, prepared, and seeded with the appropriate seed mix. Removal of silt fence — silt fences shall be removed when they have served their useful purpose, but not before the upward sloping area has been permanently stabilized. Vegetation Maintenance The wetland buffers will be maintained to discourage the growth of non-native or invasive species. Activities allowed within the buffer will be those that promote growth of native vegetation, including: • Periodic cutting or burning to promote growth of native vegetation. • Spot spraying of non-native or invasive species. • Actions to address diseased species. • Activities required for the safety of the general public. • Other actions to improve buffer or habitat area quality, as approved by Rice Creek Watershed District. Buffers will be kept free of fertilizer, trash, snow, mulch, yard waste and will not be cropped, pastured, or mowed (except as to promote growth of native vegetation). Placement of structures, public utilities, and non -motorized linear surfaces (e.g., trails) will be avoided within the buffer except with approval by Rice Creek Watershed District. Buffer Monuments The buffer areas will be indicated by permanent, free-standing markers placed at each lot line and at 200 -foot intervals in between. Markers in public right of way will be placed flush to the ground or on breakaway stakes. AWARD: SALE: Springsted t --D w cec5igyi 412 71Zo 15 Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Tel: 651-223-3000 Fax: 651-223-3002 Email: advisors@springsted.com www.springsted.com $3,185,000(a) CITY OF LINO LAKES, MINNESOTA GENERAL OBLIGATION BONDS, SERIES 2015A (BOOK ENTRY ONLY) FTN FINANCIAL CAPITAL MARKETS April 27, 2015 Standard & Poor's Rating: AA Bidder Interest Rates Price Net Interest True Interest Cost Rate FTN FINANCIAL CAPITAL MARKETS 2.00% 2017-2025 $3,251,079.00(b) $586,753.81 (b) 2.0870%Mb) 2.25% 2026-2027 2.50% 2028-2029 3.00% 2030-2031 NORTHLAND SECURITIES, INC. 2.00% 2017-2026 $3,238,331.00 $598,775.88 2.1351% UNITED BANKERS' BANK 2.50% 2027-2029 BERNARDI SECURITIES, INCORPORATED 3.00% 2030-2031 RAYMOND JAMES & ASSOCIATES, INC. 3.00% 2017-2021 $3,311,964.05 $611,816.26 2.1693% 4.00% 2022-2023 2.00% 2024-2025 2.25% 2026-2027 2.50% 2028-2029 2.75% 2030-2031 UMB BANK, N.A. 1.50% 2017 $3,333,356.00 $620,263.38 2.1712% 2.00% 2018-2019 2.25% 2020 2.50% 2021-2023 2.75% 2024-2025 3.00% 2026-2031 JANNEY MONTGOMERY SCOTT, LLC 3.00% 2017 $3,389,387.95 $621,957.05 2.1734% 4.00% 2018-2023 2.00% 2024-2026 3.00% 2027-2031 PIPER JAFFRAY & CO. 2.00% 2017-2024 $3,253,203.45 $618,614.05 2.1992% 2.50% 2025-2026 2.75% 2027-2030 3.00% 2031 (a) Subsequent to bid opening, the issue size decreased from $3,185,000 to $3,095,000. (b) Subsequent to bid opening, the price, net interest cost, and true interest rate have changed to $3,158,352.55, $577,205.89, and 2.0926%, respectively. Public Sector Advisors Bidder Interest Rates Price Net Interest True Interest Cost Rate STERNE, AGEE & LEACH, INC. 2.00% 2017-2021 BANK OF OKLAHOMA 4.00% 2022-2023 SUNTRUST ROBINSON HUMPHREY, INC. 2.00% 2024-2025 2.25% 2026-2027 2.50% 2028-2029 2.75% 2030-2031 $3,256,019.95 $629,106.61 2.2464% ROBERT W. BAIRD & COMPANY, 2.00% 2017-2021 $3,315,725.65 $646,831.85 2.2757% INCORPORATED 4.00% 2022-2023 C.L. KING & ASSOCIATES 2.00% 2024-2025 CRONIN & COMPANY, INC. 3.00% 2026-2031 VINING-SPARKS IBG, LIMITED PARTNERSHIP LOOP CAPITAL MARKETS, LLC EDWARD D. JONES & COMPANY WNJ CAPITAL CREWS & ASSOCIATES CASTLEOAK SECURITIES, L.P. DAVENPORT & COMPANY LLC DUNCAN-WILLIAMS, INC. ROSS, SINCLAIRE & ASSOCIATES, LLC DOUGHERTY & COMPANY LLC COUNTRY CLUB BANK OPPENHEIMER & CO. INC. SUMRIDGE PARTNERS R. SEELAUS & COMPANY, INC. SIERRA PACIFIC SECURITIES ALAMO CAPITAL ISAAK BOND INVESTMENTS, INC. REOFFERING SCHEDULE OF THE PURCHASER Rate Year Yield 2.00% 2017 0.60% 2.00% 2018 0.80% 2.00% 2019 0.95% 2.00% 2020 1.15% 2.00% 2021 1.25% 2.00% 2022 1.40% 2.00% 2023 1.50% 2.00% 2024 1.65% 2.00% 2025 1.75% 2.25% 2026 2.05% 2.25% 2027 2.05% 2.50% 2028 2.25% 2.50% 2029 2.25% 3.00% 2030 2.40% 3.00% 2031 2.40% BBI: 3.52% Average Maturity: 8.653 Years STANDARD & POOR'S RATINGS SERVICES McGRAW HILL FINANCIAL RatingsDirect® Summary: Lino Lakes, Minnesota; General Obligation Primary Credit Analyst: David H Smith, Chicago (312) 233-7029; david.smith@standardandpoors.com Secondary Contact: Errol R Arne, New York (1) 212-438-2379; errol.arne@standardandpoors.com Table Of Contents Rationale Outlook Related Criteria And Research WWW.STANDARDANDPOORS.COM/RATINGSDIRECT APRIL 24, 2015 1 1395482 I 300238792 Summary: Lino Lakes, Minnesota; General Obligation Credit Profile US$3.645 mil GO bnds ser 2015A due 02/01/2031 Long Term Rating Lino Lakes City GO bnds ser 2014A due 02/01/2026 Long Term Rating Rationale AA/Stable AA/Stable New Affirmed Standard & Poor's Ratings Services assigned its 'AA' long term rating to Lino Lakes, Minn.'s 2015A general obligation (GO) bonds. At the same time, we affirmed our existing 'AA' rating on the city's existing GO debt. The outlook is stable. The bonds are general obligations of the city, which has pledged its full faith and credit power to levy direct general ad valorem property taxes without limitation as to rate or amount. In addition, the city will pledge abatement revenues.. The series 2015A bond proceeds will be used to finance various street reconstruction projects and for construction projects associated with a new municipal fire station. The 'AA' rating reflects our assessment of the city's: • Strong economy, with access to a broad and diverse metropolitan statistical area (MSA); • Strong management, with "good" financial policies; • Strong budgetary performance, with operating surpluses in the general fund and at the total governmental fund level; • Very strong budgetary flexibility, with an available fund balance in fiscal 2013 of 61% of operating expenditures; • Very strong liquidity, with total government available cash of 2.8x total governmental fund expenditures and 11.3x governmental debt service, as well as access to external liquidity we consider strong; • Weak debt and contingent liability position, with debt service carrying charges of 25.2% and net direct debt that is 181.6% of total governmental fund revenue, but rapid amortization with 92.3% of debt scheduled to be retired in 10 years; and • Strong institutional framework score. Strong economy We consider Lino Lakes' economy to be strong. Lino Lakes, with an estimated population of 20,574, is located in Anoka County in the Minneapolis, Minn., St. Paul, Minn. Bloomington, Wis. MSA, which we consider to be broad and diverse. The city has a projected per capita effective buying income of 120% of the U.S. level and per capita market value of $87,415. Overall, the city's market value grew by 1.8% over the past year to $1.8 billion in 2015. The county unemployment rate was 4.9% in 2013. Strong management We view the city's management as strong, with "good" financial policies and practices under our Financial W W W. STANDARDANDPOORS. COM/RATINGSDIRECT APRIL 24, 2015 2 1395482 300238792 Summary: Lino Lakes, Minnesota; General Obligation Management Assessment methodology, indicating financial practices exist in most areas, but that governance officials might not formalize or monitor all of them on a regular basis. Relevant management policies include monitoring budget -to -actual results on a quarterly basis. The city also maintains a five-year financial plan and a capital improvement plan, which are both updated annually. The formal fund balance policy requires an unassigned general fund balance of 40% to 50% of expenditures. Strong budgetary performance Lino Lakes' budgetary performance is strong in our opinion, with an operating surplus of 2.4% in the general fund and 7.1% across all governmental funds in fiscal 2013. The city estimates that it will report an approximate $78,000 deficit in fiscal 2014 (year ending December 2014). Although the city needed to draw down its reserves, the result was better than it had projected as the city received additional revenue from traffic control than anticipated. The city's fiscal 2015 budget calls for a drawdown from general fund reserves. Management indicates that the deficit is due to start-up costs associated with the new fire department and fire station in the city. Very strong budgetary flexibility Lino Lakes' budgetary flexibility is very strong, in our view, with an available fund balance in fiscal 2013 of 61% of operating expenditures, or $5.2 million. We expect the available fund balance will remain above 30% of expenditures for the current and next fiscal years, which we view as a positive credit factor. Very strong liquidity In our opinion, Lino Lakes' liquidity is very strong, with total government available cash of 2.8x total governmental fund expenditures and 11.3x governmental debt service in 2013. In our view, the city has strong access to external liquidity if necessary. Weak debt and contingent liability profile In our view, Lino Lakes' debt and contingent liability profile is weak. Total governmental fund debt service is 25.2% of total governmental fund expenditures, and net direct debt is 181.6% of total governmental fund revenue. Approximately 92.3% of the direct debt is scheduled to be repaid within 10 years, which is in our view a positive credit factor. Lino Lakes' combined pension and other postemployment benefit (OPEB) contributions totaled 4.0% of total governmental fund expenditures in 2013. The city made 106% of its annual required pension contribution in 2014. The city is expected to issue between $2 million and $4 million in additional debt for capital projects within the next two years. Strong institutional framework The institutional framework score for Minnesota cities with a population greater than 2,500 is strong. See the institutional framework score for Minnesota local governments. W W W. STANDARDANDPOORS. COM/RATINGSDIRECT APRIL 24, 2015 3 1395482 1 300238792 Summary: Lino Lakes, Minnesota; General Obligation Outlook The stable outlook reflects our view that the city will maintain its very strong budgetary flexibility and liquidity, which are supported by strong management practices and policies. We do not expect to change the rating within the two-year outlook horizon. We could lower the rating if the budgetary performance and debt scores worsen. Alternatively, if the city demonstrates improved economic characteristics and an improved debt and contingent liability profile, a higher rating may be possible. Related Criteria And Research Related Criteria USPF Criteria: Local Government GO Ratings Methodology And Assumptions, Sept. 12, 2013 Related Research • S&P Public Finance Local GO Criteria: How We Adjust Data For Analytic Consistency, Sept. 12, 2013 • Institutional Framework Overview: Minnesota Local Governments Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT APRIL 24, 2015 4 1395482 I 300238792 Copyright © 2015 Standard & Poor's Financial Services LLC, a part of McGraw Hill Financial. All rights reserved. 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