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HomeMy WebLinkAbout2016.07.05 CC PacketAGENDA HUGO CITY COUNCIL TUESDAY, JULY 5, 2016 - 7:00 PM HUGO CITY HALL A. CALL TO ORDER B. ROLL CALL C. PLEDGE OF ALLEGIANCE D. APPROVAL OF MINUTES 1. June 13, 2016 Photo and City Administrator Performance Review 2. June 13, 2016 Executive Session 3. June 20, 2016 City Council Meeting 4. June 27, 2016 CIP Workshop E. APPROVAL OF AGENDA F. APPOINTMENTS/PRESENTATIONS Presentation of 2015 Audit Report - Jason Miller, Smith Schafer & Associates G. CONSENT AGENDA All matters listed under the Consent Agenda are considered to be routine by the City Council and will be enacted by one motion and a roll call vote. If a member of the City Council or the public wishes to discuss an item, that item will be removed from the Consent Agenda and will be considered separately. 1. Approval of Claims 2. Approve Annual Performance Review for Public Works Worker Jeff Maas 3. Approve Annual Performance Review for Community Development Assistant Rachel Leitz 4. Approve Reduction No. 3 in the Letter of Credit for OP3 Prairie Village LLC, Prairie Village 3rd Addition 5. Approve Reduction No 2 in the Letter of Credit for OP3 Prairie Village LLC for Waters Edge 5th Addition 6. Approve Reduction No 2 in the Letter of Credit for OP3 Prairie Village LLC for Prairie Village 4th Addition 7. Approve Temporary On -Sale Liquor License for the Hugo Lions Club for Tough Mudder Event on July 16-17, 2016 8. Approve Special Event Permit for Wilson Tool Company Picnic on Saturday, August 13, 2016 9. Approve Application for Pyrotechnic Display, Inc for Fireworks at the Wilson Tool Company Picnic on Saturday, August 13, 2016 10. Approve Temporary On -Sale Liquor License to Hugo Lions Club for the Wilson Tool Employee Picnic on Saturday, August 13, 2016 11. Approve Brian Esch and John Brockberg as Probationary Employees on the Hugo Fire Department 12. Approve Resolution Appointing Election Judges for 2016 Primary and General Elections 13. Approve Resolution Approving Joint Powers Agreement and Court Data Services Amendment for Johnson /Turner 14. Approve Resolution Approving the Master Partnership Contract with MnDOT for 147th Street/Oneka Lake Boulevard Street Project 15. Approve Termination of Escrow Agreement for Property at 16635 and 16673 Forest Boulevard (ARK) 16. Approve Solar Ordinance Subscription Agreement with Geronimo 17. Approve Oneka Parkway Bridge Maintenance Agreement with the Rice Creek Watershed District 18. Approve Resolution Approving Preliminary Plat and Final Plat for Bald Eagle Industrial Park 6th Addition H. AWARD OF BID 1. Oneka Lake Boulevard/147th Street Improvement Project I. UNFINISHED BUSINESS 1. Update on June 27, 2016 CIP Workshop 2. J. NEW BUSINESS 1. 2. K. VISITOR PRESENTATIONS 1. 2. L. COUNCIL PRESENTATIONS 1. Yellow Ribbon Network Update 2. M. ADMINISTRATIVE PRESENTATIONS 1. Forest Lake YMCA Ribbon Cutting Ceremony on July 14, 2016 2. NE Metro Water Summit and BBQ on July 14, 2106 3. Hugo Lions Community Golf Scramble on Sunday, August 14, 2016 4. N. ADJOURNMENT BACKGROUND MEMO FOR THE CITY COUNCIL MEETING ON JULY 6, 2015 D.1 June 13, 2016 Photo and City Administrator Performance Review D.2 June 13, 2016 Executive Session D.3 June 20, 2016 City Council Meeting DA June 27, 2016 CIP Workshop Staff recommends Council approve the above minutes as presented. Presentation of 2015 Audit Report - Jason Miller, Smith Schafer & Associates Jason Miller from the independent accounting firm of Smith Schafer & Associates will present the Hugo City Council with a recap of the audit of City's finances for the 2015 fiscal year. The Council will listen to the presentation from Jason Miller after which questions will be taken. City staff recommends Council formally accept the 2015 City Audit as recommended by Finance Director Ron Otkin. G. 1 Approval of Claims Staff recommends Council approve the Claims Roster as presented. G. 2 Approve Annual Performance Review for Public Works Worker Jeff Maas Jeff Maas was hired by the City of Hugo on July 24, 2006 as a Public Works Worker and has worked for nine years in the Public Works Department. Public Works Director Scott Anderson recommends Council approve the annual performance review for Public Works Worker Jeff Maas. G.3 Approve Annual Performance Review for Community Development Assistant Rachel Leitz Rachel Leitz was hired as a Community Development intern on January 12, 2015. At the July 6, 2015 meeting, the Council approved the hiring of Rachel as the new full-time Community Development Assistant with a start date of July 13, 2015. Planner Rachel Juba recommends Council approve the annual performance review for Community Development Assistant Rachel Leitz. G4 Approve Reduction No. 3 in the Letter of Credit for OP3 Prairie Village LLC, Prairie Village 3rd Addition OP3 Prairie Village, developer, has requested the City reduce the letter of credit being held for the Prairie Village 3rd Addition. Senior Engineering Technician Steve Duff has inspected the work and recommends the reduction of the letter of credit being held for the constructed improvements in the Prairie Village 3rd Addition be reduced to $139,300.00 of the original letter of credit $1,393,000.00. G.5 Approve Reduction No 2 in the Letter of Credit for OP3 Prairie Village LLC for Waters Edge 5` Addition OP3 Prairie Village LLC has requested the City reduce their letter of credit for the Water's Edge 5th Addition Development. Senior Engineering Technician Steve Duff has inspected the work and recommends the reduction of the letter of credit being held for the constructed improvements in the Water's Edge 5th Addition Development be reduced to $30,411.50 of the original letter of credit $304,115.00. G.6 Approve Reduction No 2 in the Letter of Credit for OP3 Prairie Village LLC for Prairie Village 411 Addition OP3 Prairie Village LLC has requested the City reduce their letter of credit for the Prairie Village 4th Addition Development. Senior Engineering Technician Steve Duff has inspected the work and recommends the reduction of the letter of credit being held for the constructed improvements in the Prairie Village 4th Development be reduced to $63,672.00 of the original letter of credit $636,720.00 G7 Approve Temporary On -Sale Liquor License for the Hugo Lions Club for Tough Mudder Event on July 16-17, 2016 Tough Mudder event organizers requested the Hugo Lions Club members serve beer at their event at Wild Wings on Saturday and Sunday, July 16 and IT The Lions Club has submitted an application for a Temporary On -Sale Liquor License and the appropriate Liquor Liability Insurance naming the City as additionally insured. In addition, they have secured two Washington County Deputies to be stationed in the area where alcohol is served. Staff recommends Council approve the Temporary On -Sale Liquor License for the Hugo Lions Club for the Tough Mudder Event on July 16 and 17, 2016. G.8 Approve Special Event Permit for Wilson Tool Employee Picnic on Saturday, August 13,2016 Wilson Tool has applied for a Special Event Permit for their annual company picnic on Saturday, August 13, 2016. Wilson Tool has reserved the Hanilf Fields, Hanifl Shelter, and the Rice Lake Center for their event to celebrate their 50 year anniversary. A special event permit is required because they expect between 1,200 and 2,000 people to attend, there will be live music and fireworks, and alcohol will be served. Wilson Tool will be doing a presentation during the event that the Council will be invited to. Staff will inform Council of the schedule closer to the date and prepare a form of recognition for the Council to present. Staff recommends Council approve the Special Event Permit for Wilson Tool to hold their annual picnic at the Hanifl Fields and Shelter on Saturday, August 13, 2016. G.9 Approve Application for Pyrotechnic Display, Inc for Fireworks at the Wilson Tool Company Picnic on Saturday, August 13, 2016 Pyrotechnic Display, Inc. has applied for a permit to display fireworks as part of the Wilson Tool company picnic. A Certificate of Liability Insurance has been provided to the City naming the City as additionally insured. Staff recommends Council approve the permit for Pyrotechnic Display, Inc for a fireworks display on Saturday, August 13, 2016 at the Hanifl Fields, subject to approval by the Hugo Fire Chief. G.10 Approve Temporary On -Sale Liquor License to Hugo Lions Club for the Wilson Tool Company Picnic on Saturday, August 13, 2016 As in past years, the Hugo Lions Club has applied for Temporary On -Sale Liquor License to serve alcohol at the annual Wilson Tool picnic to be held at the Hanifl Shelter and Fields. The City has received the appropriate Liquor Liability Insurance naming the City as additionally insured, and they have secured four Washington County Deputies to be on site. Staff recommends Council approve the Temporary On -Sale Liquor License for the Wilson Tool company picnic. G.11 Approve Brian Esch and John Brockberg as Probationary Employees on the Hugo Fire Department Brian Esch and John Brockberg have completed the application procedure to become firefighters on the Hugo Fire Department. Fire Chief Kevin Colvard and Deputy Chief Jim Compton, Jr. recommend appointment of Brian and John as probationary firefighters. Staff recommends Council appoint Brian Esch and John Brockberg as probationary firefighters on the Hugo Fire Department effective July 5, 2016. G.12 Approve Resolution Appointing Election Judges for 2016 Primary and General Elections The City has received 39 applications from individuals to serve as election judges for the City of Hugo's Primary and General Elections in 2016. All election judges will receive two hours of training, and many of the judges have served in several past elections. City Clerk Michele Lindau has prepared a resolution listing the election judges who will be staffing the five precincts. Staff recommends the Council approve the resolution appointing election judges for the Primary and General Elections for 2016. G.13 Approve Resolution Approving Joint Powers Agreement and Court Data Services Amendment for Johnson /Turner At its July 18, 2011 meeting, Council approved a Masters Joint Powers Agreement with the MN Department of Public Safety, Bureau of Criminal Apprehension (BCA) to allow the City attorney's firm of Johnson and Turner to access the BCA's Criminal Justice Data Communications Network (CJDN). In July 2012, Council approved an amendment to provide additional tools available to access court data. This was a five-year agreement that will expire soon, and Johnson/Turner is requesting Council approve the resolution approving the agreements. G.14 Approve Resolution Approving the Master Partnership Contract with MnDOT for 147' Street/Oneka Lake Boulevard Street Proiect The 147th Street/Oneka Lake Boulevard project involves the use of the City's state -aid funds, and as such includes specific requirements related to materials inspections. A number of the required materials inspections can be completed most efficiently by MnDOT on behalf of the City. MnDOT will complete the materials inspections on behalf of the City, and bill the City accordingly for the work. The City needs to enter into a contract with MnDOT to allow for completion of the work, and staff recommends approving the enclosed Resolution and associated contract. G.15 Approve Termination of Escrow Agreement for Property at 16635 and 16673 Forest Boulevard (ARK) At its November 4, 2013 meeting, the Council approved the revocation of the Special Use Permit and Auto Dismantling License for property owned by Norman Horton at 16635 and 16673 Forest Boulevard. An Order was also approved that defined the steps required to clean up the property. In November, 2015, the City entered into an Escrow Agreement with the Trustees of the property who escrowed $25,000 to ensure the conditions in the Special Use Permit, which were required upon termination of the permit, were completed. Staff has inspected the property and determined they are in compliance of all the requirements. Staff recommends Council approve the termination of the Escrow Agreement for the property at 16635 and 16673 Forest Boulevard and release the funds to the Trustees of the property. G.16 Approve Solar Ordinance Subscription Agreement with Geronimo At the April 4, 2016 meeting, Community Development Assistant Rachel Leitz spoke to the Council about a solar subscription RFP through the Met Council that the City joined in 2015. She stated that the City had been paired with Geronimo Energy and have been given the opportunity to subscribe to a solar garden. In return, the City would receive a bill credit on its energy bill. The Council had questions regarding the contract and other background information on the company. At its May 16, 2016 meeting, staff provided the Council with supplemental information on the solar subscription, including the contract. The City Council directed staff to move forward with the subscription and begin review and negotiations of the contract. Staff recommends approval of the final agreement for the City's subscription subject to review by the City Attorney. G.17 Approve Oneka Parkwav Bridle Maintenance Agreement with the Rice Creek Watershed District At its August 3, 2015, meeting the City Council approved the Clearwater Cove development. The approval included the requirement for the construction of Oneka Parkway from Frenchman Road (CSAH 8) to the development. The construction requires a bridge over Clearwater Creek and approval from the Rice Creek Watershed District (RCWD). The RCWD Rule G for crossings of conveyance systems requires the City to enter into an agreement with the district to maintain the bridge. Staff is comfortable maintaining the bridge per the approved plans and permit that was issued by the district. Staff recommends the City Council approve the maintenance agreement for the Oneka Parkway Bridge. G.18 Approve Resolution Approving Preliminary Plat and Final Plat for Bald Eagle Industrial Park 611 Addition Gary Michalski is requesting approval of a preliminary plat and final plat to allow for a 9.42 acre parcel to be split into two 4.71 are parcels. According to the City Code, all subdivisions in zoning districts that are eligible for municipal sewer and water, which create two or more lots or parcels shall be platted. At its June 23, 2016, meeting the Planning Commission held a public hearing and considered the request. The Planning Commission recommended approval of the preliminary plat and final plat for Bald Eagle Industrial Park Oh Addition. Staff recommends adoption of the resolution approving the preliminary plat and final plat for Bald Eagle Industrial Park 6th Addition, subject to the conditions listed in the attached resolution. H.1 Award of Bid for the Oneka Lake Boulevard/1471h Street Improvement Proiect At its May 16, 2016 meeting, Council approved the resolution approving the plans specifications for the Oneka Lake Boulevard/147th Street Project an approving the advertisement for bids. Bids were received and opened on Thursday, June 30, 2016 at 10 a.m. The City received six bids and staff will review them with the Council at the meeting. I.1 Update on June 27, 2016 CIP Workshop The Council held a workshop on Monday, June 27, 2016 to discuss the street capital improvement projects. Staff will provide an update on the meeting and request Council schedule a neighborhood meeting on a potential street project. K.1 Yellow Ribbon Network Update Council Members Chuck Haas and Phil Klein will report to Council any updates on the City of Hugo's Yellow Ribbon Network activities. L.1 Forest Lake YMCA Ribbon Cutting Ceremony on July 14, 2016 The Council has scheduled a meeting to attend the Forest Lake Ribbon Cutting Ceremony on Thursday, July 14, 1206. L.2 Water Summit and BBQ on Thursday, July 14, 2016 The Hugo City Council has scheduled a Water Summit to include a BBQ on Thursday, July 14, 2016. The BBQ will be at 6:30 and the meeting will begin at 7 p.m. L.3 Hugo Lions Community Golf Scramble on Sunday, August 14, 2016 The Hugo Lion Club will hold a Golf Scramble on Sunday, August 14, 2016 at the Oneka Ridge Golf Course at 9 a.m. All proceeds will go to the Hugo Yellow Ribbon Network. M. Adiournment MINUTES FOR THE HUGO CITY COUNCIL PHOTO AND CITY ADMINISTRATOR PERFORMANCE REVIEW MONDAY, JUNE 13, 2016 6:30 P.M. PRESENT: Haas, Klein, Miron, Petryk, Weidt ABSENT: None ALSO PRESENT: City Administrator Bryan Bear, Assistant City Attorney Katie Jarvi The Council gather outside City Hall for a photo to be taken of them by Cindra Schmidt. This photo will be framed and hung outside the Council Chambers. The Council entered into executive session to discuss the annual performance review for City Administrator Bryan Bear. At approximately 8:00 p.m. Council adjourned the executive session and returned to regular session to adjourn the meeting. Respectfully submitted, Bryan J. Bear City Administrator MINUTES FOR HUGO CITY COUNCIL MEETING ON JUNE 20, 2016 Call to Order Mayor Weidt called the meeting to order at 7:00 p.m. PRESENT: Haas, Klein, Miron, Petryk, Weidt ABSENT: None ALSO PRESENT: City Administrator Bryan Bear, City Engineer Jay Kennedy, City Attorney Dave Snyder, and City Clerk Michele Lindau Approval of Minutes for the June 6, 2016 City Council Meeting Petryk made motion, Miron seconded, to approve the minutes for the City Council meeting on June 6, 2016 as presented. All Ayes. Motion carried. Approval of the Agenda Weidt made motion, Klein seconded, to approve the agenda as presented. Two residents asked questions on the status of a proposed development in the area of the northeast corner of 130th Street and TH61. City Administrator Bryan Bear informed them a concept was to be presented to the Planning Commission on June 23, 2016. All Ayes. Motion carried. Washington County Library Strategic Plan — Director Keith Rvskoski and Commissioner Fran Miran Washington County recently completed the library strategic planning process. This 20 -month process involved more than 800 people. Public participation in the form of surveys, questionnaires, forums, retreats, meetings and a public comment period resulted in a final strategic plan released in February 2016. Washington County Library Director Keith Ryskoski and Senior Library Manager at Hardwood Creek Amy Worwa were in attendance to talk about the plan. Ryskoski explained the goals outlined in the plan were to deliver programs, expand public awareness, cultivate partnerships, and develop as a community technology hub. The goal to improve facilities will be discussed in more detail at the July 12th workshop with the Washington County Board. Amy talked about their mission statement: Inspire curiosity, champion innovation and spark Hugo City Council Meeting Minutes for June 20, 2016 Page 2 of 5 opportunity. She explained that Hugo residents mainly visit the Hardwood Creek Branch, which is located 6.1 miles north of City Hall. She provided statistics on items checked out and online access hours showing a high return on investments. The use of electronic books, magazines, and audiobooks continues to grow. These items are purchased per copy by the library and are more expensive than paper. Amy was happy to say they received 1,229 hours of volunteerism in 2015 and the three conference rooms at Hardwood Creek are often used. The library of tomorrow will still be a hub of community opportunity with lots of programing and services for all ages. Amy stated that the library appreciates the unique relationship with the Hugo Parks and Recreation Commission and the school district for library activities. Keith said the library would like to be involved with the City's future needs, and he thanked Council for their time. Commissioner Fran Miron provided an update on some of the activities at Washington County. He said he would be at the EDA meeting the following day to talk about significant issues on economic develop. He talked about the importance of the library plan and provided information on capital improvement projects in the County, stating they add value and provide safety elements. No formal action was taken. Approval of the Consent Agenda Miron made motion, Klein seconded, to approve the following Consent Agenda: 1. Approval of Claims 2. Approve Second Amendment to Lease for Bruce and Virginia Bernin at 6540 Greene Ave for an Extension Through June 1, 2022 3. Approve Temporary On -sale Liquor License for North Star Gay Rodeo on July 30-31, 2016 at Dead Broke Arena 4. Approve Variance Request of April Barnhart for Side Yard Setback located at 5368 145th Street North 5. Approve Final Pay Request to Pember Companies for 129th Street Bridge Project 6. Approve CUP Renewal for Thommes and Thomas Land Clearing All Ayes. Motion carried. Approval of Claims Adoption of the Consent Agenda approved the Claims Roster as presented. Hugo City Council Meeting Minutes for June 20, 2016 Page 3 of 5 Approve Second Amendment to Lease for Bruce and Virginia Bernin at 6540 Greene Ave for an Extension through June 1, 2022 In 2002, the City of Hugo approved a purchase agreement with Bruce and Virginia Bernin for their 23 acre parcel located at 6540 Greene Avenue North for use as a future City park. The acquisition of their property was partly offset by a $275,000 grant from the MN DNR. At that time, the Bernins entered into a lease agreement with the City to rent the property and remain living in the home and operating their tree farm for ten years. In 2009, the Council approved a five-year extension to the original ten-year lease, until the year 2017. As part of that extension, the lease was amended to remove the tree farm operation. The Bernins were requesting another five-year extension to June, 2022 to continue leasing the property for residential use. The lessee will continue to pay $8,950 annually for the next five-year term, payable in monthly installments. The Parks Commission had considered the request at their June 8, 2016 meeting and recommend approval to the Council. Adoption of the Consent Agenda approved the second amendment to the lease agreement for Bruce and Virginia Bernin for their home at 6450 Greene Avenue North through June 1, 2022. Approve Temporary On -sale Liquor License for North Star Gay Rodeo on July 30-31, 2016 at Dead Broke Arena The MN North Star Gay Rodeo Association had applied for a temporary on -sale liquor license to serve alcohol at their event on July 30 & 31, 2016 at the Dead Broke Arena. NSGR secured two deputies for the event and will provide the City a copy of the liquor liability insurance naming the City as additionally insured. Adoption of the Consent Agenda approved the temporary on - sale liquor license for the North Star Gay Rodeo. Approve Variance Request of April Barnhart for Side Yard Setback located at 5368145th Street North April Barnhart requested a variance to allow a three-foot side yard setback, where City ordinance requires a ten -foot side yard setback, to expand a finished porch on her home. At its June 9, 2016 meeting, the Board of Zoning Appeals and Adjustment considered the request and held a public hearing. No one spoke during the public hearing, and the Board agreed that the request met the criteria necessary to approve the variance. The Board had recommended approval to Council. Adoption of the Consent Agenda approved RESOLUTION 2016-15 APPROVING A VARIANCE FOR APRIL BARNHART IN THE FUTURE CENTRAL BUSINESS ZONING DISTRICT ON PROPERTY LOCATED AT 5368 145TH STREET NORTH. Approve Final Pay Request to Pember Companies for 129th Street Bridge Proiect The City of Hugo received the Final Pay Request No.5 from Pember Companies, Inc for the 129th Street Bridge Improvements. City Engineer Jay Kennedy and Senior Engineering Technician Steve Duff hah reviewed the final pay request, and found it to be satisfactory for work completed on this project. Adoption of the Consent Agenda approved the Final Pay Request No. 5 to Pember Companies, Inc in the amount of $49,829.34 for work completed to Hugo City Council Meeting Minutes for June 20, 2016 Page 4 of 5 date on the 129th Street Bridge Improvements. Approve CUP Renewal for Thommes and Thomas Land Clearing Tom and Joanne Benick requested approval of a renewal of the conditional use permit (CUP) on their property generally located south of 165th Street, west of Forest Boulevard. The CUP allows for the processing and storage of firewood, recycling of tree waste, and wood chipping and, the operation of a mobile air curtain furnace. The permit is to be renewed every two years. On June 15, 2016, staff inspected the property and found it to be in compliance with the approved CUP conditions. It was in staff's opinion that the applicant meets the conditions listed in the CUP. Adoption of the Consent Agenda approved the renewal of the CUP for Thommes and Thomas Land Clearing. Yellow Ribbon Network Update Council Member Chuck Haas and Phil Klein provided an update on recent activities of the City of Hugo's Yellow Ribbon Network. Northland fence had rented a movie theater in Mounds View for special screening of Independence Day on June 23, 2016 with all proceeds going to the Hugo YRN. Members of the National Guard, including some soldiers from Hugo, are in training in California. The 1481h Fighter Wing out of Duluth is currently deployed to Korea, the 131St Infantry Regiment is going to Egypt, and the 168th Engineer Battalion is already in Kuwait. They had sent the YRN a certificate of appreciation of their support. Haas welcomed back former City Parks Commissioner Dan Gabriella who served as a pilot in the Air Guard. He was recently reassigned to the east coast and is now back as a new commander of the 131St Air Wing. Wednesday is burger night and Keller Williams Realty will sponsor it. Haas thanked everyone who helped in the kitchen at Good Neighbor Days. CIP Workshop on Monday, June 27, 2016 City Administrator Bryan Bear reminded Council of the workshop scheduled for Monday, June 27, 2016 at 7 p.m. to discuss the CIP for City streets. The workshop will be held at Hugo City Hall. Forest Lake YMCA Ribbon Cutting Ceremony on Thursday, July 14, 2016 City Administrator Bryan Bear informed Council the Forest Lake YMCA will hold a Ribbon Cutting Ceremony on Thursday, July 14, 2016 a 9 a.m. -9:30 a.m. follow by tours from 9:30 — 11 a.m. The YMCA is located at 19845 Forest Road North in Forest Lake. Haas made motion, Petryk seconded, to schedule the YMCA Ribbon Cutting on Thursday, July 14, 2016. All Ayes. Motion carried. Hugo City Council Meeting Minutes for June 20, 2016 Page 5 of 5 Hugo Good Neighbor Food Shelf Charity Clay Shoot on August 20, 2016 City Administrator Bryan Bear informed Council that the Hugo Good Neighbor Food Shelf is holding a charity clay shoot on Saturday, August 20, 2016 from 9 a.m. — 3 p.m. at Wild Wings of Oneka. Schedule Midyear Budget Review City Administrator requested Council select a date at the end of August on which to hold the midyear budget review meeting. Miron made motion, Klein seconded, to schedule the annual midyear budget review for Monday, August 22, 2016 at 7 p.m. All Ayes. Motion carried. Adiournment Miron made motion, Klein seconded made motion, seconded to adjourn at 8:01 p.m. All Ayes. Motion carried. Respectfully Submitted, Michele Lindau City Clerk Hugo City Council Agenda Street CIP Workshop Monday, June 27, 2016 7:00 p.m. Mayor Weidt called the meeting to order at 7 p.in. Present: Haas, Klein, Petryk, Miron, Weidt Absent: None Also Present: City Administrator Bryan Bear, City Engineer Jay Kennedy, Finance Director Ron Otkin, Public Works Director Scott Anderson, and City Clerk Michele Lindau. City Administrator Bryan Bear stated that the purpose of the meeting was to identify Council priorities with respect to additional levy capacity that will available at the end of 2019 when most of the city's bonds will be retired. This additional capacity can be used to either fully fund the street CIP or be used to fund improvements to Lions Park as was discussed at a joint workshop with the Parks Commission. He stated that although the city could issue bonds for the park improvements, the Council would need to levy approximately $464,000 per year for 15 years to repay them. However, it is the Finance Director's goal to eliminate borrowing. Thus, the Council needs to provide direction on what projects should be funded with this additional levy capacity. City Engineer Jay Kennedy provided a report that categorized city streets by their condition, and presented the Council with eight prioritized projects for their consideration. The costs for these eight projects totaled $15 million with primary funding coming from state -aid (34%), property taxes (46%) and special assessments (20%). Haas talked about the miscalculation of the population projection by the Met Council which impacts how state transportation dollars are distributed. Bear explained the City did appeal the population estimate and that the Met Council it has revised our population upward. Finance Director Ron Otkin discussed the current roadway CIP levy of $539,657, which is not sufficient to complete all eight prioritized road projects. But the CIP would be fully funded if all of the additional levy capacity, beginning in 2020, were dedicated to road improvements. He also explained that if the city issued bonds for improvements to Lions Park, the annual levy of $464,000 would result in a tax increase of $133 on a median valued homestead. Otkin also explained that the City's equipment replacement program is fully funded through 2020, including the replacement of the 1992 pumper/tanker truck for $500,000; however, there will not be sufficient funds to purchase an aerial fire truck without the issuance of equipment certificates. City Council Minutes for June 27, 2016 CIP Workshop Page 2 of 2 Mayor Weidt asked if the long-standing policy of maintaining a flat tax rate is becoming obsolete. Otkin explained that it is most likely that our tax rate would need to increase if property values were to collapse like they did during the great recession. The Council talked about how the City is unique in maintaining the tax rate, and how the budget would be affected with another recession. They discuss whether a slight increase in tax rate would be appropriate and if the flat tax rate was important in attracting new businesses. Following additional discussion, it was the Council's consensus to place the highest prioritized road project for consideration at a future regular meeting. The streets affected by this project include portions of Homestead Avenue, Homestead Drive, 126th Street and 132nd Street. The meeting adjourned at approximately 8:30 p Respectfully Submitted, Michele Lindau City Clerk CITY OF HUGO, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 PREPARED BY: FINANCE DIRECTOR'S OFFICE FINANCE DIRECTOR RONALD OTKIN CITY OF HUGO, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended December 31, 2015 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement Elected and Appointed Officials Organizational Chart FINANCIAL SECTION REFERENCE PAGE v vi vii Independent Auditor's Report 1 Management's Discussion and Analysis 4 Basic Financial Statements Government -wide Financial Statements Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements Balance Sheet - Governmental Funds 18 Reconciliation of Net Position in the Government -wide Financial Statements and Fund Balances in the Fund Basis Financial Statements 19 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 20 Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 21 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund 22 Statement of Net Position - Proprietary Fund 27 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Fund 28 Statement of Cash Flows - Proprietary Fund 29 Notes to Financial Statements 30 Required Supplementary Information Schedule of City Contributions General Employees Retirement Fund 67 Schedule of Proportionate Share of Net Pension Liability General Employees Retirement Fund 67 City of Hugo Firefighter's Relief Association Schedule of Funding Progress for the Fire Relief Association 68 Schedule of Employer Contributions for the Fire Relief Association 68 Combining and Individual Nonmajor Fund Financial Statements and Schedules Combining Balance Sheet - Nonmajor Governmental Funds 69 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds 70 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Park Fund 71 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -Firefighter's Relief Fund 72 CITY OF HUGO, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended December 31, 2015 TABLE OF CONTENTS (CONTINUED) REFERENCE PAGE FINANCIAL SECTION (CONTINUED) Changes in Net Position Schedule of Revenues, Expenditures, and Changes in Fund 85 Balances - Budget and Actual - Tax Increment Financing Schedule 3 Collection Fund 73 Schedule of Revenues, Expenditures, and Changes in 91 Fund Balances - Budget and Actual - Abatement Levy Offset Fund 74 Schedule of Revenues, Expenditures, and Changes in Property Tax Rates and Tax Levies - Direct and Overlapping Fund Balances - Budget and Actual - General Obligation Bonds Fund 75 Schedule of Revenues, Expenditures, and Changes in Fund Principal Property Taxpayers Balances - Budget and Actual - Compensated Absences Fund 76 Schedule of Revenues, Expenditures, and Changes in Fund Schedule 8 Balances - Budget and Actual - Property and Equipment Water and Sanitary Sewer Charges by Customer Acquisition Fund 77 Schedule of Revenues and Expenses - By Department - Schedule 10 Proprietary Fund 78 Supplementary Information 102 Schedule of Cash and Investments - All Funds 79 Schedule of Debt Service Requirements - All Funds 81 Schedule of Bonds Payable 82 STATISTICAL SECTION (UNAUDITED) Net Position by Component Schedule 1 83 Changes in Net Position Schedule 2 85 Fund Balances, Governmental Funds Schedule 3 89 Changes in Fund Balances, Governmental Funds Schedule 4 91 Tax Capacity and Estimated Actual Value of Taxable Property Schedule 5 93 Property Tax Rates and Tax Levies - Direct and Overlapping Property Tax Rates Schedule 6 94 Principal Property Taxpayers Schedule 7 95 Schedule of Property Tax Levies and Collections Schedule 8 96 Water and Sanitary Sewer Charges by Customer Schedule 9 98 Ratios of Outstanding Debt by Type Schedule 10 100 Ratios of General Bonded Debt Outstanding Schedule 11 102 Computation of Direct and Indirect General Obligation Bonded Debt and Legal Debt Margin Schedule 12 104 Legal Debt Margin Information Schedule 13 105 Pledged Revenue Coverage Schedule 14 107 Demographic and Economic Statistics Schedule 15 108 Principal Employers Schedule 16 109 Full -Time Equivalent Employees by Function Schedule 17 110 Operating Indicators by Function/Program Schedule 18 112 Capital Assets Statistics by Function/Program Schedule 19 114 OTHER REPORT SECTION Independent Auditor's Report on Minnesota Legal Compliance 115 CITY OF HUGO, MINNESOTA INTRODUCTORY SECTION December 31, 2015 This Page Left Blank Intentionally City of Hugo 14669 Fitzgerald Avenue North Hugo, MN 55038 PHONE: (651) 762-6300 FAX.• (651) 426-2859 June 9, 2016 To the Honorable Mayor and Council Members of the City of Hugo: Minnesota statutes require all cities to issue an annual report on its financial position and activity prepared in accordance with generally accepted accounting principles (GAAP), and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants or the Office of the State Auditor. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Hugo for the fiscal year ended December 31, 2015. This report consists of management's representations concerning the finances of the City of Hugo. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Hugo has established a comprehensive internal control framework that is designed both to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Hugo's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Hugo's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Hugo's financial statements have been audited by Smith, Schafer and Associates, Ltd., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Hugo for the fiscal year ended December 31, 2015, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of Hugo's financial statements for the fiscal year ended December 31, 2015 are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. A "Single Audit" designed to meet the special needs of federal grantor agencies was not performed for the year ended December 31, 2015 as the City did not participate in any programs that required this additional independent audit. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Hugo's MD&A can be found immediately following the report of the independent auditors. CITY OF HUGO, MINNESOTA PROFILE OF THE GOVERNMENT The Village of Hugo was incorporated in 1906. In January, 1972, the Township of Oneka and the Village were consolidated, creating the City of Hugo. The City is located approximately 17 miles northeast of the Minneapolis/Saint Paul metropolitan area. Located in Washington County, it covers an area of 36 square miles and has an estimated population of 14,352. The City of Hugo is a statutory city. Policy-making and legislative authority are vested in a governing council consisting of the mayor and four council members. The governing council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring both the city's administrator and attorney. The city's administrator is responsible for carrying out the policies and ordinances of the governing council and overseeing the day-to-day operations of the city. The council is elected on a non-partisan basis. The mayor serves a two-year term and council members serve four-year staggered terms, with two of these positions elected every two years. Three of the council members are elected by ward. The mayor and one council member are elected at large. The City of Hugo provides a wide range of services including police and fire protection; construction and maintenance of streets and infrastructure; recreational facilities; and water and sewer services. The annual budget serves as the foundation for the city's financial planning and control. All departments and agencies of the city submit requests for appropriation to the city's finance director in August of each year. The finance director uses these requests as the starting point for developing a proposed budget. The finance director then provides this proposed budget to the council for review. Work sessions are then held with the council covering each department budget. The council is required to hold public hearings on the proposed budget and to adopt a final budget no later than December 31, the close of the city's fiscal year. The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., police). Department heads may make transfers of appropriations within a department. Transfers of appropriations between funds, however, require the special approval of the city council. Budget -to -actual comparisons are provided in this report for each governmental fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented starting on page 22. For nonmajor governmental funds with appropriated annual budgets, this comparison is presented in the governmental fund subsection of this report, which starts on page 71. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Hugo operates. Economic condition and outlook. The city's tax base, as measured by total tax capacity, increased 16.9% from a year ago and has increased a substantial 42% over the past ten years, evidencing both Hugo's favorable location in the Twin Cities metropolitan area as well as significant residential and commercial development. Rapid growth is further reflected in population estimates in 2015 (14,352), or a 125% increase over the 2000 census count. CITY OF HUGO, MINNESOTA Economic condition and outlook (continued) Despite the 2009 housing crisis, the City has continued to see strong residential development. From 2009 to 2014, an average of 79 housing units were constructed each year. During 2015, 65 new single- family housing units and 5 new townhome units were constructed with a value of $21,592,000. New residential development is expected to remain strong in 2016. Commercial development is also increasing in response to the growing population and increasing demand for goods and services. Over $25,000,000 in new commercial development has been constructed within the past five years, including a new grocery store, three health clinics, and other retail businesses located primarily along the newly improved CSAH 8 corridor. In 2015, construction was completed on a 113,000 square foot senior housing complex containing a mix of market -rate apartments, assisted living and memory care units. The City's tax base is comprised mainly of residential homestead (68.2%) and commercial/industrial property (14.4%). The balance consists of non -homestead residential property (11.1%), agricultural and seasonal recreational property (4.4%), and personal property (1.9%). The ten largest taxpayers make up 8.47% of the city's net tax capacity, providing the city with a very stable source of property tax revenue. The city's industrial parks contain five major employers with a total employee count in excess of 800. Median Effective Buying Income (EBI) is 129% of the state median. The financial policies employed by the City of Hugo did not have a significant impact on the 2015 financial statements. Long-term financial planning. The city council is directing city staff on numerous projects that will affect the growth of the city. A partial list includes: 2030 Comprehensive Plan. The city recently adopted its comprehensive plan, adding over 5,000 acres to the Metropolitan Urban Service Area. This expansion effectively doubles the land area for development within the city. Property within this area has been guided to develop with a variety of land uses accommodating the demand for additional residential development as well as providing substantial land areas for services and future employment centers. The plan, when implemented, will accommodate a population of 40,000 by the year 2030. Transportation Corridor Planning. The city has partnered with the State of Minnesota, Washington County, Regional Rail Authority, and adjacent cities and counties to develop plans for future transportation improvements. Planned improvements include a future interchange on 1-35E, right-of- way preservation, and expansion of several roadways into multi -lane, multi -functional transportation corridors that can accommodate the vehicle, pedestrian and mass transit growth needs expected to occur in the city by the year 2030. Downtown Redevelopment. With funding provided by the Metropolitan Council, the City completed a downtown master plan and marketing study for the downtown area, with the goal of reinvigorating the town center. The City also completed a transportation plan for the downtown area and has secured federal funding for improvements to Trunk Highway 61. The city has also purchased several properties in the downtown area and is working with several property owners interested in redeveloping their properties through the use of tax increment financing. CITY OF HUGO, MINNESOTA Long-term financial planning (continued) • Emerging Retail Market. Due to rapid residential growth, the City is experiencing a demand for additional retail space, primarily along the CSAH 8 corridor. In addition, city planning efforts include the identification of land for future retail centers along T.H. 61 in the downtown area and along CSAH 4. The city has re -guided residential land toward commercial uses along these corridors in an effort to broaden the tax base and provide a better ratio of commercial to residential development. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Hugo, Minnesota for its comprehensive annual financial report for the fiscal year ended December 31, 2014. This was the fifteenth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the government must publish an easily readable and efficiently organized comprehensive annual financial report. This report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement Program's requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. The preparation of this report could not be accomplished without the professional, efficient services of many dedicated people. We first express our appreciation to all members of the city staff who assisted and contributed in preparing the report. We also thank the staff of Smith, Schafer and Associates, Ltd. for their assistance and review of the document. And finally, we acknowledge the Mayor and the members of the City Council for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, Ronald J. Otkin Finance Director Bryan J. Bear City Administrator iw i r & h Govem n nt Finance Officers Association Certificate Achievement nt for Excellence in Financial Reporting Presented to City ofHugo Minnesota For its Comprehensive Annual Financial Rcpcart for the Fiscal Yeav Ended December 31., 2014 *4� 0 e 4 a. -Poo CITY OF HUGO, MINNESOTA ELECTED AND APPOINTED OFFICIALS December 31, 2015 POSITION NAME TERM EXPIRES ELECTED OFFICIALS City Council: Mayor Tom Weidt December 31, 2016 Council Member Ward I Becky Petryk December 31, 2018 Council Member Ward II Phil Klein December 31, 2016 Council Member Ward III Chuck Haas December 31, 2018 Council Member At Large Mike Miron December 31, 2016 APPOINTED OFFICIALS City Administrator Bryan J. Bear Continuous Finance Director Ronald J. Otkin Continuous City Clerk Michele Lindau Continuous .j CITY OF HUGO, MINNESOTA ORGANIZATIONAL CHART December 31, 2015 City Council City Administrator Planning I I pity I I Parks I\ I Y Y I I I I Commission 1 Engineer Commission Cit Attorne Auditors Public Community Dev. Public Works Finance FireLaw Director Director I I City Clerk I I Director Dept. Enforcement I Community I Dev. Assoc. Senior Buildinq Official Engineerinq Tech Assist. Office Su Lead Worker Workers Utility Billing This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA FINANCIAL SECTION December 31, 2015 This Page Left Blank Intentionally Z.I <:)MITH+SCHAFER A S S O C IAT E S, LTD. Certified Public Accountants and Consultants Me,mrers of .American Institute of CPA's. Private Companies Practice Section. Minnesota Society of CPA's INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of the City Council City of Hugo, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Hugo, Minnesota as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the City of Hugo's, basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Maplewood Office • 2035 E County Road D • Suite A - Maplewood MH 55109 • PH (651) 770-8414 • FAX (651) 770-5175 Offices in: Edina, Red Wing, and Rochester • www.smithschafer.com PrimeGlobal Member of PdmeGlobol. A Global Association of Independent Accounting Firms Honorable Mayor and Members of the City Council Page 2 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Hugo, Minnesota, as of December 31, 2015, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 5 to the financial statements, in 2015 the City adopted new accounting guidance Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions and Governmental Accounting Standards Board (GASB) Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 14 and the required supplementary information as listed in the Table of Contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential 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 Hugo, Minnesota's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, supplementary information and statistical section listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Honorable Mayor and Members of the City Council Page 3 Other Information (continued) The combining and individual nonmajor fund financial statements and schedules, and the supplementary information 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 information is fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Maplewood, Minnesota June 9, 2016 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Hugo, Minnesota, we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City of Hugo for the fiscal year ended December 31, 2015. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in pages i — iv of this report. New Accounting Pronouncements. The City implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, and the related GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an Amendment of GASB Statement No. 68, for the year ended December 31, 2015. These Statements established accounting and financial reporting standards for pensions. FINANCIAL HIGHLIGHTS • The assets of the City of Hugo exceeded its liabilities at the close of the most recent fiscal year by $74,609,968 (net position). Of this amount, $25,143,396 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies. • The City's total net position increased by $4,622,478, primarily due to charges for services and other income in the City's sewer and water fund in excess of operating expenses (including depreciation) as well as capital grants and contributions and increased property tax revenues received by governmental activities. • At the end of the current fiscal year, unassigned fund balance for the general fund was $2,422,714 or 57 percent of total general fund expenditures. Given the uncertainty of state funding, to plan for the future and to be prepared for any contingencies, the City believes this is an appropriate amount. • As of the close of the current fiscal year, the City of Hugo's governmental funds reported combined ending fund balances of $15,836,138. • The City of Hugo decreased general long-term debt obligations by $7,070,000 during the current fiscal year primarily as a result of the refunding of the 2004 and 2005 general obligation bonds. • The City was again recognized in 2015 by the Government Finance Officers Association of the United States and Canada (GFOA) for obtaining a Certificate of Achievement for Excellence in Financial Reporting. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City of Hugo's basic financial statements. The City of Hugo's basic financial statements are comprised of the following three components: El CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS 1. Government -wide financial statements, providing information for the City as a whole. 2. Fund financial statements, providing detailed information for the City's significant funds. 3. Notes to the financial statements, providing additional information that is essential to understanding the government -wide and fund statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Additional explanation of these sections of the financial statements follows. Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City of Hugo's finances, in a manner similar to a private - sector business. The statement of net position presents information on all of the City of Hugo's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Hugo 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 the 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 not used, compensated absences). Both of the government -wide financial statements distinguish functions of the City of Hugo 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 Hugo include general government, community development, public safety, highways and streets, and parks. The business - type activities of the City of Hugo includes the sewer and water fund. The government -wide financial statements can be found on pages 15-17 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 Hugo, 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 Hugo can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements. 5 CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS The City's fund balances are classified by the following types: Non -spendable — representing that portion of fund balance that is not in a spendable form. Included in this category are advances to other funds, prepaid items and inventory. Restricted — reports resources that have external constraints placed upon their use. Committed — reports those resources committed for a specific purpose by Council action. The constraints cannot be changed or removed without Council action. Assigned — represents the portion of fund balance the City intends to use for a specific purpose. The Council has authorized the City Administrator and City Finance Director to assign fund balance. Unassigned — comparable to the old unreserved, undesignated classification of fund balance, this represents the amount available for any purpose. However, only the General Fund may report a positive fund balance. Fund balance in other governmental funds will fall into one or more of the categories listed above, unless a fund has a negative balance. Detail information regarding the fund balance classifications are found in Notes 1 and 3 in the Notes to the Financial Statements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Hugo maintains nine individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, the general obligation bonds fund, the public improvements fund and the property and equipment acquisition fund, which are considered to be major funds. Data from the other five governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City of Hugo adopts an annual budget for its general fund and certain special revenue, debt service and capital project funds. Budgetary comparison statements have been provided for the general fund (pages 22-26), the special park fund (page 71), the firefighter's relief fund (page 72), the tax increment financing collection fund (page 73), the abatement levy offset fund (page 74), and the other debt service and capital project funds with a budget (pages 75-77) to demonstrate compliance with the budget. The basic governmental fund financial statements can be found on pages 18-21 of this report. A CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS Proprietary funds. The City of Hugo maintains one type of proprietary fund — enterprise funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of Hugo uses enterprise funds to account for its sewer and water operations. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide information for the sewer and water fund, which is considered to be a major fund of the City of Hugo. The basic proprietary fund financial statements can be found on pages 27-29 and 78 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 30-66 of this report. Other information. The combining and individual fund statements referred to earlier in connection with nonmajor governmental funds can be found on pages 69-77 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. In the case of the City of Hugo, assets exceeded liabilities by $74,609,968 at the close of the most recent fiscal year. A significant portion of the City of Hugo's net position (57 percent) reflects its investment in capital assets (e.g. land, buildings, vehicles, and equipment), less any related debt used to acquire those assets that is still outstanding. The balance of the City's net investment in capital assets increased 8 percent from the prior year due primarily to additional infrastructure completed by the City during the year as well as debt payments. The City of Hugo uses its capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Hugo's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Current and other assets Capital assets Total assets Deferred outflows of resources Long-term liabilities outstanding Other liabilities Total liabilities Deferred inflows of resources Net assets: Net investment in capital assets Restricted Unrestricted Total net position City of Hugo, Minnesota's Net Position Governmental Activities Business -Type Activities Total 2015 2014 2015 2014 2015 2014 $ 21,616,812 $ 26,146,620 $ 19,257,201 $ 18,180,330 $ 40,874,013 $ 44,326,950 29,201,788 28,110,507 16,679,906 16,206,682 45,881,694 44,317,189 50,818,600 54,257,127 35,937,107 34,387,012 86,755,707 88,644,139 145,730 31,474 177,204 10,148,889 16,095,768 249,735 26,673 10,398,624 16,122,441 1,662,474 1,592,045 72,581 53,352 1,735,055 1,645,397 11,811,363 17,687,813 322,316 80,025 12,133,679 17,767,838 157,245 32,019 189,264 26,217,435 23,454,304 16,679,906 16,206,682 42,897,341 39,660,986 6,569,231 7,022,529 6,569,231 7,022,529 6,209,056 6,092,481 18,934,340 18,100,305 25,143,396 24,192,786 $ 38,995,722 $ 36,569,314 $ 35,614,246 $ 34,306,987 $ 74,609,968 $ 70,876,301 7 CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS An additional portion of the City of Hugo's net position (9 percent) represents resources that are subject to external restrictions on how they may be used. The balance of the City's restricted net position decreased 6 percent from the prior year, primarily as a result of scheduled debt service payments made during the year. The City of Hugo's balance of unrestricted net position at December 31, 2015 ($25,143,396) may be used to meet the government's ongoing obligations to citizens and creditors. Unrestricted net position increased by 4 percent during the year due primarily to capital grants received for street and utilities construction. At the end of the current fiscal year, the City of Hugo was able to report positive balances in all categories of net position, both for the government as a whole, as well as for its business -type activities. The same was true at the end of the prior fiscal year. Governmental activities. Governmental activities increased the City of Hugo's net position by $3,092,479. The most significant factors accounting for this increase relate to increased property tax and service revenue as a result of increased housing development within the City and a decrease in interest expense as a result of the refunding of the 2004 and 2005 general obligation bonds. Business -type activities. Business -type activities increased the City of Hugo's net position by $1,529,999. The majority of this increase is attributable to noncash capital contributions and charges for services. A condensed version of the Statement of Activities follows: Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Grants and contributions not restricted to specific programs Other Total revenues Expenses: General government Public safety Highways and streets Community development Parks Interest on long-term debt Sewer and water Total expenses Increase in net position before transfers Transfers Increase in net position Net position, beginning of year, as restated Net position, end of year City of Hugo, Minnesota's Change in Net Position Governmental Activities Business -Type Activities Totals 2015 2014 2015 2014 2015 2014 $ 599,373 $ 600,768 342,514 260,534 2,618,455 1,964,258 5,930,619 5,169,220 $ 2,536,840 $ 2,388,668 1,041,058 818,017 $ 3,136,213 $ 2,989,436 342,514 260,534 3,659,513 2,782,275 5,930,619 5,169,220 12,987 8,351 12,987 8,351 89,291 284,622 317,129 432,261 406,420 716,883 9,593,239 8,287,753 3,895,027 3,638,946 13,488,266 11,926,699 1,122,799 1,134,472 1,766,538 1,605,641 2,798,767 1,652,444 44,810 29,743 629,830 695,534 245,855 420,400 6,608,599 5,538,234 2,984,640 2,749,519 107,839 108,279 3,092,479 2,857,798 35,903,243 33,711,516 $ 38,995,722 $ 36,569,314 1 2,257,189 1,980,909 2,257,189 1,980,909 1,637,838 1,658,037 (107,839) (108,279) 1,529,999 1,549,758 34,084,247 32,757,229 $ 35,614,246 $ 34,306,987 1,122,799 1,134,472 1,766,538 1,605,641 2,798,767 1,652,444 44,810 29,743 629,830 695,534 245,855 420,400 2,257,189 1,980,909 8,865,788 7,519,143 4,622,478 4,407,556 4,622,478 4,407,556 69,987,490 66,468,745 $ 74,609,968 $ 70,876,301 CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS Below are specific graphs that provide comparisons of the governmental activities direct program revenues with their expenses. Any shortfalls in direct revenues are primarily supported by property tax levy or general state aid. Expenses and Program Revenues -Governmental Activities $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 ■ Program revenues ■ Expenses e6 e\ -El Je\op�er� e�a\ 0 Q aAs GeN' G Revenues by Source - Governmental Activities Grants and contributions not Interestand other restricted to specific programs - less than 1 % Charges fo services 7% Capital grants and contributions 18% 9 Operating grants and contributions 4% Property taxes 70% CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS The following graphs relate the business -type activity's program revenues with its expenses. Since this activity requires significant physical assets to operate, any excess revenues are held for planned capital replacement and expansion to keep pace with growing demand for services. Expenses and Program Revenues - Business -Type Activities $4,000,000 $3,750,000 $3,500,000 $3,250,000 $3,000,000 $2,750,000 $2,500,000 $2,250,000 $2,000,000 $1,750,000 $1,500,000 $1,250,000 $1,000,000 $750,000 $500,000 $250,000 $0 Water and sewer Revenues by Source - Business -Type Activities Interest and other 8% Capital grants and contributions 27% 10 Charges for services 65% CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS Financial Analysis of the Government's Funds As noted earlier, the City of Hugo uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds. The focus of the City of Hugo's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Hugo's financing requirements. In particular, committed, assigned and unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Hugo's governmental funds reported combined ending fund balances of $15,836,138, a decrease of $4,426,473 from the prior year primarily as a result of the refunding of the 2004 and 2005 general obligation bonds. The entire ending fund balance of the governmental funds constitutes spendable fund balance, which is further classified as restricted, committed, assigned or unassigned. The general fund is the chief operating fund of the City of Hugo. At the end of the current fiscal year, unassigned fund balance of the general fund was $2,422,714. As a measure of the general fund's liquidity, it may be useful to compare the unassigned fund balance to total fund expenditures. Unassigned fund balance represents 57 percent of total general fund expenditures. The general fund's total fund balance increased by $106,265 during the current fiscal year. This year's increase was primarily due to licenses and permit revenues in excess of expectations related to increased building activity. Revenues in the general fund met or exceeded budget projections in all cases. General fund expenditures met or were less than budgeted projections in all departments except community development and as a fund overall. The general obligations bonds fund decreased its fund balance by $5,730,367 for the year due primarily to debt service payments, including the refunding of the 2004 and 2005 general obligation bonds, in excess of property taxes and intergovernmental revenues allocated to this fund. The public improvements fund increased its fund balance by $636,124 for the year due primarily to intergovernmental revenues and collection of property taxes and special assessments in excess of capital outlay expenditures. The property and equipment acquisition fund increased its fund balance by $305,435 for the year due primarily to transfers from other funds. The special revenue funds increased their fund balances by $317,771 for the year due primarily to collection of property taxes and developer fees in excess of capital outlay expenditures. The debt service funds (other than the general obligations fund as described as a major fund above) have a total fund balance of $932,397 as of December 31, 2015. These fund balances decreased by $61,701 for the year due primarily to transfers to other funds for bond principal and interest payments. 11 CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS Proprietary funds. The City of Hugo's proprietary funds statements found on pages 27-29 and 78 provide the same type of information found in the government -wide financial statements, but in more detail. The unrestricted net position in the respective proprietary fund totaled $18,934,340 at December 31, 2015. The proprietary fund's net position increased by $1,529,999 due largely to one-time infrastructure fees for new development and noncash capital contributions from developers. Water utility conservation rates were implemented in 2010. Although metered water connections increased 2.0% in 2015, revenue from the sale of water increased 6.0%. This was primarily due to an increase in residential and irrigation services. The water utility remains profitable but increasing calls for higher water conservation may lead to the need to increase rates in 2016. Sewer utility rates were decreased in 2013 to account for decreased sewage treatment costs imposed by the Metropolitan Council. Sewer connections increased 2.0% in 2015, resulting in a 5.5% increase in revenue. The sewer utility had operating income of $128,837 in 2015, primarily due to an increase in service charges revenue coupled with a decrease in sewer costs charged by the Metropolitan Council. General Fund Budgetary Highlights The city's general fund operations remain healthy due to historically sound financial management and conservative budgeting practices. The general fund balance of $2.4 million is a substantial 57% of general fund expenditures. The City's general fund year end results were better than budgeted, particularly in nonbusiness licenses revenue and charges for services, as well as highways and street expenses and park expenses for which the city traditionally budgets conservatively. The city no longer receives local government aid from the state. This loss in aid created short-term pressures which were offset by budget planning and the city now has more stability in its revenue stream as it will no longer be as vulnerable to additional state reductions. Significant differences between the final budget and actual results can be briefly summarized as follows: • Licenses and permits revenue exceeded budget by $192,888 due primarily to higher than budgeted building permit revenue as a result of increased construction in the City. • The City received a grant in the amount of $56,714 from the State of Minnesota to help with disaster clean-up. This amount was not included in the 2015 budget. • Charges for services revenue exceeded budget by $145,330 due primarily to various fees related to increased construction in the City. • Public safety expenditures were less than budget by $60,719 due primarily to lower than budgeted fire protection services. • Highways and streets expenditures were less than budget by $181,977 due primarily to lower than expected street materials and repairs and maintenance costs. • Parks expenditures were less than budget by $91,917 due primarily to lower than expected seasonal labor costs and equipment maintenance costs. 12 CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS Capital Asset and Debt Administration Capital assets. The City of Hugo's investment in capital assets for its governmental and business -type activities as of December 31, 2015, amounts to $45,881,694 (net of accumulated depreciation). This investment in capital assets includes land, buildings and systems, improvements, machinery and equipment, park facilities, roads, and highways. The total increase in the City of Hugo's reported investment in capital assets for the current fiscal year was $1,606,972, or 3.6 percent. The increase in governmental activities and in business -type activities capital assets is due primarily to various street construction projects within the City during 2015. City of Hugo, Minnesota's Capital Assets (net of depreciation) Additional information on the City of Hugo's capital assets can be found in Note 3:C. on pages 46-47 of this report. Long-term debt. At the end of the current fiscal year, the City of Hugo had $8,795,000 in bonds outstanding. The entire amount of this debt is backed by the full faith and credit of the government. City of Hugo, Minnesota's Outstanding Debt General Obligation Bonds Payable Governmental Activities Business -Type Activities Total 2015 2014 2015 2014 2015 2014 General obligation bonds $ 8,795,000 $ 15,865,000 $ $ $ 8,795,000 $ 15,865,000 13 Governmental Activities Business-TypeActivities Totals 2015 2014 2015 2014 2015 2014 Land $ 4,628,249 $ 4,578,710 $ 259,560 $ 259,560 $ 4,887,809 $ 4,838,270 Construction in progress 48,245 48,245 48,245 48,245 Buildings 3,763,902 3,892,287 16,221,606 15,747,968 19,985,508 19,640,255 Improvements other than buildings 457,990 597,334 457,990 597,334 Machinery and equipment 2,175,999 2,175,711 150,495 150,909 2,326,494 2,326,620 Infrastructure 18,175,648 16,866,465 18,175,648 16,866,465 Total $ 29,201,788 $ 28,110,507 $ 16,679,906 $ 16,206,682 $ 45,881,694 $ 44,317,189 Additional information on the City of Hugo's capital assets can be found in Note 3:C. on pages 46-47 of this report. Long-term debt. At the end of the current fiscal year, the City of Hugo had $8,795,000 in bonds outstanding. The entire amount of this debt is backed by the full faith and credit of the government. City of Hugo, Minnesota's Outstanding Debt General Obligation Bonds Payable Governmental Activities Business -Type Activities Total 2015 2014 2015 2014 2015 2014 General obligation bonds $ 8,795,000 $ 15,865,000 $ $ $ 8,795,000 $ 15,865,000 13 CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS The City of Hugo's total bonds, certificates and notes payable decreased by $7,070,000 during the current fiscal year. A more detailed breakdown of these obligations can be found in Note 3:D., beginning on page 48. The City of Hugo maintains an AA+ bond rating on its general obligation bonds from Standard and Poor's. Economic Factors and Next Year's Budgets and Rates • The unemployment rate for the City of Hugo (Washington County) ended 2015 at 2.8 percent, down from 2.9 percent a year ago. This compares favorably to the State of Minnesota average unemployment rate of 3.7 percent and the United States average rate of 5.0 percent. • Hugo continues to see new construction growth, primarily in residential properties, but also in the commercial area. The city's total market valuation increased 15.6% for taxes payable year 2015, with new construction adding 1.6% to the 14.0% increase in the total market valuation of existing properties. • Investment income has increased due to the purchase of shorter -term investment vehicles. All of these factors were considered in preparing the City of Hugo's budget for the 2016 fiscal year. To deal with both cycles in the economy and to plan for future capital expansion and capital acquisitions, the city routinely puts aside resources. The City will continue to monitor developments at the state level that may impact city funding or the City's long term planning. Continued State budget deficits, legislative inactivity or additional State mandates imposed on the city will have an impact on future tax rates and the level of services provided to citizens. Requests for Information This financial report is designed to provide a general overview of the City of Hugo's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Office of the Finance Director, 14669 Fitzgerald Avenue North, Hugo, MN 55038. 14 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA GOVERNMENT -WIDE FINANCIAL STATEMENTS December 31, 2015 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA STATEMENT OF NET POSITION December 31, 2015 Deferred Outflows of Resources Deferred outflows from pension activity 145,730 31,474 177,204 Liabilities Accounts payable Accrued interest payable Accrued expenses Due to other governmental units Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Net pension liability Total Liabilities 112,479 56,457 29,883 454,146 1,009,509 1,701,277 7,403,414 1,044,198 11,811,363 57,884 3,111 10,586 1,000 21,472 2,744 225,519 322,316 170,363 56,457 32,994 464,732 1,010,509 1,722,749 7,406,158 1,269,717 12,133,679 Deferred Inflows of Resources Deferred inflows from pension activity 157,245 32,019 189,264 Net Position Net investment in capital assets 26,217,435 Restricted for: Creditors 6,190,050 Regulations 379,181 Unrestricted 6,209,056 Total Net Position $ 38,995,722 See Notes to Financial Statements 15 16,679,906 18,934,340 $ 35,614,246 42,897,341 6,190,050 379,181 25,143,396 $ 74,609,968 Governmental Business -Type Activities Activities Totals Assets Cash and investments $ 17,185,540 $ 18,148,180 $ 35,333,720 Receivables (net of allowance for uncollectibles) 1,423,532 719,133 2,142,665 Deposits receivable 1,500 1,500 Due from other governmental units 2,633,503 388,388 3,021,891 Net pension asset 374,237 374,237 Capital assets: Nondepreciable 4,628,249 307,805 4,936,054 Depreciable, net 24,573,539 16,372,101 40,945,640 Total Assets 50,818,600 35,937,107 86,755,707 Deferred Outflows of Resources Deferred outflows from pension activity 145,730 31,474 177,204 Liabilities Accounts payable Accrued interest payable Accrued expenses Due to other governmental units Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Net pension liability Total Liabilities 112,479 56,457 29,883 454,146 1,009,509 1,701,277 7,403,414 1,044,198 11,811,363 57,884 3,111 10,586 1,000 21,472 2,744 225,519 322,316 170,363 56,457 32,994 464,732 1,010,509 1,722,749 7,406,158 1,269,717 12,133,679 Deferred Inflows of Resources Deferred inflows from pension activity 157,245 32,019 189,264 Net Position Net investment in capital assets 26,217,435 Restricted for: Creditors 6,190,050 Regulations 379,181 Unrestricted 6,209,056 Total Net Position $ 38,995,722 See Notes to Financial Statements 15 16,679,906 18,934,340 $ 35,614,246 42,897,341 6,190,050 379,181 25,143,396 $ 74,609,968 CITY OF HUGO, MINNESOTA STATEMENT OF ACTIVITIES For the Year Ended December 31, 2015 Functions/Programs Governmental activities: General government Public safety Highways and streets Community development Parks Interest on long-term debt Total governmental activities Business -Type activities: Water and sewer Total See Notes to Financial Statements General revenues: General property taxes Grants and contributions not restricted to specific programs Investment earnings Net increase (decrease) in fair value of investments Miscellaneous Transfers Total general revenues and transfers Change in net position Net position - beginning, as originally stated Restatement due to change in accounting standards (Note 5) Net position - beginning, as restated Net position - ending 16 Program Revenues Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions $ 1,122,799 $ 533,119 $ 88,541 $ 1,766,538 41,554 92,167 2,798,767 161,806 2,424,175 44,810 629,830 24,700 194,280 245,855 6,608,599 599,373 342,514 2,618,455 2,257,189 2,536,840 1,041,058 $ 8,865,788 $ 3,136,213 $ 342,514 $ 3,659,513 General revenues: General property taxes Grants and contributions not restricted to specific programs Investment earnings Net increase (decrease) in fair value of investments Miscellaneous Transfers Total general revenues and transfers Change in net position Net position - beginning, as originally stated Restatement due to change in accounting standards (Note 5) Net position - beginning, as restated Net position - ending 16 Net (Expense) Revenue and Chanaes in Net Position Governmental Business -Type Activities Activities Totals $ (501,139) $ $ (501,139) (1,632,817) (1,632,817) (212,786) (212,786) (44,810) (44,810) (410,850) (410,850) (245,855) (245,855) (3,048,257) (3,048,257) 17 1,320,709 1,320,709 (3,048,257) 1,320,709 (1,727,548) 5,930,619 5,930,619 12,987 12,987 63,745 74,066 137,811 14,946 17,670 32,616 10,600 225,393 235,993 107,839 (107,839) 6,140,736 209,290 6,350,026 3,092,479 1,529,999 4,622,478 36,569,314 34,306,987 70,876,301 (666,071) (222,740) (888,811) 35,903,243 34,084,247 69,987,490 $ 38,995,722 $ 35,614,246 $ 74,609,968 17 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA FUND FINANCIAL STATEMENTS December 31, 2015 CITY OF HUGO, MINNESOTA BALANCE SHEET GOVERNMENTALFUNDS December 31, 2015 Liabilities, Deferred Inflows of Debt Service Capital Project Resources, and Fund Balance 379,181 Fund Fund 1,814,672 1,814,672 Liabilities 3,569,436 4,488,691 61,761 General Property and Other 2,422,714 Accounts payable $ 101,425 Obligation Public Equipment Governmental $ 112,479 Unearned revenue General Bonds Improvements Acquisition Funds Total Assets 29,883 29,883 Cash and investments $ 3,944,268 $ 3,098,443 $ 3,401,552 $4,486,723 $2,254,554 $ 17,185,540 Receivables (Net of Allowance for 1,594,963 10,882 172 1,606,017 Uncollectibles) Accounts 12,536 12,536 Accrued interest 1,822 1,240 1,814 2,140 1,060 8,076 Taxes 92,258 18,418 7,440 1,935 2,319 122,370 Special assessments 674,449 606,101 1,280,550 Due from other governmental units 59,051 2,397,500 176,952 1,935 2,633,503 TOTAL ASSETS $ 4,109,935 $ 6,190,050 $ 4,193,859 $4,490,798 $2,257,933 $21,242,575 Liabilities, Deferred Inflows of Fund Balance Resources, and Fund Balance 379,181 3,478,864 Committed 1,814,672 1,814,672 Liabilities 3,569,436 4,488,691 61,761 8,119,888 Unassigned 2,422,714 2,422,714 Accounts payable $ 101,425 $ $ 10,882 $ 172 $ $ 112,479 Unearned revenue 1,009,509 $ 21,242,575 1,009,509 Salaries payable 29,883 29,883 Due to other governmental units 454,146 454,146 Total Liabilities 1,594,963 10,882 172 1,606,017 Deferred Inflows of Resources Unavailable revenue: Property taxes 92,258 18,418 7,440 1,935 2,319 122,370 Special assessments 674,449 606,101 1,280,550 Due from other governmental units 2,397,500 2,397,500 Total Deferred Inflows of Resources 92,258 3,090,367 613,541 1,935 2,319 3,800,420 Fund Balance Fund Balance Restricted 3,099,683 379,181 3,478,864 Committed 1,814,672 1,814,672 Assigned 3,569,436 4,488,691 61,761 8,119,888 Unassigned 2,422,714 2,422,714 Total Fund Balance 2,422,714 3,099,683 3,569,436 4,488,691 2,255,614 15,836,138 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCE $ 4,109,935 $ 6,190,050 $ 4,193,859 $4,490,798 $2,257,933 $ 21,242,575 See Notes to Financial Statements CITY OF HUGO, MINNESOTA RECONCILIATION OF NET POSITION IN THE GOVERNMENT -WIDE FINANCIAL STATEMENTS AND FUND BALANCES IN THE FUND BASIS FINANCIAL STATEMENTS December 31, 2015 Amounts reported for governmental activities in the statement of net position are different because: Total governmental fund balances (page 18) Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Governmental funds - capital assets Less: Accumulated depreciation Other long-term assets are not available to pay for current -period expenditures and, therefore, are unavailable in the funds. Delinquent property taxes Deferred and delinquent special assessments Due from other governmental units $ 45,564,174 (16,362,386) $ 122,370 1,280,550 2,397,500 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Bonds and notes payable $ (8,795,000) Net pension liability (asset), deferred outflows and inflows from pension activity (681,476) Compensated absences Accrued interest Unamortized bond premiums and discounts Net position of governmental activities (page 15) See Notes to Financial Statements 19 (302,104) (56,457) (7,587) $ 15,836,138 29,201,788 3,800,420 (9,842,624) $ 38,995,722 Revenues Property taxes Special assessments Licenses and permits Intergovernmental revenues Charges for services Court fines Other Revenue Investment earnings Net increase in the fair value of investments Rent Miscellaneous Total Revenues Expenditures Current: General government Public safety Highways and streets Community development Parks Unallocated Capital outlay Bond principal retirement Interest on bonds Fiscal charges and other Total Expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Sale of capital assets Transfers in Transfers out Total Other Financing Sources (Uses) Net change in fund balances FUND BALANCES, beginning FUND BALANCES, ending CITY OF HUGO, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2015 3,343 2,261 3,051 Debt Service Capital Project 14,946 7,490 8,100 Fund Fund 37,523 22,980 4,800 171,300 General Property and Other 394,570 9,103,242 Obligation Public Equipment Governmental 1,429,020 General Bonds Improvements Acquisition Funds Total $ 4,300,660 $ 758,503 $ 600,641 $ 105,555 $ 203,956 $ 5,969,315 4,273,840 173,382 758,790 932,172 297,071 297,071 186,039 488,859 639,946 259 303 1,315,406 207,890 207,890 41,554 41,554 14,015 10,566 12,792 18,249 8,123 63,745 3,343 2,261 3,051 4,353 1,938 14,946 7,490 8,100 8,950 24,540 37,523 22,980 4,800 171,300 236,603 5,095,585 1,433,571 2,038,200 141,316 394,570 9,103,242 979,788 979,788 1,571,184 1,571,184 1,204,844 1,204,844 43,498 43,498 337,316 337,316 137,210 137,210 1,429,020 509,960 72,131 2,011,111 7,070,000 7,070,000 272,283 272,283 11,975 11,975 4,273,840 7,354,258 1,429,020 509,960 72,131 13,639,209 821,745 (5,920,687) 609,180 (368,644) 322,439 (4,535,967) 1,655 1,655 217,264 26,944 672,424 43,056 959,688 (715,480) (26,944) (109,425) (851,849) (715,480) 190,320 26,944 674,079 (66,369) 109,494 106,265 (5,730,367) 636,124 305,435 256,070 (4,426,473) 2,316,449 8,830,050 2,933,312 4,183,256 1,999,544 20,262,611 $ 2,422,714 $ 3,099,683 $ 3,569,436 $ 4,488,691 $ 2,255,614 $ 15,836,138 See Notes to Financial Statements C CITY OF HUGO, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2015 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds (page 20) $ (4,426,473) Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay -capitalized $ 1,595,836 Depreciation expense (1,301,107) 294,729 Infrastructure is contributed from developers to governmental activities. The amounts affect governmental net position but do not affect fund balance. 1,150,330 The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins and donations) is to decrease net assets. (353,778) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Unavailable revenue, End of year $ 3,800,420 Unavailable revenue, Beginning of year (4,462,408) (661,988) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences (3,339) Bond, contract and loan proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Principal retirement on long-term debt $ 7,070,000 Change in net pension liability (15,405) Change in accrued interest 113,987 Change in bond discounts and premium (75,584) 7,092,998 Change in net position of governmental activities (pages 16 and 17) $ 3,092,479 See Notes to Financial Statements 21 CITY OF HUGO, MINNESOTA GENERALFUND Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2015 Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES General Property Taxes Ad Valorem $ 4,129,940 $ 4,129,940 $ 4,151,782 $ 21,842 Franchise 145,085 145,085 148,878 3,793 Total General Property Taxes 4,275,025 4,275,025 4,300,660 25,635 Licenses and Permits Business Nonbusiness Total Licenses and Permits Intergovernmental Revenues Homestead and other tax credits Fire 2% insurance aid State disaster funds Curbside recycling grant Pera rate increase aid Other aid and grants Total Intergovernmental Revenues Charges for Services Court Fines Miscellaneous Revenues Refunds and reimbursements Investment earnings Net increase in the fair value of investments Penalties and interest Non -levy related taxes Rental income Total Miscellaneous Revenues TOTAL REVENUES See Notes to Financial Statements 17,340 17,340 17,925 585 86,843 86,843 279,146 192,303 104,183 104,183 297,071 192,888 62,560 62,560 207,890 145,330 33,450 33,450 41,554 8,104 675 675 23,500 23,500 14,015 (9,485) 10,131 10,131 74,068 74,068 82,540 8,472 8,484 8,484 56,714 56,714 30,280 30,280 30,376 96 1,451 1,451 1,451 15,488 5,000 5,000 4,827 (173) 110,799 110,799 186,039 75,240 62,560 62,560 207,890 145,330 33,450 33,450 41,554 8,104 675 675 23,500 23,500 14,015 (9,485) $ 4,632,900 $ 4,632,900 $ 5,095,585 $ 462,685 (Continued) 22 3,343 3,343 9,000 9,000 28,318 19,318 8,484 8,484 8,530 46 5,899 5,899 7,490 1,591 46,883 46,883 62,371 15,488 $ 4,632,900 $ 4,632,900 $ 5,095,585 $ 462,685 (Continued) 22 CITY OF HUGO, MINNESOTA GENERALFUND Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Continued) For the Year Ended December 31, 2015 EXPENDITURES General Government Mayor and Council Personal services Other services and charges Ordinance and proceedings Total Mayor and Council Administration Personal services Supplies Other services and charges Professional services Capital outlay Total Administration Audio/Video Personal services Capital outlay Other services and charges Total Audio/Video Elections Supplies Other services and charges Total Elections Clerk/Treasurer Personal services Supplies Other services and charges Total Clerk/Treasurer See Notes to Financial Statements Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) $ 31,500 $ 31,500 $ 28,725 $ 2,775 3,270 3,270 4,412 (1,142) 3,700 3,700 2,897 803 38,470 38,470 36,034 2,436 63,930 63,930 64,542 (612) 6,985 6,985 5,921 1,064 43,767 43,767 43,261 506 42,024 42,024 40,081 1,943 2,000 2,000 1,095 905 158,706 158,706 154,900 3,806 1,425 1,425 1,176 249 4,000 4,000 740 3,260 8,216 8,216 5,082 3,134 13,641 13,641 6,998 6,643 112 (112) 4,150 4,150 863 3,287 4,150 4,150 975 3,175 80,021 80,021 84,300 (4,279) 250 250 146 104 28,473 28,473 26,460 2,013 $ 108,744 $ 108,744 $ 110,906 $ (2,162) (Continued) 23 CITY OF HUGO, MINNESOTA GENERALFUND Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Continued) For the Year Ended December 31, 2015 Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) EXPENDITURES (CONTINUED) General Government (Continued) 74,749 74,749 71,855 2,894 Finance Director 500 500 100 400 Personal services $ 159,257 $ 159,257 $ 159,944 $ (687) Supplies 1,000 1,000 1,419 (419) Other services and charges 57,873 57,873 57,179 694 Capital outlay 3,000 3,000 332 2,668 Total Finance Director 221,130 221,130 218,874 2,256 Assessing 76,896 76,896 68,419 8,477 Planning and Zoning Personal services 74,749 74,749 71,855 2,894 Supplies 500 500 100 400 Other services and charges 12,918 12,918 12,291 627 Professional services 7,200 7,200 4,200 3,000 Capital outlay 2,000 2,000 332 1,668 Total Planning and Zoning 97,367 97,367 88,778 8,589 Engineering Personal services 90,099 90,099 90,642 (543) Supplies 4,850 4,850 2,842 2,008 Other services and charges 17,113 17,113 16,497 616 Professional services 9,307 9,307 41,046 (31,739) Capital outlay 3,650 3,650 832 2,818 Total Engineering 125,019 125,019 151,859 (26,840) Legal Fees 91,906 91,906 71,441 20,465 General Government Building Personal services 7,928 7,928 7,400 528 Supplies 6,350 6,350 4,003 2,347 Other services and charges 76,013 76,013 55,001 21,012 Capital outlay 5,000 5,000 4,200 800 Total General Government Building 95,291 95,291 70,604 24,687 Total General Government $ 1,031,320 $ 1,031,320 $ 979,788 $ 51,532 See Notes to Financial Statements (Continued) 24 CITY OF HUGO, MINNESOTA GENERALFUND Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Continued) For the Year Ended December 31, 2015 EXPENDITURES (CONTINUED) Public Safety Police Contracted services Fire Protection Personal services Supplies Other services and charges Capital outlay Total Fire Protection Protective Inspection Personal services Supplies Other services and charges Professional services Capital outlay Total Protective Inspection Animal Control Professional services Total Public Safety Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) $ 861,751 $ 861,751 $ 856,844 $ 4,907 221,861 221,861 171,991 49,870 25,250 25,250 38,835 (13,585) 230,488 230,488 212,366 18,122 1,500 1,500 7,243 (5,743) 479,099 479,099 430,435 48,664 194,409 194,409 195,256 (847) 500 500 653 (153) 84,844 84,844 79,285 5,559 3,300 3,300 3,828 (528) 2,000 2,000 664 1,336 285,053 285,053 279,686 5,367 6,000 6,000 4,219 1,781 1,631,903 1,631,903 1,571,184 60,719 Highways and Streets Administration and Engineering Personal services 451,907 451,907 416,029 35,878 Supplies 441,043 441,043 344,780 96,263 Other services and charges 325,384 325,384 288,025 37,359 Capital outlay 2,500 2,500 12,784 (10,284) Total Administration and Engineering 1,220,834 1,220,834 1,061,618 159,216 Streets/Recycling Street Lighting Total Highways and Streets See Notes to Financial Statements 14,702 14,702 15,038 (336) 151,285 151,285 128,188 23,097 $ 1,386,821 $ 1,386,821 $ 1,204,844 $ 181,977 (Continued) 25 CITY OF HUGO, MINNESOTA GENERALFUND Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Continued) For the Year Ended December 31, 2015 Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) EXPENDITURES (CONTINUED) Community Development Personal services $ 20,800 $ 20,800 $ 36,181 $ (15,381) Other services and charges 5,289 5,289 6,985 (1,696) Capital outlay 332 (332) Total Community Development 26,089 26,089 43,498 (17,409) Parks Personal services 218,411 218,411 187,504 30,907 Other services and charges 208,822 208,822 149,569 59,253 Capital outlay 2,000 2,000 243 1,757 Total Parks 429,233 429,233 337,316 91,917 Other Unallocated Remittance to Fire Relief Association 74,068 74,068 82,540 (8,472) Contributions 15,750 15,750 15,345 405 Miscellaneous 37,716 37,716 39,325 (1,609) Total Other Unallocated 127,534 127,534 137,210 (9,676) TOTAL EXPENDITURES 4,632,900 4,632,900 4,273,840 359,060 Excess (deficiency) of revenues over (under) expenditures 821,745 821,745 OTHER FINANCING SOURCES (USES) Transfers Out (715,480) (715,480) Net Change in Fund Balance 106,265 106,265 FUND BALANCE, beginning 2,316,449 2,316,449 2,316,449 FUND BALANCE, ending See Notes to Financial Statements $ 2,316,449 $ 2,316,449 $ 2,422,714 $ 106,265 0 CITY OF HUGO, MINNESOTA PROPRIETARY FUND Statement of Net Position December 31, 2015 ASSETS Current Assets Cash and cash equivalents $ 18,148,180 Receivables 225,519 Accounts receivable 472,242 Accrued interest 9,487 Special assessments (net of allowance for uncollectibles) 237,404 Due from other governmental units 388,388 Deposits 1,500 Total Current Assets 19,257,201 Noncurrent Assets 16,679,906 Property and Equipment 18,934, 340 Nondepreciable 307,805 Depreciable 24,674,024 Total Property and Equipment 24,981,829 Less: Accumulated depreciation 8,301,923 Net Property and Equipment 16,679,906 Total Assets 35,937,107 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows from pension activity 31,474 LIABILITIES Current Liabilities Current portion of long-term debt (compensated absences) 21,472 Accounts payable 57,884 Due to other governmental units 10,586 Salaries payable 3,111 Unearned revenue 1,000 Total Current Liabilities 94,053 Long-term Liabilities Net pension liability 225,519 Compensated absences, net of current portion 2,744 Total Long -Term Liabilities 228,263 Total Liabilities 322,316 DEFERRED INFLOWS OF RESOURCES Deferred inflows from pension activity 32,019 NET POSITION Net investment in capital assets 16,679,906 Unrestricted 18,934, 340 Total Net Position $ 35,614,246 See Notes to Financial Statements 27 CITY OF HUGO, MINNESOTA PROPRIETARY FUND Statement of Revenues, Expenses and Changes in Fund Net Position For the Year Ended December 31, 2015 Operating Revenue 351,248 Water charges $ 867,847 Meter sales 24,578 Sewer charges 1,104,839 Total Operating Revenues 1,997,264 Operating Expenses Personal services 351,248 Engineering 99,177 Electricity 90,595 Repairs and maintenance 537,816 Sewer charges - MCES 471,903 Depreciation 587,412 Miscellaneous 119,038 Total Operating Expenses 2,257,189 Operating (Loss) (259,925) Nonoperating Revenue Future infrastructure charges 539,576 Rental income 29,404 Intergovernmental revenue 13,124 Investment earnings 74,066 Net increase in the fair value of investments 17,670 Miscellaneous 182,865 Total Nonoperating Revenue 856,705 Net Income Before Transfers and Contributions 596,780 Capital contributions - special assessments 7,161 Noncash capital contributions 1,033,897 Transfers out (107,839) Change in net position 1,529,999 Net Position, Beginning, as originally stated 34,306,987 Restatement (Note 5) (222,740) Net Position, Beginning, as restated 34,084,247 Net Position, End of Year $ 35,614,246 See Notes to Financial Statements CITY OF HUGO, MINNESOTA PROPRIETARY FUND Statement of Cash Flows For the Year Ended December 31, 2015 Cash Flows From Operating Activities Cash received from customers $ 2,487,751 Cash paid to suppliers (1,688,529) Cash paid to employees (349,540) Other income 225,393 Net Cash Provided By Operating Activities 675,075 Cash Flows From Noncapital Financing Activities Transfers to other funds (107,839) Cash Flows From Capital and Related Financing Activities Acquisition of capital assets (26,739) Special assessments and property taxes 41,773 Net Cash Provided By Capital and Related Financing Activities 15,034 Cash Flows From Investing Activities Investment earnings received 89,240 Net increase (decrease) in the fair value of investments 17,670 Net Cash Provided By Investing Activities 106,910 Net Increase in Cash and Cash Equivalents 689,180 Cash and Cash Equivalents, Beginning of Year 17,459,000 Cash and Cash Equivalents, End of Year $ 18,148,180 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating (loss) $ (259,925) Adjustments to reconcile operating (loss) to net cash provided by operating activities Depreciation 587,412 Change in net pension liability 3,324 Future infrastructure charges, included in nonoperating revenues 539,576 Other income 225,393 (Increase) Decrease In: Accounts receivable (49,089) Due from other governmental units (388,388) Increase (Decrease) In: Accounts payable 16,693 Due to other governmental units 1,695 Salaries payable 841 Estimated liability for compensated absences (2,457) Net Cash Provided By Operating Activities $ 675,075 Noncash Investing, Capital and Financing Activities Receipt of contributed property $ 1,033,897 See Notes to Financial Statements M This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies The financial statements of the City of Hugo, Minnesota, (the City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. A. Reporting Entity The City was incorporated under the laws of the State of Minnesota and operates under an elected Mayor -Council form of government. As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Hugo (the primary government) and its component unit. 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 potential component unit's board, is able to impose its will on the potential 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. The component unit discussed below is included in the City's reporting entity because of the significance of its operational or financial relationship with the City. Blended Component Unit The Economic Development Authority of the City of Hugo serves all the citizens of the government and is governed by a board comprised of the City's elected council. The rates for user charges, if any, and bond issuance authorization are approved by the City's council and legal liability for the General Obligation portion of the Authority's debt remains with the City. The activities of the Authority are reported in the Debt Service Funds and Capital Projects Funds. Activities of the Economic Development Authority, if any, will be included in the General Obligation Bonds Fund or a new fund will be created. The debt issued by the Authority (if any) is included in noncurrent liabilities on the statement of net position. The Authority does not issue separate financial statements. W CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) A. Reporting Entity (Continued) Related Organizations The Hugo Firefighter's Relief Association is organized as a non-profit organization, legally separate from the City, by its members to provide pension and other benefits to its members in accordance with Minnesota statutes. The membership appoints the board of this Association and separate financial statements are issued by this Association. All funding is conducted in accordance with Minnesota statutes. Although the City levies property taxes for the Association, this Association is fiscally independent to determine and levy taxes. The City's portion of the costs of the Association's pension benefits are included in the General Fund. The Association does not have any significant operational or financial relationship with the City. B. Government -wide and Fund Financial Statements The government -wide financial statements (i.e. the statement of net position and the statement of activities) report information on all of the activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 31 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, licenses and permits, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. The City reports the following major governmental funds: The general fund is the government's primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund. The general obligation bonds fund accounts for the accumulation of resources (property tax and special assessments revenue) for payment of general obligation improvement bonds and interest. The public improvements fund is an accumulation of resources (taxes, special assessments, intergovernmental revenues, transfers from other funds, etc.) for expenditures for public improvements including traffic signals and other public assets. 32 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued) The property and equipment acquisition fund accounts for the accumulation of resources (special assessments, intergovernmental revenues, developers' fees, etc.) for acquisition of high dollar value property and equipment for use in the operation of the City. The City reports the following major proprietary funds: The sewer and water utility fund accounts for the operation of the City owned sewer and water utility system. As a general rule the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are payments -in -lieu of taxes and other charges between the City's enterprise funds and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. 33 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity Cash and investments (including cash equivalents) Cash balances from all funds (including cash equivalents) are pooled and invested to the extent available in various securities as authorized by Minnesota statutes. Earnings from the pooled investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. Investments are stated at fair value, based upon quoted market prices at the reporting date. Cash and cash equivalents for purposes of the basic financial statements includes amounts in demand deposits as well as all investments held by the City. 2. Receivables and payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non- current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Advances between funds, if any, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. Property tax levies are set by the City Council in December of each year and are certified to Washington County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The County spreads all levies over taxable property. Such taxes become a lien on January 1, of the following year, and are recorded as receivables by the City at that date. Revenues from property taxes are accrued and recognized in the year collectible, net of delinquencies. 34 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity (continued) 2. Receivables and Pavables (continued) Real property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. Personal property taxes may be paid on February 28 and June 30. The County provides tax settlements to cities and other taxing districts normally during the months of January, June and December. Taxes which remain unpaid at December 31 are classified as delinquent taxes receivable. The net amount of delinquent taxes receivable are fully offset by deferred revenue in the governmental funds of the fund financial statements because they are not known to be available to finance current expenditures. Assessments are levied at various times upon City Council resolution for property owner improvements made by the City. Generally, assessment collections are deferred over periods ranging from one to fifteen years with interest charges ranging from 4.27% to 7.50%. Revenue from these assessments is recognized when assessed in the government -wide financial statements and as the annual installments become collectible in the governmental funds of the fund financial statements. Annual installments not collected as of each December 31 are classified as delinquent assessments receivable. The net amount of delinquent assessments receivable are fully offset by deferred inflows of resources in the governmental funds of the fund financial statements because they are not known to be available to finance current expenditures. 3. Tax Increment Districts Tax increment revenues received are recorded in the applicable Special Revenue Fund. Such amounts are transferred to the Debt Service Fund as needed to service bond principal and interest payments. 35 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity (continued) 4. Capital assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life greater than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business - type activities is included as part of the capitalized value of the assets constructed, net of interest earned on the invested debt proceeds over the same period. Property, plant and equipment are capitalized when acquired, and depreciation is provided using the straight- line method applied over the following estimated useful lives of the assets. Useful Life in Years Buildings 20-30 Infrastructure 30-40 Other Improvements 10-15 Machinery and Equipment 5-30 The City reviews its property, plant and equipment for impairment whenever events indicate the decline in service utility of the capital asset is significant in magnitude and the event of change in circumstances is outside the normal cycle of the capital assets. 5. Compensated absences benefits Vacation, sick pay and compensatory overtime are accrued when earned in the government -wide financial statements and the proprietary fund types. In the Governmental Funds of the fund financial statements, vacation, sick pay and compensatory overtime are recorded as expenditures and accrued as current liability only if they have matured, for example, as a result of employee's resignations and retirements. 0 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity (continued) 5. Compensated absences benefits (continued) The City compensates employees upon termination for the balance of unused personal time off (PTO) and compensatory time up to specified maximum accumulations. The maximum PTO accumulation per employee is 520 hours and the maximum compensatory time accumulation is 40 hours for exempt employees and 120 hours for nonexempt employees. The compensation is computed at the employee's rate of pay at the time of termination. The City has created a debt service fund to ensure funds are available to pay for compensated absences. Transfers are made from the General Fund as deemed necessary to fund the Compensated Absences Debt Service Fund. 6. Long-term obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statements of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 7. Pensions For purposes of measuring the net pension liability, deferred outflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA's fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA's fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 37 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity (continued 7. Fund equity In the government -wide and proprietary financial statements, net position is classified in the following categories: Net Investment in Capital Assets — This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt attributed to the acquisition, construction or improvement of the assets. Restricted Net Position — This amount is restricted by external creditors, grantors, contributors, laws or regulations of other governments. Unrestricted Net Position — This amount is all net position that does not meet the definition of "net investment in capital assets" or "restricted net position". The City classifies governmental fund balances as follows: Non -spendable — includes fund balance amounts that cannot be spent either because it is not in spendable form or because of legal or contractual restraints. Restricted — amounts are restricted by external creditors, grantors, contributors, laws or regulations of other governments. Committed — includes amounts that can be used only for the specific purposes imposed by formal action (resolution) of the City Council, which is the City's highest level of decision- making authority. Those committed amounts cannot be used for any other purpose unless the Council rescinds or changes the specified use by taking the same type of action (resolution) it employed to previously commit those amounts. Assigned — includes fund balance amounts that are intended to be used for specific purposes that are neither considered restricted or committed. The City Council, by majority vote, may assign fund balances to be used for specific purposes when appropriate. The Council has delegated the power to assign fund balances to the City Administrator and Finance Director. Unassigned — includes positive fund balances within the General Fund which have not been classified within the above mentioned categories and negative fund balances in other governmental funds. M. CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity (continued) 7. Fund equity (continued) The City uses restricted/committed amounts to be spent first when both restricted and unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as a grant agreement requiring dollar for dollar spending. Additionally, the City would first use committed, then assigned and lastly unassigned amounts when expenditures are made. E. Concentration of Credit Risk Financial instruments which expose the City to a concentration of credit risk consist primarily of cash, investments and accounts and loans receivable. Credit risk associated with cash and investments is discussed in Note 3. The City's accounts and loans receivable are concentrated geographically, and for the most part, amounts are due from individuals residing in and businesses located in the City of Hugo. F. Use of estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. BE CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) G. Conduit Debt Obligations The City has issued a Tax Increment Revenue Note to provide financial assistance to private - sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The note is secured solely by tax increments. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the note. Accordingly, the note is not reported as a liability in the accompanying financial statements. The outstanding principal balance of the note as of December 31, 2015 was $250,175. Additionally, the City issued lease revenue bonds during 2014 to provide funding to a private sector entity for a project deemed to be in the public interest. Although these bonds bear the name of the City, the City has no obligation for such debt. Accordingly, the bonds are not reported as liabilities in the financial statements of the City. As of December 31, 2015, the outstanding principal amount of these bonds was $20,985,000. The City also issued lease revenue bonds during for a project deemed to be in the public interest. City, the City has no obligation for such debt. liabilities in the financial statements of the City. principal amount of these bonds was $8,800,000. .S 2015 to provide funding to a nonprofit entity Although these bonds bear the name of the Accordingly, the bonds are not reported as As of December 31, 2015, the outstanding CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2. Stewardship, Compliance, and Accountability Budgetary Information Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are legally adopted by Council resolution for the General Fund, certain Special Revenue and Debt Service Funds and the Property and Equipment Acquisition Capital Project Fund. Formal budgetary integration is employed as a management control device during the year for the General Fund, Special Revenue Funds, Debt Service Funds and the Property and Equipment Acquisition Capital Project Fund. Budgetary control for other Capital Project Funds is based on a project completion time cycle rather than an annual basis, therefore budgetary comparisons on an annual basis would not present meaningful information. The City follows these legal compliance procedures in establishing the budgetary data reflected in the financial statements. Budget requests are submitted by all department heads to the City Administrator. The Administrator's office compiles the budget requests into an overall preliminary City budget, balancing budget requests with available revenue. 2. The preliminary budget is submitted to the City Council in September for its review and/or modification. 3. City administration presents the proposed budget to the City Council which in turn holds a truth -in -taxation public hearing on the proposed budget. The budget resolution adopted by the City Council sets forth the budget at the fund level for the General Fund, Special Revenue Funds, Debt Service Funds and certain Capital Projects Funds. 4. All budgeted appropriations lapse at the end of the fiscal year. The legal level of control (the level on which expenditures may not legally exceed appropriations) for each budget is at the fund level. Management cannot legally amend or transfer appropriations between funds without the approval of the City Council once the budget has been approved. Any over expenditures of appropriations or transfers of appropriated amounts must be approved by the City Council. 5. Budgeted amounts are as originally adopted, or as amended by the City Council. The budget cannot be amended without approval by the City Council. All budget amounts presented in the accompanying supplementary information reflect the original budget and the final budget (which are the same for the year ended December 31, 2015). Encumbrance accounting is employed in governmental funds. Encumbrances (e.g. purchase orders, contracts) outstanding at year end are reported as commitments of fund balances and do not constitute expenditures or liabilities because the commitments will be reappropriated and honored during the subsequent year. There were no encumbrances at December 31, 2015. 41 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds A. Deposits and Investments In accordance with applicable Minnesota statutes, the City maintains deposits at depository banks authorized by the City Council. All such depositories are members of the Federal Reserve System. Minnesota statutes require that all deposits be protected by insurance, surety bond, or collateral. The fair value of collateral pledged must equal 110% of the deposits not covered by insurance or surety bonds. Authorized collateral includes certain state or local government obligations and legal investments described in the investment policy section. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than the institution furnishing the collateral. The City's deposits in banks at December 31, 2015 were entirely covered by federal depository insurance or by collateral held by the City or its agent in the City's name. Investment Policy The City does not maintain a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates or that would limit its investment choices as a means of managing its exposure to credit risk. The City is authorized by Minnesota Statutes to invest idle funds as follows: (a) Direct obligations or obligations guaranteed by the United States or its agencies. (b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above. (c) General obligations of the State of Minnesota or its municipalities. (d) Bankers acceptances of United States banks eligible for purchase by the Federal Reserve System. (e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. (f) Repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a reporting dealer to the Federal Reserve Bank of New York, or certain Minnesota securities broker-dealers. 42 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) A. Deposits and Investments (continued) (g) Money market funds with institutions that have portfolios consisting exclusively of United States Treasury obligations and Federal Agency issues. (h) Guaranteed investment contracts (gic's) issued or guaranteed by United States commercial banks or domestic branches of foreign banks or United States insurance companies and with a credit quality in one of the top two highest categories. Interest Rate Risk Interest rate risk is the risk that changes in market 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 does not have a formal policy related to interest rate risk for its investments, but one of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needs for operation. The following is a summary of the City of Hugo's cash and investment portfolio including the range of maturities and investment ratings by type of investment: Investment Cash Certificates of Deposit Range of Maturities N/A March 2016 - March 2018 Money Market Funds N/A U.S. Government Securities January 2018 - December 2020 Total N/A Not applicable or not available * Where rated 43 Rating Value N/A $ 104,480 N/A 3,632,863 Unrated 23,215,724 AAA - AA+* 8,380,653 $ 35,333,720 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) A. Deposits and Investments (continued) A reconciliation of cash and temporary investments as shown on the Statement of Net Position for the City follows: Carrying amount of deposits $ 104,480 Investments 35,229,240 Total $ 35,333,720 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 investments are rated by various credit rating agencies, where applicable, to indicate the associated credit risk. Investment ratings by investment type are included in the preceding summary of investments. The City does not have a formal policy related to the credit risk of its investments, but continues to buy safe and liquid assets that are allowable under Minnesota Statutes. Concentration of Credit Risk The City places no limit on the amount the City may invest with any one issuer. Investments in any one issuer that represented 5% or more of total investments as of December 31, 2015 were as follows: Issuer RBC Wealth Management Investment Type Money Market Funds 44 Value $ 23,215,724 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) A. Deposits and Investments (continued) Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of the failure of the counter party, the City will not be able to recover the value of its investment securities that are in the possession of an outside party. At December 31, 2015 all investments were insured or registered or the securities were held by the City or its agent in the City's name. B. Due From and To Other Governmental Units Amounts due from other governmental units as of December 31, 2015 were as follows: Washington Fund Type County General $ 59,051 Debt Service Capital Project 176,952 Proprietary Ind. School State of District #624 Minnesota 2,397,500 Total $ 59,051 2,397,500 176,952 388,388 Amounts due to other governmental units as of December 31, 2015 were as follows: Washington Fund Type County General $ 431,282 Proprietary 45 State of Metropolitan Minnesota Council Total $ 3,183 $ 19,681 $ 454,146 10,586 10,586 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) C. Capital Assets Capital asset activity for the year ended December 31, 2015 was as follows: Governmental Activities Beginning Ending Balance Increases Decreases Balance Capital assets, not being depreciated: Land $ 4,578,710 $ 49,539 $ $ 4,628,249 Total capital assets, not being depreciated 4,578,710 49,539 4,628,249 Capital assets, being depreciated Buildings and improvements 6,163,398 74,280 6,237,678 Land Improvements 1,566,117 1,566,117 Infrastructure 25,071,401 2,196,655 539,488 26,728,568 Machinery and equipment 6,231,016 425,692 253,146 6,403,562 Total capital assets, being depreciated 39,031,932 2,696,627 792,634 40,935,925 Less accumulated depreciation for: Buildings and improvements 2,271,111 202,665 2,473,776 Land Improvements 968,783 139,344 1,108,127 Infrastructure 8,204,936 586,853 238,869 8,552,920 Machinery and equipment 4,055,305 372,245 199,987 4,227,563 Total accumulated depreciation 15,500,135 1,301,107 438,856 16,362,386 Total capital assets, being depreciated, net 23,531,797 1,395,520 353,778 24,573,539 Governmental activities capital assets, net $ 28,110,507 $ 1,445,059 $ 353,778 $ 29,201,788 W. CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) C. Capital Assets (continued) Business -type activities Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings and improvements Machinery and equipment Total capital assets, being depreciated Less accumulated depreciation for: Buildings and improvements Machinery and equipment Total accumulated depreciation Total capital assets, being depreciated, net Business -type activities capital assets, net Beginning Ending Balance Increases Decreases Balance $ 259,560 $ $ $ 259,560 48,245 48,245 307,805 307,805 23,120,520 1,033,896 24,154,416 511,093 26,740 18,225 519,608 23,631,613 1,060,636 18,225 24,674,024 7,372,552 560,258 7,932,810 360,184 27,154 18,225 369,113 7,732,736 587,412 18,225 8,301,923 15,898,877 473,224 16,372,101 $ 16,206,682 $ 473,224 $ $ 16,679,906 Depreciation expense was charged to functions/programs as follows: Governmental Activities: General government Public safety Highways and streets Park and recreation Economic development/tourism Total Business -Type Activities: Sewer and Water 47 $ 79,351 142,675 858,001 218,446 2,634 $ 1,301,107 $ 587,412 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) D. Long -Term Debt The City issues general obligation bonds to provide funds for economic development and for the acquisition and construction of major capital facilities including infrastructure. General obligation bonds have been issued for both general government and proprietary activities. Bonds issued to provide funds for proprietary activities are reported in proprietary funds if they are expected to be repaid from proprietary revenues. General obligation bonds are direct obligations and pledge the full faith and credit of the City. Tax increment bonds are expected to be repaid from tax increments received over the life of the tax increment districts. Special assessment bonds are expected to be repaid, in part, from assessments to the benefited properties. A summary of long-term debt outstanding at December 31, 2015 is as follows: General obligation bonds: 2007 A Improvement Bonds 2009 A Improvement Bonds 2009 B Tax Abatement Bonds 2010 Capital Improvement Bonds 2011 Improvement Bonds 2013 Crossover Refunding Bonds Other Liabilities: Compensated Absences Unamortized premium Less: Unamortized (discount) 326,320 25,628 (18,041) Total Long-term Debt $ 9,128,907 Liquidation of the compensated absences liability occurs within the department and fund (typically the General Fund for the governmental fund liability) for which the corresponding employees are assigned. LK Range of Final Balance Issue Date Interest Rates Maturity 12/31/15 10/17/2007 4.00% - 4.15% 2023 $ 565,000 7/21/2009 3.00% - 3.875% 2020 485,000 11/5/2009 2.50% - 3.00% 2020 520,000 8/19/2010 2.00% - 2.50% 2018 395,000 11/9/2011 2.00% - 3.00% 2027 995,000 3/20/2013 0.50% - 1.15% 2020 5,835,000 326,320 25,628 (18,041) Total Long-term Debt $ 9,128,907 Liquidation of the compensated absences liability occurs within the department and fund (typically the General Fund for the governmental fund liability) for which the corresponding employees are assigned. LK CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) D. Long -Term Debt (continued) The following is a summary of the changes in long-term debt obligations for the year ended December 31, 2015: GOVERNMENTAL ACTIVITIES Bonds and Notes and Contracts Payable: General obligation bonds: 2004 Capital Improvement Bonds 2005 Tax Abatement Bonds 2007 A Improvement Bonds 2009 A Improvement Bonds 2009 B Tax Abatement Bonds 2010 Capital Improvement Bonds 2011 Improvement Bonds 2013 Crossover Refunding Bonds Other Liabilities: Compensated Absences Unamortized premium Less: Unamortized (discount) Governmental Activities Long-term Liabilities BUSINESS -TYPE ACTIVITIES Other Liabilities: Compensated Absences Business -Type Activities Long-term Liabilities Total $ 16,122,441 $ 154,359 $ 7,147,893 $ 9,128,907 $ 1,722,749 . • Amounts Beginning Ending Due Within Balance Additions Reductions Balance One Year $ 1,190,000 $ $ 1,190,000 $ $ 5,375,000 5,375,000 645,000 80,000 565,000 80,000 580,000 95,000 485,000 95,000 615,000 95,000 520,000 95,000 520,000 125,000 395,000 130,000 1,105,000 110,000 995,000 110,000 5,835,000 5,835,000 1,060,000 298,765 133,165 129,826 302,104 131,277 30,602 4,974 25,628 (98,599) (80,558) (18,041) 16,095,768 133,165 7,124,242 9,104,691 1,701,277 26,673 21,194 23,651 24,216 21,472 26,673 21,194 23,651 24,216 21,472 $ 16,122,441 $ 154,359 $ 7,147,893 $ 9,128,907 $ 1,722,749 . • CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) D. Long -Term Debt (continued) The City has entered into a joint powers agreement with Independent School District Number 624 (ISD #624) to issue tax abatement bonds for the City's and School District's portion of the costs related to the construction of certain County Roads within the City and School District. The roads constructed are the property of Washington County. Amounts paid for the road construction from the proceeds of the tax abatement bonds represent the City of Hugo's and ISD #624's portion of the project costs. Since the roads are owned by the County, the City has not recorded capital assets related to the County Road expenditures. The bonds were issued by the City and accordingly are included in noncurrent liabilities on the City's Statement of Net Position. The School District is responsible for the repayment of 50% of the principal and interest owed on the bonds. Therefore, the City has recorded a due from the School District on the Statement of Net Position for 50% of amounts expended for the project. Crossover Refunding In 2013, the City issued $5,835,000 General Obligation Refunding Bonds, Series 2013 with interest rates ranging from 0.50 to 1.15%. The bonds were issued to crossover refund General Obligation Bonds, Series 2004A and General Obligation Tax Abatement Bonds, Series 2005A with interest rates of 3.5% - 4.5%. The net proceeds of the refunding bonds were deposited into an irrevocable trust to provide for future debt service payments on the refunded bonds. This advance refunding was undertaken to reduce total debt service payments by $335,023 over the next 7 years. The net present value of the reduction in debt service payments for this refunding was determined to be $318,668. The 2004A and 2005A bonds were refunded during 2015. Debt Service Requirements Debt service requirements to maturity for long-term debt, excluding compensated absences, as of December 31, 2015 were as follows: 50 General Obligation Debt Year Principal Interest 2016 $ 1,570,000 $ 126,235 2017 1,625,000 106,243 2018 1,680,000 83,058 2019 1,615,000 58,403 2020 1,675,000 32,636 2021-2025 540,000 42,026 2026-2027 90,000 2,700 $ 8,795,000 $ 451,301 50 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) D. Long -Term Debt (continued) The City of Hugo is the administering authority for the City of Hugo Tax Increment Financing District, No. 1-1 and for the City of Hugo Tax Increment Financing District, No. 1-2. The districts are redevelopment type and authorized under Minnesota law chapter 469. District No. 1-1 was certified in 1997 and will continue until December 31, 2023. District No. 1-2 was certified in 2010 and will continue until 2036. Information regarding District No. 1-1 and 1-2 is as follows: District No. 1-1 District No. 1-2 Original net tax capacity $ 429 $ 295,992 Current net tax capacity 82,356 245,451 Captured net tax capacity: Retained by authority 81,927 Total general obligation tax increment bond issued 4,030,000 Amounts redeemed 4,030,000 Outstanding bonds at December 31, 2015 $ $ 51 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) E. Interfund Transfers Transfers are used to 1) move revenues from the fund with collection authorization to the debt service fund as debt service principal and interest payments become due; 2) move unrestricted general fund revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations. The amounts transferred from the water fund were used to finance various infrastructure projects in the City projects funds. Interfund transfers during the year ended December 31, 2015 were as follows: Major Governmental Funds: General General Obligation Bonds Property and Equipment Acquisition Public Improvements Non -Major Governmental Funds: Compensated Absences Abatement Levy Offset Total Governmental Funds Proprietary Funds: Water and Sewer Utility Fund Total All Funds 52 Transfers In Transfers Out $ $ 715,480 217,264 26,944 672,424 26,944 43,056 109,425 959,688 851,849 107,839 $ 959,688 $ 959,688 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) F. Fund Equity The City has committed and assigned portions of fund equity in the governmental funds. A summary at December 31, 2015 is as follows: The City has restricted portions of fund balance in the fund financial statements and fund equity in the government -wide financial statements. The restricted fund balance / equity represents the portion not available for expenditure or legally segregated for specific future use. A summary of the restricted portion of the fund balance / equity at December 31, 2015 is as follows: Restriction Imposed By Specific Purpose Contributors Grantors Creditors Regulations Restricted Fund Balance Debt Service Funds: Debt service requirements TIF Capital Project Fund: Tax increment financing plan Total Restricted Fund Balance Restricted Net Position Debt service requirements Tax increment financing plan Total Restricted Net Position $ $ $ 3,099,683 $ 379,181 $ $ $ 3,099,683 $ 379,181 $ $ $ 6,190,050 $ 379,181 $ $ $ 6,190,050 $ 379,181 53 Property and Abatement Compensated Firefighter's Public Equipment Special Park Levy Offset Absences Relief Improvements Acquisition Committed Park improvement $ 882,275 $ $ $ $ $ Bond principal retirement 485,923 Compensated absences 446,474 Total Committed $ 882,275 $ 485,923 $ 446,474 $ $ $ Assigned Municipal contributions to fire relief $ $ $ $ 61,761 $ $ Public improvements 3,569,436 Property and equipment acquisition 4,488,691 Total Assigned $ $ $ 61,761 3,569,436 4,488,691 The City has restricted portions of fund balance in the fund financial statements and fund equity in the government -wide financial statements. The restricted fund balance / equity represents the portion not available for expenditure or legally segregated for specific future use. A summary of the restricted portion of the fund balance / equity at December 31, 2015 is as follows: Restriction Imposed By Specific Purpose Contributors Grantors Creditors Regulations Restricted Fund Balance Debt Service Funds: Debt service requirements TIF Capital Project Fund: Tax increment financing plan Total Restricted Fund Balance Restricted Net Position Debt service requirements Tax increment financing plan Total Restricted Net Position $ $ $ 3,099,683 $ 379,181 $ $ $ 3,099,683 $ 379,181 $ $ $ 6,190,050 $ 379,181 $ $ $ 6,190,050 $ 379,181 53 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information A. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors or omissions; injuries to employees; or natural disasters. The City participates in the League of Minnesota Cities Insurance Trust (LMCIT) to provide its general liability and property coverage. The LMCIT is a public entity risk pool currently operating as a common risk management and insurance program for participating Minnesota Cities. All cities in the LMCIT are jointly and severally liable for all claims and expenses of the pool. The amount of any liability in excess of assets of the pool may be assessed to the participating cities if a deficiency occurs. The City purchases commercial insurance for property values in excess of the LMCIT policy limits and all other risks of loss. Settled claims have not exceeded the LMCIT or commercial coverage in any of the past three fiscal years. Worker's compensation insurance is also purchased through the League of Minnesota Cities Insurance Trust (LMCIT). The worker compensation program is a retrospectively rated contract with premiums or required contributions based primarily on the experience rates of the participating cities. There were no significant reductions in insurance coverage from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years B. Commitments and Contingencies Insurance: The City has outstanding claims subject to its insurance deductible. Although the outcome of these actions are not presently determinable, in the opinion of management, the resolution of these matters will not have a material adverse effect on the financial condition of the City. General Litigation: Although the City is occasionally involved in litigation, management was unaware of any pending lawsuits in which the City was involved as of December 31, 2015. It is the opinion of management that any potential claim regarding any lawsuits against the City would be covered by the liability insurance of the City and that any potential claim against the City would not materially affect the financial statements. 54 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) 1. Public Employees Retirement Association (PERA) - Defined Benefit A. Plan Description The City participates in the following cost-sharing multiple -employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA's defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA's defined benefit pension plans are tax qualified under Section 401(a) of the Internal Revenue Code. All full-time and certain part-time employees of the City of Hugo are covered by the General Employees Retirement Fund (GERF). GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All new members must participate in the Coordinated Plan. Benefits Provided PERA provides retirement, disability and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature. Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Members in plans that are at least 90 percent funded for two consecutive years are given 2.5% increases. Members in plans that have not exceeded 90% funded, or have fallen below 80%, are given 1 % increases. The benefit provisions stated in the following paragraph 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. 55 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) Public Employees Retirement Association (PERA) - Defined Benefit (Continued A. Plan Description (continued) 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 ten years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first ten years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. Disability benefits are available for vested members and are based upon years of service and average high -five salary. B. Contributions Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.50%, respectively, of their annual covered salary in calendar year 2015. The City was required to contribute 11.78% of pay for Basic Plan members and 7.50% for Coordinated Plan members in calendar year 2015. The City's contributions to the GERF for the year ended December 31, 2015 were $111,569. The City's contributions were equal to the required contributions as set by state statute. 56 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) Public Employees Retirement Association (PERA) - Defined Benefit (Continued) C. Pension Costs At December 31, 2015, the City reported a liability of $1,269,717 for its proportionate share of the GERF's net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2014 through June 30, 2015, relative to the total employer contributions received from all of PERA's participating employers. At June 30, 2015, the City's proportion was .0245% at the end of the measurement period and .0278% for the beginning of the period. For the year ended December 31, 2015, the City recognized pension expense of $169,250 for its proportionate share of the GERF's pension expense. At December 31, 2015, the City reported its proportionate share of the GERF's deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual economic experience Difference between projected and actual investment earnings Changes in proportion Contributions paid to PERA subsequent to the measurement date Total 57 Deferred Deferred Outflows of Inflows of Resources Resources $ $ 64,015 120,198 116,263 57,006 $ 177,204 $ 180,278 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) Public Employees Retirement Association (PERA) - Defined Benefit (Continued) C. Pension Costs (Continued) $57,006 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Expense Year ending June 30: Amount 2016 $ (30,042) 2017 (30,042) 2018 (30,044) 2019 30,049 D. Actuarial Assumptions The total pension liability in the June 30, 2015 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.75% per year Active Member Payroll Growth 3.50% per year Investment Rate of Return 7.90% Salary increases were based on a service -related table. Mortality rates for active members, retirees, survivors and disabilitants were based on RP -2000 tables for males or females, as appropriate, with slight adjustments. Benefit increases for retirees are assumed to be 1% effective every January 1 st through 2026 and 2.5% thereafter. Actuarial assumptions used in the June 30, 2015 valuation were based on the results of actuarial experience studies. The experience study in the GERF was for the period from July 1, 2004 through June 30, 2008, with an update of economic assumptions in 2014. There were no changes in actuarial assumptions in 2015. CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) Public Employees Retirement Association (PERA) - Defined Benefit (Continued) D. Actuarial Assumptions (continued) The long-term expected rate of return on pension plan investments is 7.9%. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis using a building- block method in which best -estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class Domestic Stocks International Stocks Bonds Alternative Assets Cash E. Discount Rate Target Allocation 45% 15% 18% 20% 2% Long -Term Expected Real Rate of Return 5.50% 6.00% 1.45% 6.40% 0.50% The discount rate used to measure the total pension liability was 7.9%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on that assumption, each of the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 59 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) Public Employees Retirement Association (PERA) - Defined Benefit (Continued) F. Pension Liability Sensitivity The following presents the City's proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate: 1% Decrease in 1 % Increase in Discount Rate Discount Rate Discount Rate (6.9%) (7.9%) (8.9%) City's proportionate share of the GERF net pension liability $ 1,996,447 $ 1,269,717 $ 669,550 G. Pension Plan Fiduciary Net Position Detailed information about each pension plan's fiduciary net position is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org; 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. :l CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) 2. Hugo Firefighter's Relief Association A. Plan Description The Hugo Firefighter's Relief Association administers a single -employer defined benefit pension plan (the Plan) available to volunteer firefighters. As of December 31, 2015, the plan covered 27 active firefighters and 10 vested terminated firefighters whose pension benefits are deferred. The plan is established and administered in accordance with Minnesota Statutes, Chapter 424 A. The December 31, 2015 information is the latest reported for this Plan. B. Benefits Provided Volunteer firefighters for the City are members of the Hugo Firefighter's Relief Association. Association members are eligible to receive a lump sum benefit after 20 years of service with a minimum retirement age of 50. Currently retirees receive a benefit of $3,200 for every year of service. These benefit provisions and all other requirements are consistent with State statutes. Volunteers of the fire department are not required to contribute to the relief association. Members with 10 years of service receive partial vesting at 60% of the 20 -year rate and 4% added for every one year of service beyond ten years up to 20 years. C. Contributions The Plan is funded by fire state aid, investment earnings and, if necessary, employer contributions as specified in Minnesota statutes, and voluntary City contributions. The State of Minnesota contributed $81,540 in state aid to the plan on behalf of the Association for the year ended December 31, 2015, which was recorded as revenue. The City levies property taxes for the benefit of the Association and passes through state aids allocated to the plan, all in accordance with State statutes. During 2015, at the Association's direction, the City did not levy any property taxes to be paid to the Association. D. Pension Costs At December 31, 2015, the City reported a net pension asset of $374,237 for the plan. The net pension asset was measured as of December 31, 2015. The total pension liability used to calculate the net pension asset in accordance with GASB 68 was determined by applying an actuarial formula to specific census data certified by the fire department as of December 31, 2015. 61 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) 2. Hugo Firefighter's Relief Association D. Pension Costs (continued) The following table presents the changes in net pension liability (asset) during the year. Beginning Balance 12/31/14 Changes for the Year Service cost Interest on pension liability Plan changes Net investment income Contributions (state) Administrative expenses Net Changes Balance End of Year 12/31/15 Total Fiduciary Net Pension Pension Net Position Liability Liability (a) (b) (Asset) (a -b) $ 721,352 $1,111,300 $ (389,948) 29,535 29,535 48,691 48,691 12,058 12,058 3,233 (3,233) 81,540 (81,540) (10,200) 10,200 90,284 74,573 15,711 $ 811,636 $1,185,873 $ (374,237) For the year ended December 31, 2015, the City recognized pension expense (benefit) of $(63,069). At December 31, 2015, the Association reported deferred inflows of resources and deferred outflows of resources related to pension from the following sources: Difference between projected and actual investment earnings Total 62 Deferred Deferred Outflows of Inflows of Resources Resources $ $ 8,986 $ $ 8,986 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) 2. Hugo Firefighter's Relief Association D. Pension Costs (continued) Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Expense Year ending June 30: Amount 2016 $ (2,247) 2017 (2,247) 2018 (2,247) 2019 (2,245) E. Actuarial Assumptions The total pension liability at December 31, 2015 was determined using the entry age normal actuarial cost method and the following actuarial assumptions: • Retirement eligibility at the later of age 50 or 20 years of service • Investment rate of return of 6.75% • Inflation rate 4.0% There were no changes in actuarial assumptions in 2015. F. Discount Rate The discount rate used to measure the total pension liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that contributions to the Plan will be made as specified in statute. Based on that assumption and considering the funding ratio of the plan, the fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 63 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) 2. Hugo Firefighter's Relief Association G. Pension Liability Sensitivity The following presents the City's net pension asset for the Association's plan, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's net pension asset would be if it were calculated using a discount rate 1% lower or 1% higher than the current discount rate: 1 % Decrease 1% Increase in in Discount Discount Rate Discount Rate Rate (5.75%) (6.75%) (7.75%) Net pension liability (asset) $ (352,125) $ (374,237) $ (393,945) H. Plan Investments 1. Investment Policy All investments undertaken by the plan are governed by the prudent person rule and other standards codified in Minnesota Statutes, Chapter 11A and Chapter 356A. Within the requirements defined by state law, the Plan establishes investment policy for all funds under its control. These investment policies are tailored to the particular needs of each fund and specify investment objectives, risk tolerance, asset allocation, investment management structure and specific performance standards. Studies guide the ongoing management of the funds and are updated periodically. 64 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) 2. Hugo Firefighter's Relief Association H. Plan Investments (Continued) 2. Asset Allocation The long-term target asset allocation and long-term expected real rate of return is the following: The long-term return on assets has been set based on the plan's target investment allocation along with long-term return expectations by asset class. When there is sufficient historical evidence of market outperformance, historical average returns may be considered. 3. Description of significant investment policy changes during the year The Plan made no significant changes to their investment policy during the year. I. Pension Plan Fiduciary Net Position Detailed information about the Hugo Firefighter's Relief Association plan's fiduciary net position as of December 31, 2015 is available in a separately -issued financial report that includes financial statements and required supplementary information. D. Postemployment Benefits As required by state statute, employees are allowed to participate in the City's group health insurance plan after retirement. However, management has determined that any liability related to postemployment benefits would be immaterial to these financial statements as of December 31, 2015. 65 Long -Term Expected Target Real Rate of Asset Class Allocation Return Cash 7.00% 2.00% Fixed income 27.00% 4.75% Equities 66.00% 8.00% Total 100% 6.75% The long-term return on assets has been set based on the plan's target investment allocation along with long-term return expectations by asset class. When there is sufficient historical evidence of market outperformance, historical average returns may be considered. 3. Description of significant investment policy changes during the year The Plan made no significant changes to their investment policy during the year. I. Pension Plan Fiduciary Net Position Detailed information about the Hugo Firefighter's Relief Association plan's fiduciary net position as of December 31, 2015 is available in a separately -issued financial report that includes financial statements and required supplementary information. D. Postemployment Benefits As required by state statute, employees are allowed to participate in the City's group health insurance plan after retirement. However, management has determined that any liability related to postemployment benefits would be immaterial to these financial statements as of December 31, 2015. 65 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 5. Change in Accounting Standards During the year ended December 31, 2015, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions and Governmental Accounting Standards Board (GASB) Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68. The cumulative effect of applying these statements is reported as a restatement of beginning net position. Following is a reconciliation of the previously reported December 31, 2014 balances with the amounts reported on the December 31, 2015 financial statements: Activities/Fund Net Position December 31, 2014 as Previously Reported Restatement for Net Pension Liability Net Position December 31, 2014 as Restated Governmental Activities $ 36,569,314 $ (666,071) $ 35,903,243 Business -Type Activities $ 34,306,987 $ (222,740) $ 34,084,247 Proprietary Fund Water and Sewer Utility Fund $ 34,306,987 $ (222,740) $ 34,084,247 CITY OF HUGO, MINNESOTA REQUIRED SUPPLMENETARY INFORMATION December 31, 2015 This Page Left Blank Intentionally CITY OF HUGO Schedule of City Contributions PERA General Employees Retirement Fund December 31, 2015 Contributions in Relation to Statutorily Statutorily Contributions as a Required Required Contribution Covered Percentage of Contribution Contribution Deficiency Employee Covered Payroll Year Ended December 31 (a) (b) (Excess) (a -b) Payroll (d) (b/d) 2014 $ 103,560 $ 103,560 $ $ 1,428,404 7.3% 2015 111,569 111,569 1,487,583 7.5% 2016 2017 2018 2019 2020 2021 2022 2023 CITY OF HUGO Schedule of Proportionate Share of Net Pension Liability PERA General Employees Retirement Fund December 31, 2015 2014 0.0278% $ 1,305,905 $1,428,404 91.4% 78.7% 2015 0.0245% 1,269,717 1,487,583 85.4% 78.2% 2016 2017 2018 2019 2020 2021 2022 2023 67 Proportionate Share (Amount) of Proportionate the Net Pension Plan Fiduciary Proportionate Share (Amount) Liability (Asset) as Net Position as a (Percentage) of the Net Covered- a Percentage of its Percentage of the Fiscal Year of Net Pension Pension Liability Employee Covered Employee Total Pension Ended June 30 Liability (Asset) (Asset) (a) Payroll (b) Payroll (a/b) Liability 2014 0.0278% $ 1,305,905 $1,428,404 91.4% 78.7% 2015 0.0245% 1,269,717 1,487,583 85.4% 78.2% 2016 2017 2018 2019 2020 2021 2022 2023 67 CITY OF HUGO, MINNESOTA Schedule of Funding Progress for the Fire Relief Association December 31, 2015 Actuarial Valuation Date Actuarial Accrued Liability (AAL) Valuation of Plan Assets (a) Actuarial Valuation of Plan Assets (b) Net Pension Liability (Asset) (a -b) 12/31/15 $ 811,636 $ 1,185,873 $ (374,237) CITY OF HUGO, MINNESOTA Schedule of Employer Contributions for the Fire Relief Association December 31, 2015 Actuarially determined contributions Actual contributions paid Contributions deficiency (excess) :: 2015 2014 CITY OF HUGO, MINNESOTA COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES December 31, 2015 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA NONMAJOR FUNDS December 31, 2015 SPECIAL REVENUE FUNDS Special Park Fund: This fund is used to accumulate resources (property taxes, fees from developers and other miscellaneous revenues) to provide funds for constructing and improving the City's parks. Firefighter's Relief Fund: This fund was established by City Council resolution to set aside funds for municipal contributions to the Hugo Firefighter's Relief Association. Tax Increment Financing Collection Fund: This fund is an accumulation of tax increment proceeds and land sales. DEBT SERVICE FUNDS Abatement Levy Offset Fund: This fund is used to offset the property tax levies required to retire certain bonds issued by the City. Compensated Absences Fund: This fund is used to accumulate resources (transfers from the General Fund) to ensure funds are available to pay compensated absences as they become payable. CITY OF HUGO, MINNESOTA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2015 Special Revenue Debt Service Firefighter's Tax Increment Abatement Total Nonmajor Special Relief Financing Levy Compensated Governmenal Park Fund Fund Collection Fund Offset Absences Fund Assets Cash and investments $ 881,899 $ 61,735 $ 379,000 $ 485,660 $ 446,260 $ 2,254,554 Receivables (Net of Allowance for Uncollectibles) Accrued interest 376 26 181 263 214 1,060 Taxes - delinquent 2,030 289 2,319 TOTAL ASSETS $ 884,305 $ 62,050 $ 379,181 $ 485,923 $ 446,474 $ 2,257,933 Liabilities, Deferred Inflows of Resources, and Fund Balance Deferred Inflows of Resources Unavailable revenue: Property Taxes $ 2,030 $ 289 $ $ $ $ 2,319 Fund Balance Fund Balance Restricted 379,181 379,181 Committed 882,275 485,923 446,474 1,814,672 Assigned 61,761 61,761 Total Fund Balance 882,275 61,761 379,181 485,923 446,474 2,255,614 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE $ 884,305 $ 62,050 $ 379,181 $ 485,923 $ 446,474 $ 2,257,933 i• REVENUES Property taxes Intergovernmental revenues Other Revenue Investment earnings Net increase in the fair value of investments Rent Miscellaneous TOTAL REVENUES EXPENDITURES Capital Outlay Excess (deficiency) of revenues over(under)expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Net change in fund balances FUND BALANCES, beginning FUND BALANCES, ending CITY OF HUGO, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2015 6,018 284,594 17,343 66,113 15,834 2,581 72,131 2,087 322,439 43,056 43,056 (109,425) (109,425) 284,594 17,343 15,834 (106,844) 45,143 256,070 597,681 44,418 363,347 592,767 401,331 1,999,544 $ 882,275 $ 61,761 $ 379,181 $ 485,923 $ 446,474 $ 2,255,614 70 Special Revenue Debt Service Firefighter's Tax Increment Abatement Total Nonmajor Special Relief Financing Levy Compensated Governmental Park Fund Fund Collection Fund Offset Absences Funds $ 106,683 $ 17,132 $ 80,141 $ $ $ 203,956 262 41 303 2,759 137 1,458 2,084 1,685 8,123 658 33 348 497 402 1,938 8,950 8,950 171,300 171,300 290,612 17,343 81,947 2,581 2,087 394,570 6,018 284,594 17,343 66,113 15,834 2,581 72,131 2,087 322,439 43,056 43,056 (109,425) (109,425) 284,594 17,343 15,834 (106,844) 45,143 256,070 597,681 44,418 363,347 592,767 401,331 1,999,544 $ 882,275 $ 61,761 $ 379,181 $ 485,923 $ 446,474 $ 2,255,614 70 CITY OF HUGO, MINNESOTA SPECIAL PARK FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2015 Variance with Final Budget Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES Property taxes Intergovernmental revenues Other revenues Investment earnings Net increase in the fair value of investments Rent Developer fees Total Revenues EXPENDITURES Unallocated Capital Outlay Bernin Property Lions Park Property taxes Total Expenditures Net Change in Fund Balances Fund Balance, January 1 Fund Balance, December 31 $ 106,578 $ 106,578 $ 106,683 $ 105 262 262 2,759 2,759 71 658 658 8,950 8,950 8,950 171,300 171,300 115,528 115,528 290,612 175,084 4,908 4,908 4,035 873 100,000 100,000 1,381 98,619 602 602 602 105,510 105,510 6,018 99,492 10,018 10,018 284,594 274,576 597,681 597,681 597,681 $ 607,699 $ 607,699 $ 882,275 $ 274,576 71 CITY OF HUGO, MINNESOTA FIREFIGHTER'S RELIEF FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2015 REVENUES Property taxes Intergovernmental revenues Other revenues Investment earnings Net increase in the fair value of investments Total Revenues Net Change in Fund Balances Fund Balance, January 1 Fund Balance, December 31 Budgeted Amounts Oriainal Final Variance with Final Budget Favorable Actual (Unfavorable, $ 17,157 $ 17,157 $ 17,132 $ (25) 41 41 137 137 33 33 17,157 17,157 17,343 186 17,157 17,157 17,343 186 44,418 44,418 44,418 $ 61,575 $ 61,575 $ 61,761 $ 186 72 CITY OF HUGO, MINNESOTA TAX INCREMENT FINANCING COLLECTION FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2015 REVENUES Property taxes Other revenues Investment earnings Net increase in the fair value of investments Total Revenues EXPENDITURES Capital Outlay TIF note payments Miscellaneous Total Expenditures Net Change in Fund Balances Fund Balance, January 1 Fund Balance, December 31 Variance with Final Budget Budgeted Amounts Favorable Oriainal Final Actual (Unfavorable) $ 84,329 $ 84,329 $ 80,141 $ (4,188) $ 379,843 $ 379,843 $ 379,181 $ (662) 73 1,458 348 1,458 348 84,329 84,329 81,947 (2,382) 67,463 370 67,463 370 65,788 325 1,675 45 67,833 67,833 66,113 1,720 16,496 363,347 16,496 363,347 15,834 363,347 (662) $ 379,843 $ 379,843 $ 379,181 $ (662) 73 CITY OF HUGO, MINNESOTA ABATEMENT LEVY OFFSET Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2015 Variance with Final Budget Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES Other revenues Investment earnings $ $ $ 2,084 $ 2,084 Net increase in the fair value of investments 497 497 Total Revenues 2,581 2,581 Other Financing Sources (Uses) Transfers out (109,425) (109,425) (109,425) Net Change in Fund Balances (109,425) (109,425) (106,844) 2,581 Fund Balance, January 1 592,767 592,767 592,767 Fund Balance, December 31 $ 483,342 $ 483,342 $ 485,923 $ 2,581 74 CITY OF HUGO, MINNESOTA GENERAL OBLIGATION BONDS Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2015 Variance with Final Budget Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES Property taxes $ 753,245 $ 753,245 $ 758,503 $ 5,258 Special assessments 130,925 130,925 173,382 42,457 Intergovernmental revenue 487,013 487,013 488,859 1,846 Other revenues Investment earnings 6,547 6,547 10,566 4,019 Net increase in the fair value of investments 2,261 2,261 Total Revenues 1,377,730 1,377,730 1,433,571 55,841 EXPENDITURES Debt service Principal retirement 7,070,000 7,070,000 7,070,000 Interest on bonds 272,283 272,283 272,283 Fiscal charges 25,350 25,350 11,975 13,375 Total Expenditures 7,367,633 7,367,633 7,354,258 13,375 Excess (deficiency) of revenues over (under) expenditures (5,989,903) (5,989,903) (5,920,687) 69,216 OTHER FINANCING SOURCES (USES) Transfers in 217,264 217,264 217,264 Transfers out (26,700) (26,700) (26,944) (244) TOTAL OTHER FINANCING SOURCES (USES) 190,564 190,564 190,320 (244) Net Change in Fund Balances (5,799,339) (5,799,339) (5,730,367) 68,972 Fund Balance, January 1 8,830,050 8,830,050 8,830,050 Fund Balance, December 31 $ 3,030,711 $ 3,030,711 $ 3,099,683 $ 68,972 75 CITY OF HUGO, MINNESOTA COMPENSATED ABSENCES Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2015 Variance with Final Budget Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES Other revenues Investment earnings Net increase in the fair value of investments Total Revenues OTHER FINANCING SOURCES Transfers in Net Change in Fund Balances Fund Balance, January 1 Fund Balance, December 31 $ $ $ 1,685 $ 1,685 402 402 2,087 2,087 43,056 43,056 45,143 45,143 401,331 401,331 401,331 $ 401,331 $ 401,331 $ 446,474 $ 45,143 Note: The City adopted a $0 activity budget in this fund for the year ended December 31, 2015. 76 CITY OF HUGO, MINNESOTA PROPERTY AND EQUIPMENT ACQUISITION Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2015 Variance with Final Budget Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES Property taxes Intergovernmental Other revenues Investment earnings Net increase in the fair value of investments Rent Miscellaneous Total Revenues EXPENDITURES Capital outlay Property and equipment acquisition Miscellaneous Total Expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Sale of capital assets Transfers in Total Other Financing Sources (Uses) Excess (Deficit) Financing Sources Over Uses Fund Balance, January 1 Fund Balance, December 31 $ 105,535 $ 105,535 $ 105,555 $ 20 259 259 18,249 18,249 4,353 4,353 10,800 10,800 8,100 (2,700) 4,800 4,800 674,079 674,079 116,335 116,335 141,316 24,981 379,500 379,500 502,735 (123,235) 9,086 9,086 7,225 1,861 388,586 388,586 509,960 (121,374) (272,251) (272,251) (368,644) (96,393) 1,655 1,655 672,424 672,424 674,079 674,079 (272,251) (272,251) 305,435 577,686 4,183,256 4,183,256 4,183,256 $ 3,911,005 $ 3,911,005 $ 4,488,691 $ 577,686 77 CITY OF HUGO, MINNESOTA PROPRIETARY FUND Schedule of Revenues and Expenses - By Department For the Year Ended December 31, 2015 Operating Revenue Sale of water Meter sales Sewer charges Total Operating Revenues Operating Expenses Personal services Engineering Electricity Repairs and maintenance Sewer charges - MCES Depreciation Miscellaneous Total Operating Expenses Operating Income (Loss) Other Revenue (Expense) Water and Sewer Utility Fund Water Sewer Construction Department Department Department Totals $ 867,847 $ $ $ 867,847 24,578 24,578 1,104,839 1,104,839 892,425 1,104,839 1,997,264 175,626 175,622 351,248 5,274 93,903 99,177 82,429 8,166 90,595 174,464 48,775 314,577 537,816 471,903 471,903 361,074 226,338 587,412 63,325 54,931 782 119,038 862,192 985,735 409,262 2,257,189 $ 30,233 $ 119,104 $ (409,262) (259,925) Future infrastructure charges 539,576 Rental income 29,404 Intergovernmental revenue 13,124 Investment earnings 74,066 Net increase in the fair value of investments 17,670 Miscellaneous 182,865 Total Other Revenue (Expense) 856,705 Net Income Before Transfers and Contributions 596,780 Capital contributions - special assessments 7,161 Noncash capital contributions 1,033,897 Transfers (107,839) Change in Net Position $ 1,529,999 •uol;ua;aa ano o; uol;lpuoo e;ou mann sasuodsaa ano pue dlysuol;elan leuolssa;ad ano;o asanoo lewaou ay; w paaan000 suolssnoslp asay; 'aanannoH -sao;lpne s,Aj!o ay; se uol;ua;aa o; aolad aeaA pea ;uawa6euew i4pm 'spaepue;s 6uglpne pue soldlouud bul;un000e;o uogeopdde ay; 6ulpnloul 'saa;;ew;o A;auen a ssnoslp AllejauaB aM sonssl jo s6uipu13 l.!pn y aa4]O -slue;un000e aay;o y;iM suope;lnsuoo yons ou aaam away; 'abpalnnou� ano of -s;oe; ;uenalaa aql Ile sey;ue;lnsuoo ay;;ey; eulwaalap o; sn y;lnn �loayo o;;ue;un000e 6ul;lnsuoo ay; annbaa spaepue;s leuolssa;oad ano 's;uawa;e;s asoy; uo passaadxa aq Aew;ey; uoluldo s,ao;lpne;o ads(; aq; JO uol;eulwaa;ap a ao s;uawa;e;s leloueug s,;lun 1e;u9wuaan06 ay; o; oldlouud bul;un000e ue;o uogeolldde sanlonul uol;e;lnsuoo a;l suogen;ls ule}iao uo „uoluldo puooes„ a bulule;qo o; aellwls 'sial;ew 6u1;un000e pue 6uglpne ;noge slue;un000e aay;o y;lnn ;lnsuoo o; aploap (ew ;uawa6euew 'seseo awns ul s;ue;un000y;uapuadepuljay;O Lipm uoge;InsuoO;uawaBeuepy '960Z `6 aunr pa;ep aa;;al uol;e;uasaadaa ;uawa6euew ay; ul papnloul we ley; ;uawa6euew woa; suope;uasaadaa uleuao pa;senbaa aM sugi;e;uesa idad ;uawaBeueyV ;lpne ano;o asanoo ay; 6uunp esoae s;uawaaa6eslp yons ou ley; }iodaa o; poseald we aM •}iodai s,ao;lpne ay; ao s;uawa;e;s leloueug ay; o; ;ueo1;lu6ls aq pinoo ley; 'uogoe;sl;es ano o; panlosaa lou ao aay;aynn 'aa;;ew buglpne ao '6ul}jodaa 'bul;un000e leloueul; a se;uawa6euew y;lM;uawaaa6eslp a aullap spaepue;s leuolssaload 'aaual sly; ;o sasodand ao� ;uawaBeueW 4]in4 s;uawaW&Se 1p •alogm a se uaje; s;uawa;e;s leloueul; s,;lun uoluldo yoea o; 'a;e6aa66e ay; ul ao (llenpinlpul aay;la 'leua;ew aaann;uawa6euew (q pa;oaaaoo pue saanpeoowd;lpne;o;lnsaa a se pa;oa;ap s;uawa;e;sslw ay; ;o auou 'uol;lppe ul eloynn a se uaNe; s;uawa;e;s leloueul; ay; o; 'a;e6aa66e ay; ul pue Allenpinlpul y;oq 'leua;ewwl aae s;oa;;a alay;ley; paulwaa;ap sey ;uawa6euew s;uawa;e;s leloueul; ay; ;o s;uawa;e;sslw pa;oaaaooun sezlaewwns alnpayos payoe;;e ayl quawa6euew ;o lana) a;epdadde ay; o; way; a;eolunwwoo pue 'lelnu; AIJealo aae ley; asoy; uey; aay;o ';lpne ay; 6uunp pal;guapl s;uawa;e;sslw llejq pue uMou>l Ile a;elnwnooe o; sn aambaa spaepue;s leuolssa;oad sxewe4e;ssyy pa;oaaaooun pue paaoaajoO ;!pne ano bugaldwoo pue bulwaojjed ul;uawa6euew y;lnn 6ulleep w saglnol};lp;ueogluft ou paaa;unooua aM #pny ay; Bu.iwjojaad Qi paaa;unoou3 sag;no;j!o oMl a6ed e;osauulw 'o6nH;o 43 llounoO j!o ay; ;o saagwaw pue ao (ew algeaouoH -s "r. 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spunq s;aaroad le}lde:) ZIOZ "OZ os 0000098 000'coo' t$ 000,0094 000'000'zs 000'0o9zs lta^ wor�aley�syl!ws SHWA _ s438.road je;idet) 01 OZ �[5L. uroraa)eyasyl!ws Sgtl3A V J 'NI'�S•`IT T:\�r (wa3suw1 a�o3ag)awoou� PN❑ sasuadno sanuanagB pun.1 aameS pue as;eM IlGA wJD'A;ey)syUws saw _ u7iv1.JS•FuuvS� spuaal leuoile.iedp spun.q espd iOW3 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA SUPPLEMENTARY INFORMATION December 31, 2015 CITY OF HUGO, MINNESOTA SCHEDULE OF CASH AND INVESTMENTS - ALL FUNDS December 31, 2015 U.S. Government Securities: Interest Book 0.875% 01/23/18 Yield Maturity Value CASH: 497,875 Federal Home Loan Mortgage 0.625% 10/26/18 Change funds Federal National Mortgage Association 1.000% Open $ 200 Petty cash 0.500% 07/30/19 499,970 50 Checking - US Bank 07/30/19 496,920 Open 104,230 Total Cash 489,720 Federal National Mortgage Association 1.250% $ 104,480 INVESTMENTS: Federal Home Loan Mortgage 1.125% 12/30/19 498,910 Certificates of Deposit - BMW Bank North America of UT CD 0.700% 03/08/16 200,058 1.250% - Synovus Bank of Columbus GA CD 0.500% 03/14/16 199,988 09/30/20 - Capital One Bank USA CD 0.400% 04/28/16 245,000 - Sallie Mae Bank of Murray UT CD 0.400% 04/28/16 245,000 - Cadence Bank of Starkville MS CD 0.400% 07/22/16 245,000 - Ally Bank of Midvale UT CD 0.500% 07/29/16 245,000 - Everbank of Jacksonville FL CD 0.900% 10/17/16 200,128 - Beal Bank of Las Vegas NV CD 0.550% 10/26/16 245,000 - BMO Harris Bank National Association CD 0.550% 10/28/16 244,600 - Goldman Sachs Bank of New York CD 0.550% 10/28/16 144,775 - Merrick Bank South of Jordan UT CD 0.600% 10/28/16 245,000 - Mizuho Bank USA CD 0.500% 10/28/16 243,539 - Comenity Capital Bank of Utah CD 0.600% 11/02/16 244,602 - Goldman Sachs Bank of NY CD 2.050% 01/11/17 101,135 - American Express Centurion Bank CD 0.600% 01/03/17 244,481 - Wells Fargo Bank of North America CD 0.850% 01/31/18 139,484 - JP Morgan Chase Bank of Columbus OH CD 0.750% 03/15/18 200,074 Total Certificates of Deposit $ 3,632,864 Money Market Funds - RBC Wealth Management 0.01% Open $23,215,723 Total Money Market Funds $23,215,723 U.S. Government Securities: Federal National Mortgage Association 0.875% 01/23/18 609,177 Federal Home Loan Banks 0.750% 05/21/18 497,875 Federal Home Loan Mortgage 0.625% 10/26/18 498,955 Federal National Mortgage Association 1.000% 12/27/18 999,230 Federal Home Loan Mortgage 0.500% 07/30/19 499,970 Federal National Mortgage Association 1.250% 07/30/19 496,920 Federal National Mortgage Association 1.000% 10/29/19 489,720 Federal National Mortgage Association 1.250% 11/21/19 275,204 Federal Home Loan Mortgage 1.125% 12/30/19 498,910 Federal Home Loan Bank 1.500% 02/21/20 137,728 Federal National Mortgage Association 1.250% 06/17/20 499,390 Federal Home Loan Mortgage 1.250% 09/30/20 494,035 79 CITY OF HUGO, MINNESOTA SCHEDULE OF CASH AND INVESTMENTS - ALL FUNDS December 31, 2015 Total U.S. Government Securities Total Investments Total Cash and Investments :1 $ 8,380,653 $ 35,229,240 $ 35,333,720 Interest Book Yield Maturity Value U.S. Government Securities (continued): Federal Home Loan Mortgage 1.000% 10/29/20 496,605 Federal Home Loan Mortgage 1.125% 10/29/20 395,364 Federal Home Loan Mortgage 1.000% 10/29/20 494,940 Federal Home Loan Mortgage 1.000% 12/28/20 498,745 Federal Home Loan Mortgage 1.500% 12/30/20 497,885 Total U.S. Government Securities Total Investments Total Cash and Investments :1 $ 8,380,653 $ 35,229,240 $ 35,333,720 CITY OF HUGO, MINNESOTA SCHEDULE OF DEBT SERVICE REQUIREMENTS - ALL FUNDS DECEMBER 31, 2015 Year General Obligation Bonds and Certificates Principal Interest 2016 $ 1,570,000 2017 1,625,000 2018 1,680,000 2019 1,615,000 2020 1,675,000 2021 185,000 2022 180,000 2023 85,000 2024 45,000 2025 45,000 2026 45,000 2027 45,000 $ 8,795,000 126,235 106,243 83,058 58,403 32,636 16,341 10,913 6,739 4,658 3,375 2,025 675 $ 451,301 CITY OF HUGO, MINNESOTA SCHEDULE OF BONDS PAYABLE DECEMBER 31, 2015 82 Balance- Bonds Final Maturity Annual Beginning of Bonds Outstanding - Paying Rates Dates Issue Date Date Amount Payment Years Year Retired End of Year Agent G.O. Refunding Bonds 2013 Crossover Refunding Bonds 0.50-1.15 2-1 3/20/2013 2/1/2020 $ 1,060,000 2016 $5,835,000 $ $ 5,835,000 1 1,115,000 2017 1,160,000 2018 1,220,000 2019 1,280,000 2020 G.O. Special Assessment Bonds 2011 Improvement Bonds 2.00-3.00 2-1;8-1 11/9/2011 2/1/2027 $ 110,000 2016-2021 $1,105,000 $110,000 $ 995,000 1 115,000 2022 40,000 2023 45,000 2024-2027 G.O. Property Tax Bonds 2010 Capital Improvement Bonds 2.00-2.50 2-1;8-1 8/1/2010 2/1/2018 $ 130,000 2016-2017 $ 520,000 $125,000 $ 395,000 1 135,000 2018 G.O. Special Assessment Bonds 2009A Improvement Bonds 3.00-3.875 2-1;8-1 7/21/2009 2/1/2020 $ 95,000 2016-2018 $ 580,000 $ 95,000 $ 485,000 1 100,000 2019-2020 G.O. Tax Abatement Bonds 20098 Tax Abatement Bonds 2.50-3.00 2-1;8-1 11/5/2009 2/1/2020 $ 95,000 2016 $ 615,000 $ 95,000 $ 520,000 1 100,000 2017 105,000 2018 110,000 2019-2020 G.O. Special Assessment Bonds 2007A Improvement Bonds 4.00-4.15 2-1; 8-1 10/17/2007 2/1/2023 $ 80,000 2016 $ 645,000 $ 80,000 $ 565,000 1 75,000 2017-2021 65,000 2022 45,000 2023 Paying Agents: 1 - U.S. Bank Trust Total Bonds Payable $ 8,795,000 82 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA STATISTICAL SECTION (UNAUDITED) December 31, 2015 This part of the City's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Content Page Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 83 Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. 93 Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 100 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. 108 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. 112 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business -type activities Net investment in capital assets Restricted Unrestricted Total business -type activities net position Primary government CITY OF HUGO, MINNESOTA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (Accrual Basis of Accounting) Fiscal Year Net investment in capital assets 2015 $ 39,660,986 2014 Restricted 2013 7,022,529 13,519,890 Unrestricted 25,143,396 24,192,786 $ 26,217,435 $ 23,454,304 $ 21,367,621 6,569,231 7,022,529 13, 519, 890 6,209,056 6,092,481 (1,175,995) $ 38,995,722 $ 36,569,314 $ 33,711,516 $ 16,679,906 $ 16,206,682 $ 15,928,980 18,934,340 18,100,305 16,828,249 $ 35,614,246 $ 34,306,987 $ 32,757,229 Net investment in capital assets $ 42,897,341 $ 39,660,986 $ 37,296,601 Restricted 6,569,231 7,022,529 13,519,890 Unrestricted 25,143,396 24,192,786 15,652,254 Total primary government net position $ 74,609,968 $ 70,876,301 $ 66,468,745 Note: The City adopted GASB Statement No 65 in 2013. Amounts in this schedule prior to 2012 have not been restated for GASB Statement No. 65. The City adopted GASB Statements No. 68 and 71 in 2015. Amounts in this schedule prior to 2015 have not been restated for GASB Statements No. 68 and 71. ,31 Schedule 1 2012 2011 2010 2009 2008 2007 2006 $ 21,481,371 $ 21,076,493 $ 22,085,591 $ 19,521,661 $ 20,958,423 $ 19,467,781 $ 19,252,179 8,465,178 3,380,316 3,835,653 8,416,890 10,776,350 11,217,879 7,923,894 8,592,657 8,156,742 $ 33,782,202 $ 32,873,699 $ 32,861,941 $ 30,739,540 $ 28,882,317 $ 28,060,438 $ 27,408,921 $ 16,152,741 $ 15,987,237 $ 15,946,269 $ 13,768,023 $ 13,788,320 $ 13,380,563 $ 12,469,727 16,235,027 14,173,388 13,395,948 14,976,026 13,966,966 12,574,574 10,647,500 $ 32,387,768 $ 30,160,625 $ 29,342,217 $ 28,744,049 $ 27,755,286 $ 25,955,137 $ 23,117,227 $ 37,634,112 $ 37,063,730 $ 38,031,860 $ 33,289,684 $ 34,746,743 $ 32,848,344 $ 31,721,906 8,465,178 3,380,316 20,070,680 22,590,278 24,172,298 26,193,905 21,890,860 21,167,231 18,804,242 $ 66,169,970 $ 63,034,324 $ 62,204,158 $ 59,483,589 $ 56,637,603 $ 54,015,575 $ 50,526,148 ;• CITY OF HUGO, MINNESOTA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (Accrual Basis of Accounting) Expenses Governmental activities: General government Public safety Highways and streets Community development Parks Interest on long-term debt Total governmental activities expenses Business -Type activities: Water and sewer Total primary government expenses Program Revenues Governmental activities: Charges for services: General government Public safety Highways and streets Community development Parks Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Fiscal Year 2015 2014 2013 $ 1,122,799 $ 1,134,472 $ 1,065,863 1,766,538 1,605,641 1,604,478 2,798,767 1,652,444 2,542,320 44,810 29,743 30,483 629,830 695,534 628,316 245,855 420,400 536,639 6,608,599 5,538,234 6,408,099 2,257,189 1,980,909 1,914,195 $ 8,865,788 $ 7,519,143 $ 8,322,294 533,119 41,554 24,700 342,514 2,618,455 3,560,342 537,526 36,835 26,407 260,534 1,964,258 2,825,560 371,013 31,477 27,020 779,206 176,212 1,384,928 Business -type activities: Charges for services: Water and sewer 2,536,840 2,388,668 2,339,417 Capital grants and contributions 1,041,058 818,017 97,613 Total business -type activities program revenues 3,577,898 3,206,685 2,437,030 Total primary government program revenues $ 7,138,240 $ 6,032,245 $ 3,821,958 L -IR Schedule 2 2012 2011 2010 2009 2008 2007 2006 $ 1,067,927 $ 1,053,948 $ 1,085,789 $ 1,248,415 $ 1,539,156 $ 1,244,357 $ 1,191,292 1,564,118 1,530,435 1,404,480 1,503,033 1,419,224 1,209,781 1,148,337 2,433,615 2,672,496 4,981,297 2,467,723 2,927,427 3,069,610 2,812,305 28,593 194,508 194,704 202,069 195,102 227,969 235,597 578,792 598,387 548,569 451,118 613,217 552,174 474,421 515,183 494,872 687,954 630,395 645,538 636,428 666,189 6,188,228 6,544,646 8,902,793 6,502,753 7,339,664 6,940,319 6,528,141 1,720,993 1,922,499 2,101,368 2,162,573 1,743,071 1,600,040 1,840,958 $ 7,909,221 $ 8,467,145 $ 11,004,161 $ 8,665,326 $ 9,082,735 $ 8,540,359 $ 8,369,099 $ 478,209 $ 292,519 $ 368,515 $ 453,546 $ 1,135,846 $ 660,862 $ 997,023 39,092 50,068 56,813 47,892 57,326 62,515 69,679 17,696 17,097 29,113 36,514 112,433 24,516 24,258 17,568 21,428 741,340 775,350 569,054 778,401 406,259 335,573 273,114 420,143 74,332 3,691,149 841,942 68,418 1,154,456 3,268,554 1,707,897 1,228,783 4,797,964 2,146,297 1,709,803 2,248,071 4,629,798 2,784,960 2,276,159 2,337,983 2,544,390 2,775,372 3,296,303 3,424,186 149,899 8,927 66,755 18,501 65,831 22,013 818,052 2,934,859 2,285,086 2,404,738 2,562,891 2,841,203 3,318,316 4,242,238 $ 4,642,756 $ 3,513,869 $ 7,202,702 $ 4,709,188 $ 4,551,006 $ 5,566,387 $ 8,872,036 :. CITY OF HUGO, MINNESOTA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (Accrual Basis of Accounting) Net(Expense)Revenue Governmental Activities Business -type activities Total primary government net revenue General Revenues and Other Changes In Net Position Governmental activities: General property taxes Grants and contributions not restricted to specific programs Interest income Net increase (decrease) in the fair value of investments Miscellaneous Transfers Total governmental activities Business -type activities: General property taxes Grants and contributions not restricted to specific programs Interest income Net increase (decrease) in the fair value of investments Miscellaneous Transfers Total business -type activities Total primary government Change in Net Position Fiscal Year 2015 2014 2013 $ (3,048,257) $ (2,712,674) $ (5,023,171) 1,320,709 1,225,776 522,835 $ (1,727,548) $ (1,486,898) $ (4,500,336) $ 5,930,619 $ 5,169,220 $ 4,957,502 12,987 8,351 7,692 63,745 97,122 123,271 14,946 165,934 (249,734) 10,600 21,566 9,657 107,839 108,279 104,097 6,140,736 5,570,472 4,952,485 74,066 98,298 129,708 17,670 194,271 (286,689) 225,393 139,692 107,704 (107,839) (108,279) (104,097) 209,290 323,982 (153,374) $ 6,350,026 $ 5,894,454 $ 4,799,111 Governmental activities $ 3,092,479 $ 2,857,798 $ (70,686) Business -type activities 1,529,999 1,549,758 369,461 Total primary government $ 4,622,478 $ 4,407,556 $ 298,775 Note: The City adopted GASB Statement No 65 in 2013. Amounts in this schedule prior to 2012 have not been restated for GASB Statement No. 65. ,YA Schedule 2 (continued) 2012 2011 2010 2009 2008 2007 $ (4,480,331) $ (5,315,863) $ (4,104,829) $ (4,356,456) $ (5,629,861) $ (4,692,248) $ (1,898,343) 1,213,866 362,587 303,370 400,318 1,098,132 1,718,276 2,401,280 $ (3,266,465) $ (4,953,276) $ (3,801,459) $ (3,956,138) $ (4,531,729) $ (2,973,972) $ 502,937 $ 5,164,809 $ 5,254,269 $ 5,770,883 $ 5,506,486 $ 5,330,462 $ 4,808,497 $ 3,792,821 9,278 3,753 3,770 213,564 443,941 214,033 59,883 117,355 173,136 338,671 380,820 555,189 598,016 584,561 40,171 67,721 9,093 8,101 7,875 56,060 8,181 104,475 (171,258) 104,813 104,708 114,273 (332,841) (516,498) 5,436,088 5,327,621 6,227,230 6,213,679 6,451,740 5,343,765 3,928,948 5,033 141,153 140,422 140,036 210,764 7,181 25,504 9,734 3,602 119,149 190,576 300,479 451,949 609,365 544,584 387,667 998,603 93,987 94,099 92,870 40,999 92,440 73,357 (104,475) 171,258 (104,813) (104,708) (114,273) 332,841 516,498 1,013,277 455,821 294,798 588,445 702,017 1,119,635 1,191,888 $ 6,449,365 $ 5,783,442 $ 6,522,028 $ 6,802,124 $ 7,153,757 $ 6,463,400 $ 5,120,836 $ 955,757 $ 11,758 $ 2,122,401 $ 1,857,223 $ 821,879 $ 651,517 $ 2,030,605 2,227,143 818,408 598,168 988,763 1,800,149 2,837,911 3,593,168 $ 3,182,900 $ 830,166 $ 2,720,569 $ 2,845,986 $ 2,622,028 $ 3,489,428 $ 5,623,773 -I General fund Unreserved Unassigned Total general fund All other governmental funds Reserved Unreserved, reported in: Special revenue funds Debt service funds Capital projects funds Restricted Committed Assigned Total all other governmental funds Total governmental funds CITY OF HUGO, MINNESOTA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting) 2015 2014 2013 2012 2011 2,422,714 2,316,449 2,186,178 2,109,985 2,160,273 2,422,714 2,316,449 2,186,178 2,109,985 2,160,273 3,478,864 9,193,397 9,567,219 3,940,302 3,380,316 1,814,672 1,591,779 1,432,846 1,518,457 714,894 8,119,888 7,160,986 6,943,377 6,716,756 7,679,292 13,413,424 17,946,162 17,943,442 12,175,515 11,774,502 $15,836,138 $20,262,611 $20,129,620 $ 14,285,500 $ 13,934,775 Note: The City implemented GASB Statement No. 54 in 2011; therefore, classifications of fund balance changed in 2011 and subsequent years. Schedule 3 2010 2009 2008 2007 2006 $ 2,181,107 $ 2,111,128 $ 2,067,361 $ 1,947,046 $ 1,812,789 100,000 251,142 837,142 436,572 1,806,400 610,038 1,566,606 1,525,221 3,168,547 2,895,071 2,164,718 1,636,187 1,386,953 6,820,406 6,930,513 5,586,276 5,063,294 6,610,066 10,425,525 11,731,984 8,612,174 9,103,229 9,522,240 $ 12,606,632 $ 13,843,112 $ 10,679,535 $ 11,050,275 $11,335,029 Co CITY OF HUGO, MINNESOTA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST FISCAL TEN YEARS (Modified Accrual Basis of Accounting) 2015 2014 2013 2012 2011 Revenues Property taxes $ 5,969,315 $ 5,180,422 $ 5,005,479 $ 5,318,041 $ 5,223,887 Special assessments 932,172 345,508 290,505 406,071 624,953 Licenses and permits 297,071 248,642 213,255 302,752 167,373 Intergovernmental revenues 1,315,406 1,206,757 1,003,735 769,373 792,938 Charges for services 207,890 248,497 145,558 159,122 120,308 Court fines 41,554 36,835 31,477 39,092 50,068 Other Revenue Investment earnings 63,745 97,122 123,271 117,355 173,782 Net change in the fair value of investments 14,946 165,934 (249,734) Developer fees 404,041 Land sales Rent 24,540 31,976 19,525 16,765 24,364 Insurance settlement Miscellaneous 236,603 326,104 240,127 202,573 204,763 Total Revenues 9,103,242 8,291,838 6,823,198 7,331,144 7,382,436 EXPENDITURES General government 979,788 986,220 973,069 958,965 900,935 Public safety 1,571,184 1,420,115 1,375,303 1,355,607 1,333,944 Highways and streets 1,204,844 1,204,207 1,199,078 1,157,640 1,166,248 Community development 43,498 20,345 17,515 22,797 181,021 Parks 337,316 349,113 321,655 317,301 297,422 Unallocated 137,210 124,799 134,590 104,377 119,753 Debt service Bond principal retirement 7,070,000 1,570,000 1,515,000 1,260,000 1,120,000 Interest on bonds 272,283 450,981 430,069 463,374 476,157 Miscellaneous Fiscal charges 11,975 5,776 9,102 48,967 52,333 Issuance costs 59,468 Advance refunding escrow Capital outlay 2,011,111 2,135,570 855,610 1,403,591 1,575,007 Total Expenditures 13,639,209 8,267,126 6,890,459 7,092,619 7,222,820 Excess (deficiency) of revenues over (under) expenditures (4,535,967) 24,712 (67,261) 238,525 159,616 OTHER FINANCING SOURCES (USES) Issuance of debt 5,835,000 1,325,000 Premium (Discount) on issuance of debt (27,716) 5,185 Payment to bond escrow agent Sale of property 1,655 7,725 9,600 Transfers in 959,688 1,029,021 518,621 2,076,262 705,068 Transfers out (851,849) (920,742) (414,524) (1,971,787) (876,326) Total other financing sources (uses) 109,494 108,279 5,911,381 112,200 1,168,527 Net change in fund balances $ (4,426,473) $ 132,991 $ 5,844,120 $ 350,725 $ 1,328,143 Debt service as a percentage of noncapital expenditures 60.97% 34.93% 29.42% 29.40% 25.82% 91 Schedule 4 2010 2009 2008 2007 2006 $ 5,563,298 $ 5,474,995 $ 5,278,287 $ 4,722,736 $ 3,789,592 316,848 536,069 330,382 634,279 104,306 210,829 348,343 1,022,525 470,342 644,846 3,372,522 1,345,592 840,100 834,501 1,544,215 146,107 86,072 153,692 169,830 244,965 56,813 47,762 57,026 61,505 68,469 338,671 380,820 555,189 598,016 584,561 2,425,000 7,752 44,343 37,093 519,176 29,310 30,697 31,238 34,887 54,798 72,020 361,557 33,136 35,694 71,270 67,651 10,395,955 8,291,238 8,348,476 7,634,459 7,694,599 911,625 964,806 1,336,479 1,017,392 888,432 1,195, 244 1,300,168 1,236,755 1,021,815 1,010, 965 1,307,156 1,073,741 1,264,979 1,045,845 892,129 183,342 175,409 157,234 167,518 156,208 252,874 182,051 161,881 167,084 56,566 109,741 100,323 94,055 90,862 142,926 806,865 2,425,000 785,000 700,000 950,000 734,359 676,857 608,321 631,185 625,731 54,805 6,364 48,463 29,403 5,643 6,064 225,080 4,832,777 2,600,215 3,245,278 3,771,751 4,276,786 12,168,159 7,819,437 8,833,489 8,864,062 9,026,405 (1,772,204) 471,801 (485,013) (1,229,603) (1,331,806) 1,340,000 2,570,000 1,270,000 156,000 20,772 17,068 7,690 (929,861) 2,333,972 1,478,522 2,429,789 1,018,776 661,519 (2,229,159) (1,373,814) (2,315,516) (1,351,617) (1,178,017) 535,724 2,691,776 114,273 944,849 (360,498) $ (1,236,480) $ 3,163,577 $ (370,740) $ (284,754) $ (1,692,304) 30.31% 23.00% 19.40% 21.22% 32.45% 92 SCHEDULE5 CITY OF HUGO, MINNESOTA TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS 93 Total Estimated Tax Capacity Total Adjusted City % of Tax Capacity Payable Market Real Personal Tax Tax Urban Tax to Total Estimated Year Value Property Property Capacity Capacity (1) Rate Market Value 2006 $ 1,133,074,000 $ 10,826,524 $ 229,117 $ 11,055,641 $ 10,048,262 35.826 % 0.01 2007 1,470,556,400 13,553,070 245,668 13,798,738 12,674,707 35.144 0.01 2008 1,568,574,700 15,232,828 238,245 15,471,073 14,161,910 34.941 0.01 2009 1,567,781,100 15,492,415 239,741 15,732,156 14,350,560 34.443 0.01 2010 1,485,921,700 15,126,688 262,716 15,389,404 13,891,937 34.274 0.01 2011 1,360,991,900 14,025,951 248,164 14,274,115 12,630,639 34.236 0.01 2012 1,341,568,000 13,065,273 255,652 13,320,925 12,247,068 36.498 0.01 2013 1,295,537,600 12,545,414 276,956 12,822,370 11,774,742 36.511 0.01 2014 1,344,215,300 13,111,735 284,514 13,396,249 12,355,637 36.417 0.01 2015 1,554,927,700 15,374,167 283,928 15,658,095 14,603,836 36.318 0.01 (1) Tax Capacity adjusted for captured tax increment, fiscal disparities, and transmission lines. NOTE - Valuations are determined as of January 1 of year preceding tax collection year. The County determines a property's tax capacity by multiplying a property's estimated market value times the property's class rate which is determined by its use. The total City tax levy divided by the total City tax capacity determines a percentage, the City tax rate, that is applied to each parcel's tax capacity to determine the tax amount. 93 CITY OF HUGO, MINNESOTA PROPERTY TAX RATES AND TAX LEVIES DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (Percent of Tax Capacity) Debt Total Range of Tax Rates Service City for Independent Tax Rate Tax Rate School Districts Washington Urban Urban 624, 831, 832 & 834 County 2006 26.012 % 6.924% City of Hugo Operating Debt Total Operating Tax Service City Tax Fiscal Rate Tax Rate Tax Rate Rate Year Rural Rural Rural Urban CITY OF HUGO, MINNESOTA PROPERTY TAX RATES AND TAX LEVIES DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (Percent of Tax Capacity) Debt Total Range of Tax Rates Service City for Independent Tax Rate Tax Rate School Districts Washington Urban Urban 624, 831, 832 & 834 County 2006 26.012 % 6.924% 32.936 % 28.902% 6.924% 35.826 % 14.060 - 23.075 % 26.968 % 2007 26.912 5.242 32.154 29.902 5.242 35.144 12.299 - 22.628 25.673 2008 27.875 3.968 31.843 30.973 3.968 34.941 15.137 - 22.691 25.936 2009 28.660 2.598 31.258 31.845 2.598 34.443 13.455 - 24.480 26.371 2010 27.975 3.191 31.166 31.083 3.191 34.274 12.895 - 26.389 27.775 2011 27.874 3.265 31.139 30.971 3.265 34.236 15.411 - 34.330 29.772 2012 29.403 3.828 33.231 32.669 3.828 36.497 17.331 - 38.360 31.939 2013 29.326 3.927 33.253 32.585 3.927 36.512 22.018 - 37.105 34.225 2014 30.152 2.915 33.067 33.502 2.915 36.417 23.150 - 39.770 32.811 2015 30.612 2.304 32.916 34.013 2.305 36.318 21.124 - 34.496 30.186 Source: Washington County Taxation Division Note: The City's direct property tax rate is determined by dividing the amount of tax levied by the City Council by the City's total tax capacity. 'Overlapping rates are those of local and county governments that apply to property owners within the City of Hugo. Not all overlapping rates apply to all City of Hugo property owners. Although the property tax rates apply to all city property owners, some city properties lie within the geographical boundaries of different school and watershed districts. 94 Schedule 6 Overlapping Rates Range of Tax Rates Special Range of Total for Taxing Direct and Ovelapping Watershed Districts Districts Tax Rates 1.794 - 4.408 % 2.427 % 78.185 - 92.704 % 1.315 - 4.580 2.331 73.772 - 90.356 1.608 - 4.532 2.367 76.891 - 90.467 1.545 - 4.002 2.351 74.980 - 91.647 1.511 - 4.153 2.558 75.905 - 95.149 1.725 - 4.275 2.664 80.711 - 105.277 2.340 - 4.906 2.909 87.750 - 114.611 2.517 - 5.307 3.163 95.176 - 116.312 2.387 - 5.066 3.127 94.542 - 117.191 2.185 - 4.769 2.826 89.237 - 108.595 SCHEDULE7 CITY OF HUGO, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO (1) Source: Washington County Taxation Division 95 2015 2006 Percentage Percentage of Total City of Total City Taxable Tax Taxable Tax Tax Capacity Tax Capacity Taxpayers (1) Capacity Rank Value Capacity Rank Value NSP/Xcel Energy $ 349,912 1 2.40 % $ 238,800 1 2.38 % Wilson Tool International 211,040 2 1.45 184,794 2 1.84 Victor Hugo Blvd LLC 169,072 3 1.16 Schwieters Properties 129,316 4 0.89 102,918 3 1.03 Martin Prop LLC 82,356 5 0.56 14688 Everton LLC 63,728 6 0.43 Team Two Investments LLC 60,328 7 0.41 JWF Victor LLC et al 58,816 8 0.40 4L LLC 57,238 9 0.39 Velasco Hugo LLC 56,092 10 0.38 Pulte Homes of MN Corp 79,067 4 0.79 POA -Scherer LLC 76,285 5 0.76 Woodlands Toy Store LP 74,620 6 0.74 Nor -Lakes Holding Co LLC 51,140 7 0.51 Pratt Investment Company 50,992 8 0.51 MN Pipeline Co 39,583 9 0.40 Oneka Ridge LLC 38,093 10 0.38 TOTAL $ 1,237,898 8.47 % $ 936,292 9.34 % (1) Source: Washington County Taxation Division 95 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA SCHEDULE OF PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Fiscal Collected within the Year Taxes Levied Net Tax Levy Fiscal Year of the Levy Collections Ended for the for the Percentage in Subsequent December 31 Fiscal Year Fiscal Year (1) Amount of Net Levy Years 2006 $ 3,771,811 $ 3,565,418 $ 3,495,075 98.03 $ 70,343 2007 4,652,080 4,424,824 4,282,842 96.79 141,982 2008 5,190,509 4,947,318 4,790,304 96.83 157,014 2009 5,330,059 4,985,828 4,842,016 97.12 139,125 2010 5,218,217 4,932,445 4,742,254 96.14 182,828 2011 4,839,717 4,528,339 4,361,893 96.32 159,106 2012 4,960,596 4,950,356 4,860,849 98.19 73,935 2013 4,750,286 4,740,403 4,659,447 98.29 66,889 2014 4,940,809 4,931,497 4,862,330 98.60 44,869 2015 5,717,021 5,703,010 5,654,146 99.14 (1) Tax Levy adjusted for powerlines and market value credit in all years, and disaster credit in 2009 (2) On records of Washington County Auditor before allowance for uncollectible and excludes Tai Increment Districts. 0. Schedule 8 Delinquent Total Collections to Date Total Taxes As A Amount $ 3,565,418 Percentage Delinquent % Of Total of Net Levy Taxes 2 Net Tax Levy 100.00 $ 0.00 4,424,824 100.00 0.00 4,947,318 100.00 0.00 4,981,141 99.91 4,687 0.09 4,925,082 99.85 7,363 0.15 4,520,999 99.84 7,340 0.16 4,934,784 99.69 15,752 0.32 4,726,336 99.70 14,067 0.30 4,907,199 99.51 24,298 0.49 5,654,146 99.14 48,864 0.86 97 CITY OF HUGO, MINNESOTA WATER AND SANITARY SEWER CHARGES BY CUSTOMER LAST TEN FISCAL YEARS Water (in millions of gallons) Type of Customer Residential Commercial Service Industrial Service Irrigation Service Institutional Service Total gallons Total direct rate per 1,000 gallons Sanitary Sewer ( in millions of gallons) Type of Customer Residential Commercial Industrial Institutional Total gallons Total direct rate per 1,000 gallons 2015 2014 2013 2012 2011 249.290 248.144 282.765 299.950 243.366 12.334 11.318 11.251 11.616 11.090 9.534 7.599 7.166 7.211 7.159 72.262 54.870 83.198 104.747 73.703 1.701 1.375 1.720 1.926 1.465 345.121 323.306 386.100 425.450 336.783 $ 2.515 $ 2.519 $ 2.553 $ 2.468 $ 2.553 2015 2014 2013 2012 2011 249.290 248.144 282.765 299.950 243.366 12.334 11.318 11.251 11.616 11.090 9.534 7.599 7.166 7.211 7.159 1.701 1.375 1.720 1.926 1.465 272.859 268.436 302.902 320.703 263.080 $ 4.049 $ 3.901 $ 3.447 $ 3.435 $ 4.279 .; Schedule 9 2010 2009 2008 2007 2006 252.179 271.084 243.067 245.376 212.100 11.861 11.462 11.715 7.989 8.956 6.487 6.644 8.291 7.539 6.581 89.290 106.387 72.778 93.495 73.192 2.025 1.488 1.757 2.391 2.520 361.842 397.065 337.608 356.790 303.349 $ 2.477 $ 2.541 $ 2.593 $ 2.542 $ 2.559 2010 2009 2008 2007 2006 252.179 271.084 243.067 245.376 212.100 11.861 11.462 11.715 7.989 8.956 6.487 6.644 8.291 7.539 6.581 2.025 1.488 1.757 2.391 2.520 272.552 290.678 264.830 263.295 230.157 $ 3.647 $ 3.019 $ 3.282 $ 2.932 $ 2.918 • CITY OF HUGO, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 100 Other Governmental Activities Debt Total Special Tax Lease Land Use Certificates Capital Tax Governmental Fiscal Assessment Increment Revenue Planning of Improvement Abatement Activities Year Bonds Bonds Bonds Loan Indebtedness Bonds Bonds Debt 2006 $ 90,000 $ 1,835,000 $ 2,260,000 $ $ 455,000 $ 2,363,634 $ 7,819,488 $ 14,823,122 2007 1,237,690 1,560,000 2,090,000 40,000 180,000 2,226,745 7,825,356 15,159,791 2008 1,187,339 1,465,000 1,910,000 40,000 2,084,974 7,763,790 14,451,103 2009 2,044,406 1,360,000 1,720,000 1,943,326 9,212,261 16,279,993 2010 1,954,226 3,156,190 8,982,063 14,092,479 2011 3,094,222 2,817,550 8,397,025 14,308,797 2012 2,913,745 2,449,004 7,692,153 13,054,902 2013 2,623,253 3,106,102 11,626,924 17,356,279 2014 2,337,744 2,728,486 10,730,773 15,797,003 2015 2,052,219 1,439,671 5,310,697 8,802,587 Note: Details of the city's outstanding debt can be found in the notes to the financial statements. Note: The City adopted GASB Statement No. 65 in 2013. Amounts in this schedule prior to 2012 have not been restated for GASB Statement No. 65. 100 Business -Type Activities Utility Revenue Bonds $ 2,480,000 $ 2,305,000 2,120, 000 1,925,000 Total Business Activities Debt 2,480,000 $ 2,305,000 2,120,000 1,925,000 Schedule 10 Total Primary Percentage Government of Personal Per Debt Income Capita 17,303,122 0.04 $ 1,670 17,464,791 0.03 1,453 16,571,103 0.03 1,318 18,204,993 0.03 1,385 14,092,479 0.02 1,057 14,308,797 0.02 1,057 13,054,902 0.02 950 17,356,279 0.02 1,251 15,797,003 0.02 1,112 8,802,587 N/A 613 101 CITY OF HUGO, MINNESOTA RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS General Bonded Debt Outstanding Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. See Schedule 15 for personal income and population data See Schedule 5 for estimated market value information Total $ 17,303,122 17,424,791 16,531,103 18,204,993 14,092,479 14,308,797 13,054,902 17,356,279 15,797,003 8,802,587 Note: The City adopted GASB statement No. 65 in 2013. Amounts in this schedule prior to 2012 have not been restated for GASB Statement No. 65. Source: City of Hugo Finance Department (1) Includes funds of $5,693,117 (2014) and $5,742,264 (2013) in an escrow account to cover two years of interest payments on the Series 2013A Bonds and the 2015-2020 maturities of the Series 2004A and Series 2005A Bonds. 102 Special Tax Lease Certificates Capital Tax Utility Fiscal Assessment Increment Revenue of Improvement Abatement Revenue Year Bonds Bonds Bonds Indebtedness Bonds Bonds Bonds 2006 $ 90,000 $ 1,835,000 $ 2,260,000 $ 455,000 $ 2,363,634 $ 7,819,488 $ 2,480,000 2007 1,237,690 1,560,000 2,090,000 180,000 2,226,745 7,825,356 2,305,000 2008 1,187,339 1,465,000 1,910,000 2,084,974 7,763,790 2,120,000 2009 2,044,406 1,360,000 1,720,000 1,943,326 9,212,261 1,925,000 2010 1,954,226 3,156,190 8,982,063 2011 3,094,222 2,817,550 8,397,025 2012 2,913,745 2,449,004 7,692,153 2013 2,623,253 3,106,102 11,626,924 2014 2,337,744 2,728,486 10,730,773 2015 2,052,219 1,439,671 5,310,697 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. See Schedule 15 for personal income and population data See Schedule 5 for estimated market value information Total $ 17,303,122 17,424,791 16,531,103 18,204,993 14,092,479 14,308,797 13,054,902 17,356,279 15,797,003 8,802,587 Note: The City adopted GASB statement No. 65 in 2013. Amounts in this schedule prior to 2012 have not been restated for GASB Statement No. 65. Source: City of Hugo Finance Department (1) Includes funds of $5,693,117 (2014) and $5,742,264 (2013) in an escrow account to cover two years of interest payments on the Series 2013A Bonds and the 2015-2020 maturities of the Series 2004A and Series 2005A Bonds. 102 Schedule 11 103 Net Less: General Percentage Available Bonded of Actual in Debt Debt Market Value Per Service Outstanding of Property Capita $ (1,241,609) $ 16,061,513 1.42 1,550 (1,452,523) 15,972,268 1.09 1,329 (1,941,654) 14,589,449 0.93 1,160 (2,451,764) 15,753,229 1.00 1,199 (2,720,919) 11,371,560 0.77 853 (3,135,598) 11,173,199 0.82 825 (3,656,596) 9,398,306 0.70 684 (9,225,641) (1) 8,130,638 0.63 586 (8,830,050) (1) 6,966,953 0.52 491 (3,099,683) 5,702,904 0.37 397 103 Schedule 12 CITY OF HUGO, MINNESOTA COMPUTATION OF DIRECT AND INDIRECT GENERAL OBLIGATION BONDED DEBT AND LEGAL DEBT MARGIN December 31, 2015 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable (a) Debt Debt repaid with property taxes Independent School District #624 $ 93,420,000 15.07% $ 14,078,394 Independent School District #831 30,325,000 3.44% 1,043,180 Independent School District #832 50,740,000 4.62% 2,344,188 Independent School District #834 136,865,000 0.90% 1,231,785 Other debt Washington County 164,020,000 5.40% 8,857,080 Regional Transit 206,020,000 0.52% 1,071,304 Subtotal, overlapping debt 28,625,931 City direct debt 8,802,587 8,802,587 Total direct and overlapping debt $ 37,428,518 Sources: Tax capacity data to estimate applicable percentages provided by Washington County. Debt outstanding data provided by each governmental unit. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Hugo. This process recognizes that, when considering the city's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therfore responsible for repaying the debt, of each overlapping government. (a) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using tax capacity values. Applicable percentages were estimated by determining the portion of another governmental unit's tax capacity value that is within the city's boundaries and dividing it by each unit's total tax capacity value. 104 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (Dollars in Thousands) Debt limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit Fiscal Year 2015 2014 2013 2012 2011 $ 43,322 $ 36,634 $ 34,940 $ 36,356 $ 39,099 809 1,094 1,391 1,767 2,179 $ 42,513 $ 35,540 $ 33,549 $ 34,589 $ 36,920 1.87% 2.99% 3.98% 4.86% 5.57% The legal debt limit for municipalities in Minnesota was increased in 2008 from 2% to 3% of the market value of taxable property. This limit applies only to the City's general obligation tax levy bonds and excludes specia assessment, tax increment and tax abatement bonds. 105 Schedule 13 Legal Debt Margin Calculation for the Fiscal Year 2015 Taxable Market Value $1,444,058,600 Debt Limit (3% of market value) 43,321,758 Debt applicable to limit: General obligation bonds 1,435,000 Less: Amount set aside for repayment of general obligation debt (626,189) Total net debt applicable to limit 808,811 Legal debt margin $ 42,512,947 2010 2009 2008 2007 2006 $ 42,332 $ 43,873 $ 43,092 $29,411 $ 22,661 2,537 2,891 3,263 3,740 4,604 $ 39,795 $ 40,982 $ 39,829 $25,671 $ 18,057 5.99% 6.59% 7.57% 12.72% 20.32% W. Schedule 14 CITY OF HUGO, MINNESOTA PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS Notes: (1) Gross revenue includes investment earnings, hook-up charges and special assessments. (2) Operating expenses do not include interest, depreciation, or amortization expense. (3) Details regarding the City's outstanding debt can be found in the notes to the financia statements. 107 Utility Revenue Bonds Net Fiscal Gross Operating Available Debt Service (3) Year Revenue (1) Expenses (2) Revenue Principal Interest Coverage 2006 $ 4,125,009 $ 1,313,253 $ 2,811,756 $ 170,000 $ 108,615 10.09 2007 4,095,374 1,043,879 3,051,495 175,000 102,351 11.00 2008 3,578,618 1,165,722 2,412,896 185,000 95,382 8.61 2009 3,248,863 1,570,104 1,678,759 195,000 87,736 5.94 2010 2,760,541 1,564,187 1,196,354 1,925,000 25,958 0.61 2011 2,569,649 1,405,593 1,164,056 2012 3,920,983 1,196,586 2,724,397 2013 2,301,642 1,385,995 915,647 2014 2,848,133 1,429,577 1,418,556 2015 2,861,130 1,669,777 1,191,353 Notes: (1) Gross revenue includes investment earnings, hook-up charges and special assessments. (2) Operating expenses do not include interest, depreciation, or amortization expense. (3) Details regarding the City's outstanding debt can be found in the notes to the financia statements. 107 SCHEDULE15 CITY OF HUGO, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Sources: (1) Metropolitan Council/2010-Census Bureau (2) Bureau of Economic Analysis - Washington County, Minnesota (3) Estimate based on County unemployment rate provided by Minnesota Department of Employment and Economic Development 1: PERSONAL INCOME PER CAPITA STATE CITY (thousands of PERSONAL UNEMPLOYMENT UNEMPLOYMENT YEAR POPULATION (1) dollars) INCOME (2) RATE (3) RATE (3) 2006 10,361 $ 474,223 $ 45,770 4.4 3.6 2007 12,022 565,046 47,001 5.0 4.2 2008 12,573 608,483 48,396 6.3 5.8 2009 13,140 599,184 45,600 7.6 7.1 2010 13,332 624,124 46,814 7.0 6.4 2011 13,536 677,017 50,016 5.8 5.2 2012 13,739 700,923 51,017 5.4 4.9 2013 13,878 719,144 51,819 4.6 4.0 2014 14,201 764,482 53,833 3.6 2.9 2015 14,352 N/A N/A 3.7 2.8 Sources: (1) Metropolitan Council/2010-Census Bureau (2) Bureau of Economic Analysis - Washington County, Minnesota (3) Estimate based on County unemployment rate provided by Minnesota Department of Employment and Economic Development 1: SCHEDULE16 CITY OF HUGO, MINNESOTA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (1) Telephone survey of individual employers, June 2016 (2) Telephone survey of individual employers, April 2006 (3) City staff estimate based on Metropolitan Council estimate of employment 109 2015 2006 Percentage of Percentage of Total City Total City Employer Employees (1) Rank Employment (3) Employees (2) Rank Employment (3) Wilson Tool 402 1 14.3% 520 1 26.7% JL Schwieters 227 2 8.1% Schwieters Companies Inc 109 3 3.9% 105 2 5.4% Lametti & Sons, Inc. 100 4 3.6% 21 7 1.1% Festival Foods 99 5 3.5% Oneka Elementary School 76 6 2.7% Blue Heron Grille 75 7 2.7% Northland Pallet 67 8 2.4% Glamos Wire/Donner Industries 60 9 2.1% 50 3 2.6% Wild Wings Game Farm 35 10 1.2% Pearson Mechanical 45 4 2.3% Imperial Tool, Inc. 30 5 1.5% Nor -Lakes Services 23 6 1.2% Industrial Painting Specialists 20 8 1.0% Como Lube 18 9 0.9% Nor -Lakes Services 15 10 0.8% (1) Telephone survey of individual employers, June 2016 (2) Telephone survey of individual employers, April 2006 (3) City staff estimate based on Metropolitan Council estimate of employment 109 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Function 2015 2014 2013 2012 2011 City Administrator 1.00 1.00 1.00 1.00 1.00 City Clerk 1.00 1.00 1.00 1.00 1.00 Finance 2.00 2.00 2.00 2.00 2.00 Planning and Zoning 1.00 1.00 1.00 1.00 1.00 General Government Buildings 0.00 0.00 0.00 0.00 0.36 Engineering 1.00 1.00 1.00 1.00 1.00 General Government 6.00 6.00 6.00 6.00 6.36 Fire 2.50 2.50 2.50 2.50 2.50 Building Inspections 3.00 3.00 3.00 3.00 3.00 Public Safety 5.50 5.50 5.50 5.50 5.50 Streets and Roadways 6.34 6.34 6.34 6.34 6.34 Public Works 6.34 6.34 6.34 6.34 6.34 Parks 4.52 4.52 4.52 4.52 4.52 Parks and Recreation 4.52 4.52 4.52 4.52 4.52 Community Development 1.50 0.50 0.50 0.50 2.00 1.50 0.50 0.50 0.50 2.00 Total Governmental Activities 23.86 22.86 22.86 22.86 24.72 Water Utility 1.33 1.33 1.33 1.33 1.33 Sewer Utility 1.33 1.33 1.33 1.33 1.33 Total Business Activities 2.66 2.66 2.66 2.66 2.66 Totals for Organization 26.52 25.52 25.52 25.52 27.38 Source: City's Adopted Budgets 110 Schedule 17 2010 2009 2008 2007 2006 1.00 2.00 1.95 1.91 1.00 1.00 1.00 1.00 1.00 1.00 2.00 2.00 2.00 1.00 1.00 1.00 1.00 1.00 2.00 1.75 0.36 0.50 0.50 0.50 0.50 1.00 1.00 1.00 1.00 1.00 6.36 7.50 7.45 7.41 6.25 2.50 2.50 2.50 2.50 2.50 3.69 4.00 4.00 4.00 5.75 6.19 6.50 6.50 6.50 8.25 6.34 6.34 6.34 6.34 6.34 6.34 6.34 6.34 6.34 6.34 4.52 3.09 3.09 2.29 1.25 4.52 3.09 3.09 2.29 1.25 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 25.41 25.43 25.38 24.54 24.09 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 2.66 2.66 2.66 2.66 2.66 28.07 28.09 28.04 27.20 26.75 111 CITY OF HUGO, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program 2015 2014 2013 Planning and Zoning 166 Conditional use permits 5 2 5 Minor subdivisions 0 1 1 Plats/Planned unit developments 9 4 9 Rezonings 0 0 0 Site plans 3 4 2 Variances 5 10 4 Fire Total emergency responses 467 607 601 EMS responses 317 478 440 Fire responses 150 129 161 Building Inspections Residential permit valuations 20,664 27,140 12,398 (thousands of dollars) Commercial permit valuations 928 13,759 5,246 (thousands of dollars) New dwelling units 69 49 52 Water Utility Number of customers 3,259 3,195 3,163 Average daily consumption 946 886 1,058 (thousands of gallons) Sanitary Sewer Utility Number of customers 3,397 3,331 3,298 Average daily flow 748 735 830 (thousands of gallons) Sources: Various City Department's annual budget workload measurements 112 2012 2011 1 6 0 4 1 2 0 1 5 3 3 2 573 537 356 371 217 166 18,083 11,160 10,482 783 3,109 3,077 1,166 923 3,248 3,119 879 721 Schedule 18 2010 2009 2008 2007 2006 6 4 2 10 10 1 1 1 1 1 3 3 8 5 9 1 0 1 1 1 3 0 5 4 5 6 4 11 12 10 609 550 496 433 417 437 402 362 315 321 172 148 134 118 96 16,254 26,625 59,953 34,132 47,599 1,042 2,739 6,925 5,244 7,646 86 147 184 250 341 2,973 2,880 2,774 2,611 2,376 991 1,088 925 978 831 3,098 3,005 2,894 2,732 2,499 747 796 726 721 631 113 Sources: Various City Department's annual financial report statistics and budget workload measurements 114 Schedule 19 CITY OF HUGO, MINNESOTA CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Fire Stations 1 1 1 1 1 1 1 1 1 1 Public Works Bituminous streets (miles) 72 71 70 70 69 68 68 68 68 67 Gravel streets (miles) 20 20 20 20 21 21 21 21 21 21 Street lights 926 918 910 910 910 899 881 869 845 742 Storm sewer (miles) 36 35 33 33 33 33 33 33 32 32 Park & Recreation Acres of parkland 389.5 385.0 385.0 385.0 385.0 385.0 385.0 260.0 260.0 221.4 Number of parks 15 14 14 14 14 14 14 13 13 11 Water Utility Miles of watermain 58 57 56 55 55 54 54 54 54 51 Number of fire hydrants 688 680 668 666 661 653 640 631 625 625 Sanitary Sewer Utility Miles of sanitary sewer 53 52 51 51 51 50 50 50 50 47 Sources: Various City Department's annual financial report statistics and budget workload measurements 114 CITY OF HUGO, MINNESOTA OTHER REPORT SECTION December 31, 2015 This Page Left Blank Intentionally IASMITH•SCHAFER & A 5 5 O C IAT E 5, LTD. Certified Public Accountants and Consultants Members of American Institute of CPA's Private Companies Practice Section, Minnesota Society of CPA`; MINNESOTA LEGAL COMPLIANCE Independent Auditor's Report To the Honorable Mayor and Members of the City Council City of Hugo We have audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of the governmental activities, the business -type activities, each major fund and the remaining fund information of the City of Hugo, Minnesota, as of and for the year ended December 31, 2015, and the related notes to the financial statements, and have issued our report thereon dated June 9, 2016. The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota State Statutes Sec. 6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions and tax increment financing. Our audit considered all of the listed categories. In connection with our audit, nothing came to our attention that caused us to believe that the City of Hugo, Minnesota failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities, other than the issue noted below. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City of Hugo, Minnesota's noncompliance with the above referenced provisions. As of December 31, 2015, the City's records showed uncashed checks held for more than three years. These checks were not reported and paid to the state Commissions of Commerce pursuant to Minn. Stat. Sections 345.41 and 345.43. This report is intended solely for the information and use of those charged with governance and management of the City of Hugo, Minnesota and the State Auditor and is not intended to be, and should not be, used by anyone other than these specified parties. Gmw0 k, &Li'`�.F Maplewood, Minnesota June 9, 2016 Maplewood Office • 2035 E County Road D • Suite A • Maplewood MN 55109 • PH (551) 770-8414 • FAX (651) 770-5175 Offices in: Edina, Red Wing, and Rochester • www.sniiihschafer.com _. PrrmeGlabal Member of PrimeGlobel. A Global Association of Independent Accounting Farms This Page Left Blank Intentionally City of Hugo Claims July 5, 2016 6,1 Vendor Invoice Amount I Description Department Adventures in Advertising WH30673 1 $_ _328_87 Welcome to Hugo New Resident Bags_ [Administration AI's Coffee Company _ 142074 $ 151.40 Breakroom Supplies _ Gen Govt Bldgs AI's Coffee Company 142075 $ 86.40 Breakroom Supplies _- Public Works Bauer Built Tire 180190504 $ 248.30 -- Tires - Unit #324 Parks Dept Braun Intertec Corporation _ B061441 $ 693.00 Material Testing -Graveling Project Street Det City of Roseville_ _ 221612 $ 396.53 June Phone Service _ Various City of Roseville _ 221592 $ 3,914.17 _ June Computer ServiceVarious Comcast _ 5/11/2016 $ 239.85 Business Internet thru June 20 Comcast 6/11/2016 $ _ 239.85 Business Internet (thru July 20L _Administration _ Administration ConnelLlndustrial Electronics _ 10133 $ _ 227.10 Tech Labor & Parts - Lift Station No. 2 Sewer Utility E.H. Renner & Sons Inc _ 150020000 $ _ 200.00 __ Inspections - Wells No. 3 & 4 W@ter Utility_ ECM Publishers Inc _ Renewal $ 52.00 1 Year Subscription - Forest Lake Times _ Ordinances/Proceedings ESS Brothers & Sons Inc VV3195 _ $ 4,613.00 Adjustable Rings, Seals &Wrap Stormwater Fund ESS Brothers & Sons Inc VV3585 $ 1,302.00 _ Adjustable Rings Sealant & Rope Stormwater Fund Finance and Commerce 742796507 $_ 276.93 _ Advertisement for Bids - 147th Street/Oneka Lake Blvd_ Street Reconstruction Force America Distributing LLC Foremost Promotions IN001-1061148 346457 $ $ 27.86 281.01 PartUnit#204 s- Fire Department Open House Supplies [Street Dept _ Fire Dept _ Hawkins Inc 3901548 RI $ 2,659.22 Water Chemicals Water Utility Home Depot Credit Services 4581710 _ $ 39.35 Shed Supplies -Compost Site _ Recycling Hots Egui ment of Minnesota _ 52392 $ _ 1,615.50 Undercarriage Pressure Washing Cart _ 'Fire Dept Hots Equpment of Minnesota_ Integra Telecom 52392 13941907 $ $ 53.95 91.20 Parts for Washbay _ ___ Fax Lines ept nistration _ Jefferson Fire &Safety Inc_ 227072 $ 315.38 Through the Pump Foam System ]tl John Deere Financial P18918 $ 568.40 Parts - Unit #301 _ e t Parks Dept John Deere Financial P21787 $ _ 76.54 _ Parts- Unit #317 Street Dept Kushlan Products LLC 56438 _ $ _ 159.98 Parts for Cement Mixer _ Public Works Lebens Floral & Garden 6774 $ 550.00 Landscaping Supplies Gen Gov't Bldgs Magic JumpInflatables 112111 _ $ ___L690 .00 Jump Castle _ Parks Dept Martin -McAllister 10448 1$ _500.00 Public Safety Assessment - John Brockber2 _ Fire Dept Martin -McAllister 10448 - $ 500.00 Public Safety Assessment - Brian Esch Fire Dept MartinM -cAllister 10448 $ 500.00 Public Safety Assessment- David Thompson Fire Dept Menards _._.____ 22472 _._._-. $ _ 3295 Supplies - Lift Station No. 2 _ _ Sewer Utility Menards_ _ _ _ 23001 _- $ 8.99 Parts for Mowers ...__-_..__ Parks Det Menards 23001 $ 10.61 -- - Tools _ __. ...__ Parks Dept Minnesota Pipe &Equipment _ _ _ 357607 $ 60.00 Water Lid Puller Water Det_ M -R Sign Cc Inc 190118 $_ 911.45 _ Stop Signs _ Street Dept M -R Sign Cc Inc 190890 $ -S104 700.50 Keep Right & No Outlet Signs _ Street Dept North American Safety Inc 19954 _ _.00 Safety Supplies _ _ Public Warks Northwest Lasers and Instruments 1521 _ $ 128.00 _ _ Digital Level En ineering Dept Olson's Sewer Service Inc 83382 $ 695.00 PW Facility Se tic System Pumping _ _ Public Works Polar Chevrolet 81269 $ 70.65 _ Parts - Unit #114 Street Dept Precision Pipeline LLC _ CGC0001 _ $ 15,000.00 Ditch Maintenance Stormwater Fund Press Publications 517872 $ 163.66 Advertisement -for Bids - 147th StreeVOneka Lake Blvd Street Reconstruction Press Publications _ 517870 _ $ 30.69 Planning Commission Public Hearing Notice OrdinanceslProceedings Rabouin Inc CLAIM $ 3,000.00 2017 Assessment- Partial Billing #6 _ _ Assessor Recreation Sports and Play Inc 20 -Jun -16 $ 191.00 1 Lacrosse Goals -Diamond Point Park _ Parks Dept Recreation Sports and Play Inc_ Rehbems Black Dirt _ 20 -Jun -16$ 6976 $ 191.00 288.00 Lacrosse Goals -Lions Park Pulverized Black Dirt - McCollar Park Parks Det Special Parks Fund Ricoh USA, Inc $ 210.00 ier Lease Payment _ _ Public Works Schifsky (T. A.) & Sons Inc _97016734 59909 ,Cc _ __ $ 159.00 Fine Asphalt Street Dept Schmidt, Cindra Invoice $ _ _ 219.00 _ Cit Council Portrait& Prints Mayor/Council__ Schoonover, C nthia CLAIM $ 437.18 Historical Commission Supplies 'Historical Commission_ SiteOne Landscape Supply LLC 76377883 $ 13.59 Irrigation Hardware Parks Dept Snap-On Industrial ARV! 29303446 $ 183.05 __ Shop Tools _ Public Works Snap-On Industrial�ARV / 29303445 $ 158.88 _ Shop Tools Public Works Sun Life Financial July $ 627.64 _ Disability Premium _ Finance Dept T -Mobile � $ _ 37.75 Cellular Phone Charges Administration _ T- Mobile 870254054 $ 1,956.73 _ Cellular Phone Char e� s ___ Various Tybee Types 6/16/2016 _ $ 534.24 _ Oral History Interview Transcriptions Historical Washington County _ 89501 $ 150.00 __ 2016 Citrix License Commission Community Development Associates _ - May y 32 ,204.00 Engineering Fees -See Attached Breakdown -_-__ Various Za_cks Inc _ 31246 _$ $ 77.45 Rain Suits - __Public Works � ---- _ -_ - Total Claims for Jul 5 2016 y $ 8 15282 I Page 1 r -- u N U 1 a m M 0 t00 n r O O r O r 0 c0 41 O m w N n 0- N p 6 O N n O R M N O cN C O N co r (m0 r O r N w M O O M 3 0 M v 0 0C'i 0 m 04 Oj r V O M C-4 Of m 06 � M 0 a0 « m» co» � » `A o 00 E 6% V) V) V) rn Vo, 6% 6n in ¢ «n 0 o oo uoi o0 0 o n po 0 00 dLo t�7 O voi M 04 0 `- N R uN1 O a00 000 M t0 N d. 0 O C U V N m `.cli a0 O m O LO 00j N fA f9 to fA iH di � 4i V3 M O y c o 0 0 0 0 0 0 3 o v v 0 3 3 0 v o 0 W o 0 0 0 0 0 0 o w w w or o 0 0 0 0 0 0 a o O N 0 0 U N a W W O U O m N O O 7 c(J C N y Z Z Z Z y U N c0 Z Z o V y N cd w w w w vi V) 6% a a¢¢� w a a� to c 0 � c v > E > E ^ a a x d � E m y o c c d > O N C O O 'o ` o 0 0 ava � m y y ¢ w y yovm w w w ai Oc cm O acom JE WN o maa) 0 0 c o c o° v 0c.` O N = O U OOO �= Y C a a1 0 o c a Q E — 0 N y 0 v U o a M° 0 'n `o c 0 0 Z N .O Y a? M a) U U a1 'C > C O co C m a5 a) y 0 E N al O 0 c ) n n E m 3 y m w v m C7 L L O J a) My N c0 L-. c0 O O O N N O O p � O 0 y N O W r U_ T U 0_' N d (A m U J J U N N N i N O N M N O N O O O O O V ao O c0 M 0) N T I 7 cf1 N r O N 0 y N c0 10 9 N i V 9 c0 10 9 9 T c0 r r n 00 O O O O 1� V V 7 C 7 v v v 7 a' v a 00 m 0 Q� ao ro 1 ro 1 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o ro w w m w ao ao d O O c0 01 O O O O O O T O Q) a) Q) D) Q) N N N N � Z D.Lc`5 EXCELSIOR O 2he.Bxeelsior Group June 23, 2016 Steve Duff City of Hugo 14669 Fitzgerald Avenue N Hugo, MN 55038 Re: Prairie Village and Waters Edge — Letter of Credit No. 10216 and No. 11829 Dear Mr. Duff, OP3 Prairie Village, LLC hereby requests a reduction in Letter of Credit No. 10216 and No. 11829 currently in the amounts of $187,625 and $210,899.61, respectively. The item left to complete is final lift of asphalt. If you have any questions related to this application, please do not hesitate to contact me at 952.525.3223 or deb.rid�rewayooExcelsiorLLC.com. Thank you. Sincerely, Deb R9dg Sy er Mana Asset g The Excelsior Group, LLC c 1660 Highway 100 South, Suite 400, St. Louis Park, MN 55416 952-525-3200 .- ExcelsiorLLCcom 4. info@ExcelsiorLLC.com Alcohol & Gambling Enforcement Minnesota Department of Public Safety Alcohol and Gambling Enforcement Division 445 Minnesota Street, Suite 222, St. Paul, MN 55101 651-201-7500 Fax 651-297-5259 TTY 651-282-6555 APPLICATION AND PERMIT FOR A 1 DAY TO 4 DAY TEMPORARY ON -SALE LIQUOR LICENSE Name of organization Date organized Tax exempt number [4L o L) E ms- I 1,54/`)337S_ Address City State Zip Code (BCS (1bh 2`)U I-� p Minnesota Name of person making application Business phone Home phone MAO -V, 24-17 6(2-RT?-(`FCf 1 I s/-4�/S' Date(s) of event Type of organization 7-16 - ) 6 —7-1-7 -16 ❑ Club 0 Charitable Ej Religious F1 Other non-profit Organization officer's name City State Zip Code m t e S h et+rz,+({�_� Minnesota SSd3 Organization officer's name City State Zip Code 0,4h (3 :� ITIAA -2Q iZ HuAci Minnesota S303g Organization officer's name City State Zip Code (\(\A \A MV— tj ei -Qovcr t- Lj Minnesota ,5'c5�Q3� Organization officer's name City State Zip Code Minnesota Location where permit will be used. If an outdoor area, describe. %,IA W+hS Game PMe-SCCzve - lAIJe).o +mv\. If the applicant will contract for intoxicating liquor service give the name and address of the liquor license providing the service. in N If the applicant will carry liquor liability insurance please provide the carrier's name and amount of coverage. West Bey\c;, ` ir.S C6 tj©oof000 LtoinS C(u6S Zh-kMVWyowl\ Ir000.(006 APPROVAL APPLICATION MUST BE APPROVED BY CITY OR COUNTY BEFORE SUBMITTING TO ALCOHOL AND GAMBLING ENFORCEMENT City or County approving the license Date Approved �3O Fee Amount Permit Date Date Fee Paid City or County E-mail Address City or County Phone Number Signature City Clerk or County Official Approved Director Alcohol and Gambling Enforcement CLERKS NOTICE: Submit this form to Alcohol and Gambling Enforcement Division 30 days prior to event. ONE SUBMISSION PER EMAIL, APPLICATION ONLY. PLEASE PROVIDE A VALID E-MAIL ADDRESS FOR THE CITY/COUNTY AS ALL TEMPORARY PERMIT APPROVALS WILL BE SENT BACK VIA EMAIL. E-MAIL THE APPLICATION SIGNED BY CITY/COUNTY TO AGE.TEMPORARYAPPLICATION@STATE MN US A� o CERTIFICATE OF LIABILITY INSURANCE DATE(MMIDDIYVYY) CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, 6/29/2016 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT Lucas Olson NAME: Christensen Group Insurance 11100 eren Road West PRONE (952)653-1000 A N FANG No:(9-0 653-1100 EMAIL IL ADDRESS :lolson@christensen rolP•com INSURERS AFFORDING COVERAGE NAIC p Minnetonka MN 55343 INSURERA:NSI - A Division of West Bend 22608 INSURED INSURER B: Hugo Lions Club INSURERC: PO HOX 321 INSURERD: INSURER E CLAIMS -MADE IX OCCUR Hugo MN 55038 INSURER F: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ILTR TYPE OF INSURANCE ADDL SUER POLICY NUMBER POLICY EFF MM OIYYYY POLICY EXP MM/DDIYY Y LIMITS X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ 11.000,000 A CLAIMS -MADE IX OCCUR DAMAGE ( RENTED PREMISES Ea occurrence) $ 100,000 MED ESP (Any one person) $ EXCLUDED A108567 1/1/2016 1/1/2017 PERSONAL B ADV INJURY $ 11000,000 GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 21000,000 X POLICY PRO - 1:1 F7JECT LOC PRODUCTS -COMP/OP AGG $ 2,000,000 Additional Insured $ OTHER I AUTOMOSILE LIABILITY COMBINED SINGLE LIMIT $ Ea accident) BODI LY INJURY (Per person) $ ANY AUTO ALL OWNED SCHEDULED BODILY INJURY (Per accident) $ AUTOS AUTOS HIRED AUTOS ANONO-0WNED PROPERTY DAMAGE $ Per accident $ UMBRELLA LIAB OCCUR EACH OCCURRENCE $ EXCESS LIAB CLAIMS -MADE AGGREGATE $ DED I I RETENTION WORKERS COMPENSATIONRS' ANO EMPLOYERSIPARTNERV YIN LIILIPER=ACCIDENT STAT E. L. EACH ANY PROPRIETOR/ PARTNERIEXECUTIVE EXCLUDED? ❑ NIA E.L. DISEAIf (Mandatory (Mantlatoryin NH) yes, tlescrihe under E.L. DISEA DESCRIPTION OF OPERATIONS below A LIQUOR LIABILITY A108575 1/1/2016 1/1/2017 EACH COMMON CAUSE $1,000,000 AGGREGATE $1,000,000 DESCRIPTION OF OPERATIONS / LOCATIONS /VEHICLES (ACORD 101, Additional Remarks Schedule, maybe attached if more space is required) RE: Tough Mudder event at Wild Wings of Oneka on Saturday and Sunday, July 16 and 17 Certificate Holder is included as an Additional Insured under the Commercial General Liability and Liquor Liability when required by written contract. hugo.mn.us City of Hugo Attn: Michele Lindau 14669 Fitzgerald Ave N Hugo, MN 55038 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE Hendrickson/LMO �`�" �""'�'�""`-I"''�"'�I ©1988-2014 ACORD CORPORATION. All riahts reser.d ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD INS025 (201401) 68 Cit of �iugo To: Hugo City Council From: City Clerk Michele Lindau Memorandum Date: June 30, 2016 Re: Special Event Permit for Wilson Tool Company Picnic on Saturday, August 13, 2016 Wilson Tool has applied for a Special Event Permit to hold their annual company picnic. This year, they will be celebrating their 50" anniversary. This event requires a Special Event Permit approved by Council because there will be amplified sound, alcohol will be served, and approximately 1,200 — 2,000 people are expected to attend. The event is free of charge for past and present employees, families of Wilson Tool, Inc, and special guests including the City Council. The event will be held at the Hanifl Fields and Shelter, and the Rice Lake Centre will be used for the preparation of food and event activities. There is sufficient parking on site. Food and alcohol will be served free of charge. Because it is a private event, no permit from Washington County Health Department is necessary for the serving of food. The Hugo Lions Club has made application to the City for a Temporary Liquor License to serve beer and wine coolers during the event, and the Lions have provided the proper insurance. Four Washington County Sheriff Deputies have been secured to patrol the event. One or two nurses employed by Wilson Tool will be on-site, and there will be six massage therapists. Approximately 60 other individuals will be working the event. Approximately 20 tents ranging in size from 10' X 10' to 40' X 80' will be rented and installed by the rental company. Porta -potties, hand washing stations, and trash receptacles will also be provided by Wilson Tool. An amplified PA system for music and announcements will be used throughout the day, and a band will play between 7:30 and midnight. Also this year, they will have a fireworks display at 10 p.m. Wilson Tool has held their annual picnic for several years at Lions Park and for the past year at Hanifl. Staff believes the event is well planned and recommends Council approve the special event permit subject to information provided in the application and the following conditions: CONDITIONS Prior to the Event 1. Applicant will provide the City a copy of the signed Hold Harmless Agreement. 2. Applicant will obtain all necessary electrical permits for the event. 3. Applicant will contact the Hugo Public Works Director regarding the condition of the fields to determine if they can be driven on for the purpose of delivering tables and chairs, etc. Applicant will comply with his direction. 4. Applicant will contact the Public Works Director to establish the timing of marking the location of the sprinkler system on the fields. During the Event 5. The applicant shall conduct the event as described and in accordance with the approved plans submitted with the application. 6. Parking attendants will be used, and all parking will be on the paved parking lot area. 7. Wristbands will be worn by those 21 years of age and older to identify persons who can consume alcohol. 8. Weather conditions will be monitored during the event and delays/cancellations will be determined by the responsible person. After the Event 9. If inflatable bounce houses are used, they will be deflated immediately after the event to prevent unsupervised use 10. Tables, chairs, tents and all other items as part of the event will be removed by Monday, August 15, 2016 11. Applicant will properly dispose of all trash generated as part of this event. Minor changes to this permit may be approved by City staff. Changes staff deems to be significant will require Council review and approval. To whom it may concern, Wilson Tool would like to hold their annual picnic on Saturday August 13th 2016 at Hanifl Park from 4:30 P.M. until 12:00 A.M. We hope for between 1200 and 2000 attendees. The event is free of charge and open to all current and retired employees of Wilson Tool and their families. We would like to set up approximately 20 tents sizes ranging from 10' x 10' all the way up to a 40' x 80', 300 tables, 1500 chairs, 5 to 10 interactive activities, 10 porta potties, 4 portable hand washing stations, a 40 yard container for trash, 20 to 30 garbage cans, and 2 refrigerated trailers for beverages on Thursday August 11th and Friday August 12th and removal by Monday August 15th Their will be security from 4 P.M.to 8 A.M. on August 1 Phand 12th. We will be serving grilled food, pulled pork, nachos and cheese, popcorn, cotton candy, ice cream, bottled water, soda pop, beer wine and wine coolers from 4:30 P.M. until. 11:30 P.M.. The Lions club will provide us with bartenders, insurance, and a liquor license. We will have roughly 60 people working the picnic as well as 1-2 nurses on site, 6 massage therapists, and 4 Washington county police officers. re�.�e.✓ks a.+ 10 o'clock l3arcl �v+ T-30 - m�kw�kf Thank you in advance, Wally Zschokke Wilson Tool International G . 9 APPLICATION FOR OUTDOOR DISPLAY OF FIREWORKS/PYROTECHNIC SPECIAL EFFECTS Applicant instructions: This application must be completed and returned at least 15 days prior to date of display. Name ofapplicant (Sponsoring Organization): Wilson Tool Interntaional Address of applicant: 4902 Evergreen Pl. North Branch. MN 55056 Name of authorized agent of applicant: _Pyrotechnic Disnlav, Inc Address of agent: 9405 River Road SE. Clear Lake. MN 55319 Telephone number of agent: 320-743-6496 Ext. I Date of display: August 13, 2016 Time of display: _about 1 int Location of display: Hugo, Minnesota - please see attached site man Manner and place of storage of fireworks/pyrotechnic special effects prior to display: Delivery and storage in truck on day of displav Type & number of fireworks/pyrotechnic special effects to be discharged: I.3G product - up to 5 inch aerial shells and Multi -Shot Box Items & Candles Minnesota State law requires that this display be conducted under the direct supervision of a pyrotechnic operator eerlified by the State Fire Marshal. Name of supervising operator: Dylan Stanton Certificate No.: 0770 Required attachments. The following attachments nmst be included with this application: I. Proof of a bond or certificate of insurance in amount of at least S 5.000.000.00 _ 2. A diagram of the grounds at which the display will be held. This diagram (drawn to scale or with dimensions included) must show the point at which the fireworks/pyrotechnic special effects are to be discharged; the location of ground pieces; the location of all buildings, highways, streets, communication lines and other possible overhead obstructions; and the lines behind which the audience will be restrained 3. Names and ages of all assistants that will be participating in the display. Andy Saxe, Cert # 01015, 33 The discharge of the listed fireworks on the date and at the location shown on this application is hereby approved, subject to the following conditions, if any: I understand and agree to comply with all provisions of this application, MN Statute 624.20 through 624.25, MN State Fire Code, National Fire Protection Association Standard 1123 (2006 edition), applicable federal law(s) and the requirements of the issuing authority, and will ensure that the fireworks/pyrotechnic special effects are discharged in a manner that will not endanger persons or property or constitute a nuisance. Signature of applicant (or agent): Signature of Fire chief: Date of application: June 29, 2016 Date: Printed name of above official: Phone: Signature of issuing authority: Printed name of above official: Phone: ACC) CERTIFICATE OF LIABILITY INSURANCER�ATEI MIOD"YYY) L-� THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT; If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed, If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsements . PRODUCER Britton Gallagher One Cleveland Center, Floor 30 1375 East 9th Street E, T NAME: PHONE rFAX 216-658-Z Arc NR: _ E-MAIL ADDRESS: Cleveland OH 44114 INSURER(S) AFFORDING COVERAGE NAICN INSURERA:Company INSURER S;Everesf IndomnityInsurance C GENERAL LIABILITY INSURED INSURER C:EVereStNaJiQ0aIInsuranceC Pyrotechnic Display Inc. 8450 W. St. Francis Road Frankfort IL 60423 INSURER D: N WC Assigned isk Plan INSURER E: INSURER F: AMP N PREMISES Ea or<ua ce1 5500,000 COVERAGES CERTIFICATE NUMBER: 789003136 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS, INS R LTR TYPE OF INSURANCE ADDL SUER N R'.WO POLICY EFF POLICY NUMBER (MMIDDNYYYI POLICY up fMMIDDNYYYILIMITS B GENERAL LIABILITY S18ML00006-151 9/30/2015 9/30/2016 EACH OCCURRENCE 51,000.000 X COMMERCIAL GENERAL LIABILITY CLAIMS -MADE IT]OCCUR AMP N PREMISES Ea or<ua ce1 5500,000 MED EXP (Any one person) 5 PERSONAL 8 AOV INJURY 51,000,000 GENERAL AGGREGATE 52.000,000 i PRODUCTS -COMNOP AGO 52.000,000 GEN'L AGGREGATE LIMIT APPLIES PER POLICY [X�J PRO- LjECT LOC I5 C AUTOMOBILE LIABILITY 618CA00006-151 9/30/2015 9/30/2016 Eaaccd.ra 31,000,000 X ANY AUTO BODILY INJURY (Per person) $ ALL OWNED SCHEDULED AUTOS AUTOS BODILY INJURY (Per acc,dent S 1 % X NON -OWNED HIRED At AUTOS PROPERTY DAMAGE Perarcidenl S $ A UMBRELLA LIAR X OCCUR 'EAU733983 119/30/2015 9/30/2016 EACH OCCURRENCE $4,000.000 X EXCESS UAB CLAIMS -MADE AGGREGATE S4000,000 DED I I RETENTIONSS 19130/2015 D WORKERS COMPENSATION AND EMPLOYERS' LIABILITY VIN MNAROOODO19716-7(MN) 9/30/2016 X VJC STATU- OTH- EL EACH ACCIDENT $1,000,000 • ANY PROPRIETORMARTNERIEXECUTIVE OPRCER/MEMBER EXCLUDED' NIA DISEASE-EAEMPLOYE $1,000,000 ((Mandatory in NH) DESCRI witansTION ostler DESCRIPTION OF OPERATIONS below IEL EL DISEASE - POLICY LIMIT 51.000000 I DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (AHach ACORD 101, Additional Remarks Schedule, if more space is inquired) Additional Insured extension of coverage is provided by above referenced General Liability policy where required by written agreement. DISPLAY DATE: August 13, 2016 LOCATION: City of Hugo, Minnesota ADDITIONAL INSURED: City of Hugo, Minnesota; Wilson Tool International Wilson Tool International Attn: Mr. Wally Zschokke 4902 Evergreen PI North Branch MN 55056 ACURU 25 (201011)5) SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE 1988-2010 ACORD 1 he ACORD name and logo are registered marks of ACORD reserved. NO �. OA cD 2 r iT 7 i (D 1 0 N N M O LO N ,Q- D Z ro O M ll .� Y,' P.,y FT 1 6,►c) Minnesota Department of Public Safety ` Alcohol and Gambling Enforcement Division 445 Minnesota Street, Suite 222, St. Paul, MN 55101 651-201-7500 Fax 651-297-5259 TTY 651-282-6555 Alcohol & Gambling Enforcement APPLICATION AND PERMIT FOR A 1 DAY TO 4 DAY TEMPORARY ON -SALE LIQUOR LICENSE Name of organization Date organized Tax exempt number Huv o L(oc.3 C u �3 IF l� 7s Y'V2337s Address City State Zip Code 14 v e\cD Minnesota Name of person making application Business phone Home phone MAw-, I 6(2 -Ss cj-146s-/—q-2q—(Tj Date(s) of event Type of organization 13 2,o(6 RClub ❑ Charitable ❑ Religious ❑ Other non-profit Organization officer's name City State Zip Code m(C�Ret Skfq-,(1 I Minnesota �S(�Q Organization officer's name Ciity1 State Zip Code lR �A(.�Zo� ' > (S( V P l`"iU0 U Minnesota Organization officer's name City State Zip Code 8 V\ e- 1-Iru2-Y �c22'iAfZ C, Minnesota __yo Organization officer's name City State Zip Code VhACL14 -e( - 02:t Av. O Minnesota 5-5038 Location where permit will be used. If an outdoor area, describe. j � �i (� Too( "'� _moi llv HAo4l- Fr -t45- "'S' If the applicant will contract for intoxicating liquor service give the name and address of the liquor license providing the service. /V/� If the applicant will carry liq�yluor liability insurance please provide the carrier's name and amount of coverage. [,rvc1S Gl,.la .L h"}�26'Lh-'FrorvtC (� pGc>�OOU 6J2-S"T Qer"Ck jr-.9, tf 000�c�00 APPROVAL APPLICATION MUST BE APPROVED BY CITY OR COUNTY BEFORE SUBMITTING TO ALCOHOL AND GAMBLING ENFORCEMENT 04 a-1-1,4 6 City or County apprbvingthelicense Date Approved 1� Fee Amount Permit Date Date Fee Paid City or County E-mail Address / n City or County Phone Number Sig a Ure, rty Clerk or County 0 iva Approved Director Alcohol and Gambling Enforcement CLERKS NOTICE: Submit this form to Alcohol and Gambling Enforcement Division 30 days priorto event. ONE SUBMISSION PER EMAIL, APPLICATION ONLY. PLEASE PROVIDE A VALID E-MAIL ADDRESS FOR THE CITY/COUNTY AS ALL TEMPORARY PERMIT APPROVALS WILL BE SENT BACK VIA EMAIL. E-MAIL THE APPLICATION SIGNED BY CITY/COUNTY TO AGE.TEMPORARYAPPLICATION(o)STATE.MN.US ALc a CERTIFICATE OF LIABILITY INSURANCE DTE (MMM 016Y) THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(les) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT NAME: Lucas Olson Christensen Group insurance 11100 Brea Road West PHONE E% (952)653-1000 FAX No: (952)653-11011 A DRE s: lolsonWchriatensengroup.com INSURI AFFORDING COVERAGE NAIC 4 INSURERA:NSI - A Division of West Bend 22608 Minnetonka MN 55343 INSURED INSURER B Hugo Lions Club INSURER C: INSURER D: PO BOX 321 INSURER E Hugo MN 55038 INSURER F: COVERAGES CERTIFICATE NUMBER:16-17 Liab REVISION NUMBER - THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTRjhlaa rypE OF INSURANCE ADDL SUER J= POLICY NUMBER POLICY EFF MMIDDIYYYY LIMITS A X COMMERCIAL GENERAL LIABILITY CLAIMS -MADE R�OCCUR EACH OCCURRENCE $ 1,000, 000 DAMAGETORENTED 100,000 PREMISES Ea occurrence $ MED I(Any one person) $ EXCLUDED A108567 1/1/2016 1/1/2017 PERSONAL B ADV INJURY $ 11000,000 GERI AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 2,000,000 X POLICY ❑ PRO ECT D LOC PRODUCTS - COMP/OP AGG $ 2,000,000 I Additional Insured $ OTHER' r AUTOMOBILE LIABILITY COMBINED SINGLE UI 7 - Ea accident) BODILY INJURY (Per person) $ ANY AUTO ALL OWNED SCHEDULED AUTOS AUTOS BODILY INJURY Per accitlent $ ( ) NON -OWNED HIRED AUTOS AUTOS PROPERTY DAMAGE $ Per accitlent UMBRELLA LIAB H OCCUR EACH OCCURRENCE $ AGGREGATE $ EXCESS ICLAIMS-MADE DED I I RETENTION$ $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY YIN I PER OTH- STATUTE ER EL EACH ACCIDENT $ ANY PROPRIETOR/PARTNERIEXECUTIVE OFFICERIMEMBER EXCLUDED? ❑NIA E.L. DISEASE - EA EMPLOYE $ (Mandator, in Ni If yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE -POLICY LIMIT $ A LIQUOR LIABILITY A108575 1/1/2016 1/1/2017 EACH COMMON CAUSE $110001000 AGGREGATE $1,000,000 DESCRIPTION OF OPERATIONS / LOCATIONS /VEHICLES (ACORD 101, Additional Remarks Schedule, maybe attached if more space Is required) RE: Wilson Tool Picnic at the Hanifl Fields, 7032 137th Street North, on Saturday, August 13, 2016 Certificate Holder is included as an Additional Insured lender the Commercial General Liability and Liquor Liability when required by written contract. MLindau@ci.hugo.mn. us City of Hugo Attn: Michele Lindau 14669 Fitzgerald Ave N Hugo, MN 55038 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE Hendrickson/LNO n foRR.2ntaArnan cnoonoennu eu rinHle rne.,..,..a ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD INS025 (201401) G. ID_ RESOLUTION 2016- A RESOLUTION APPOINTING ELECTION JUDGES FOR PRIMARY AND GENERAL ELECTIONS IN THE YEAR 2016 BE IT RESOLVED by the City Council of the City of Hugo, State of Minnesota, the following Election Judges are appointed to serve in the Primary Election and General Election in 2016: LuAnn Adams Corine Roberts Joan Arndt Marilyn Rosenquist Debra Barnes Barbara Schaaf Judy Berger Jody Schwab Cheryl Bierman Tony Schwab Kathleen Brevig Deborah Seelig Jean Carr Charles VonFeldt Alice Christiansen Diane Weber Mary Ann Creager Cheryll White Barbara Erickson Linda Woo Karen Fairchild Janet Zahler Laura Farrell Bernie Zeller Marilyn Ferry Jessica Parrucci Ken Harris Wanda LeBlanc -Fricke Gwen Holets Bronwen Kleissler Cynthia Jorgenson Averi Windisch Pam Kasper Marlys Sime Sally Miesen Michi Eichinger Randolph Miller Cindra Schmidt Judy Pedersen BE IT FURTHER RESOLVED, that in case an appointed judge is unable to serve, the City Clerk is authorized to find a substitute judge for the judge who cannot serve. Whereupon said resolution was declared passed and adopted this 5' day of July, 2016. Tom Weidt, Mayor ATTEST: Michele Lindau, City Clerk U. 13 RESOLUTION 20I6 - RESOLUTION APPROVING STATE OF MINNESOTA JOINT POWERS AGREEMENTS WITH THE CITY OF HUGO ON BEHALF OF ITS CITY ATTORNEY AND ARRESTING AGENCY WHEREAS, the City of Hugo on behalf of its Prosecuting Attorney and Arresting Agency desires to enter into Joint Powers Agreements with the State of Minnesota, Department of Public Safety, Bureau of Criminal Apprehension to use systems and tools available over the State's criminal justice data communications network for which the City is eligible. The Joint Powers Agreements further provide the City with the ability to add, modify and delete connectivity, systems and tools over the five year life of the agreement and obligates the City to pay the costs for the network connection. NOW,THEREFORE, BE IT RESOLVED by the City Council of the City of Hugo, Minnesota as follows: 1. That the State of Minnesota Joint Powers Agreements by and between the State of Minnesota acting through its Department of Public Safety, Bureau of Criminal Apprehension and the City of Hugo on behalf of its Prosecuting Attorney and Arresting Agency, are hereby approved. Copies of the two Joint Powers Agreements are attached to this Resolution and made a part of it. 2. That the Washington County Sheriff, William M. Hutton, or his successor, is designated the Authorized Representative for the Arresting Agency. The Authorized Representative is also authorized to sign any subsequent amendment or agreement that may be required by the State of Minnesota to maintain the City's connection to the systems and tools offered by the State. 3. That the City Prosecutor, Sarah B. Sicheneder, or her successor, is designated the Authorized Representative for the Prosecuting Attorney. The Authorized Representative is also authorized to sign any subsequent amendment or agreement that may be required by the State of Minnesota to maintain the City's connection to the systems and tools offered by the State. To assist the Authorized Representative with the administration of the agreement, Sarah B. Sicheneder, David K. Snyder or any attorney at Johnson/Turner Legal is appointed as the Authorized Representative's designee. 4. That Tom Weidt, the Mayor for the City of Hugo, and Michele Lindau, the City Clerk, are authorized to sign the State of Minnesota Joint Powers Agreements. Resolution 2016 - Passed and Adopted by the City Council on this 5d' day of July, 2016 Tom Weidt, Mayor ATTEST: Michele Lindau, City Clerk JOHNSON TURNER June 21, 2016 Michele Lindau City of Hugo 14669 Fitzgerald Avenue North Hugo, MN 55038 Re: City of Hugo - Prosecution Dear Michele: LEGAL Our current Master Joint Powers Agreement is expiring soon; therefore, enclosed are the following documents that are required to permit our firm to continue to utilize and electronically access court records and court documents through the State's Criminal Justice Data Communications Network ("CJDN"): 1. State of Minnesota Joint Powers Agreement Authorized Agency, 2. Court Data Services Subscriber Amendment to CJDN Subscriber Agreement; and, 3. Sample Resolution approving the agreements as we are required to provide proof of authority to the State Court Administrator's Office. I kindly request that you obtain signatures to the Joint Powers Agreement and Court Data Services Amendment. You and Mayor Weidt are the required signatories pursuant to Minn. Stat. §412.201. Additionally, the Bureau of Criminal Apprehension requires that we provide them with a signed Resolution approving the Joint Powers Agreement, a sample of which is attached. Please return these documents to our office in the self-addressed stamped envelope. If you have any questions regarding this matter, please do not hesitate to contact me. Thank you. Sincerely, JOHNSON/ TURNER LEGAL w Sarah B. Sicheneder SBS/mah Enclosures 56 East BroadwayAoenue,Suite 206 / Forest Lake, MN 55025 P651.464.7292 f651.464.7348 johnsonturnercom. FOREST LAKE LAKE ELMO WOODBURY BLAINE SWIFT Contract # 110485 MN082161A STATE OF MINNESOTA JOINT POWERS AGREEMENT AUTHORIZED AGENCY This agreement is between the State of Minnesota, acting through its Department of Public Safety, Bureau of Criminal Apprehension ('BCA") and the City of Hugo on behalf of its Prosecuting Attorney ("Agency"). Recitals Under Minn. Stat. § 471.59, the BCA and the Agency are empowered to engage in those agreements that are necessary to exercise their powers. Under Minn. Stat. § 299C.46 the BCA must provide a criminal justice data communications network to benefit authorized agencies in Minnesota. The Agency is authorized by law to utilize the criminal justice data communications network pursuant to the terms set out in this agreement. In addition, BCA either maintains repositories of data or has access to repositories of data that benefit authorized agencies in performing their duties. Agency wants to access these data in support of its official duties. The purpose of this Agreement is to create a method by which the Agency has access to those systems and tools for which it has eligibility, and to memorialize the requirements to obtain access and the limitations on the access. Agreement 1 Term of Agreement 1,1 Effective date: This Agreement is effective on the date the BCA obtains all required signatures under Minn. Stat. § 16C.05, subdivision 2. 1.2 Expiration date: This Agreement expires five years from the date it is effective. 2 Agreement between the Parties 2.1 General access. BCA agrees to provide Agency with access to the Minnesota Criminal Justice Data Communications Network (CJDN) and those systems and tools which the Agency is authorized by law to access via the CJDN for the purposes outlined in Minn. Stat. § 299C.46. 2.2 Methods of access. The BCA offers three (3) methods of access to its systems and tools. The methods of access are: A. Direct access occurs when individual users at the Agency use Agency's equipment to access the BCA's systems and tools. This is generally accomplished by an individual user entering a query into one of BCA's systems or tools. B. Indirect access occurs when individual users at the Agency go to another Agency to obtain data and information from BCA's systems and tools. This method of access generally results in the Agency with indirect access obtaining the needed data and information in a physical format like a paper report. C. Computer -to -computer system interface occurs when Agency's computer exchanges data and information with BCA's computer systems and tools using an interface. Without limitation, interface types include: state message switch, web services, enterprise service bus and message queuing. For purposes of this Agreement, Agency employees or contractors may use any of these methods to use BCA's systems and tools as described in this Agreement. Agency will select a method of access and can change the methodology following the process in Clause 2.10. 2.3 Federal systems access. in addition, pursuant to 28 CFR §20.30-38 and Minn. Stat. §299C.58, BCA may provide Agency with access to the Federal Bureau of Investigation (FBI) National Crime Information Center. SWIFT Contract # 110485 MN082161A 2.4 Agency policies. Both the BCA and the FBI's Criminal Justice Information Systems (FBI-CJIS) have policies, regulations and laws on access, use, audit, dissemination, hit confirmation, logging, quality assurance, screening (pre- employment), security, timeliness, training, use of the system, and validation. Agency has created its own policies to ensure that Agency's employees and contractors comply with all applicable requirements. Agency ensures this compliance through appropriate enforcement. These BCA and FBI-CJIS policies and regulations, as amended and updated from time to time, are incorporated into this Agreement by reference. The policies are available at https:. 'app.dps.mn.gov/ci do ' 2.5 Agency resources. To assist Agency in complying with the federal and state requirements on access to and use of the various systems and tools, information is available at ht s:.', s s.x.state.mn.us, sites/bcaservicecatalo default.as x. Additional information on appropriate use is found in the Minnesota Bureau of Criminal Apprehension Policy on Appropriate Use of Systems and Data available at htt s://dps.mn.goN;'divisions/bca/bca- divisions/mnjis/DocumentsBCA-Policy-on-Appropriate-Use-of-Systems-and-Data pdf. 2.6 Access granted. A. Agency is granted permission to use all current and future BCA systems and tools for which Agency is eligible. Eligibility is dependent on Agency (i) satisfying all applicable federal or state statutory requirements; (ii) complying with the terms of this Agreement; and (iii) acceptance by BCA of Agency's written request for use of a specific system or tool. B. To facilitate changes in systems and tools, Agency grants its Authorized Representative authority to make written requests for those systems and tools provided by BCA that the Agency needs to meet its criminal justice obligations and for which Agency is eligible. 2.7 Future access. On written request by Agency, BCA also may provide Agency with access to those systems or tools which may become available after the signing of this Agreement, to the extent that the access is authorized by applicable state and federal law. Agency agrees to be bound by the terms and conditions contained in this Agreement that when utilizing new systems or tools provided under this Agreement. 2.8 Limitations on access. BCA agrees that it will comply with applicable state and federal laws when making information accessible. Agency agrees that it will comply with applicable state and federal laws when accessing, entering, using, disseminating, and storing data. Each party is responsible for its own compliance with the most current applicable state and federal laws. 2.9 Supersedes prior agreements. This Agreement supersedes any and all prior agreements between the BCA and the Agency regarding access to and use of systems and tools provided by BCA. 2.10 Requirement to update information. The parties agree that if there is a change to any of the information whether required by law or this Agreement, the party will send the new information to the other party in writing within 30 days of the change. This clause does not apply to changes in systems or tools provided under this Agreement. This requirement to give notice additionally applies to changes in the individual or organization serving a city as its prosecutor. Any change in performance of the prosecutorial function must be provided to the BCA in writing by giving notice to the Service Desk, BCA.ServiceDeA@state.mn.us. 2.11 Transaction record. The BCA creates and maintains a transaction record for each exchange of data utilizing its systems and tools. In order to meet FBI-CJIS requirements and to perform the audits described in Clause 7, there must be a method of identifying which individual users at the Agency conducted a particular transaction. If Agency uses either direct access as described in Clause 2.2A or indirect access as described in Clause 2.213, BCA's transaction record meets FBI-CJIS requirements. When Agency's method of access is a computer to computer interface as described in Clause 2.2C, the Agency must SWIFT Contract # 110485 NIN082161A keep a transaction record sufficient to satisfy FBI-CJIS requirements and permit the audits described in Clause 7 to occur. If an Agency accesses data from the Driver and Vehicle Services Division in the Minnesota Department of Public Safety and keeps a copy of the data, Agency must have a transaction record of all subsequent access to the data that are kept by the Agency. The transaction record must include the individual user who requested access, and the date, time and content of the request. The transaction record must also include the date, time and content of the response along with the destination to which the data were sent. The transaction record must be maintained for a minimum of six (6) years from the date the transaction occurred and must be made available to the BCA within one (1) business day of the RCA's request. 2.12 Court information access. Certain BCA systems and tools that include access to and/or submission of Court Records may only be utilized by the Agency if the Agency completes the Court Data Services Subscriber Amendment, which upon execution will be incorporated into this Agreement by reference. These BCA systems and tools are identified in the written request made by Agency under Clause 2.6 above. The Court Data Services Subscriber Amendment provides important additional terms, including but not limited to privacy (see Clause 8.2, below), fees (see Clause 3 below), and transaction records or logs, that govern Agency's access to and/or submission of the Court Records delivered through the BCA systems and tools. 2.13 Vendor personnel screening. The BCA will conduct all vendor personnel screening on behalf of Agency as is required by the FBI CHS Security Policy. The BCA will maintain records of the federal, fingerprint -based background check on each vendor employee as well as records of the completion of the security awareness training that may be relied on by the Agency. 3 Payment The Agency understands there is a cost for access to the criminal justice data communications network described in Minn. Stat. § 299C.46. At the time this Agreement is signed, BCA understands that a third party will be responsible for the cost of access. Agency will identify the third party and provide the BCA with the contact information and its contact person for billing purposes so that billing can be established. The Agency will provide updated information to BCA's Authorized Representative within ten business days when this information changes. If Agency chooses to execute the Court Data Services Subscriber Amendment referred to in Clause 2.12 in order to access and/or submit Court Records via BCA's systems, additional fees, if any, are addressed in that amendment. 4 Authorized Representatives The BCA's Authorized Representative is Dana Gotz, Department of Public Safety, Bureau of Criminal Apprehension, Minnesota Justice Information Services, 1430 Maryland Avenue, St. Paul, MN 55106, 651-793-1007, or her successor. The Agency's Authorized Representative is Sarah Sicheneder, City Attorney, 56 E Broadway Avenue, Suite 206, Forest Lake, MN 55025, (651) 464-7292, or his/her successor. 5 Assignment, Amendments, Waiver, and Contract Complete 5.1 Assignment. Neither party may assign nor transfer any rights or obligations under this Agreement. 5.2 Amendments. Any amendment to this Agreement, except those described in Clauses 2.6 and 2.7 above must be in writing and will not be effective until it has been signed and approved by the same parties who signed and approved the original agreement, their successors in office, or another individual duly authorized. 5.3 Waiver. If either party fails to enforce any provision of this Agreement, that failure does not waive the provision or the right to enforce it. 5.4 Contract Complete. This Agreement contains all negotiations and agreements between the BCA and the Agency. No other understanding regarding this Agreement, whether written or oral, may be used to bind either party. SWIFT Contract # 110485 MN082161A Liability Each party will be responsible for its own acts and behavior and the results thereof and shall not be responsible or liable for the other party's actions and consequences of those actions. The Minnesota Torts Claims Act, Minn. Stat. § 3.736 and other applicable laws govern the BCA's liability. The Minnesota Municipal Tort Claims Act, Minn. Stat. Ch. 466, governs the Agency's liability. 7 Audits 7.1 Under Minn. Stat. § 16C.05, subd. 5, the Agency's books, records, documents, internal policies and accounting procedures and practices relevant to this Agreement are subject to examination by the BCA, the State Auditor or Legislative Auditor, as appropriate, for a minimum of six years from the end of this Agreement. Under Minn. Stat. § 6.551, the State Auditor may examine the books, records, documents, and accounting procedures and practices of BCA. The examination shall be limited to the books, records, documents, and accounting procedures and practices that are relevant to this Agreement. 7.2 Under applicable state and federal law, the Agency's records are subject to examination by the BCA to ensure compliance with laws, regulations and policies about access, use, and dissemination of data. 7.3 If Agency accesses federal databases, the Agency's records are subject to examination by the FBI and Agency will cooperate with FBI examiners and make any requested data available for review and audit. 7.4 To facilitate the audits required by state and federal law, Agency is required to have an inventory of the equipment used to access the data covered by this Agreement and the physical location of each. Government Data Practices 8.1 BCA and Agency. The Agency and BCA must comply with the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, as it applies to all data accessible under this Agreement, and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by the Agency under this Agreement. The remedies of Minn. Stat. §§ 13.08 and 13.09 apply to the release of the data referred to in this clause by either the Agency or the BCA. 8.2 Court Records. If Agency chooses to execute the Court Data Services Subscriber Amendment referred to in Clause 2.12 in order to access and/or submit Court Records via BCA's systems, the following provisions regarding data practices also apply. The Court is not subject to Minn. Stat. Ch. 13 (see section 13.90) but is subject to the Rules of Public Access to Records of the Judicial Branch promulgated by the Minnesota Supreme Court. All parties acknowledge and agree that Minn. Stat. § 13.03, subdivision 4(e) requires that the BCA and the Agency comply with the Rules of Public Access for those data received from Court under the Court Data Services Subscriber Amendment. All parties also acknowledge and agree that the use of, access to or submission of Court Records, as that term is defined in the Court Data Sen•ices Subscriber Amendment, may be restricted by rules promulgated by the Minnesota Supreme Court, applicable state statute or federal law. All parties acknowledge and agree that these applicable restrictions must be followed in the appropriate circumstances. 9 Investigation of alleged violations; sanctions For purposes of this clause, "Individual User" means an employee or contractor of Agency. 9.1 Investigation. Agency and BCA agree to cooperate in the investigation and possible prosecution of suspected violations of federal and state law referenced in this Agreement. Agency and BCA agree to cooperate in the investigation of suspected violations of the policies and procedures referenced in this Agreement. When BCA becomes aware that a violation may have occurred, BCA will inform Agency of the suspected violation, subject to any restrictions in applicable law. When Agency becomes aware that a violation has occurred, Agency will inform BCA subject to any restrictions in applicable law. 9.2 Sanctions Involving Only BCA Systems and Tools. The following provisions apply to BCA systems and tools not covered by the Court Data Services Subscriber Amendment. None of these provisions alter the Agency's internal discipline processes, including those governed by a 4 SWIFT Contract # 110485 MN082161A collective bargaining agreement. 9.2.1 For BCA systems and tools that are not covered by the Court Data Senices Subscriber Amendment, Agency must determine if and when an involved Indi-vidual User's access to systems or tools is to be temporarily or permanently eliminated. The decision to suspend or terminate access may be made as soon as alleged violation is discovered, after notice of an alleged violation is received, or after an investigation has occurred. Agency must report the status of the Individual User's access to BCA without delay. BCA reserves the right to make a different determination concerning an Individual User's access to systems or tools than that made by Agency and BCA's determination controls. 9.2.2 If BCA determines that Agency has jeopardized the integrity of the systems or tools covered in this Clause 9.2, BCA may temporarily stop providing some or all the systems or tools under this Agreement until the failure is remedied to the BCA's satisfaction. If Agency's failure is continuing or repeated, Clause 11.1 does not apply and BCA may terminate this Agreement immediately-. 9.3 Sanctions Involving Only Court Data Senices The following provisions apply to those systems and tools covered by the Court Data Services Subscriber Amendment, if it has been signed by Agency. As part of the agreement between the Court and the BCA for the delivery of the systems and tools that are covered by the Court Data Senices Subscriber Amendment, BCA is required to suspend or terminate access to or use of the systems and tools either on its own initiative or when directed by the Court. The decision to suspend or terminate access may be made as soon as an alleged violation is discovered, after notice of an alleged violation is received, or after an investigation has occurred. The decision to suspend or terminate may also be made based on a request from the authorized Representative of Agency. The agreement further provides that only the Court has the authority to reinstate access and use. 9.3.1 Agency understands that if it has signed the Court Data Services Subscriber Amendment and if Agency's Individual Users violate the provisions of that Amendment, access and use will be suspended by BCA or Court. Agency also understands that reinstatement is only at the direction of the Court. 9.3.2 Agency further agrees that if Agency believes that one or more of its Individual Users have violated the terms of the Amendment, it will notify BCA and Court so that an investigation as described in Clause 9.1 may occur. 10 Venue Venue for all legal proceedings involving this Agreement, or its breach, must be in the appropriate state or federal court with competent jurisdiction in Ramsey County, Minnesota. 11 Termination 11.1 Termination. The BCA or the Agency may terminate this Agreement at any time, with or without cause, upon 30 days' written notice to the other party's Authorized Representative. 11.2 Termination for Insufficient Funding. Either party may immediately terminate this Agreement if it does not obtain funding from the Minnesota Legislature, or other funding source; or if funding cannot be continued at a level sufficient to allow for the payment of the services covered here. Termination must be by written notice to the other party's authorized representative. The Agency is not obligated to pay for any services that are provided after notice and effective date of termination. However, the BCA will be entitled to payment, determined on a pro rata basis, for services satisfactorily performed to the extent that funds are available. Neither party will be assessed any penalty if the agreement is terminated because of the decision of the Minnesota Legislature, or other funding source, not to appropriate funds. Notice of the lack of funding must be provided within a reasonable time of the affected party receiving that notice. 12 Continuing obligations The following clauses sur% ive the expiration or cancellation of this Agreement: 6. Liability; 7. Audits; 8. Government Data Practices; 9. Investigation of alleged violations; sanctions; and IO.Venue. SWIFT Contract # 110485 NIN082161 A The parties indicate their agreement and authority to execute this Agreement by signing below. 1. AGENCY: CITY OF HUGO 2. DEPARTMENT OF PUBLIC SAFETY, BUREAU OF CRIMINAL APPREHENSION Name: Tom Weidt Name: (PRINTED) Signed: _ Title: Mayor (,Aith delegated authority) Date: Name: Michele Lindau Signed: Title: City Clerk (with delegated authority) Date: L Signed: Title: (with delegated authority) Date: 3. COMMISSIONER OF ADMINISTRATION delegated to Materials Management Division By: Date: COURT DATA SERVICES SUBSCRIBER AMENDMENT TO CJDN SUBSCRIBER AGREEMENT This Court Data Services Subscriber Amendment ("Subscriber Amendment") is entered into by the State of Minnesota, acting through its Department of Public Safety, Bureau of Criminal Apprehension, (`BCA") and the City of Hugo on behalf of its Prosecuting Attorney ("Agency"), and by and for the benefit of the State of Minnesota acting through its State Court Administrator's Office ("Court") who shall be entitled to enforce any provisions hereof through any legal action against any party. Recitals This Subscriber Amendment modifies and supplements the Agreement between the BCA and Agency, SWIFT Contract number 110485, of even or prior date, for Agency use of BCA systems and tools (referred to herein as "the CJDN Subscriber Agreement"). Certain BCA systems and tools that include access to and/or submission of Court Records may only be utilized by the Agency if the Agency completes this Subscriber Amendment. The Agency desires to use one or more BCA systems and tools to access and/or submit Court Records to assist the Agency in the efficient performance of its duties as required or authorized by law or court rule. Court desires to permit such access and/or submission. This Subscriber Amendment is intended to add Court as a party to the CJDN Subscriber Agreement and to create obligations by the Agency to the Court that can be enforced by the Court. It is also understood that, pursuant to the Master Joint Powers Agreement for Delivery of Court Data Services to CJDN Subscribers ("Master Authorization Agreement") between the Court and the BCA, the BCA is authorized to sign this Subscriber Amendment on behalf of Court. .Upon execution the Subscriber Amendment will be incorporated into the CJDN Subscriber Agreement by reference. The BCA, the Agency and the Court desire to amend the CJDN Subscriber Agreement as stated below. The CJDN Subscriber Agreement is amended by the addition of the following provisions: 1. TERM; TERMINATION; ONGOING OBLIGATIONS. This Subscriber Amendment shall be effective on the date finally executed by all parties and shall remain in effect until expiration or termination of the CJDN Subscriber Agreement unless terminated earlier as provided in this Subscriber Amendment. Any party may terminate this Subscriber Amendment with or without cause by giving written notice to all other parties. The effective date of the termination shall be thirty days after the other party's receipt of the notice of termination, unless a later date is specified in the notice. The provisions of sections 5 through 9, 12.b., 12.c., and 15 through 24 shall survive any termination of this Subscriber Amendment as shall any other provisions which by their nature are intended or expected to survive such termination. Upon termination, the Subscriber shall perform the responsibilities set forth in paragraph 7(f) hereof. 2. Definitions. Unless otherwise specifically defined, each term used herein shall have the meaning assigned to such term in the CJDN Subscriber Agreement. 1 a. "Authorized Court Data Services" means Court Data Services that have been authorized for delivery to CJDN Subscribers via BCA systems and tools pursuant to an Authorization Amendment to the Joint Powers Agreement for Delivery of Court Data Services to CJDN Subscribers ("Master Authorization Agreement") between the Court and the BCA. b. "Court Data Services" means one or more of the services set forth on the Justice Agency Resource webpage of the Minnesota Judicial Branch website (for which the current address is www. courts.state.mn.us) or other location designated by the Court, as the same may be amended from time to time by the Court. C. "Court Records" means all information in any form made available by the Court to Subscriber through the BCA for the purposes of carrying out this Subscriber Amendment, including: i. "Court Case Information" means any information in the Court Records that conveys information about a particular case or controversy, including without limitation Court Confidential Case Information, as defined herein. ii. "Court Confidential Case Information" means any information in the Court Records that is inaccessible to the public pursuant to the Rules of Public Access and that conveys information about a particular case or controversy. iii. "Court Confidential Security and Activation Information" means any information in the Court Records that is inaccessible to the public pursuant to the Rules of Public Access and that explains how to use or gain access to Court Data Services, including but not limited to login account names, passwords, TCP/IP addresses, Court Data Services user manuals, Court Data Services Programs, Court Data Services Databases, and other technical information. iv. "Court Confidential Information" means any information in the Court Records that is inaccessible to the public pursuant to the Rules of Public Access, including without limitation both i) Court Confidential Case Information; and ii) Court Confidential Security and Activation Information. d. "DCA" shall mean the district courts of the state of Minnesota and their respective staff. C. "Policies & Notices" means the policies and notices published by the Court in connection with each of its Court Data Services, on a website or other location designated by the Court, as the same may be amended from time to time by the Court. Policies & Notices for each Authorized Court Data Service identified in an approved request form under section 3, below, are hereby made part of this Subscriber Amendment by this reference and provide additional terms and conditions that govern Subscriber's use of Court Records accessed through such services, including but not limited to provisions on access and use limitations. 2 f. "Rules of Public Access" means the Rules of Public Access to Records of the Judicial Branch promulgated by the Minnesota Supreme Court, as the same may be amended from time to time, including without limitation lists or tables published from time to time by the Court entitled Limits on Public Access to Case Records or Limits on Public Access to Administrative Records, all of which by this reference are made a part of this Subscriber Amendment. It is the obligation of Subscriber to check from time to time for updated rules, lists, and tables and be familiar with the contents thereof. It is contemplated that such rules, lists, and tables will be posted on the Minnesota Judicial Branch website, for which the current address is www. courts.state.mn.us. g. "Court" shall mean the State of Minnesota, State Court Administrator's Office. h. "Subscriber" shall mean the Agency. i. "Subscriber Records" means any information in any form made available by the Subscriber to the Court for the purposes of carrying out this Subscriber Amendment. 3. REQUESTS FOR AUTHORIZED COURT DATA SERVICES. Following execution of this Subscriber Amendment by all parties, Subscriber may submit to the BCA one or more separate requests for Authorized Court Data Services. The BCA is authorized in the Master Authorization Agreement to process, credential and approve such requests on behalf of Court and all such requests approved by the BCA are adopted and incorporated herein by this reference the same as if set forth verbatim herein. a. Activation. Activation of the requested Authorized Court Data Service(s) shalI occur promptly following approval. b. Rejection. Requests may be rejected for any reason, at the discretion of the BCA and/or the Court. C. Requests for Termination of One or More Authorized Court Data Services. The Subscriber may request the termination of an Authorized Court Data Services previously requested by submitting a notice to Court with a copy to the BCA. Promptly upon receipt of a request for termination of an Authorized Court Data Service, the BCA will deactivate the service requested. The termination of one or more Authorized Court Data Services does not terminate this Subscriber Amendment. Provisions for termination of this Subscriber Amendment are set forth in section 1. Upon termination of Authorized Court Data Services, the Subscriber shall perform the responsibilities set forth in paragraph 7(f) hereof. 4. SCOPE OF ACCESS TO COURT RECORDS LIMITED. Subscriber's access to and/or submission of the Court Records shall be limited to Authorized Court Data Services identified in an approved request form under section 3, above, and other Court Records necessary for Subscriber to use Authorized Court Data Services. Authorized Court Data Services shall only be used according to the instructions provided in corresponding Policies & Notices or other materials and only as necessary to assist Subscriber in the efficient performance of Subscriber's duties 3 required or authorized by law or court rule in connection with any civil, criminal, administrative, or arbitral proceeding in any Federal, State, or local court or agency or before any self-regulatory body. Subscriber's access to the Court Records for personal or non -official use is prohibited. Subscriber will not use or attempt to use Authorized Court Data Services in any manner not set forth in this Subscriber Amendment, Policies & Notices, or other Authorized Court Data Services documentation, and upon any such unauthorized use or attempted use the Court may immediately terminate this Subscriber Amendment without prior notice to Subscriber. 5. GUARANTEES OF CONFIDENTIALITY. Subscriber agrees: a. To not disclose Court Confidential Information to any third party except where necessary to carry out the Subscriber's duties as required or authorized by law or court rule in connection with any civil, criminal, administrative, or arbitral proceeding in any Federal, State, or local court or agency or before any self-regulatory body. b. To take all appropriate action, whether by instruction, agreement, or otherwise, to insure the protection, confidentiality and security of Court Confidential Information and to satisfy Subscriber's obligations under this Subscriber Amendment. C. To limit the use of and access to Court Confidential Information to Subscriber's bona fide personnel whose use or access is necessary to effect the purposes of this Subscriber Amendment, and to advise each individual who is permitted use of and/or access to any Court Confidential Information of the restrictions upon disclosure and use contained in this Subscriber Amendment, requiring each individual who is permitted use of and/or access to Court Confidential Information to acknowledge in writing that the individual has read and understands such restrictions. Subscriber shall keep such acknowledgements on file for one year following termination of the Subscriber Amendment and/or CJDN Subscriber Agreement, whichever is longer, and shall provide the Court with access to, and copies of, such acknowledgements upon request. For purposes of this Subscriber Amendment, Subscriber's bona fide personnel shall mean individuals who are employees of Subscriber or provide services to Subscriber either on a voluntary basis or as independent contractors with Subscriber. d. That, without limiting section 1 of this Subscriber Amendment, the obligations of Subscriber and its bona fide personnel with respect to the confidentiality and security of Court Confidential Information shall survive the termination of this Subscriber Amendment and the CJDN Subscriber Agreement and the termination of their relationship with Subscriber. e. That, notwithstanding any federal or state law applicable to the nondisclosure obligations of Subscriber and Subscriber's bona fide personnel under this Subscriber Amendment, such obligations of Subscriber and Subscriber's bona fide personnel are founded independently on the provisions of this Subscriber Amendment. 6. APPLICABILITY TO PREVIOUSLY DISCLOSED COURT RECORDS. Subscriber acknowledges and agrees that all Authorized Court Data Services and related Court Records disclosed to Subscriber prior to the effective date of this Subscriber Amendment shall be subject to the provisions of this Subscriber Amendment. 4 7. LICENSE AND PROTECTION OF PROPRIETARY RIGHTS. During the term of this Subscriber Amendment, subject to the terms and conditions hereof, the Court hereby grants to Subscriber a nonexclusive, nontransferable, limited license to use Court Data Semites Programs and Court Data Services Databases to access or receive the Authorized Court Data Services identified in an approved request form under section 3, above, and related Court Records. Court reserves the right to make modifications to the Authorized Court Data Services, Court Data Services Programs, and Court Data Services Databases, and related materials without notice to Subscriber. These modifications shall be treated in all respects as their previous counterparts. a. Court Data Services Programs. Court is the copyright owner and licensor of the Court Data Services Programs. The combination of ideas, procedures, processes, systems, logic, coherence and methods of operation embodied within the Court Data Services Programs, and all information contained in documentation pertaining to the Court Data Services Programs, including but not limited to manuals, user documentation, and passwords, are trade secret information of Court and its licensors. b. Court Data Services Databases. Court is the copyright owner and licensor of the Court Data Services Databases and of all copyrightable aspects and components thereof. All specifications and information pertaining to the Court Data Services Databases and their structure, sequence and organization, including without limitation data schemas such as the Court XML Schema, are trade secret information of Court and its licensors. C. Marks. Subscriber shall neither have nor claim any right, title, or interest in or use of any trademark used in connection with Authorized Court Data Services, including but not limited to the marks "MNCIS" and "Odyssey." d. Restrictions on Duplication, Disclosure, and Use. Trade secret information of Court and its licensors will be treated by Subscriber in the same manner as Court Confidential Information. In addition, Subscriber will not copy any part of the Court Data Services Programs or Court Data Services Databases, or reverse engineer or otherwise attempt to discern the source code of the Court Data Services Programs or Court Data Services Databases, or use any trademark of Court or its licensors, in any way or for any purpose not specifically and expressly authorized by this Subscriber Amendment. As used herein, "trade secret information of Court and its Iicensors" means any information possessed by Court which derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use. "Trade secret information of Court and its licensors" does not, however, include information which was known to Subscriber prior to Subscriber's receipt thereof, either directly or indirectly, from Court or its licensors, information which is independently developed by Subscriber without reference to or use of information received from Court or its licensors, or information which would not qualify as a trade secret under Minnesota law. It will not be a violation of this section 7, sub -section d, for Subscriber to make up to one copy of training materials and configuration documentation, if any, for each individual authorized to access, use, or configure Authorized Court Data Services, solely for its own use in connection with this Subscriber Amendment. Subscriber will take all steps reasonably necessary to protect the copyright, trade secret, and trademark rights of Court and its licensors and Subscriber will advise its bona fide personnel who are permitted access to any of the Court Data Services Programs and Court Data Services Databases, and trade secret information of Court and its licensors, of the restrictions upon duplication, disclosure and use contained in this Subscriber Amendment. 5 e. Proprietary- Notices. Subscriber will not remove any copyright or proprietary notices included in and/or on the Court Data Services Programs or Court Data Services Databases, related documentation, or trade secret information of Court and its licensors, or any part thereof, made available by Court directly- or through the BCA, if any, and Subscriber will include in and/or on any copy of the Court Data Services Programs or Court Data Sen ices Databases, or trade secret information of Court and its licensors and any documents pertaining thereto, the same copyright and other proprietary notices as appear on the copies made available to Subscriber by Court directly or through the BCA, except that copyright notices shall be updated and other proprietary notices added as may be appropriate. f. Title; Return. The Court Data Services Programs and Court Data Services Databases, and related documentation, including but not limited to training and configuration material, if any, and logon account information and passwords, if any, made available by the Court to Subscriber directly or through the BCA and all copies, including partial copies, thereof are and remain the property of the respective licensor. Except as expressly provided in section 12.b., within ten days of the effective date of termination of this Subscriber Amendment or the CJDN Subscriber Agreement or within ten days of a request for termination of Authorized Court Data Service as described in section 4, Subscriber shall either: (i) uninstall and return any and all copies of the applicable Court Data Services Programs and Court Data Services Databases, and related documentation, including but not limited to training and configuration materials, if any, and logon account information, if any; or (2) destroy the same and certify in writing to the Court that the same have been destroyed. 8. INJUNCTIVE RELIEF. Subscriber acknowledges that the Court, Court's licensors, and DCA will be irreparably harmed if Subscriber's obligations under this Subscriber Amendment are not specifically enforced and that the Court, Court's licensors, and DCA would not have an adequate remedy at law in the event of an actual or threatened violation by Subscriber of its obligations. Therefore, Subscriber agrees that the Court, Court's licensors, and DCA shall be entitled to an injunction or any appropriate decree of specific performance for any actual or threatened violations or breaches by Subscriber or its bona fide personnel without the necessity of the Court, Court's licensors, or DCA showing actual damages or that monetary damages would not afford an adequate remedy. Unless Subscriber is an office, officer, agency, department, division, or bureau of the state of Minnesota, Subscriber shall be liable to the Court, Court's licensors, and DCA for reasonable attorneys fees incurred by the Court, Court's licensors, and DCA in obtaining any relief pursuant to this Subscriber Amendment. 9. LIABILITY. Subscriber and the Court agree that, except as otherwise expressly provided herein, each party will be responsible for its own acts and the results thereof to the extent authorized by law and shall not be responsible for the acts of any others and the results thereof. Liability shall be governed by applicable law. Without limiting the foregoing, liability of the Court and any Subscriber that is an office, officer, agency, department, division, or bureau of the state of Minnesota shall be governed by the provisions of the Minnesota Tort Claims Act, Minnesota Statutes, section 3.376, and other applicable law. Without limiting the foregoing, if Subscriber is a political subdivision of the state of Minnesota, liability of the Subscriber shall be governed by the provisions of Minn. Stat. Ch. 466 (Tort Liability, Political Subdivisions) or other applicable law. Subscriber and Court further acknowledge that the liability, if any, of the BCA is governed by a separate agreement between the Court and the BCA dated December 13, 2010 with DPS -M -0958. 0 10. AVAILABILITY. Specific terms of availability shall be established by the Court and communicated to Subscriber by the Court and/or the BCA. The Court reserves the right to terminate this Subscriber Amendment immediately and/or temporarily suspend Subscriber's Authorized Court Data Services in the event the capacity of any host computer system or legislative appropriation of funds is determined solely by the Court to be insufficient to meet the computer needs of the courts served by the host computer system. 11, [reserved] 12. ADDITIONAL USER OBLIGATIONS. The obligations of the Subscriber set forth in this section are in addition to the other obligations of the Subscriber set forth elsewhere in this Subscriber Amendment. a. Judicial Policy Statement. Subscriber agrees to comply with all policies identified in Policies & Notices applicable to Court Records accessed by Subscriber using Authorized Court Data Services. Upon failure of the Subscriber to comply with such policies, the Court shall have the option of immediately suspending the Subscriber's Authorized Court Data Services on a temporary basis and/or immediately terminating this Subscriber Amendment. b. Access and Use; Log. Subscriber shall be responsible for all access to and use of Authorized Court Data Services and Court Records by Subscriber's bona fide personnel or by means of Subscriber's equipment or passwords, whether or not Subscriber has knowledge of or authorizes such access and use. Subscriber shall also maintain a log identifying all persons to whom Subscriber has disclosed its Court Confidential Security and Activation Information, such as user ID(s) and password(s), including the date of such disclosure. Subscriber shall maintain such logs for a minimum period of six years from the date of disclosure, and shall provide the Court with access to, and copies of, such logs upon request. The Court may conduct audits of Subscriber's logs and use of Authorized Court Data Services and Court Records from time to time. Upon Subscriber's failure to maintain such logs, to maintain accurate logs, or to promptly provide access by the Court to such logs, the Court may terminate this Subscriber Amendment without prior notice to Subscriber. C. Personnel. Subscriber agrees to investigate, at the request of the Court and/or the BCA, allegations of misconduct pertaining to Subscriber's bona fide personnel having access to or use of Authorized Court Data Services, Court Confidential Information, or trade secret information of the Court and its licensors where such persons are alleged to have violated the provisions of this Subscriber Amendment, Policies & Notices, Judicial Branch policies, or other security requirements or laws regulating access to the Court Records. d. Minnesota Data Practices Act Applicability. If Subscriber is a Minnesota Government entity that is subject to the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, Subscriber acknowledges and agrees that: (1) the Court is not subject to Minn. Stat. Ch. 13 (see section 13.90) but is subject to the Rules of Public Access and other rules promulgated by the Minnesota Supreme Court; (2) Minn. Stat. section 13.03, subdivision 4(e) requires that Subscriber comply with the Rules of Public Access and other rules promulgated by the Minnesota Supreme Court for access to Court Records provided via the 7 BCA systems and tools under this Subscriber Amendment; (3) the use of and access to Court Records may be restricted by rules promulgated by the Minnesota Supreme Court, applicable state statute or federal law; and (4) these applicable restrictions must be followed in the appropriate circumstances. 13. FEES; INVOICES. Unless the Subscriber is an office, officer, department, division, agency, or bureau of the state of Minnesota, Subscriber shall pay the fees, if any, set forth in applicable Policies & Notices, together with applicable sales, use or other taxes. Applicable monthly fees continence ten (10) days after notice of approval of the request pursuant to section 3 of this Subscriber Amendment or upon the initial Subscriber transaction as defined in the Policies & Notices, whichever occurs earlier. When fees apply, the Court shall invoice Subscriber on a monthly basis for charges incurred in the preceding month and applicable taxes, if any, and payment of all amounts shall be due upon receipt of invoice. If all amounts are not paid within 30 days of the date of the invoice, the Court may immediately cancel this Subscriber Amendment without notice to Subscriber and pursue all available legal remedies. Subscriber certifies that funds have been appropriated for the payment of charges under this Subscriber Amendment for the current fiscal year, if applicable. 14. MODIFICATION OF FEES. Court may modify the fees by amending the Policies & Notices as provided herein, and the modified fees shall be effective on the date specified in the Policies & Notices, which shall not be less than thirty days from the publication of the Policies & Notices. Subscriber shall have the option of accepting such changes or terminating this Subscriber Amendment as provided in section 1 hereof. 15. WARRANTY DISCLAIMERS. a. WARRANTY EXCLUSIONS. EXCEPT AS SPECIFICALLY AND EXPRESSLY PROVIDED HEREIN, COURT, COURT'S LICENSORS, AND DCA MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, NOR ARE ANY WARRANTIES TO BE IMPLIED, WITH RESPECT TO THE INFORMATION, SERVICES OR COMPUTER PROGRAMS MADE AVAILABLE UNDER THIS AGREEMENT. b. ACCURACY AND COMPLETENESS OF INFORMATION. WITHOUT LIMITING THE GENERALITY OF THE PRECEDING PARAGRAPH, COURT, COURT'S LICENSORS, AND DCA MAKE NO WARRANTIES AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THE COURT RECORDS. 15. RELATIONSHIP OF THE PARTIES. Subscriber is an independent contractor and shall not be deemed for any purpose to be an employee, partner, agent or franchisee of the Court, Court's licensors, or DCA. Neither Subscriber nor the Court, Court's licensors, or DCA shall have the right nor the authority to assume, create or incur any liability or obligation of any kind, express or implied, against or in the name of or on behalf of the other. 17. NOTICE. Except as provided in section 2 regarding notices of or modifications to Authorized Court Data Services and Policies & Notices, any notice to Court or Subscriber hereunder shall be deemed to have been received when personally delivered in writing or seventy- two (72) hours after it has been deposited in the United States mail, first class, proper postage prepaid, addressed to the party to whom it is intended at the address set forth on page one of this Agreement or at such other address of which notice has been given in accordance herewith. 18. NON -WAIVER. The failure by any party at any time to enforce any of the provisions of this Subscriber Amendment or any right or remedy available hereunder or at law or in equity, or to exercise any option herein provided, shall not constitute a waiver of such provision, remedy or option or in any way affect the validity of this Subscriber Amendment. The waiver of any default by either Party shall not be deemed a continuing waiver, but shall apply solely to the instance to which such waiver is directed. 19. FORCE MAJEURE. Neither Subscriber nor Court shall be responsible for failure or delay in the performance of their respective obligations hereunder caused by acts beyond their reasonable control. 20. SEVERABILITY. Every provision of this Subscriber Amendment shall be construed, to the extent possible, so as to be valid and enforceable. If any provision of this Subscriber Amendment so construed is held by a court of competent jurisdiction to be invalid, illegal or otherwise unenforceable, such provision shall be deemed severed from this Subscriber Amendment, and all other provisions shall remain in full force and effect. 21. ASSIGNMENT AND BINDING EFFECT. Except as otherwise expressly permitted herein, neither Subscriber nor Court may assign, delegate and/or otherwise transfer this Subscriber Amendment or any of its rights or obligations hereunder without the prior written consent of the other. This Subscriber Amendment shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns, including any other legal entity into, by or with which Subscriber may be merged, acquired or consolidated. 22. GOVERNING LAW. This Subscriber Amendment shall in all respects be governed by and interpreted, construed and enforced in accordance with the laws of the United. States and of the State of Minnesota. 23. VENUE AND JURISDICTION. Any action arising out of or relating to this Subscriber Amendment, its performance, enforcement or breach will be venued in a state or federal court situated within the State of Minnesota. Subscriber hereby irrevocably consents and submits itself to the personal jurisdiction of said courts for that purpose. 24. INTEGRATION. This Subscriber Amendment contains all negotiations and agreements between the parties. No other understanding regarding this Subscriber Amendment, whether written or oral, may be used to bind either party, provided that all terms and conditions of the CJDN Subscriber Agreement and all previous amendments remain in full force and effect except as supplemented or modified by this Subscriber Amendment. IN WITNESS WHEREOF, the Parties have, by their duly authorized officers, executed this Subscriber Amendment in duplicate, intending to be bound thereby. 0 1. SUBSCRIBER (AGENCY) Subscriber must attach written verification of authority to sign on behalf of and bind the entity, such as an opinion of counsel or resolution. Name: Tom Weidt Signed: Title: Mayor (a,rith delegated authority) Date: Name: Michele Lindau Signed: Title: City Clerk (with delegated authority) Date: 10 2. DEPARTMENT OF PUBLIC SAFETY, BUREAU OF CRIMINAL APPREHENSION Name: (PRINTE Signed: Title: (with delegated authority) Date: 3. COMMISSIONER OF ADMINISTRATION delegated to Materials Management Division By: Date: 4. COURTS Authority granted to Bureau of Criminal Apprehension Name: (PRINTED) Signed: Title: (with authorized authority) Date: RESOLUTION 2016 - A RESOLUTION APPROVING THE MASTER PARTNERSHIP CONTRACT WITH THE MINNESOTA DEPARTMENT OF TRANSPORTATION. WHEREAS, the Minnesota Department of Transportation wishes to cooperate closely with local units of government to coordinate the delivery of transportation services and maximize the efficient delivery of such services at all levels of government; and WHEREAS, the Master Partnership Contract provides a framework for MnDOT and local agencies to provide payment to each other for services rendered; and WHEREAS, some routine services are included in the contractor and all other services are accomplished through the execution of work orders; and WHEREAS, MnDOT and local governments are authorized by Minnesota Statutes sections 471.59, 174.02, and 161.20, to undertake collaborative efforts for the design, construction, maintenance, and operation of state and local roads; and WHEREAS, the parties wish to be able to respond quickly and efficiently to such opportunities for collaboration, and have determined that having the ability to write "work orders" against a master contact would provide the greatest speed and flexibility in responding to identified needs. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF HUGO, MINNESOTA: 1. That the City of Hugo enter into a Master Partnership Contract with the Minnesota Department of Transportation, a copy of which has been provided to the City Council of Hugo. 2. That the proper City of Hugo officers are authorized to execute such contract and any amendments thereto. 3. That the City Administrator of the City of Hugo is authorized to negotiate work order contract pursuant to the Master Contract, which work order contacts may provide for payment to or from MnDOT, and that the City Administrator of the City of Hugo may execute such work order contracts on behalf of the City of Hugo without further approval by the City Council of Hugo. Council members voting AYE: Council members voting NAY: Whereupon said resolution was declared passed and adopted this 5th day of July, 2016. Tom Weidt, Mayor ATTEST: Michele Lindau, City Clerk 6. 19 Minnesota Department of Transportation Metro District Office of State Aid Telephone: 651-234-7773 e8 1500 West County Rd B2 sharon.lemay@state.mn.us oa*nr Roseville, MN 55113-3174 To: Local Agency RE: Proposed Master Partnership Contract Attached is a proposed master partnership contract along with a sample City Resolution, The Master Partnership Contract provides a framework for Mn/DOT and Local Agencies to provide payment to each other for services rendered. A few routine services are included in the contract and all other services are accomplished through the execution of work orders. If acceptable, please print 3 copies and arrange to have the Master Contract presented to your City Council for their approval and execution. Please ensure that the original signatures of the officials authorized to execute this contract on their behalf are obtained on all four copies of the agreement. A signature acknowledgment must be included either on the signature page or attached as a separate document. (It is suggested that all signers use blue ink so that the original signatures are obvious and will not be mistaken for photo copies.) Please provide signatures only under the Local Government heading. Also required is a new resolution passed by the City Council authorizing its officials to sign and execute the agreement on its behalf. (Only the named officials may sign the agreement: if anyone else signs in the named official's place, the agreement will not be executed.) This resolution must be contain the notarized signature of the individual certifying the resolution. Sample forms and language are enclosed with this letter. Please provide three original versions of a resolution including signatures and City/County stamp. Work Orders do not need City Council approval unless the City Council stipulates that in their resolution. Generally only the City Engineer needs to sign Work Orders. To expedite the approval process, the executed agreements and resolutions should be returned to me to obtain further signatures. Please note that no work shall be performed by Mn/DOT personnel until the full execution of the agreement. After execution by Mn/DOT and other State officials, a copy of the agreement will be returned to you. If you have any questions or require additional information, please feel free to contact me at 651-234-7773. Sincerely, Sharon LeMay, Metro State Aid MnDOT Agreement # 1002061 STATE OF MINNESOTA AND CITY OF HUGO MASTER PARTNERSHIP CONTRACT This master contract is between the State of Minnesota, acting through its Commissioner of Transportation hereinafter referred to as the "State" and the City of Hugo, acting through its City Council, hereinafter referred to as the "Local Government." Recitals 1. The parties are authorized to enter into this agreement pursuant to Minnesota Statutes. §§15.061, 471.59 and 174.02. 2. Minn. Stat. § 161.20, subd. 2, authorizes the Commissioner of Transportation to make arrangements with and cooperate with any governmental authority for the purposes of constructing, maintaining and improving the trunk highway system. 3. Each party to this Contract is a "road authority" as defined by Minn. Stat. §160.02, subd. 25. 4. Minn. Stat. § 161.39, subd. 1, authorizes a road authority to perform work for another road authority. Such work may include providing technical and engineering advice, assistance and supervision, surveying, preparing plans for the construction or reconstruction of roadways, and performing roadway maintenance. 5. Minn. Stat. §174.02, subd. 6, authorizes the Commissioner of Transportation to enter into agreements with other governmental entities for research and experimentation; for sharing facilities, equipment, staff, data, or other means of providing transportation -related services; or for other cooperative programs that promote efficiencies in providing governmental services, or that further development of innovation in transportation for the benefit of the citizens of Minnesota. 6. Each party wishes to occasionally procure services from the other party, which the parties agree will enhance the efficiency of delivering governmental services at all levels. This Master Partnership Contract provides a framework for the efficient handling of such requests. This Master Partnership Contract contains terns generally governing the relationship between the parties hereto. When specific services are requested, the parties will (unless otherwise specified herein) enter into a "Work Order" contracts. 7. Subsequent to the execution of this Master Partnership Contract, the parties may (but are not required to) enter into "Work Order" contracts. These Work Orders will specify the work to be done, timelines for completion, and compensation to be paid for the specific work. 8. The parties are entering into this Master Partnership Contract to establish terms that will govern all of the Work Orders subsequently issued under the authority of this Contract. Master Contract 1. Term of Master Contract; Use of Work Order Contracts; Survival of Terms 1.1. Effective Date: This contract will be effective on the date last signed by the Local Government, and all State officials as required under Minn. Stat. § 16C.05, subd. 2. 1.2. A party must not accept work under this Contract until it is fully executed. 1.3. Expiration Date. This Contract will expire on June 30, 2017. Page 1 of 14 CM Master Partnership Contract (CM Rev. 10/05/2015) MnDOT Agreement # 1002061 1.4. Work Order Contracts. A work order contract must be negotiated and executed (by both the State and the Local Government) for each particular engagement, except for Technical Services provided by the State to the Local Government as specified in Article 2. The work order contract must specify the detailed scope of work and deliverables for that engagement. A party must not begin work under a work order until such work order is fully executed. The terms of this Master Partnership Contract will apply to all work orders issued hereunder, unless specifically varied in the work order. The Local Government understands that this Master Contract is not a guarantee of any payments or work order assignments, and that payments will only be issued for work actually performed under fully -executed work orders. 1.5. Survival of Terms. The following clauses survive the expiration or cancellation of this master contract and all work order contracts: 12. Liability; 13. State Audits; 14. Government Data Practices and Intellectual Property; 17. Publicity; 18. Governing Law, Jurisdiction, and Venue; and 22. Data Disclosure. All terms of this Master Contract will survive with respect to any Work Order issued prior to the expiration date of the Master Contract. 1.6. Sample Work Order. A sample work order contract is available upon request from the State. 2. Technical Services 2.1. Technical Services include repetitive low-cost services routinely performed by the State for the Local Government. These services may be performed by the State for the Local Government without the execution of a work order, as these services are provided in accordance with standardized practices and processes and do not require a detailed scope of work. Technical services are limited to the following services: 2.1.1.Pavement Striping, Sign and Signal Repair, Bridge Load Ratings, Bridge and Structure Inspections, Minor Bridge Maintenance, Minor Road Maintenance (such as guard rail repair and sign knockdown repair), Pavement Condition Data, Materials Testing and Carcass Removal. 2.1.2. Every other service not falling under the services listed in 2. 1.1 will require a Work Order contract. 2.2. The Local Government may request the State to perform Technical Services in an informal manner, such as by the use of email, a purchase order, or by delivering materials to a State lab and requesting testing. A request may be made via telephone, but will not be considered accepted unless acknowledged in writing by the State. 2.3. The State will promptly inform the Local Government if the State will be unable to perform the requested Technical Services. Otherwise, the State will perform the Technical Services in accordance with the State's normal processes and practices, including scheduling practices taking into account the availability of State staff and equipment. 2.4. Payment Basis. Unless otherwise agreed to by the parties prior to performance of the services, the State will charge the Local Government the State's then -current rate for performing the Technical Services. The then -current rate may include the State's normal and customary labor additives. The State will invoice the Local Government upon completion of the services, or at regular intervals not more than once monthly as agreed upon by the parties. The invoice will provide a summary of the Technical Services provided by the State during the invoice period. 3. Services Requiring A Work Order Contract 3.1. Work Order Contracts: A party may request the other party to perform any of the following services under individual work order contracts. Page 2 of 14 CM Master Partnership Contract (CM Rev. 10/05/2015) MnDOT Agreement # 1002061 3.2. Professional and Technical Services. A party may provide professional and technical services upon the request of the other party. As defined by Minn. Stat. § 16C.08, subd. 1, professional/technical services "means services that are intellectual in character, including consultation, analysis, evaluation, prediction, planning, programming, or recommendation; and result in the production of a report or completion of a task." Professional and technical services do not include providing supplies or materials except as incidental to performing such services. Professional and technical services include (by way of example and without limitation) engineering services, surveying, foundation recommendations and reports, environmental documentation, right-of-way assistance (such as performing appraisals or providing relocation assistance, but excluding the exercise of the power of eminent domain), geometric layouts, final construction plans, graphic presentations, public relations, and facilitating open houses. A party will normally provide such services with its own personnel; however, a party's professional/technical services may also include hiring and managing outside consultants to perform work provided that a party itself provides active project management for the use of such outside consultants. 3.3. Roadway Maintenance. A party may provide roadway maintenance upon the request of the other party. Roadway maintenance does not include roadway reconstruction. This work may include but is not limited to snow removal, ditch spraying, roadside mowing, bituminous mill and overlay (only small projects), seal coat, bridge hits, major retaining wall failures, major drainage failures, and message painting. All services must be performed by an employee with sufficient skills, training, expertise or certification to perform such work, and work must be supervised by a qualified employee of the party performing the work. 3.4. Construction Administration. A party may administer roadway construction projects upon the request of the other party. Roadway construction includes (by way of example and without limitation) the construction, reconstruction, or rehabilitation of mainline, shoulder, median, pedestrian or bicycle pathway, lighting and signal systems, pavement mill and overlays, seal coating, guardrail installation, and channelization. These services may be performed by the Providing Party's own farces, or the Providing Party may administer outside contracts for such work. Construction administration may include letting and awarding construction contracts for such work (including state projects to be completed in conjunction with local projects). All contract administration services must be performed by an employee with sufficient skills, training, expertise or certification to perform such work. 3.5. Emergency Services. A party may provide aid upon request of the other party in the event of a man-made disaster, natural disaster or other act of God. Emergency services includes all those services as the parties mutually agree are necessary to plan for, prepare for, deal with, and recover from emergency situations. These services include, without limitation, planning, engineering, construction, maintenance, and removal and disposal services related to things such as road closures, traffic control, debris removal, flood protection and mitigation, sign repair, sandbag activities and general cleanup. Work will be performed by an employee with sufficient skills, training, expertise or certification to perform such work, and work must be supervised by a qualified employee of the party performing the work. If it is not feasible to have an executed work order prior to performance of the work, the parties will promptly confer to determine whether work may be commenced without a fully -executed work order in place. If work commences without a fully -executed work order, the parties will follow up with execution of a work order as soon as feasible. 3.6. When a need is identified, the State and the Local Government will discuss the proposed work and the resources needed to perform the work. If a party desires to perform such work, the parties will negotiate the specific and detailed work tasks and cost. The State will then prepare a work order contract. Generally, a work order contract will be limited to one specific Page 3 of 14 CM Master Partnership Contract (CM Rev. 10/05/2015) MnDOT Agreement # 1002061 project/engagement, although "on call" work orders may be prepared for certain types of services, especially for "Technical Services" items as identified section 2.1.2. The work order will also identify specific deliverables required, and timeframes for completing work. A work order must be fully executed by the parties prior to work being commenced. The Local Government will not be paid for work performed prior to execution of a work order and authorization by the State. 4. Responsibilities of the Providing Party The party requesting the work will be referred to as the "Requesting Party" and the party performing the work will be referred to as the "Providing Party." Each work order will set forth particular requirements for that project/engagement. 4.1. Terms Applicable to ALL Work Orders. The terms in this section 4.1 will apply to ALL work orders. 4.1.1. Each work order will identify an Authorized Representative for each party. Each party's authorized representative is responsible for administering the work order, and has the authority to make any decisions regarding the work, and to give and receive any notices required or permitted under this Master Contract or the work order. 4.1.2. The Providing Party will furnish and assign a publicly employed licensed engineer (Project Engineer), to be in responsible charge of the project(s) and to supervise and direct the work to be performed under each work order. For services not requiring an engineer, the Providing Party will furnish and assign another responsible employee to be in charge of the project. The services of the Providing Party under a work order may not be otherwise assigned, sublet, or transferred unless approved in writing by the Requesting Party's authorized representative. This written consent will in no way relieve the Providing Party from its primary responsibility for the work. 4.1.3. If the Local Government is the Providing Party, the Project Engineer may request in writing specific engineering and/or technical services from the State, pursuant to Minn. Stat. Section 161.39. The work order may require the Local Government to deposit payment in advance or may, at the State's option, permit payment in arrears. If the State furnishes the services requested, the Local Government will promptly pay the State to reimburse the state trunk highway fund for the full cost and expense of furnishing such services. The costs and expenses will include the current State labor additives and overhead rates, subject to adjustment based on actual direct costs that have been verified by audit. 4.1.4. Only the receipt of a fully executed work order contract authorizes the Providing Party to begin work on a project. Any and all effort, expenses, or actions taken by the Providing Party before the work order contract is fully executed is considered unauthorized and undertaken at the risk of non-payment. 4.1.5. In connection with the performance of this contract and any work orders issued hereunder, the Providing Agency will comply with all applicable Federal and State laws and regulations. When the Providing Party is authorized or permitted to award contracts in connection with any work order, the Providing Party will require and cause its contractors and subcontractors to comply with all Federal and State laws and regulations. 4.2. Additional Terms for Roadway Maintenance. The terms of section 4.1 and this section 4.2 will apply to all work orders for Roadway Maintenance. 4.2.1. Unless otherwise provided for by agreement or work order, the Providing Party must obtain all permits and sanctions that may be required for the proper and lawful performance of the work. Page 4 of 14 CM Master Partnership Contract (CM Rev. 10/05/2015) MnDOT Agreement # 1002061 4.2.2. The Providing Party must perform maintenance in accordance with MnDOT maintenance manuals, policies and operations. 4.2.3. The Providing Party must use State -approved materials, including (by way of example and without limitation), sign posts, sign sheeting, and de-icing and anti -icing chemicals. 4.3. Additional Terms for Construction Administration. The terms of section 4.1 and this section 4.3 will apply to all work orders for construction administration. 4.3.1. Contract(s) must be awarded to the lowest responsible bidder or best value proposer in accordance with state law. 4.3.2. Contractor(s) must be required to post payment and performance bonds in an amount equal to the contract amount. The Providing Party will take all necessary action to make claims against such bonds in the event of any default by the contractor. 4.3.3. Contractor(s) must be required to perform work in accordance with the latest edition of the Minnesota Department of Transportation Standard Specifications for Construction. 4.3.4. For work performed on State right-of-way, contractor(s) must be required to indemnify and hold the State harmless against any loss incurred with respect to the performance of the contracted work, and must be required to provide evidence of insurance coverage commensurate with project risk. 4.3.5. Contractor(s) must pay prevailing wages pursuant to applicable state and federal law. 4.3.6. Contractor(s) must comply with all applicable Federal, and State laws, ordinances and regulations, including but not limited to applicable human rights/anti-discrimination laws and laws concerning the participation of Disadvantaged Business Enterprises in federally - assisted contracts 4.3.7. Unless otherwise agreed in a Work Order, each party will be responsible for providing rights of way, easement, and construction permits for its portion of the improvements. Each party will, upon the other's request, furnish copies of right of way certificates, easements, and construction permits. 4.3.8. The Providing Party may approve minor changes to the Requesting Party's portion of the project work if such changes do not increase the Requesting Party's cost obligation under the applicable work order. 4.3.9. The Providing Party will not approve any contractor claims for additional compensation without the Requesting Party's written approval, and the execution of a proper amendment to the applicable work order when necessary. The Local Government will tender the processing and defense of any such claims to the State upon the State's request. 4.3.10. The Local Government must coordinate all trunk highway work affecting any utilities with the State's Utilities Office. 4.3.11. The Providing Party must coordinate all necessary detours with the Requesting Party. 4.3.12. If the Local Government is the Providing Party, and there is work performed on the trunk highway right-of-way, the following will apply: 4.3.12.1 The Local Government will have a permit to perform the work on the trunk highway. The State may revoke this permit if the work is not being performed in a safe, proper and skillful manner, or if the contractor is violating the terms of any law, regulation, or permit applicable to the work. The State will have no Page 5 of 14 CM Master Parmership Contract (CM Rev. 10/05/2015) MnDOT Agreement # 1002061 liability to the Local Government, or its contractor, if work is suspended or stopped due to any such condition or concern. 4.3.12.2 The Local Government will require its contractor to conduct all traffic control in accordance with the Minnesota Manual on Uniform Traffic Control Devices. 4.3.12.3 The Local Government will require its contractor to comply with the terms of all permits issued for the project including, but not limited to, NPDES and other environmental permits. 4.3.12.4 All improvements constructed on the State's right-of-way will become the property of the State. 5. Responsibilities of the Requesting Party 5.1. After authorizing the Providing Party to begin work, the Requesting Party will furnish any data or material in its possession relating to the project that may be of use to the Providing Party in performing the work. 5.2. All such data furnished to the Providing Party will remain the property of the Requesting Party and will be promptly returned upon the Requesting Party's request or upon the expiration or termination of this contract (subject to data retention requirements of the Minnesota Government Data Practices Act and other applicable law). 5.3. The Providing Party will analyze all such data furnished by the Requesting Party. If the Providing Party finds any such data to be incorrect or incomplete, the Providing Party will bring the facts to the attention of the Requesting Party before proceeding with the part of the project affected. The Providing Party will investigate the matter, and if it finds that such data is incorrect or incomplete, it will promptly determine a method for furnishing corrected data. Delay in furnishing data will not be considered justification for an adjustment in compensation. 5.4. The State will provide to the Local Government copies of any Trunk Highway fund clauses to be included in the bid solicitation and will provide any required Trunk Highway fund provisions to be included in the Proposal for Highway Construction, that are different from those required for State Aid construction. 5.5. The Requesting Party will perform final reviews and/or inspections of its portion of the project work. If the work is found to have been completed in accordance with the work order contract, the Requesting Party will promptly release any remaining funds due the Providing Party for the Project(s). 5.6. The work order contracts may include additional responsibilities to be completed by the Requesting Party. 6. Time In the performance of project work under a work order contract, time is of the essence. 7. Consideration and Payment 7.1. Consideration. The Requesting Party will pay the Providing Party as specified in the work order. The State's normal and customary labor additives will apply to work performed by the State, unless otherwise specified in the work order. The State's normal and customary labor additives will not apply if the parties agree to a "lump sum" or "unit rate" payment. 7.2. State's Maximum Obligation. The total compensation to be paid by the State to the Local Government under all work order contracts issued pursuant to this Master Contract will not exceed $50,000.00. Page 6 of 14 CM Master Partnership Contract (CM Rev. 10105@015) MnDOT Agreement # 1002061 7.3. Travel Expenses. It is anticipated that all travel expenses will be included in the base cost of the Providing Party's services, and unless otherwise specifically set forth in an applicable work order, the Providing Party will not be separately reimbursed for travel and subsistence expenses incurred by the Providing Party in performing any work order contract. In those cases where the State agrees to reimburse travel expenses, such expenses will be reimbursed in the same manner and in no greater amount than provided in the current "MnDOT Travel Regulations" a copy of which is on file with and available from the MnDOT District Office. The Local Government will not be reimbursed for travel and subsistence expenses incurred outside of Minnesota unless it has received the State's prior written approval for such travel. 7.4. Payment. 7.4.1. Generally. The Requesting Party will pay the Providing Party as specified in the applicable work order, and will make prompt payment in accordance with Minnesota law. 7.4.2. Payment by the Local Government. 7.4.2.1. The Local Government will make payment to the order of the Commissioner of Transportation. 7.4.2.2. IMPORTANT NOTE: PAYMENT MUST REFERENCE THE "MNDOT CONTRACT NUMBER" SHOWN ON THE FACE PAGE OF THIS CONTRACT AND THE "INVOICE NUMBER" ON THE INVOICE RECEIVED FROM MNDOT. 7.4.2.3. Remit payment to the address below: MnDOT Attn: Cash Accounting RE: MnDOT Contract Number 1002061 and Invoice Number ###### Mail Stop 215 395 John Ireland Blvd St. Paul, MN 55155 7.4.3. Payment by the State. 7.4.3.1. Generally. The State will promptly pay the Local Government after the Local Government presents an itemized invoice for the services actually performed and the State's Authorized Representative accepts the invoiced services. Invoices must be submitted as specified in the applicable work order, but no more frequently than monthly. 7.4.3.2. Retainage for Professional and Technical Services. For work orders for professional and technical services, as required by Minn. Stat. § 16C.08, subd. 2(10), no more than 90 percent of the amount due under any work order contract may be paid until the final product of the work order contract has been reviewed by the State's authorized representative. The balance due will be paid when the State's authorized representative determines that the Local Government has satisfactorily fulfilled all the terms of the work order contract. 8. Conditions of Payment All work performed by the Providing Party under a work order contract must be performed to the Requesting Party's satisfaction, as determined at the sole and reasonable discretion of the Requesting Party's Authorized Representative and in accordance with all applicable federal and state laws, rules, and regulations. The Providing Party will not receive payment for work found by the State to be unsatisfactory or performed in violation of federal or state law. Page 7 of 14 CM Master Partnership Contract (CM Rev. 10/05/2015) MnDOT Agreement # 1002061 9. Local Government's Authorized Representative and Project Manager; Authority to Execute Work Order Contracts 9.1. The Local Government's Authorized Representative for administering this master contract is the Local Government's Engineer, and the Engineer has the responsibility to monitor the Local Government's performance. The Local Government's Authorized Representative is also authorized to execute work order contracts on behalf of the Local Government without approval of each proposed work order contract by its governing body. 9.2. The Local Government's Project Manager will be identified in each work order contract. 10. State's Authorized Representative and Project Manager 10.1. The State's Authorized Representative for this master contract is the District State Aid Engineer, who has the responsibility to monitor the State's performance. 10.2. The State's Project Manager will be identified in each work order contract. 11. Assignment, Amendments, Waiver, and Contract Complete 11.1. Assignment. Neither party may assign or transfer any rights or obligations under this Master Contract or any work order contract without the prior consent of the other and a fully executed Assignment Agreement, executed and approved by the same parties who executed and approved this Master Contract, or their successors in office. 11.2. Amendments. Any amendment to this master contract or any work order contract must be in writing and will not be effective until it has been executed and approved by the same parties who executed and approved the original contract, or their successors in office. 11.3. Waiver. If a party fails to enforce any provision of this master contract or any work order contract, that failure does not waive the provision or the party's right to subsequently enforce it. 11.4. Contract Complete. This master contract and any work order contract contain all negotiations and agreements between the State and the Local Government. No other understanding regarding this master contract or any work order contract issued hereunder, whether written or oral may be used to bind either party. 12. Liability. Each party will be responsible for its own acts and omissions to the extent provided by law. The Local Government's liability is governed by Minn. Stat. chapter 466 and other applicable law. The State's liability is governed by Minn. Stat. section 3.736 and other applicable law. This clause will not be construed to bar any legal remedies a party may have for the other party's failure to fulfill its obligations under this master contract or any work order contract. Neither party agrees to assume any environmental liability on behalf of the other party. A Providing Party under any work order is acting only as a "Contractor" to the Requesting Party, as the term "Contractor" is defined in Minn. Stat. §11513.03 (subd. 10), and is entitled to the protections afforded to a "Contractor" by the Minnesota Environmental Response and Liability Act. The parties specifically intend that Minn. Stat. §471.59 subd. la will apply to any work undertaken under this Master Contract and any work order issued hereunder. 13. State Audits Under Minn. Stat. § 16C.05, subd. 5, the party's books, records, documents, and accounting procedures and practices relevant to any work order contract are subject to examination by the parties and by the State Auditor or Legislative Auditor, as appropriate, for a minimum of six years from the end of this Master Contract. 14. Government Data Practices and Intellectual Property Page 8 of 14 CM Master Partnership Contract (CM Rev. 10'05/2015) MnDOT Agreement # 1002061 14.1. Government Data Practices. The Local Government and State must comply with the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, as it applies to all data provided by the State under this Master Contract and any work order contract, and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by the Local Government under this Master Contract and any work order contract. The civil remedies of Minn. Stat. § 13.08 apply to the release of the data referred to in this clause by either the Local Government or the State. 14.2. Intellectual Property Rights 14.2.1. Intellectual Property Rights. The Requesting Party will own all rights, title, and interest in all of the intellectual property rights, including copyrights, patents, trade secrets, trademarks, and service marks in the Works and Documents created and paid for under work order contracts. Works means all inventions, improvements, discoveries (whether or not patentable), databases, computer programs, reports, notes, studies, photographs, negatives, designs, drawings, specifications, materials, tapes, and disks conceived, reduced to practice, created or originated by the Providing Party, its employees, agents, and subcontractors, either individually or jointly with others in the performance of this master contract or any work order contract. Works includes "Documents." Documents are the originals of any databases, computer programs, reports, notes, studies, photographs, negatives, designs, drawings, specifications, materials, tapes, disks, or other materials, whether in tangible or electronic forms, prepared by the Providing Party, its employees, agents, or contractors, in the performance of a work order contract. The Documents will be the exclusive property of the Requesting Party and all such Documents must be immediately returned to the Requesting Party by the Providing Party upon completion or cancellation of the work order contract. To the extent possible, those Works eligible for copyright protection under the United States Copyright Act will be deemed to be "works made for hire." The Providing Party Government assigns all right, title, and interest it may have in the Works and the Documents to the Requesting Party. The Providing Party must, at the request of the Requesting Party, execute all papers and perform all other acts necessary to transfer or record the Requesting Party's ownership interest in the Works and Documents. Notwithstanding the foregoing, the Requesting Party grants the Providing Party an irrevocable and royalty -free license to use such intellectual property for its own non-commercial purposes, including dissemination to political subd.s of the state of Minnesota and to transportation -related agencies such as the American Association of State Highway and Transportation Officials. 14.2.2. Obligations with Respect to Intellectual Property 14.2.2.1. Notification. Whenever any invention, improvement, or discovery (whether or not patentable) is made or conceived for the first time or actually or constructively reduced to practice by the Providing Party, including its employees and subcontractors, in the performance of the work order contract, the Providing Party will immediately give the Requesting Party's Authorized Representative written notice thereof, and must promptly furnish the Authorized Representative with complete information and/or disclosure thereon. 14.2.2.2. Representation. The Providing Party must perform all acts, and take all steps necessary to ensure that all intellectual property rights in the Works and Documents are the sole property of the Requesting Party, and that neither Providing Party nor its employees, agents or contractors retain any interest in and to the Works and Documents. 15, Affirmative Action Page 9 of 14 CM Master Partnership Contract (CM Rev. 10105/2015) MnDOT Agreement # 1002061 The State intends to carry out its responsibility for requiring affirmative action by its Contractors, pursuant to Minn. Stat. §363A.36. Pursuant to that Statute, the Local Government is encouraged to prepare and implement an affirmative action plan for the employment of minority persons, women, and the qualified disabled, and submit such plan to the Commissioner of the Minnesota Department of Human Rights. In addition, when the Local Government lets a contract for the performance of work under a work order issued pursuant to this Master Contract, it must include the following in the bid or proposal solicitation and any contracts awarded as a result thereof: 15.1. Covered Contracts and Contractors. If the Contract exceeds $100,000 and the Contractor employed more than 40 full-time employees on a single working day during the previous 12 months in Minnesota or in the state where it has its principle place of business, then the Contractor must comply with the requirements of Minn. Stat. § 363A.36 and Minn. R. Parts 5000.3400-5000.3600. A Contractor covered by Minn. Stat. § 363A.36 because it employed more than 40 full-time employees in another state and does not have a certificate of compliance, must certify that it is in compliance with federal affirmative action requirements. 15.2. Minn. Stat § 363A.36. Minn. Stat. § 363A.36 requires the Contractor to have an affinnative action plan for the employment of minority persons, women, and qualified disabled individuals approved by the Minnesota Commissioner of Human Rights ("Commissioner") as indicated by a certificate of compliance. The law addresses suspension or revocation of a certificate of compliance and contract consequences in that event. A contract awarded without a certificate of compliance may be voided. 15.3. Minn. R. Parts 5000.3400-5000.3600. 15.3.1. General. Minn. R. Parts 5000.3400-5000.3600 implement Minn. Stat. § 363A.36. These rules include, but are not limited to, criteria for contents, approval, and implementation of affirmative action plans; procedures for issuing certificates of compliance and criteria for determining a contractor's compliance status; procedures for addressing deficiencies, sanctions, and notice and hearing; annual compliance reports; procedures for compliance review; and contract consequences for non-compliance. The specific criteria for approval or rejection of an affirmative action plan are contained in various provisions of Minn. R. Parts 5000.3400-5000.3600 including, but not limited to, parts 5000.3420-5000.3500 and 5000.3552-5000.3559. 15.3.2. Disabled Workers. The Contractor must comply with the following affirmative action requirements for disabled workers: 15.3.2.1. The Contractor must not discriminate against any employee or applicant for employment because of physical or mental disability in regard to any position for which the employee or applicant for employment is qualified. The Contractor agrees to take affirmative action to employ, advance in employment, and otherwise treat qualified disabled persons without discrimination based upon their physical or mental disability in all employment practices such as the following: employment, upgrading, demotion or transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. 15.3.2.2. The Contractor agrees to comply with the rules and relevant orders of the Minnesota Department of Human Rights issued pursuant to the Minnesota Human Rights Act. 15.3.2.3. In the event of the Contractor's noncompliance with the requirements of this clause, actions for noncompliance may be taken in accordance with Minn. Stat. Section 363A.36, and the rules and relevant orders of the Minnesota Page 10 of 14 CM Master Partnership Contract (CM Rev. 10/05/2015) MnDOT Agreement # 1002061 Department of Human Rights issued pursuant to the Minnesota Human Rights Act. 15.3.2.4. The Contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices in a form to be prescribed by the commissioner of the Minnesota Department of Human Rights. Such notices must state the Contractor's obligation under the law to take affirmative action to employ and advance in employment qualified disabled employees and applicants for employment, and the rights of applicants and employees. 15.x.2.5. The Contractor must notify each labor union or representative of workers with which it has a collective bargaining agreement or other contract understanding, that the Contractor is bound by the terns of Minn. Stat. Section 363A.36, of the Minnesota Human Rights Act and is committed to take affirmative action to employ and advance in employment physically and mentally disabled persons. 15.3.3. Consequences. The consequences for the Contractor's failure to implement its affirmative action plan or make a good faith effort to do so include, but are not limited to, suspension or revocation of a certificate of compliance by the Commissioner, refusal by the Commissioner to approve subsequent plans, and termination of all or part of this contract by the Commissioner or the State. 15.3.4. Certification. The Contractor hereby certifies that it is in compliance with the requirements of Minn. Stat. § 363A.36 and Minn. R. Parts 5000.3400-5000.3600 and is aware of the consequences for noncompliance. 16. Workers' Compensation Each party will be responsible for its own employees for any workers compensation claims. This Master Contract, and any work orders issued hereunder, are not intended to constitute an interchange of government employees under Minn. Stat. § 15.53. To the extent that this Master Contract, or any work order issued hereunder, is determined to be subject to Minn. Stat. §15.53, such statute will control to the extent of any conflict between the Contract and the statute. 17. Publicity 17.1. Publicity. Any publicity regarding the subject matter of a work order contract where the State is the Requesting Party must identify the State as the sponsoring agency and must not be released without prior written approval from the State's Authorized Representative. For purposes of this provision, publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Local Government individually or jointly with others, or any subcontractors, with respect to the program, publications, or services provided resulting from a work order contract. 17.2. Data Practices Act Section 17.1 is not intended to override the Local Government's responsibilities under the Minnesota Government Data Practices Act. 18. Governing Law, Jurisdiction, and Venue Minnesota law, without regard to its choice -of -law provisions, governs this master contract and all work order contracts. Venue for all legal proceedings out of this master contract or any work order contracts, or the breach of any such contracts, must be in the appropriate state or federal court with competent jurisdiction in Ramsey County, Minnesota. 19. Prompt Payment; Payment to Subcontractors Page 11 of 14 Chi Master Partnership Contract (CM Rev. 10/05/2015) MnDOT Agreement # 1002061 The parties must make prompt payment of their obligations in accordance with applicable law. As required by Minn. Stat. § 16A.1245, when the Local Government lets a contract for work pursuant to any work order, the Local Government must require its contractor to pay all subcontractors, less any retainage, within 10 calendar days of the prime contractor's receipt of payment from the Local Government for undisputed services provided by the subcontractor(s) and must pay interest at the rate of one and one-half percent per month or any part of a month to the subcontractor(s) on any undisputed amount not paid on time to the subcontractor(s). 20. Minn. Stat. § 181.59. The Local Government will comply with the provisions of Minn. Stat. § 181.59 which requires: Every contract for or on behalf of the state of Minnesota, or any county, city, town, township, school, school district, or any other district in the state, for materials, supplies, or construction shall contain provisions by which the Contractor agrees: (1) That, in the hiring of common or skilled labor for the performance of any work under any contract, or any subcontract, no contractor, material supplier, or vendor, shall, by reason of race, creed, or color, discriminate against the person or persons who are citizens of the United States or resident aliens who are qualified and available to perform the work to which the employment relates; (2) That no contractor, material supplier, or vendor, shall, in any manner, discriminate against, or intimidate, or prevent the employment of any person or persons identified in clause (1) of this section, or on being hired, prevent, or conspire to prevent, the person or persons from the performance of work under any contract on account of race, creed, or color; (3) That a violation of this section is a misdemeanor; and (4) That this contract may be canceled or terminated by the state, county, city, town, school board, or any other person authorized to grant the contracts for employment, and all money due, or to become due under the contract, may be forfeited for a second or any subsequent violation of the terms or conditions of this contract. 21. Termination; Suspension 21.1. Termination by the State for Convenience. The State or commissioner of Administration may cancel this Master Contract and any work order contracts at any time, with or without cause, upon 30 days written notice to the Local Government. Upon termination, the Local Government and the State will be entitled to payment, determined on a pro rata basis, for services satisfactorily performed. 21.2. Termination by the Local Government for Convenience. The Local Government may cancel this Master Contract and any work order contracts at any time, with or without cause, upon 30 days written notice to the State. Upon termination, the Local Government and the State will be entitled to payment, determined on a pro rata basis, for services satisfactorily performed. 21.3. Termination for Insufficient Funding. The State may immediately terminate or suspend this Master Contract and any work order contract if it does not obtain funding from the Minnesota legislature or other funding source; or if funding cannot be continued at a level sufficient to allow for the payment of the services covered here. Termination or suspension must be by written or fax notice to the Local Government. The State is not obligated to pay for any services that are provided after notice and effective date of termination or suspension. However, the Local Government will be entitled to payment, determined on a pro rata basis, for services satisfactorily performed to the extent that funds are available. The State will not be assessed any penalty if the master contract or work order is terminated because of the decision of the Minnesota legislature or other funding source, not to appropriate funds. The State must provide the Local Government notice of the lack of funding within a reasonable time of the State's receiving that notice. 22. Data Disclosure Under Minn. Stat. §270C.65, subd. 3, and other applicable law, the Local Government consents to disclosure of its federal employer tax identification number, and/or Minnesota tax identification number, already provided to the State, to federal and state tax agencies and state personnel involved in the Page 12 of 14 CM Master Partnership Contract (CM Rev. 10;052015) MnDOT Agreement # 1002061 payment of state obligations. These identification numbers may be used in the enforcement of federal and state tax laws which could result in action requiring the Local Government to file state tax returns and pay delinquent state tax liabilities, if any. 23. Defense of Claims and Lawsuits If any lawsuit or claim is filed by a third party (including but not limited to the Local Government's contractors and subcontractors), arising out of trunk highway work performed pursuant to a valid work order issued under this Master Contract, the Local Government will, at the discretion of and upon the request of the State, tender the defense of such claims to the State or allow the State to participate in the defense of such claims. The Local Government will, however, be solely responsible for defending any lawsuit or claim, or any portion thereof, when the claim or cause of action asserted is based on its own acts or omissions in performing or supervising the work. The Local Government will not purport to represent the State in any litigation, settlement, or alternative dispute resolution process. The State will not be responsible for any judgment entered against the Local Government, and will not be bound by the terns of any settlement entered into by the Local Government except with the written approval of the Attorney General and the Commissioner of Transportation and pursuant to applicable law. 24. Additional Provisions [The balance of this page has intentionally been left blank — signature page follows] Page 13 of 14 CM Master Partnership Contract (CM Rev. 10,'05'2015) LOCAL GOVERNMENT The Local Government certifies that the appropriate person(s) have executed the contract on behalf of the Local Government as required by applicable ordinance, resolution, or charter provision. Title: MnDOT Agreement # 1002061 M COMMISSIONER OF TRANSPORTATION (with delegated authority) Title Division Director Date: Date: By: Title By: Date: Date: Page 14 of 14 CM Master Partnership Contract (CM Rev. 10/05/2015) COMMISSIONER OF ADMINISTRATION As delegated to Materials Management Division 6). is Michele Lindau From: Bryan Bear Sent: Monday, June 27, 2016 8:12 AM To: Chuck Preisler; Rachel Leitz; Ron Otkin; Michele Lindau; Taylor Richter; Dave Snyder (David@johnsonandturner.com) Subject: FW: Horton Property Attachments: Escrow Agreement.pdf For next week's council agenda? ....assuming they are complete done. From: Moe, Paul S. [mailto:Paul.Moe@FaegreBD.comj Sent: Friday, June 24, 2016 2:13 PM To: Chuck Preisler <CPreisler@ci.hugo.mn.us> Cc: Rebecca Penovich <rebecca.penovich@gmail.com>; Bryan Bear <BBear@ci.hugo.mn.us>; David Snyder <david@johnsonturner.com>; Norm Horton <jnbused02@aol.com> Subject: RE: Horton Property Chuck: As you may know, the last portion of the fence was removed this week. In addition, a listing agreement has been signed up with Lou Suski at Gaughan Companies. Pursuant to the terms of the Escrow Agreement between the City and the owners of the property (the "Trustees'), the City would hold $25,000 in escrow until the Trustees notified the City that they have completed the "Remaining Work" at the property (specifically, the work described in Section 34 of the Special Use Permit issued by the City on May 2, 2000). The Trustees have finished the "Remaining Work." Accordingly, please make arrangements to have the funds held in escrow released to the Trustees. You can have US Bank make a check out to Rebecca Penovich and mail it to me, and I will forward it on to her. If you have any questions or would prefer that I send you a letter with this request (rather than just this email) please let me know. Thank you. Paul Paul S. Moe Partner pau1.moe@Faegrel3D.conn Download vCard D: +1612 766 7331 Faegre Baker Daniels LLP 2200 Wells Fargo Center 1 90 South Seventh Street I Minneapolis, MN 55402-3901, USA From: Moe, Paul S. Sent: Monday, May 02, 2016 3:41 PM To: 'Chuck Preisler' Cc: Rebecca Penovich; Bryan Bear; David Snyder Subject: RE: Horton Property Chuck: Thank you for your email and the pictures. I'm glad to hear that you are pleased with the improvement. We had heard from Terry Johnson and Jennie Matti last week that there were portions of the fence that they couldn't get to because of the water. They also told us that MnDOT and EMS would be back to the site when it dried out to remove the balance of the fence. Thanks also for the photo of the possible well. It may be a remnant of the work that Wenck did on site; we'll get to the bottom of it and get it addressed. We are negotiating with Lou Suski at Gaughan Companies for a listing agreement for the property. (We were referred to Lou by Sherman Malkerson.) If you hear of any potential purchasers please send them our way! Thank you. Paul Paul S. Moe Partner paul.moe@FaegreBD.corn DownloadvCard D: +1612 766 7331 Faegre Baker Daniels LLP 2200 Wells Fargo Center 190 South Seventh Street I Minneapolis, MN 55402-3901, USA From: Chuck Preisler[mailto:CPreisler(aci.huoo.mn.us] Sent: Monday, May 02, 2016 3:31 PM To: Moe, Paul S. Cc: Rebecca Penovich; Bryan Bear; David Snyder Subject: Horton Property Paul, I have attached some before and after photos of the property now that the fence with the exception of part of the north side has been removed. This is an amazing improvement. Project manager Terry Johnson from Environmental Management Solutions has left a portion of the north fence in place due to water which made it inaccessible for removal at this time. The contractor will return to remove the remaining State installed fence when the property is accessible. Mr. Johnson also stated a metal fence was also on the north side inside the fence which was installed by the State. I have not been able to access the area due to water, but if this is the case that portion of fence will need to be removed as well. I have included photos of the fence on the north side. Mr. Johnson also pointed out what he thought may be an open shallow sand point well with a PVC casing which will require securing. A photo is attached. Please contact me with any questions. Chuck Preisler Building Official City of Hugo 651-762-6313 cpreisler@ci.hugo.mn.us ESCROW AGREEMENT This ESCROW AGREEMENT (the "Agreement"), dated as of November 2015, between Rebecca H. Penovich and Thomas N. Horton, as Trustees of the Norman C. Horton Sr. Revocable Trust under agreement dated August 8, 2003, as amended (the "Trustees"), and the City of Hugo, Minnesota (the "City"). RECITALS A. The Trustees own property located at 16635 and 16673 Forest Boulevard North in Hugo, Minnesota ("the Property"), which has operated under a Special Use Permit issued by the City of Hugo on May 2, 2000 (the "Special Use Permit"). B. The Special Use Permit provides in part as follows: 34. Upon termination of this Permit, for whatever reason, and before transfer of title to the property or issuance of a new Special Use Permit for the site, the City shall cause a phase H environmental review of the property to be performed by competent technical personnel, the cost of which is to be paid by the property owner. The property owner shall have ninety (90) days from the date of the report to correct any deficiencies noted, or the City may cure such deficiencies to be corrected and charge the owner the costs for such corrections. 35. In order to ensure performance under item 34 above, the operator shall post with the City a bond in the amount of Twenty -Five Thousand Dollars ($25,000.00). Said bond shall be in continuous force and effect and run in favor of the City of Hugo. Said bond shall be an annual bond. Each year's replacement bond shall be provided to the City before the expiration of the previous year's bond (thus providing that a bond is continuously in force and effect). Should there be a lapse in bond coverage, then this permit shall automatically become null and void. C. The Special Use Permit has been terminated, but the Trustees have not yet completed the obligations set forth in Section 34 set forth above. The Trustees have been unable to maintain the bond required by Section 35 above, and so the Trustees and the City agreed that the Trustees would deliver a check the amount of $25,000 to the City in lieu of obtaining a new bond. D. The Trustees are in the process of completing the obligations set forth in Section 34 of the Special Use Permit. The Trustees have retained Wenck Associates to conduct a Phase 11 environmental assessment of the Property (as required by Section 34 of the Special Use Permit), and the City has approved of Wenck as a consultant and the scope of the Phase II investigation proposed by Wenck. US. 103271584.02 E. The remaining work on the Property described in Section 34 of the Special Use Permit is referred to herein as the "Remaining Work." The $25,000 is referred to herein as the "Escrow Funds." D. Given the City's desire to ensure the Remaining Work is performed in an expedient manner, the Trustees and the City desire to designate the City as the escrowee of Escrow Funds pursuant to the under the terms of this Agreement. ACCORDINGLY, the Trustees and the City AGREE: 1. Escrow Agent. The Trustees and the City agree that the City will act as escrowee for the purposes set forth in this Agreement. The City has deposited the Escrow Funds into a trust account and has agreed to act as the escrowee as set forth in this Agreement. 2. Deposit of Escrow Funds. The Trustees have delivered to the City $25,000 to be held by the City under this Agreement, and the City acknowledges receipt of the Escrow Funds, The City has deposited the Escrow Fund with U.S. Bank, National Association. The City waives any requirement under the Special Use Permit that the Trustees deliver a bond to the City, and agrees to accept the Escrow Funds in lieu of a bond. 3. Termination of Escrow. This Agreement shall terminate and the Escrow Funds shall be delivered out of escrow to the Trustees within two (2) weeks after the first to occur of any of the following events: (a) The receipt by the City of notification from the Trustees that the Remaining Work is completed. (b) The acknowledgement by the City of Hugo building official that the Remaining Work is completed to the City's reasonable satisfaction. 4. Liability of Escrow Agent. Upon making delivery of the Escrow Funds and performing its obligations and services under this Agreement, the City shall be released from any further liability under this Agreement The City shall have no obligation under this Agreement except to exercise good faith and ordinary care. The City may act upon receipt of any notification or other written document, and shall have no responsibility to determine or inquire into or otherwise corroborate the happening or occurrence of any event or condition. In the event of any disagreement or controversy under this Agreement or if the City in good faith is in doubt as to what action it should take with respect to the Escrow Fund, the City shall have the absolute right at its election to take any or all of the following actions: (a) To hold the Escrow Fund until the City receives a court order concerning the disposition of the Escrow Fund in form and substance reasonably satisfactory to the City; or -2- US.I03271584.02 (b) To file a suit in interpleader in an appropriate court naming the Trustees as interested parties, and to deposit the Escrow Fund with the clerk of such court in full satisfaction of its responsibilities under this Agreement. 5. Successors and Assigns. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Trustees (or either of them) and the City and their respective successors, heirs, personal representatives, and assigns. 6. Notices and Amendments. All notices or other communications to be given under this Agreement shall be deemed to have been duly given, made, and received when delivered personally or mailed by cettified mail, return receipt requested and first class postage prepaid, to the Trustees and the City at the addresses set forth below, or to such other addresses as may be designated by a similar written notice. If to the Trustees: Attn: Paul Moe Faegre Baker Daniels LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402-3901 If to City of Hugo Chuck Preisler Building Official City of Hugo 14669 Fitzgerald Avenue North Hugo, MN 55038 T No waiver or amendment of this Agreement or any provision of this Agreement shall be effective unless in writing signed by the Trustees (or either of them) and the City. 8. Survival of Existing Agreements. This Escrow Agreement serves to facilitate the payment under the agreements already in place between the Trustees and the City, but does not otherwise alter the rights and obligations contained in previous agreements, including without limitation and solely for example, the warranties associated with the materials and labor provided under the agreements. 9. Counterparts. This Agreement may be signed in two or more counterparts, which together shall comprise one and the same instrument. -3- US.103271584.02 r The Trustees and the City have signed this Agreement as of the date set forth above. tWO327LU4.02 Rebecca Penovich, as Trustee of the Norman C. Horton Sr. Revocable Trust under agreement dated August 8, 2003, as amended f7 "� Thomas . Horton, as Trustee of the Norman C. Horton Sr. Revocable Trust under agreement dated August 8, 2003, as amended THE CITY OF HUGO, MINNESOTA Name: ,,�J_ azsr 4- Agenda Number G16 SOLAR GARDEN SUBSCRIPTION AGREEMENT This Solar Garden Subscription Agreement ("Agreement") is entered into as of the day of , 20 (the "Effective Date's by and between Argo Navis CSG1, LLC, a Delaware limited liability company ("ANCSGI"), and the City of Hugo, a Minnesota statutory city (the "Subscriber"). In this Agreement, ANCSGI and Subscriber are sometimes referred to individually as a "Party" and collectively as the "Parties." RECITALS A. ANCSGI intends to develop, operate and maintain a photovoltaic generation facility qualified as a "Community Solar Garden" pursuant to Minn. Stat. 216B.1641 ("CSG Program'9 to be located at 21205 St. Croix Trail N, Scandia, MN 55073 (the "Facility") and has entered or will enter into a Standard Contract for Solar Rewards Community ("CSG Contract") with the local electric distribution company (the "LDC"). The designed capacity of the Facility shall be approximately 1,000 kWac (subject to adjustment as described herein, the "Facility Capacity"); B. The energy produced by the Facility will be delivered by ANCSGI via interconnection of the Facility to the electric grid, to the LDC, which will calculate the monetary value of the energy received from the Facility per applicable utility tariff ("Enhanced Bill Credit Rate" as defined in the CSG Contract) and apply that amount as credit to each Subscriber's bill for retail electric service based on Subscriber's percentage allocation of ANCSGI ("Bill Credits"); C. ANCSGI will, in accordance with the terms hereof, and through the administrative process established by the LDC as approved by the Minnesota Public Utilities Commission ("MPUC"), allocate and sell the right to receive Credits to its subscribers according to their respective Allocations (as defined below); D. Subscriber is an LDC customer (Premise. No. 303052875 and desires to purchase Bill Credits from ANCSGI in proportion to its expected consumption of electricity at 6900 137th Street N, Hugo, MN 55038 ("Customer Site"). NOW, THEREFORE, in consideration of the foregoing recitals, the mutual premises, representations, warranties, covenants, conditions herein contained, and the Exhibits attached hereto, Subscriber and ANCSGI agree as follows. 1. Term. The term of this Agreement shall commence on the Effective Date, and, unless terminated earlier pursuant to the provisions hereof, shall terminate on the 25th anniversary of the Commercial Operation Date (as defined below) (the "Term'). The Term shall not be extended by virtue of any period of disconnection or event of Force Majeure experienced by the Facility. 2. Operation of the Facility. a. ANCSGI shall operate the Facility during the Term so as to deliver all energy generated by the Facility to LDC in accordance with the CSG Contract and applicable LDC tariffs. b. ANCSGI shall maintain the Facility in good working order at all times during the Term, and shall operate the Facility in a manner reasonably intended to maximize the amount of Bill Credits allocable to Subscriber, consistent with good custom and practice for operation of utility generating facilities. 3. Sale and Purchase of Credits; Allocation. a. ANCSGI shall promptly notify Subscriber of the Date of Commercial Operation of the Facility as established pursuant to the CSG Contract ("Commercial Operation Date"). In the event that the Commercial Operation Date is not achieved by December 31, 2017, and any of the following events or circumstances occur, either Party may terminate this Agreement, without liability, upon delivery of such notice to the other Party: i. after timely application to the LDC (or other applicable distribution service provider whose system the Facility connects to deliver energy (the "Distribution Provider") and commercially reasonable efforts to secure interconnection services, ANCSGI has not received written confirmation and evidence that interconnection services will be available for the energy generated by the Facility at the Facility Capacity; or ii. if the LDC or another party with the authority to do so disqualifies ANCSGI or the Facility from participating in the CSG Program. b. ANCSGI shall allocate a portion of Facility Capacity to Subscriber equal to six and nine tenths percent (6.9%) of Facility Capacity (the "Allocation"). ANCSGI shall provide to LDC the Allocation along with Subscriber's name, LDC account number(s), and service address(es) ("Subscriber Data"). C. ANCSGI shall sell to Subscriber and Subscriber shall purchase from ANCSGI, the right to receive an amount of Bill Credits calculated on the basis of that portion of the total kilowattac hours delivered by the Facility to LDC which corresponds to the Allocation. The Allocation shall be effective for each and every LDC Production Month (as defined in the CSG Contract) and posted to Subscriber's account monthly for invoicing pursuant to Section 4 of this Agreement ("Monthly Energy Allocation"). Thus, where x = Subscriber's Monthly Energy Allocation, y = kWhac delivered in a Production Month, and a = Allocation, x = y x a. d. Owner shall take all reasonable steps, actions and requirements such that subscriber receives Bill Credits associated with the foregoing from the LDC. 4. Price and Payment. a. For the right to receive Bill Credits for energy generated by the Facility each month, Subscriber shall pay to ANCSGI an amount equal to the product of (i) the corresponding Subscriber's Monthly Energy Allocation, and (ii) the Enhanced Bill Credit Rate then applicable to the LDC's Solar Rewards Community Program minus one cent ($.01) (the "Monthly Allocation Payment"). There shall be no owner created fees, other than the Monthly Allocation Payment, applied by ANCSGI to Subscriber through this CSG Program. 2 b. Beginning with the second calendar month following the Commercial Operation Date, ANCSGI shall invoice Subscriber, utilizing Subscriber's preferred invoicing service, for the Monthly Allocation Payment for the Monthly Energy Allocation posted to Subscriber's account since the prior invoice date. Subscriber shall make its payments to ANCSGI no later than thirty (30) days following receipt of the applicable invoice. ANCSGI shall include with each invoice, a copy of the LDC statement delivered to ANCSGI that indicates the Monthly Energy Allocation upon which the LDC calculates the Bill Credit to Subscriber. 5. Records and Audits. a. Upon request by Subscriber, ANCSGI shall provide (i) evidence of the accuracy of its metering equipment for the Facility and/or (ii) such other information and records requested by Subscriber to enable Subscriber to verify the accuracy of the Credits awarded by the LDC and any other calculation and/or measurements described in this Agreement. b. ANCSGI shall provide reports to Subscriber (i) monthly, containing the energy produced by the Facility, and (ii) annually, containing an audited financial statement of ANCSGI, and a current statement of management, financing parties, and operatorship of ANCSGI. Subscriber may provide comments to ANCSGI on the accuracy and completeness of the annual reports, and shall provide a copy of any such comments to LDC. C. As required by Minnesota Statutes, section 16C.05, subdivision 5, the records, books, documents, and accounting procedures and practices of ANCSGI and of any subcontractor of ANCSGI relating to work performed pursuant to this Agreement shall be subject to audit and examination by the Subscriber and the Legislative Auditor or State Auditor as described in such subdivision. ANCSGI and any subcontractor of ANCSGI shall permit, upon reasonable advance written notice, the Subscriber or its designee to inspect, copy, and audit its accounts, records, and business documents at any reasonable time during regular business hours, as they may relate to the performance under this Agreement. Audits conducted by the Subscriber under this provision shall be in accordance with generally accepted auditing standards. 6. Taxes. a. Subscriber shall be solely liable for sales or similar taxes imposed by a governmental entity, if any, attributable to the sale of Credits allocated to the Subscriber. b. Subscriber shall have no interest in and have no entitlement to claim any investment tax credit or other tax benefits related to ownership of the Facility. 7. Representations, Warranties and Covenants. a. Each Party represents and warrants to the other Party: i. The Party is duly organized, validly existing, and in good standing in the jurisdiction of its organization and is qualified to do business in the State of Minnesota; ii. The Party has full legal capacity to enter into and perform this Agreement; iii. The execution of the Agreement has been duly authorized, and each person executing the Agreement on behalf of the Party has full authority to do so and to fully bind the Party; and iv. To the best of its knowledge, there is no litigation, action, proceeding or investigation pending before any court or other Governmental Authority by, against, affecting or involving its ability to carry out the transactions contemplated herein. b. ANCSGI represents, warrants, and covenants to Subscriber: i. ANCSGI has, or in the ordinary course will obtain, all licenses, permits and any other required documents to construct and operate the Facility; ii. ANCSGI shall perform its obligations under the CSG Contract and otherwise comply with all provisions of the CSG Program and other applicable tariffs. iii. Except as may be required by law or regulation, or with Subscriber's consent, ANCSGI will not publicly disclose Subscriber's LDC account information, energy usage data, or Credits. C. Subscriber represents, warrants, and covenants to ANCSGI: i. Subscriber's average annual energy consumption for its subscribing account(s) over the two year period prior to the Effective Date is 116,160 kWhac; ii. Subscriber shall not install or procure any other distributed generation resource(s) serving Subscriber's premises to which energy is delivered by LDC under Account No. 51-4549587-4, which resource(s), when combined with the Allocation, may generate energy (including energy upon which the Credits are based) exceeding one hundred twenty percent (120%) of Subscriber's average annual energy consumption, for this premise, over the twenty-four (24) months prior to such installment or procurement. iii. Within thirty (30) days of request by ANCSGI, which request shall be made not sooner than the date of commencement of construction of the Facility, Subscriber shall complete, execute, and deliver to ANCSGI the Subscriber Agency Agreement in the form attached hereto as Exhibit A. Upon execution, all of the information and statements of Subscriber provided therein shall be accurate. iv. Subscriber understands and agrees it will have no interest in or entitlement to (a) benefits or derivatives of "Unsubscribed Energy" or "RECs" associated with the Facility as each is defined in the CSG Contract; and (b) incentives under the MN Department of Commerce's Made in Minnesota program and LDC's Solar Rewards program associated with the Facility. 8. Performance Guarantee. ANCSGI hereby guarantees that in every period of two consecutive calendar years during the Term, beginning with the first full calendar year, ANCSGI will provide Monthly Energy Allocations from operation of the Facility in an amount not less than ninety percent (90%) of Expected Deliveries (weather adjusted) which will be set forth on Exhibit 11 B hereto (the "Guaranteed Performance") not later than the date of commencement of construction of the Facility. ANCSGI shall pay Subscriber one cent ($.O1) per kWh shortfall to the extent the actual aggregate Monthly Energy Allocations during any such two year period (the "Measurement Period") is less than the Guaranteed Performance for the entire Measurement Period (combining the Expected Deliveries for both calendar years). Such payment shall be Subscriber's sole remedy for default by ANCSGI under this Section 8. ANCSGI shall have no liability under this Section 8 if the Facility's failure to achieve Guaranteed Performance is due to an event of Force Majeure. 9. Default. a. Events of Default. The following shall each constitute an Event of Default by a Party: i. The Party fails to make any material payment due under this Agreement within thirty (30) days after delivery of notice from the other Party that such payment is overdue. ii. The Party materially fails to perform or comply with any material representation, warranty, obligation, covenant or agreement set forth in this Agreement and such failure continues for a period of thirty (30) days after delivery of notice thereof from the other Party. iii. The Party is subject to a petition for dissolution or reorganization, voluntary or involuntary, under the U.S. Bankruptcy Code. b. Force Majeure. Except as specifically provided herein, if by reason of Force Majeure, a Party is unable to carry out, either in whole or in part, any of its obligations herein contained, such Party shall not be deemed to be in default during the continuation of such inability, provided that: (i) the non-performing Party, within a reasonable time after the occurrence of the Force Majeure event, gives the other Party notice describing the particulars of the occurrence and the anticipated period of delay; (ii) the suspension of performance be of no greater scope and of no longer duration than is required by the Force Majeure event; (iii) no obligations of the non-performing Party which were to be performed prior to the occurrence causing the suspension of performance shall be excused as a result of the occurrence; and (iv) the non- performing Party shall use reasonable efforts to remedy the cause(s) preventing it from carrying out its obligations. "Force Majeure" as used in this Agreement shall mean an event or circumstances beyond the reasonable control of a Party and not resulting from the Party's negligence, including, but not limited to fire, acts of God, earthquake, flood or other casualty or accident; break down or failure of the LDC's electric distribution system; any manufacturer's product or equipment recall that results in the loss of more than 20% of Facility's capacity; strikes or labor disputes; war, civil strife or other violence; and any law, order, proclamation, regulation, ordinance, action, demand or requirement of any government agency or utility. Either Party may terminate this Agreement upon 15 days' written notice to the other Party if any event of Force Majeure affecting such other Party has been in existence for a period of 180 E consecutive days or longer, unless such event of Force Majeure expired before the end of the 15 day notice period. 10. Remedies; Limitation of Liability; Waiver. a. Remedies. Subject to the limitations set forth in this Agreement, the Parties each reserve and shall have all rights and remedies available to it at law or in equity with respect to the performance or non-performance of the other Parties hereto under this Agreement. Under no circumstances shall ANCSGI's liability for breach of this Agreement exceed, in any one calendar year, an amount equal to (i) the Allocation percentage times (ii) $15,000; provided, however that such limitation shall not apply to damages arising out of the sale or allocation by ANCSGI to a third party of the Credits allocated and committed to Subscriber hereunder. For example, if the Allocation is 40%, then the limit described in the preceding sentence shall equal 40% x $15,000 or $6,000 total. b. ANCSGI Damages. In the event of Subscriber's breach, repudiation, or termination of this Agreement in violation of the provisions hereof, ANCSGI shall be entitled to recover from Subscriber (subject to ANCSGI's duty to mitigate damages including its duty to try and find a replacement subscriber): the unpaid Monthly Allocation Payments due at the time of termination; and (ii) Owner's damages resulting from Subscriber's breach, including estimated Monthly Allocation Payments over the remaining Term less compensation received from the LDC, if any, attributable to Subscriber's Allocation. Any post -termination Monthly Allocation Payments that may qualify as damages under this section, will be calculated -based upon the Schedule of Expected Deliveries (Exhibit B, hereto), and the Enhanced Bill Credit Rate at the time of Subscriber's breach of this Agreement. C. Limitation of Liability. EXCEPT AS EXPRESSLY ALLOWED HEREIN, NO PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT OR PUNITIVE DAMAGES OF ANY CHARACTER, RESULTING FROM, ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY INCIDENT TO ANY ACT OR OMISSION OF A PARTY RELATED TO THE PROVISIONS OF THIS AGREEMENT, IRRESPECTIVE OF WHETHER CLAIMS OR ACTIONS FOR SUCH DAMAGES ARE BASED UPON CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR ANY OTHER THEORY AT LAW OR EQUITY. d. Exclusions. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 10, THE LIMITATIONS OF THIS SECTION 10 DO NOT APPLY TO A CLAIM FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; FOR FAILURE TO COMPLY WITH LAWS; FOR INDEMNIFICATION; FOR BREACH OF CONFIDENTIALITY, DATA PRACTICES OR FOR INTELLECTUAL PROPERTY INFRINGEMENT. 11. Early Termination. a. Either Party may terminate this Agreement on notice thereof to Subscriber in the event that ANCSGI is unable to obtain financing for the Facility on commercially reasonable terms on or before December 31, 2017. 0 b. If ANCSGI fails to perform under this Agreement due to an event of Force Majeure that lasts more than twelve (12) months or fails to restore the Facility to full operation at Capacity within twelve (12) months following an event of Force Majeure causing damage to the Facility, Subscriber shall have the right to terminate this Agreement by giving ANCSGI at least sixty (60) days prior notice of its intent to terminate based on such failure(s). In the event of termination pursuant to this Section I I (b), ANCSGI shall pay to Subscriber, as liquidated damages, one cent ($.01) for each kWh expected to have been allocated to Subscriber for the six month period following the expiration of such twelve (12) month period. C. In the event (i) the CSG Contract is terminated based on ANCSGI's breach thereof or (ii) ANCSGI materially breaches its obligations of performance in this Agreement and such breach is not cured within thirty (30) days after ANCSGI receives written notice of such breach from Subscriber (provided, however, that if such breach is not capable of being cured within such thirty -day period and ANCSGI has commenced and diligently continued actions to cure such breach within such thirty -day period, the cure period shall be extended to 180 days, so long as ANCSGI is making diligent efforts to do so), then Subscriber may terminate this Agreement as provided in this Section 11. In the event of a termination by Subscriber described in the preceding sentence, ANCSGI shall pay to Subscriber, as liquidated damages, one cent ($.01) for each kWh expected to have been allocated to Subscriber for the calendar year following termination according to the Schedule of Expected Deliveries, Exhibit B. d. The Parties agree that actual damages in the event of termination of this Agreement as specified in Sections 11(b) and I I (c), would be difficult to calculate and that the liquidated damages specified herein are a reasonable approximation of such actual damages. 12. Assignment. No Party shall assign or in any manner transfer this Agreement or any part thereof except in connection with (a) Subscriber's assignment to a party approved in advance by ANCSGI, with such approval not unreasonably withheld, on the bases of (i) creditworthiness, (ii) the party's eligibility under the Solar Rewards Community Program, (iii) Subscriber's payment to ANCSGI of seven hundred fifty dollars ($750) to cover ANCSGI's administrative expenses associated with the transfer (the "Transfer Fee") and (iv) other factors evidencing an increase in a material risk of a breach of this Agreement, (b) ANCSGI's assignment of this Agreement to any Affiliate that owns or, by long-term lease, controls the Facility, provided that such Affiliate has the same or better credit strength and has agreed in writing to recognize Subscriber's rights under this Agreement and to not disturb any of Subscriber's rights hereunder; (c) ANCSGI's collateral assignment of this Agreement to any financial institution that provides financing for the Facility (including a financial institution that enters into a sale/leaseback transaction with respect to the Facility) that has agreed in writing to recognize Subscriber's rights under this Agreement and to not disturb any of Subscriber's rights hereunder upon the foreclosure or conveyance in lieu thereof, and, in connection with any collateral assignment of this Agreement, Subscriber agrees to comply with the lender accommodations set forth in Exhibit C to this Agreement; (d) ANCSGI's assignment of this Agreement, prior to the Commencement of Operations Date, to another operator/owner of a community garden facility, in the same County and qualified under the Solar Rewards Community Program which has sufficient capacity to accept Subscriber's Allocation, has the same or better credit strength, and agrees in writing to recognize Subscriber's rights under this Agreement and to not disturb any of Subscriber's rights hereunder. 7 13. Miscellaneous. a. LDC Disputes. ANCSGI shall be solely responsible for resolving any dispute with LDC regarding the production of energy by the Facility. Subscriber shall be solely responsible for resolving any dispute with LDC regarding the calculation of the Bill Credit Rate. b. Notices. i. All notices and other formal communications which any Party may give to another under or in connection with this Agreement shall be in writing (except where expressly provided for otherwise), shall be deemed delivered upon mailing, deposit with a courier for hand delivery, or electronic transmission, and shall be sent by any of the following methods: hand delivery; reputable overnight courier; certified mail, return receipt requested; or email transmission. ii. Subscriber shall promptly notify ANCSGI of any changes in Subscriber Data. The notices and communications shall be sent to the following addresses: If to ANCSGI : BHE Renewables, LLC Program Manager — MN Community Solar Gardens 1850 N. Central Avenue Suite 1025 Phoenix, AZ 85004 BHERenewables@bherenewables.com 515-252-6677 If to Subscriber: City of Hugo 14669 Fitzgerald Avenue North Hugo, MN 55038 C. Severability. If any term, covenant or condition in the Agreement shall, to any extent, be invalid or unenforceable in any respect under Applicable Law, the remainder of the Agreement shall not be affected thereby, and each term, covenant or condition of the Agreement shall be valid and enforceable to the fullest extent permitted by Applicable Law, unless such invalidity or unenforceability frustrates or negates an essential purpose of this Agreement. d. Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Minnesota without reference to any choice of law principles. e. Dispute Resolution. i. Amicable Settlement. The Parties shall attempt in good faith to resolve all disputes arising in connection with the interpretation or application of the provisions of this Agreement or in connection with the determination of any other matters arising under this Agreement by mutual agreement. ii. Continuation of Performance. During the pendency of any dispute hereunder, the Parties shall continue to perform their respective obligations under this Agreement. iii. Equitable Relief. Nothing in this Agreement shall be construed to preclude either Party from seeking or obtaining urgent equitable or injunctive relief from a court of law in relation to this Agreement. iv. Venue and Jurisdiction. The Parties agree that the courts of the State of Minnesota and the Federal Courts sitting therein shall have jurisdiction over any action or proceeding arising under the Agreement to the fullest extent permitted by Applicable Law. f. Insurance. With respect to the services provided pursuant to this Agreement, ANCSGI shall at all times during the term of this Agreement and beyond such term when so required have and keep in force the following insurance coverages and limits: contractual liability coverage: with Minnesota Law). Commercial General Liability on an occurrence basis with General Aggregate $2,000,000 Products—Completed Operations Aggregate $2,000,000 Personal and Advertising Injury $1,500,000 Each Occurrence—Combined Bodily Injury and Property Damage $1,500,000 ii. Workers' Compensation and Employer's Liability: Workers' Compensation Statutory (If ANCSGI is based outside the state of Minnesota, coverage must comply iii. Employer's Liability. Bodily injury by: Accident—Each Accident $500,000 Disease—Policy Limit $500,000 Disease—Each Employee $500,000 An umbrella or excess policy over primary liability insurance coverages is an acceptable method to provide the required insurance limits. 0 The above establishes minimum insurance requirements. It is the sole responsibility of ANCSGI to determine the need for and to procure additional insurance which may be needed in connection with this Agreement in addition to the foregoing amounts. Upon written request, ANCSGI shall promptly submit copies of insurance policies and proof of current coverage to Subscriber. iv. ANCSGI shall not commence work until it has obtained required insurance and filed with Subscriber a properly executed Certificate of Insurance establishing compliance. The certificate(s) must name Subscriber as the certificate holder and as an additional insured for the liability coverage(s) for all operations covered under this Agreement. ANCSGI shall furnish to Subscriber updated certificates during the term of this Agreement as insurance policies expire. g. Compliance with Law. ANCSGI shall comply with all laws (including common laws), ordinances, codes, rules and regulations (collectively, "Laws") regarding ANCSGI's obligations and performance under this Agreement. ANCSGI shall obtain and maintain any and all permits, licenses, bonds, certificates and other similar approvals required in connection with this Agreement. In the event of an allegation that ANCSGI has failed to comply with any Laws or failed to obtain any and all permits, licenses, bonds, certificates and/or any other similar approvals required in connection with this Agreement, ANCSGI shall pay any fines or penalties imposed upon Subscriber as a result of such failure and shall reimburse Subscriber for any expenses (including attorneys' fees) incurred by Subscriber in responding to such allegation. h. Entire Agreement. This Agreement, and all documents referenced herein, contain the entire agreement between Parties with respect to the subject matter hereof, and supersede all other understandings or agreements, both written and oral, between the Parties relating to the subject matter hereof. i. No Joint Venture. Each Party will perform all obligations under this Agreement as an independent contractor. Nothing herein contained shall be deemed to constitute any Party a partner, agent or legal representative of another Party or to create a joint venture, partnership, agency or any relationship between the Parties. The obligations of Subscriber and ANCSGI hereunder are individual and neither collective nor joint in nature. j. Amendments; Binding Effect. This Agreement may not be amended, changed, modified, or altered unless such amendment, change, modification, or alteration is in writing and signed by each Party to this Agreement or its successor in interest. This Agreement inures to the benefit of and is binding upon the Parties and their respective successors and permitted assigns. k. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement. 1. Further Assurances. From time to time and at any time at and after the execution of this Agreement, each Party shall execute, acknowledge and deliver such documents and assurances, reasonably requested by the other for the purpose of effecting or confirming any of the transactions contemplated by this Agreement. 10 in. Survival. The provisions of Sections 10, (Remedies, Limitation of Liability; Waiver), 13(c) (Severability), 13(d) (Governing Law), and 13(e) (Dispute Resolution) shall survive the expiration or earlier termination of this Agreement for a period of six (6) years thereafter. n. No Third -Party Beneficiaries. This Agreement is intended solely for the benefit of the Parties hereto. Except as expressly set forth in this Agreement, nothing in this Agreement shall be construed to create any duty to or standard of care with reference to, or any liability to, or any benefit for, any person not a party to this Agreement. o. Confidentiality. Each Party agrees that it will not disclose Not Public Data (as hereinafter defined), directly or indirectly, under any circumstances or by any means (excluding disclosures to the LDC or as are required as a participant in the CSG Program), to any third person without the express written consent of the other Party unless such disclosure is permitted by the Minnesota Government Data Practices Act, Minn. Stat. ch. 13, or required by applicable Law. "Not Public Data" means, not public data as defined in Minnesota Statutes § 13.02, subd. 8a (2014). P. Data Practices. i. Consistent with Minnesota Statutes, section 13.05, subdivision 6, if any data on individuals is made available to ANCSGI by the Subscriber under this Agreement, ANCSGI will administer and maintain any such data in accordance with Minnesota Statutes, Chapter 13 (the "Minnesota Government Data Practices Act"), and any other statutory provisions applicable to the data. If and to the extent that Minnesota Statutes, section 13.05, subdivision 11, is applicable to this Agreement, then: (A) all of the data created, collected, received, stored, used, maintained, or disseminated by ANCSGI in performing this Agreement are subject to the requirements of the Minnesota Government Data Practices Act; (B) ANCSGI must comply with those requirements as if it were a government entity; and (C) the remedies in Minnesota Statutes, section 13.08 apply to ANCSGI. ii. Consistent with Minnesota Statutes, section 13.055, if "private data on individuals," "confidential data on individuals" or other "not public data" are provided to or made accessible to ANCSGI by the Subscriber, ANCSGI must: (A) have safeguards to ensure private or confidential data on individuals or other not public data are only accessible or viewable by ANCSGI employees and agents whose work assignments in connection with the performance of this Agreement reasonably require them to have access to the data; (B) immediately notify the Subscriber of any unauthorized access by ANCSGI employees and agents, and unauthorized access by third parties; (C) fully cooperate with Subscriber investigations into any breach in the security of private or confidential data on individuals or other not public data that may have occurred in connection with ANCSGI's access to or use of the data; and (D) fully cooperate with the Subscriber in fulfilling the notice and reporting requirements of Minnesota Statutes, section 13.055. The penalties in Minnesota Statutes, section 13.09 governing unauthorized acquisition of not public data apply to ANCSGI and ANCSGI employees and agents. If ANCSGI is permitted to use a subcontractor to perform ANCSGI's work under this Agreement, ANCSGI shall incorporate these data practices provisions into the subcontract. 11 The remainder of this page is intentionally blank. iii. If ANCSGI receives a request to release data referred to in this section, ANCSGI must immediately notify the Subscriber. The Subscriber will give ANCSGI instructions concerning the release of the data to the requesting party before the data is released. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. THE CITY OF HUGO Name: Brvan Bear Title: City Administrator ARGO NAVIS CSG1, LLC By: Name: Eric Besseling Title: Authorized Representative 12 EXHIBIT A Subscriber Agency Agreement and Consent Form 13 Solar*Rewards Community Subscriber Agency Agreement and Consent Form The undersigned ("Subscriber') has a Subscription to the following Community Solar Garden: Community Solar Garden Name: Community Solar Garden Address: 55056 Argo Navis CSG1, 36320 Kost Trl, North Branch, MN Community Solar Garden Operator: Argo Navis CSG1, Community Solar Garden contact information for Subscriber questions and complaints: Address (if different from above): 1850 N. Central Avenue, Suite 1025, Phoenix, AZ 5804 Telephone number: 515 -252 - Email address: BHERenewablesgbherenewables.com Web Site URL: http://www.bherenewables.com Subscriber Name: The City of Hugo Subscriber's Account Number with Northern States Power Company: Subscriber Service Address where receiving electrical service from Northern States Power Company: 51-4549587- 6900 137th Street North, Hugo, MN 14 15 By signing this Solar Rewards Community Subscriber Agency Agreement and Consent Form, the Subscriber agrees to all of the following: 1. Assignment of Renewable Energy Credits ("RECs'), Energy and Capacity to Northern States Power Company, a Minnesota corporation. The Subscriber agrees that the Community Solar Garden Operator has authority to assign all energy produced and capacity associated with the photovoltaic energy system at the Community Solar Garden to Northern States Power Company, and the Subscriber agrees that all energy produced, and capacity associated with the photovoltaic energy system at the Community Solar Garden shall belong to Northern States Power Company. The Subscriber also agrees that the Community Solar Garden Operator has authority to assign all RECs associated with the photovoltaic energy system at the Community Solar Garden to Northern States Power Company, and that if the Community Solar Garden or a person or entity on its behalf has assigned the RECs to Northern States Power Company, then all RECs associated with the photovoltaic energy system at the Community Solar Garden shall belong to Northern States Power Company. 2. Tax Implications. The Community Solar Garden Operator has provided the Subscriber with a statement that Northern States Power Company makes no representations concerning the taxable consequences to the Subscriber with respect to its Bill Credits to the Subscriber or other tax issues relating to participation in the Community Solar Garden. 3. Northern States Power Company hereby discloses to the Subscriber that it recognizes that not all production risk factors, such as grid -failure events or atypically cloudy weather, are within the Community Solar Garden Operator's control. 4. Information Sharing. Participating in the Solar*Rewards Community Program will require sharing Subscriber's Account Information (name, account number, service address, telephone number, email address, web site URL, information on Subscriber participation in other distributed generation serving the premises of the Subscriber, Subscriber specific Bill Credit(s)) and Subscriber's Energy Use Data (the past, present and future electricity usage attributable to the Subscriber for the service address and account number identified for participation in the Community Solar Garden). The following outlines the type of information that will be shared, and how that information will be used. a. Subscriber's Account Information and Subscriber Energy Usage Data. The Subscriber authorizes Northern States Power Company to provide the Community Solar Garden Operator (and the Community Solar Garden Operator's designated subcontractors and agents) with the Subscriber's Account Information and Subscriber's Energy Usage Data as described in Section 4 above. This information is needed to allow the Community Solar Garden Operator determine the extent to which the Subscriber is entitled to participate in the Community Solar Garden, and to validate the amount of the Bill Credits to be provided by Northern States Power Company to the Subscriber. The current data privacy policies of Northern States Power Company applicable to its Solar*Rewards Community Program provided to the Subscriber by the Community Solar Garden Operator pursuant Section 3 above are attached as Exhibit 1 of this Solar*Rewards Community Subscriber Agency Agreement and Consent Form. These privacy policies include definitions of "Subscriber's Account Information" and "Subscriber's Energy Usage Data." 16 b. Subscriber's Subscription Information: The Subscriber authorizes the Community Solar Garden Operator to provide information to Northern States Power Company identifying the Subscriber (with the Subscriber's name, service address, and account number) and detailing the Subscriber's proportional share in kilowatts of the Community Solar Garden and to provide additional updates of this information to Northern States Power Company as circumstances change. This information is needed to allow Northern States Power Company to properly apply Bill Credits for the photovoltaic energy generated by the Community Solar Garden. Also, this information is needed to allow Northern States Power Company to send to the Subscriber notices or other mailings pertaining to their involvement in the Solar*Rewards Community Program. The Community Solar Garden Operator shall not disclose Subscriber information in annual reports or other public documents absent explicit, informed consent from the Subscriber. The Community Solar Garden Operator will not release any Subscriber data to third parties except to fulfill the regulated purposes of the Solar*Rewards Community Program, to comply with a legal or regulatory requirement, or upon explicit, informed consent from the Subscriber. C. Aggregate Information. Aggregate information concerning production at the Community Solar Garden may be publicly disclosed to support regulatory oversight of the Solar*Rewards Community Program. This includes annual reports available to the public related to specific Community Solar Gardens, including but not limited to production from the Community Solar Gardens; size, location and the type of Community Solar Garden subscriber groups; reporting on known complaints and the resolution of these complaints; lessons learned and any potential changes to the Solar*Rewards Community Program; reporting on Bill Credits earned and paid; and reporting on the application process. Aggregated information will not identify individual Subscribers or provide Subscriber -Specific Account Information, Subscriber -Specific Energy Usage Data or Subscriber -specific Bill Credits unless a Subscriber provides explicit informed consent. Depending on the nature of the aggregated information, however, it may still be possible to infer the amount of production attributed to individual Subscribers to the Community Solar Garden. The Subscriber agrees to the inclusion of its production information in the creation of the aggregated information. The Community Solar Garden Operator will not use aggregated information for purposes unrelated to the Solar*Rewards Community Program without first providing notice and obtaining further consent, unless the aggregated information is otherwise available as public information. The policies of Northern States Power Company related to sharing aggregated information are part of the data privacy policies contained in the attached Exhibit 1 of this Solar*Rewards Community Subscriber Agency Agreement and Consent Form and should be provided to the Subscriber by the Community Solar Garden Operator pursuant Section 3 above. d. Information Requests from the MPUC or the Department of Commerce. The Subscriber agrees that the Community Solar Garden Operator and Northern States Power Company are authorized to provide any information they possess related to the Subscriber or the Subscriber's participation in the Community Solar Garden to the Minnesota Public Utilities Commission (MPUC), the Minnesota Department of Commerce, or the Minnesota Office of Attorney General. This information is needed to 17 allow proper regulatory oversight of Northern States Power Company and of the Solar*Rewards Community Program. e. Liability Release. Northern States Power Company shall not be responsible for monitoring or taking any steps to ensure that the Community Solar Garden Operator maintains the confidentiality of the Subscriber's Account Information, the Subscriber's Energy Usage or the Bill Credits received pertaining to the Subscriber's participation in the Community Solar Garden. However, Northern States Power Company shall remain liable for its own inappropriate release of Subscriber's Account Information and Subscriber's Energy Use Data. f. Duration of Consent. The Subscriber's consent to this information sharing shall be ongoing for the Term of the CSG Contract between the Community Solar Garden Operator and Northern States Power Company, or until the Subscriber no longer has a Subscription to the Community Solar Garden and the Community Solar Garden Operator notifies Northern States Power Company of this fact through the CSG Application System. Provided, however, the Subscriber's consent shall also apply thereafter to all such information of the Subscriber pertaining to that period of time during which the Subscriber had a Subscription to the Community Solar Garden. g. Modification. The above provisions addressing data privacy and in Exhibit 1 shall remain in place until and unless other requirements are adopted by the MPUC in its generic privacy proceeding, Docket No. E,G999/CI-12-1344, or other MPUC Order. Northern States Power Company shall file necessary revisions to its tariffs and contracts within thirty (30) days of such Order. Subscriber's Name: The City of Hugo Subscriber's Signature: Date: Bryan Bear, City Administrator 18 Exhibit 1 to Solar*Rewards Community Subscriber Agency Agreement and Consent Form Data Privacy Policies of Northern States Power Company Pertaining to the Solar*Rewards Community Program The data privacy policies of Northern States Power Company pertaining to the Solar*Rewards Community Program are as follows and may be changed from time to time as filed in the Company's tariff or as otherwise may be authorized by the Minnesota Public Utilities Commission ("MPUC"): Definitions Unless indicated otherwise, the same definition and meaning of terms in this document are the same as contained in the Standard Contract for Solar*Rewards Community. For ease of reference, here are some of the specific definitions: "Company" means Northern States Power Company, a Minnesota Corporation, and its affiliates and agents. "Subscribed Energy" means electricity generated by the PV System attributable to the Subscribers' Subscriptions and delivered to the Company at the Production Meter on or after the Date of Commercial Operation. "Subscriber" means a retail customer of the Company who owns one or more Subscriptions of a community solar garden interconnected with the Company. "Subscriber's Account Information" consists of the Subscriber's name, account number, service address, telephone number, email address, web site URL, information on Subscriber participation in other distributed generation serving the premises of the Subscriber, and Subscriber specific Bill Credit(s). "Subscriber's Energy Usage Data" includes the past, present and future electricity usage attributable to the Subscriber for the service address and account number identified for participation in the Community Solar Garden. 19 Overview This section addresses how Subscriber's Account Information and Subscriber's Energy Usage Data will be collected, used and shared as part of participation in the Solar*Rewards Community Program. 1. How Subscriber's Account Information and Energy Usage Data Will Be Exchanged a. Subscriber Specific Information Once a Subscriber has executed a Subscriber Agency Agreement and Consent Form, an ongoing data exchange will occur between the Company and a Community Solar Garden Operator (and their designated subcontractors and agents): (i) The Company will disclose the following Subscriber -specific information to the Community Solar Garden Operator: • Subscriber's Account Information • Subscriber's Energy Usage Data • Bill credits (ii) The Community Solar Garden Operator will disclose to the Company the following Subscriber -specific information: • Subscriber's Account Information • Community Solar Garden Allocation for each Subscriber's Subscription stated in kW • Production data related to the PV System • Monthly Subscription Information b. Aggregated Subscriber Information Aggregated Subscriber information will be reported as part of Permitted Public Reporting, outlined in Section 2(b) below. To be considered "aggregated" the reported information must include information attributable to all Subscribers participating in a specific Solar*Rewards Community program site, which based on program requirements will contain a minimum of five Subscribers. Depending on the nature of the aggregated information, however, from this information alone or in combination with other publicly available information it may still be possible to infer the amount of production attributed to individual Subscribers to the Community Solar Garden. 20 2. How Subscriber's Information Will Be Used The following outlines how the Subscriber's Account Information and Subscriber Energy Usage Data will be used as part of the Solar*Rewards Community Program. a. Program Management As part of administering the Solar*Rewards Community program, the Solar Garden Operator and the Company may provide information related to the Subscriber and/or the Community Solar Garden to: • the MPUC • the Minnesota Department of Commerce • the Minnesota Office of Attorney General • Other governmental or private entities as required by law or regulation Account Information and Subscriber's Energy Usage Data to service providers, agents, or contracted agents who support the program on its behalf. The Company prohibits these service providers from using or disclosing the Subscriber's information except as necessary to perform these specific services or to comply with legal requirements. More information about the Company's general privacy practices is explained in its Privacy Policy available on www.xcelenerqy.com. b. Permitted Public Reporting The Subscriber's Energy Usage Data of each participating Subscriber to a Community Solar Garden will be combined and reported in the aggregate by the Community Solar Garden Operator in its annual report on the Solar*Rewards Community program. The identity of specific Subscribers, the specific Subscriber's Account Information, Subscriber's Energy Usage Data and Subscriber -specific Bill Credit will not be listed in the public annual report unless the Subscriber has provided the Community Solar Garden Operator with prior written consent. Per the requirements of the MPUC, the Company will provide to the MPUC annual reports which will include information or data requested by the MPUC or Minnesota Department of Commerce, including the following: • Reporting on Solar*Rewards Community program costs, including an analysis of the deposit, application, participation and metering fees and further justification for these fees going forward; • Reporting on the Solar*Rewards Community Gardens, including but not limited to size, location and the type of Solar*Rewards Community subscriber groups; • Reporting on known complaints and the resolution of these complaints; 21 • A copy of each contract signed with a Community Solar Garden Operator, if not previously filed; • Lessons learned and any potential changes to the program; • Report on bill credits earned and paid; and the • Application process C. Prohibited Reporting or Sharing Except as otherwise provided in this document, the Company will not disclose the Subscriber's Account Information, Subscriber's Energy Usage Data or Subscriber -specific Bill Credits to a third party without first obtaining the Subscriber's written consent. Any requests by the Community Solar Garden Operator to the Company for information about a Subscriber that is not Subscriber's Account Information or Subscriber's Energy Usage Data will require execution of a separate written consent by the Subscriber. Notwithstanding the previous statement, the Company will not provide the Community Solar Garden Operator with the Subscriber's Social Security Number unless directed to do so by the MPUC or Minnesota Department of Commerce or compelled by law or regulation. 3. Subscriber Data Access and Correction The following outlines what information is available to the Subscriber from the Company and the Community Solar Garden Operator, and methods of correcting any inaccuracies. a. Information Available from the Company Subscribers can contact the Company's call center to obtain information pertaining to their specific Bill Credit attributable to their participation in Solar*Rewards Community Program. The correction of any allocation of previously -applied Bill Credits among Subscribers or payments to the Community Solar Garden Operator for Unsubscribed Energy, pertaining to a particular month due to any inaccuracy reflected in such Monthly Subscription Information with regard to a Subscriber's Subscription in the PV System and the beneficial share of photovoltaic energy produced by the PV System, or the share of Unsubscribed Energy, shall be the full responsibility of the Community Solar Garden Operator, unless such inaccuracies are caused by the Company. Subscribers may also obtain from the Company the following information related to the Solar*Rewards Community Program without obtaining written consent from the Community Solar Garden Operator: • Site location • Operator name • Nameplate capacity 22 • Production data related to the PV system • Bill Credit Rate and total amount of Bill Credits applied to the PV System • Any other information pertaining to the Subscriber's Subscription Other information regarding the Community Solar Garden Operator known to the Company will not be disclosed unless the Subscriber obtains prior explicit informed consent from the Community Solar Garden Operator or unless directed to do so by the MPUC or Minnesota Department of Commerce or compelled by law or regulation. b. Information Available from the Community Solar Garden Operator Subscribers and prospective subscribers can contact the Community Solar Garden Operator to obtain the following information: a Future costs and benefits of the Subscription, including: i. All nonrecurring (i.e., one-time) charges; ii. All recurring charges; iii. Terms and conditions of service; iv. Whether any charges may increase during the course of service, and if so, how much advance notice is provided to the Subscriber; V. Whether the Subscriber may be required to sign a term contract; vi. Terms and conditions for early termination; vii. Any penalties that the Community Solar Garden may charge to the Subscriber; viii. The process for unsubscribing and any associated costs; ix. An explanation of the Subscriber data the Community Solar Garden Operator will share with Northern States Power Company and that Northern States Power Company will share with the Community Solar Garden Operator; X. The data privacy policies of Northern States Power Company and of the Community Solar Garden Operator; xi. The method of providing notice to Subscribers when the Community Solar Garden is out of service, including notice of estimated length and loss of production; 23 xii. Assurance that all installations, upgrades and repairs will be under direct supervision of a NABCEP-certified solar professional and that maintenance will be performed according to industry standards, including the recommendations of the manufacturers of solar panels and other operational components; xiii. Allocation of unsubscribed production; and xiv. A statement that the Community Solar Garden Operator is solely responsible for resolving any disputes with Northern States Power Company or the Subscriber about the accuracy of the Community Solar Garden production and that Northern States Power Company is solely responsible for resolving any disputes with the Subscriber about the applicable rate used to determine the amount of the Bill Credit. • Copy of the contract with Northern States Power Company for the Solar*Rewards Community Program • Copy of the solar panel warranty • Description of the compensation to be paid for any underperformance • Proof of insurance • Proof of a long-term maintenance plan • Current production projections and a description of the methodology used to develop production projections • Community Solar Garden Operator contact information for questions and complaints • Demonstration to the Subscriber by the Community Solar Garden Operator that it has sufficient funds to operate and maintain the Solar*Rewards Community Program The Community Solar Garden Operator is solely responsible for the accuracy of the Subscriber's share of the Community Solar Garden production information forwarded to the Company, and should resolve with the Subscriber any dispute regarding the accuracy of such information. Subscribers can submit comments to the Company on the accuracy and completeness of its annual report by contacting solarrewardscommunity@xcelenergy.com. 24 4. Data Retention The Company will retain the Subscriber's Account Information, Subscriber's Energy Usage Data and information on Bill Credits for as long as required under applicable law. 25 EXHIBIT B Schedule of Expected Deliveries of Credits [pro forma; final to be provided prior to commencement of construction] Subscriber's Share (kWh) Year 1 116,160 Year 2 115,579 Year 3 115,001 Year 4 114,426 Year 5 113,854 Year 6 113,285 Year 7 112,718 Year 8 112,155 Year 9 111,594 Year 10 111,036 Year 11 110,481 Year 12 109,929 Year 13 109,379 Year 14 108,832 Year 15 108,288 Year 16 107,746 Year 17 107,208 Year 18 106,672 Year 19 106,138 Year 20 105,608 Year 21 105,080 Year 22 104,554 Year 23 104,031 Year 24 103,511 Year 25 102,994 26 Weather Adjustment Protocol for Expected Deliveries For any two-year Measurement Period respecting application of the Performance Guarantee, Expected Deliveries shall be adjusted to reflect any negative difference (shortfall) between Expected Solar Irradiation ("ESP') and Actual Solar Irradiation ("ASI"). The ratio of ASI to ESI for the Measurement Period shall be applied to Expected Deliveries as a weather adjustment prior to comparing Actual Deliveries to Expected Deliveries for the purposes of the Performance Guarantee. The method of the weather adjustment is as follows. 1. The ESI for the Facility is 1390 KWh per square meter. 2. The ASI is to be determined by monthly pyranometer readings at the Facility. The monthly readings are to be averaged for each of the two calendar years in the Measurement Period. 3. The weather adjustment factor for the measurement period is the ratio of (i) ASI, determined per Step 2 of this method to (ii) ESI, determined per Step I of this method. The Expected Deliveries for the Measurement Period is multiplied by this factor to derive the Guaranteed Performance. 27 EXHIBIT C Lender Accommodations Subscriber acknowledges that ANCSGI will be financing the installation of the Facility either through a lessor, lender or with financing accommodations from one or more financial institutions and that ANCSGI may sell or assign the Facility and/or may secure ANCSGI's obligations by, among other collateral, a pledge or collateral assignment of this Agreement and a first security interest in the Facility. In order to facilitate such sale, conveyance, or financing, and with respect to any such financial institutions of which ANCSGI has notified Subscriber in writing Subscriber agrees as follows: (a) Consent to Collateral Assignment. Provided the Financing Party has agreed in writing to recognize Subscriber's rights under this Agreement and to not disturb any of Subscriber's rights thereunder upon the foreclosure or conveyance in lieu thereof, Subscriber consents to either the sale or conveyance by ANCSGI to a Financing Party that has provided financing of ANCSGI's right, title and interest in the Facility and to this Agreement. (b) Notices of Default. Subscriber will deliver to the Financing Party, concurrently with delivery thereof to ANCSGI, a copy of each notice of default given by Subscriber under the Agreement, inclusive of a reasonable description of ANCSGI default. Subscriber will not mutually agree with ANCSGI to terminate the Agreement without the written consent of the Financing Party. (c) Rights Upon Event of Default. Notwithstanding any contrary term of this Agreement, during the continuation of an event of default by ANCSGI under its agreements with Financing Party, provided that the Financing Party has agreed in writing to recognize Subscriber's rights under the Agreement and to not disturb any of Subscriber's rights thereunder: i. The Financing Party, as collateral assignee, shall be entitled to exercise, in the place and stead of ANCSGI, any and all rights and remedies of ANCSGI under this Agreement in accordance with the terms of this Agreement and the Financing Party shall also be entitled to exercise all rights and remedies of secured parties generally with respect to this Agreement. ii. The Financing Party shall have the right, but not the obligation, to pay all sums due under this Agreement and to perform any other act, duty or obligation required of ANCSGI thereunder or cause to be cured any default of ANCSGI thereunder in the time and manner provided by the terms of this Agreement. Nothing herein requires the Financing Party to cure any default of ANCSGI under this Agreement or (unless the Financing Party has succeeded to ANCSGI's interests under this Agreement) to perform any act, duty or obligation of ANCSGI under this Agreement, but Subscriber hereby gives it the option to do so. iii. Upon the exercise of remedies under its security interest in the Facility, including any sale thereof by the Financing Party, whether by judicial proceeding or under any power of sale contained therein, or any conveyance from ANCSGI to the Financing Party (or any assignee of the Financing Party). Any such exercise shall not constitute a default under this Agreement. 28 iv. Upon any rejection or other termination of this Agreement pursuant to any process undertaken with respect to ANCSGI under the United States Bankruptcy Code, at the request of the Financing Party made within ninety (90) days of such termination or rejection, Subscriber shall enter into a new agreement with the Financing Party or its assignee having the same terms and conditions as this Agreement. (d) Right to Cure. i. Except for termination pursuant to Section 3(a) of the Subscription Agreement in connection with a failure to achieve commercial operation by December 31, 2016, Subscriber will not exercise any right to terminate or suspend this Agreement unless it shall have given the Financing Party prior written notice by sending notice to the Financing Party (at the address provided by ANCSGI) of its intent to terminate or suspend this Agreement, specifying the condition giving rise to such right, and the Financing Party shall not have caused to be cured the condition giving rise to the right of termination or suspension within thirty (30) days after such notice or (if longer) the periods provided for in this Agreement. The Parties respective obligations will otherwise remain in effect during any cure period; provided that if such ANCSGI default reasonably cannot be cured by the Financing Party within such period and the Financing Party commences and continuously pursues cure of such default within such period, such period for cure will be extended for a reasonable period of time under the circumstances, such period not to exceed additional sixty (60) days. ii. If the Financing Party (including any transferee), pursuant to an exercise of remedies by the Financing Party, shall acquire title to or control of ANCSGI's assets and shall, within the time periods described in Sub -section (d)(i) above, cure all defaults under this Agreement existing as of the date of such change in title or control in the manner required by this Agreement and which are capable of cure by a third person or entity, then such person or entity shall no longer be in default under this Agreement, and this Agreement shall continue in full force and effect. 53116334 29 MAINTENANCE AGREEMENT Waterbody/Channel Crossing Between the Rice Creek Watershed District and City of Hugo 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 103B and 103D and a drainage authority pursuant to chapter 103E of the laws of the State of Minnesota (RCWD), and the City of Hugo, a Minnesota Municipal Corporation. ("Permittee"). Recitals and Statement of Purpose WHEREAS pursuant to Minnesota Statutes § 103D.345, the RCWD has adopted and implements Rule G, "Crossings of Natural & Artificial Conveyance Systems," WHEREAS RCWD Rule G imposes certain requirements to ensure a structure placed across drainage system is maintained to perform as designed; WHEREAS as a part of the work approved under Permit #16-026, Permittee is installing a structure across drainage system subject to requirements of RCWD Rule G; WHEREAS in accordance with RCWD Rule G and as a condition of Permit #16-026, Permittee must maintain the structure in perpetuity, and its obligation to do so must be memorialized by a maintenance agreement; WHEREAS Permittee and the RCWD execute this Agreement to fulfill this condition of Permit #16-026, and concur that it is binding and rests on mutual valuable consideration; THEREFORE: 1. Permittee, at its cost, will maintain the structure labeled on Exhibit A as Oneka Parkway Bridge. 2. Permittee will inspect the structure at least annually. 3. Permittee will maintain the structure in good repair in accordance with RCWD- approved plans related to Permit #16-026. 4. Permittee will repair eroded or unstable conditions resulting from the structure as promptly as weather and seasonal conditions allow. Nothing in this Agreement imposes on Permittee any obligation of the drainage authority under the drainage code (Minnesota Statutes Chapter 103E). 5. If the Structure is not being maintained in accordance with this agreement, the RCWD may give written notice detailing the deficiency. If the deficiency has not been corrected within thirty (30) days after receipt of this notice (in the case of a deficiency which is reasonably curable within 30 days), or arrangements reasonably deemed adequate by the RCWD have not been made within that period (for deficiencies which are not reasonably curable within 30 days), then the RCWD upon final further notice may take steps that it deems reasonable to correct the deficiency, and may have access to the Property during reasonable times for that purpose. The RCWD will provide notice before entry and exercise reasonable care to avoid damage to the Property. Within thirty (3 0) days of receipt of invoice the RCWD shall be reimbursed for all costs reasonably incurred in correcting the deficiency, including administrative overhead and reasonable attorneys' fees. 6. Any notice under this agreement shall be sent by certified mail, return receipt requested, or delivered to the following address: City of Hugo 14669 Fitzgerald Ave N Hugo, MN 55038 Permittee may change this address by a certified letter to the RCWD referencing the permit number. 7. This Agreement shall run with the land and inure to the benefit and be binding upon the parties hereto, their heirs, successors and assigns. 8. 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. 9. The recitals are incorporated as a part of this Agreement. 2 IN WITNESS WHEREOF, the parties hereto have executed this Agreement. RICE CREEK WATERSHED DISTRICT RCWD Administrator, Phil Belfiori CITY OF HUGO IN City Administrator, Bryan J. Bear Date: Date: Agenda Number i CITY OF HUGO COMMUNITY DEVELOPMENT DEP.:4,RTMENT PLANNINGAND ZONING APPLICATION STAFF REPORT TO: Bryan Bear, City Administrator FROM: Rachel Juba, Planner SUBJECT: Gary Michalski. Bald Eagle Industrial Park 6"' Addition. Preliminary Plat and Final Plat DATE: June 29, 2016, for the City Council Meeting of July 5, 2016 ZONING: General Industrial (I-3) LAND USE: Industrial (I) REVIEW DEADLINE: July 15, 2016 1. DESCRIPTION OF REQUEST: The applicant is requesting approval of a preliminary plat and final plat to allow for a 9.42 acre parcel to be split into two 4.71 are parcels. According to the City Code, all subdivisions in zoning districts that are eligible for municipal sewer and water, which create two or more lots or parcels shall be platted. At this time, the applicant is simply asking for the lot split. No approval for development is proposed. At the time the applicant or its successors decide to develop the property a site plan shall be reviewed and approved by the Planning Commission and City Council. Staff has not reviewed any development concept pians for the sites in regards to compliance with City Code. 2. CONTEXT: A. Surrounding Land Use and Zoning The properties to the north, east, and south are zoned General Industrial (I-3) and are occupied by industrial uses. The property to the west, across Fenway Boulevard, is zoned Medium Density Multiple Family Residential (R-5) and is occupied by the Townhomes of Bald Eagle development. BEIP 6th Preliminary Plat and Final Plat Page 2 B. Natural Site Characteristics The property is generally flat and does not contain any wetlands. There are not significant stands of trees on the property. 3. ANALYSIS: A. Level of City Discretion in Decision -Making The City's discretion in approving or denying a preliminary plat is limited to whether or not the proposed plat meets the standards outlined in the Comprehensive Land Use Regulations. If it meets these standards, the City must approve the preliminary plat. B. Consistency with Ordinance Standards Preliminary Plat and Final plat Lot Size The I-3 zoning district requires o minimum lot size of 15,000 square feet, a minimum lot width of 100 feet, and a minimum lot depth of 150 feet. The lots comply with the ordinance standards. Setbacks The I-3 zoning district requires the following minimum setbacks: Front Yard: 30 feet Side Yard: Equal to the height of the building, in no case less than 10 feet Rear Yard: 50 feet The applicant is not proposing a development or building placement at this time. All proposed buildings shall meet the required setbacks. Wetlands In 2013, the Technical Evaluation Panel (TEP) determined there are no wetlands on the property. Drainage/Grading The proposed plat does not include any site grading, or proposed construction of impervious surface. As such, no stormwater management plan is required at this time. The specific stormwater management will be required at the time construction occurs within each parcel. The applicant may wish to plan their stormwater management collaboratively between the two parcels for efficiency; however, this is not required. BEIP 6th Preliminary Plat and Final Plat Page 3 The property is within the drainage area of the Bald Eagle Industrial Park Pond project completed when the Industrial Park was developed. As a result, a portion of the stormwater storage and treatment requirements are met. The Rice Creek Watershed Districts (RCWD) rules have changed since the Industrial Park was developed, and the volume reduction requirements will apply as the sites develop, as well as providing storage for larger rain events. This will be reviewed as development is proposed for each parcel. The City stormwater trunk fee will apply to these parcels, and will be calculated and collected at the time of building permit. Utilities Sanitary sewer service is available within Fenway Boulevard via the Met Council Environmental Services (MCES) Forest Lake Interceptor. Direct connection to the MCES sewer is not allowed; however, the plat documents show sewer stubs near the south property line of Lot 2 and the north property line of Lot 1. These stubs should be verified by the applicant before any development occurs on site. One or both stubs could be used to provide individual service to each lot, or a public sewer extension could be extended from one of the stubs to provide service to both lots. This issue will be reviewed in detail once development of one or both lots occurs. Water service is available to both properties from within Fenway Boulevard. The specifics of the connections will be reviewed as development of the lots occurs. All utility connection fees will apply to both lots within the subdivision, and will be calculated/collected at the time a building permit is issued. Streets/Access The property has direct access to Fenway Boulevard, and driveway connections can be made at the time the properties are developed. The specific driveway locations and details will be rev=iewed at the time the properties are developed. The properties have a 60 -foot wide roadway easement across the east property line, and the easement continues south to 130th Street as Farnham Avenue. The easement currently does not have an improved roadway between 130th Street and the property. The easement could be used to provide access to the site; however, a roadway to City standards would need to be constructed to do so. Park Dedication Park dedication fees do not apply to industrial properties. 2. CONCLUSION: It's in staff's opinion that all necessary requirements have been met to approve a preliminary plat and final plat. BEIP 6th Preliminary Plat and Final Plat Page 4 3. STAFF RECOMMENDATION: Staff recommends approval of the preliminary plat and final plat for Bald Eagle Industrial Park 6"' Addition, subject to the conditions listed in the attached resolution. 4. PLANNING COMMISSION RECOMMENDATION: At its June 23, 2016, meeting the Planning Commission held a public hearing and considered the request. The Planning Commission recommended approval of the preliminary plat and final plat for Bald Eagle Industrial Park 6`h Addition, subject to the conditions listed in the attached resolution. ATTACHMENTS: 1. Location Map 2. Approving Resolution 3. Engineers Memo Dated June 15, 2016 4. Preliminary Plat 5. Final Plat N Bald Eagle Industrial Park 6thAddiiton Site Map E Preliminary Plat s RESOLUTION 2016 - APPROVING A PRELIMINARY PLAT AND FINAL PLAT FOR GARY MICHALSKI FOR "BALD EAGLE INDUSTRIAL PARK 6`1 ADDITION" LOCATED NORTH OF 130Tn STREET AND EAST OF FENWAY BOULEVARD WHEREAS, Gary Michalski has requested approval of a preliminary plat and final plat to split a 9.42 acre parcel into two 4.71 acre parcels to be known as `Bald Eagle Industrial Park 6'1' Addition" located north of 130"' Street and cast of Fenway Boulevard and is legally described as follows: Lot 1, Blockl, Bald Eagle Industrial Park 0' Addition WHEREAS, the Planning Commission has reviewed said preliminary plat and recommends approval. NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUGO, MINNESOTA, that it should and hereby does approve the preliminary plat and final plat to Gary Michalski for "Bald Eagle Industrial Park 611' Addition" subject to the following conditions: 1. A preliminary plat and final plat is approved to allow the creation of 2 lots, in accordance with the plans received by the City on May 16, 2016 except as amended by this resolution. 2. The properties are subject to the General Industrial (I-3) district standards. No variances are granted or implied. 3. Any development shall comply with the comments in the Engineer's memo dated June 15, 2016. 4. Park dedication is not required for industrial development. Prior to issuance of a building permits: 5. A site plan shall be reviewed and approved by the Planning Commission and City Council. 6. All development fees shall be paid. 7. The applicant shall pay the City's Stormwater trunk fee for each lot. 8. The applicant shall pay the City's sewer and water trunk fees and SAC and WAC fees for each lot. Resolution 2016 - Page 2 ADOPTED by the City Council this 5' day of July 2016. Tom Weidt, Mayor ATTEST: Michele Lindau, City Clerk !ly°SS k-�E= Bffd'iga eeacy your egac-. June 15, 2016 Ms. Rachel Juba City Planner City of Hugo 14669 Fitzgerald Avenue North Hugo, MN 55038 Re: Preliminary and Final Plat Review Bald Eagle Industrial Park 6th Addition WSB Project No. 3288-050 Dear Ms. Juba: 701 Xenia Avenue South Suite 300 Minneapolis, MN 55416 Tel: 763-541-4800 Fax: 763-541-1700 We have reviewed the application materials for the Bald Eagle Industrial Park 6 1 Addition project including the following: Preliminary Plat prepared by EG Rud and Sons, dated May 13, 2016, revision date June 6, 2016 Final Plat prepared by EG Rud and Sons, dated June 6, 2016 Based on our review, we offer the following comments regarding the concept plan: Stormwater Manaeement I. The proposed plat does not include any site grading or proposed construction of impervious surface. As such, no stormwater management plan is required at this time. The specific stormwater management will be required at the time construction occurs within each site($). The applicant may wish to plan their stormwater management collaboratively between the two parcels for efficiency; however, this is not required. 2. The site is within the drainage area of the Bald Eagle Industrial Park pond project completed when the Industrial Park was developed. As a result, a portion of the stormwater storage and treatment requirements are met. The RCWD rules have changed since the Industrial Park was developed, and the volume reduction requirements will apply as the sites develop, as well as providing storage for larger rain events. This will be reviewed in detail as building pians move forward. 3. The City stormwater trunk fee will apply to these properties, and will be calculated and collected at the time of building permit. Street and Utilities 1. The property has direct access to Fenway Boulevard, and driveway connections can be made at the time the properties are developed. The specific driveway locations and details will be reviewed at the time the properties are developed. Equal Opportunity Employer wsbeng.com MICRY of HugaiLettea and memas}3288-050 COM LTR -r pba-06T576-Rf1P6th.da, Ms. Rachel Juba June 15, 2016 Page 2 2. The properties have a 60 -foot -wide roadway easement across the east property line, and the easement continues south to 130th Street as Farnham Avenue. The easement currently does not have an improved roadway between 130th Street and the property. The easement could be used to provide access to the site; however, a roadway would need to be constructed to do so. 3. Sanitary sewer service is available within Fenway Boulevard via the Met Council Environmental Services (MCES) Forest Lake Interceptor. Direct connection to the MCES sewer is not allowed; however, the plat documents show sewer stubs near the south property line of Lot 2 and the north property line of Lot 1. These stubs should be verified by the applicant before any development occurs on site. One or both stubs could be used to provide individual service to each lot, or a public sewer extension could be extended from one of the stubs to provide service to both lots. This issue will be reviewed in detail once development of one or both lots occurs. 4. Water service is available to both properties from within Fenway Boulevard. The specifics of the connections will be reviewed as development of the lots occurs. 5. Utility connection fees will apply to both lots within the subdivision, and will be calculated/collected at the time a building permit is issued. Thank you for the opportunity to comment on this issue. If you have any questions or items you wish to discuss, you can contact me at 763-257-7192. Sincerely, WSB & Associates, Inc. nedy, PE t ngineer cc: Steve Duff, Senior Engineering Technician, City of Hugo Scott Anderson, Public Works Director, City of Hugo jk/srb N;jG(y of NugojLetten and memmV288-05D COM LTR-r/uba-061516-8E)P6th,doa 1 PRELIMINARY PLAT 1 L �of- BALD EAGLE INDUSTRIAL PARK 6TH ADDITION r = 1 -for- JOSEPH W. MICHALSKI TESTAMENTRY TRUST iaW.. 1 � •�� x . I Field -l GRAPHIC SCALE Par c At I Areo 934 1fL Curb ' 1 inch -40 t IN �t - • rye 78 E. w �.`e °Ds53„K, � � � Thi: fAdi � e A NORcurr TH BEN e < i _ur, dere Eme The 132N0 STREET i 11 ... w, . - �. - _ _ ~"�•—! ear B NORTH r 205,145 S.F. ! ,3_y, (4.71 ACRES) 11 1A r plan ai 1 plan u .a,, c��� •• 111 yfi _ tCr end 454 4�9i'��� r E _ 1 IPA l �t r 1 a .ew• W. 9(�hF . „ .n. . wa •w.w _ Y _�_ !r� k _.8 f r — 1 s>e l 1 rrcjp �,e-1'urrr sk 1 ®a ®tl 2 1 r I I I _) a. or (4.71 ACRES) )1 Z 1 r' A. ' z an _' l , j y .06 �... 6x3" "-�'•• a rl VICINM MAP =��rr � ..„ . �- �.n- _ ;' rg. JUN 06 2016 . BART OF SEC 30. TWP. X RNf :. 21 1-2l .. n- �H 'l s•�� N .t. _ �x p.-� y - f � � V is �. _ � ! s G•� �� ” er, � r r , �' •.g-7-.1 "lsr rr rue � -- 1 � .. .aa ���� 55 �e ; � •�-• � � �� �_ Iv' .. �. c� j ` µ-ooh �_'.. � i 11 8a -� y -��-' f DRAINAGE AND unUTY EASEMENTS ARE SHOMM THUS:If I BEING 6 FEET IN 1MOTH AND ADJOINING SIDE LOT LINES �• .. ., ;�! WASH NGTION COUNTY, MINNESOTA aMNEt fPH ALSIAT LLC !r f AND 12 FEET IN 111DTid AND ADJOINING STREET LINES AND � aa. •: al_r-ac-oum f l (NO SCALE) REAR LOT LINES, UNLESS OTHERMSE SHOMN ON THIS PLAT. 1 , PROPERTY DESCRIPTION: of 1, Ell .k 1, BALL E. iGLE INDU;;TRIAL PARK 4TH F.DCITI�N, l Ill in�l�n Co. of,, Hiel—to- NOTES su r•e wa. c.mpleted L. E.R. Rud and Fans, Inc. on 10/-/1-. ingc sho::n are on the Wo'hingtc� C�.unt_ Coordinate :,-tem. sl ID 1 :0-031-21-44-0014. rn1I arra of the rur eyed prehl 410,453 sgAt. (9.42 acre:). excluding 60 f]ot rcod. 1, •osement: 379,73" salt. (6.72 acre:`, -'acts are take l at the top and L ]ck of curb. •ur•e• was prepared witl the rsnefit ct current title work. banal easement_, r_�stricli^ns and/or en_umhrarees a.a exist other those _h_wn hereon. Sur e; euh)ecl to ru i -inn up -n receipt I a el till- �cmmttm-rt or an atlom_y%s title opinic 1. CHM. CIC: MNDOT ; latie RAH. Elegy ulirn = 37320 fl. (I 080) :,gid premise: she , un lhi.. aur �y map Is in Flood Zc.t_ X (.:teas "ned to l.. out ide the 0.-% cnnua! chane_ fl.-:plo:l -cording to d Il urance h.,ls Map Community Fcnel No. 2.')63C01]gI by 11, Fed^.ra r, no_ Management gg ;, effecti a tloie, Fetruary ^3, 2016. lt� of Huta ha; indr. Al trot the cur a a9 preati�.•s shown an this ey is rurnartly z>ned os Gererol Il bird (13). Jail and Parking cetbc:k: for this zoning are: Building rcpt 30 ft Side :ettock from property not zoned :ndu�lriol 40 ft. Side .etback fr,In fropert, z.,ned Industrial t_ the minimum (10 ft_ height rf buildino) hear -0 it. kin All sides 10 ft. Vea howl herein are iron ah.. vd-idence and oshuilt co.rsfr ar, s or_-'ided by the City engineer. Exco bens were not made during the ace+: of this surve to locate underground utifitic_ ena/or structure^ The tion c.f undergrnmd utilities and/or structures m •�orns • from locolio .m hereon and odddicrol underground utilities and/or Aructures may be .antcrrd. Contact Gapher State One Coll Notification Center (;51) - 002 for -rification of utility tyre and field loration, prim t- at! t,r. —�—� —> LEGEND: • DENOTES IRON MONUHENT FOUND AS LIBELED DENOTES SANITARY MF.NHOLE ❑ DENOTES Cf.TCH BASIN '.� DENOTEC FIRE HYDRANT DI DENOTES GATE "ALOE * DENOTES LIGHTPOLE awl DEN'l POWER POLE AND G tRHE:.D WIRES DENOTES GUY WRE > •— DENOTE_ FENCE DENOTES BITUMINOUS DENOTE- WF.TERMwIN > DENOTES Sl.NITARY °EWER - _ DENOTES STORiI SEWER DENOTE E::ISTINC SPOT ELE"ATION •' "....... DENOTE: EXISTING CONTOUR (2 FT. INTERl4.L) ® DENOTE' SOIL BORING (BY OTHER-) her -by certify that this sure plan or ref „t was prepared b me ar and Y my d',ecl super ;.To. cud that I am C cull RegL:tered Land Sur n3r under the lona cf the State of Minn+eota. J UD Date: CC/06, 2016 Licence 1 41573 GRA 1: 7EN �1JO N11 pr:3F: P.a'PATL: G5/13/16 CNE::,Y BY JEF _ :ANNEO ❑ I 1131. ii/f6Che -qed plot name. JEN 2 3 Professional Land Surveyors wwwwvadaan 6776 Lake Drive NE, Suite 110 Lino Lakes, MN 55014 Tel.(651)361-8200 Fax(651)361-0701 BALD EAGLE INDUSTRIAL PARK 6TH ADDITION KNOW ALL PERSONS BY THESE PRESENTS: That Joseph W. Michalski Testamentary Trust, owner of the following described property situated M the County of Washington, State of Minnesota, to wft: Lot 1, Block 1, BALD EAGLE INDUSTRIAL PARK 47H ADDITION, Washington County, Minnesota, Hos caused the same to be surveyed and plotted as BALD EAGLE INDUSTRIAL PARK 6TH ADD1T70N and does hereby donate and dedicate to the public for public use faremr the drainage and utility easements created by this plat. In witness whereof said Joseph W. Michalek] Testamentary Trust has caused these presents to be signed by Its trustee thls-----Oay of 20— JOSE-PH 0JOSEPH W. MICHALSKI TESTAMENTARY TRUST Gory J Mkholski, Trustee STATE OF MINNESOTA COUNTY OF This Instrument was acknowledged before me on this day of 20 by Gary J. Michdaki, as Trustee of Joseph W. Michalski Testamentary Trust. on behalf of the trust. <1 \Y_ Notary Public, County, Minnesota My Commission Expires (v; I Jason E. Rud do hereby certify that I have surveyed and platted or directly supervised the survey and platting L; - of the property described on this plot as BALD EAGLE INDUSTRIAL PARK 67H AOD!TION; that 1 am o duly Licensed Land Surveyor in the State of Minnesota; that this plot is o correct representation of the boundary survey, that - all mathematical data and labels are correctly designated on the plat; that df monuments depicted on the plot have been or will be correctly set within one year as indicated an the plot; that oil water boundaries and wet lands as defined in MS Section 505.Of, Subd. 3 existing as of the date of this certffk:ntlon are shown and labeled on the plot; and that oli public ways are shown and labeled an the pfat. Dated this -- day of ____, 20__ 4 J Jason E. Rud, Licensed Land Surveyor Minnesota License No. 41578 _ STATE OF MINNESOTA COUNTY OF The foregoing Surveyors Certificate was acknowledged before me an this�ay 20-- i - by Jason E Rud. Licensed Land Surveyor, Minnesota License No. 41576. r - r Notary Public County, Minnesota r My Comr,ilaslon E: pkes j r CITY OF HUGO, MINNESOTA ; The foregoing plat of BALD EAGLE INDUSTRIAL PARK 6714 ADDITION was approved by the City Council of Hugo. Minnesota, fhfs day of 20— and hereby certifies compliance with all requirements as set forth in Minnesota Statutes, Section 505.0.3, Subdivision 2. 1 CITY OF HUGO, MINNESOTA + BY BY Mayor Clerk COUNTY SURVEYOR Pursuant to Chapter 820, Laws of Minnesota, 1871, and b accordance with Minnesota Statutes. Section 505.021, Subd. 11, this plat has been revlewed and approved this —_ day of ---_u 20— By By Washington County Surveyor COUNTY AUDITOR/TREASURER Pursuant to M6mneaoto Statutes, Section 505.021, Subd. 9, taxes payable in the year 20_ on the land hereinbefore described have been paid. Also pursuant to Minnesota Statutes, Section 272.17, there are no delinquent taxes and transfer entered this __ day of 20_v.. By BY Washington County Auditar/Treasurer Deputy COUNTY RECORDER Document Number I hereby certify that this instrument was recorded In the Office of the County Recorder for record on this _ day Of 20— at o'clock — M., and was duly recorded in Washington County 5 -sr L Records. By By Washington County Recorder Deputy JUN 06 20i E, G, ROD I SONSo INC.E8L1917Y• -D Professional Land Surveyors f I� 1 DRAINAGE AND U77UTY EASEMENTS ARE SHOWN THUS: I ,r�J3Y:7 C' • -,p±}; EA„eI.T r BEING 6 FEET IN 5ND7H AND ADJOINING SIDE LOT LINES '. • „L Nj8s AND 12 FEET IN WIDTH AND ADJOINING STREET LINES AND REAR LOT LINES; UNLESS OTHERW4SE SHOWN ON THIS PLAT. I 80T, pp 1 - - b ! i I � 1 1 { Ba ! Ir K ^� iY•f ` L� a (b• .J 1) E 1 17L Lj4 ... •E?r 1 sc. f --s. 4- ac:5 ,Cr/^p 2 r- Y -H i K LJ '•a;-..sV te=a r_S ..:@¢ `�gOB'S3"�, ! ti= sS7.gq 1 VICINITY MAP r_.. M1 ^�� T .7REET w I� 3,L 91 I r SITS ) NOT TO SCALE rI�CT'+ �TReET d SECTION 30, TOWNSHIP 3IN, RANGE 21W CITY OF HUGO ��l fill NORTH SCALE IN FEET so c z' e� ur s'J 1 Inch - no Feet ORIENTATION OF THIS BEARING SYSTEM IS BASED ON THE WASHINGTON COUNTY COORDINATE SYSTEM (NAD 63). • DEN07ES FOUND 1/2 WCW IRON PIPE MONUMENT DESCRIBED AS LABELED, O DENOTES A 7/2 INCH BY 14 INCH IRON PfPE, WIN PLASTIC CAP INSCRIBED R.L.S. NO. 4f578, NHIC71 HAS BEEN OR WELL BE SET IN ACCORDANCE WITH MS 505.021, SUED 10. BID TABULATION SUMMARY PROJECT: 147th Street / Oneka Lake Boulevard Street & Trail Improvements S.A.P. 224-104-003 OWNER: City of Hugo, MN WSB PROJECT NO.: 1904-870 BIDS OPENED: Thursday, June 30, 2016, at 10:00 a.m. Local Time Contractor Add. No. 1 Bid Grand Total Bid Rec'd Secuirty (5%) 1 Arnt Construction Company, Inc. X X $1,005,867.90 2 Park Construction Company X X $1,097,433.95 3 Midwest Asphalt Corporation X X $1,151,526.00 4 Dresel Contracting, Inc. X X $1,215,474.97 5 T. A. Schifsky & Sons, Inc. X X $1,271,795.20 6 Midwest Civil Constructors, L.L.C. X X $1,396,336.00 I hereby certify that this is a true and correct tabulation of the bids as received on June 30, 2016. James L. Stremel, PE, Project Manager Denotes corrected figure KA01904-87014dminlConstruction Adminl 1904-870 CST Bid Tab Summary-063016-signed.xls c -411W -_4�- -Opc --%NL -q►.c -mac VRr �z[rG-.. rLnUag On$Qr tl .,`yRV RO,RT r� L �n HUS% MH Registration &Putting Contest starts @7:30am ***SFMT GUN START at 9:00 A.M.*** FIELD EVENTS include: Closest to the Pin, Longest Putt, and Longest Drive. 75.00 er Person This includes: Greer, fee, Cart, Tee gift, Dinner @ the Hugo American Legion and 1 Drink ticket plus each golfer receives $100 gift card for — ' °' ' Travis Mathew apparel 2016 Cligvy Cruze J Travis Mathew head to toe signature outfit + 5500 online shopping For Sponsor and Registration Form go to Facebook> Hugo (Sons Cl spree . Set of Adams speed line woods and or contact Mike Gallivan 651-429-0070 irons with bag (set includes driver 3 wood penny Route 651-336-2613 irons and p.w) F... r Be A Hole , F .amuSPonsor O a i' $75.00 per Person This includes: Green fee, Cart, Tee gift, Dinner at the Hugo American Legion and 1 Drink ticket. rjt Jar^�_��1Fl1� J 1CJ'• a°lf�yy�\).'yJJJ .SJR J- JJ.1'•'� .._/.::nCCst ,N�J,Q ff ..1 '1 �c-i r.!r X,�3f Jr1 p'al, Phib 9 �Lr Ifl -�f4.jg j--�� S/I Cf '.C_rjvl' ENCLOSE check for $75.00 per Player. Make checks payable to: HUGO LIONS CLUB GOLF Mail to: Golfer #1 2i=* " Email Golfer #2 Phone Email ,57th St. N Ht I ivaiiiyan 12493 Forest Blvd, White Bear Lake, MN ALL Proceeds goes to Hugo Yellow Ribbon Network Golfer #3 Phone Email Golfer #4 Phone Email July 0 July a August 2016 Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 1 2 3 4 5 6 3 4 5 6 7 8 9 7 8 9 10 11 12 13 10 11 12 13 14 15 16 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21 22 23 24 25 26 27 24 25 26 27 28 29 30 28 29 30 31 31 SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY Jun 26 27 28 29 30 Jul 1 2 3 4 5 6 7 8 9 1 Independence Day 7:OOpm City Council Meeting 10 11 12 13 7:OOpm Parks 14 15 16 6:30pm BOZA 7:OOpm Planning 17 18 19 S:OOpm EDA Meets 7:OOpm Historical Commission - 20 21 22 23 7:OOpm City Council 24 25 26 27 5:OOpm Burger Night (Hugo Legion) 28 6:30pm BOZA 29 30 7:OOpm Planning Commisison 31 Aug 1 2 3 4 5 6 Michele Lindau 1 6/30/2016 1:42 PM August 2016 August 2016 September 2016 Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 6 1 2 3 7 8 9 10 11 12 13 4 5 6 7 8 9 10 14 15 16 17 18 19 20 11 12 13 14 15 16 17 21 22 23 24 25 26 27 18 19 20 21 22 23 24 28 29 30 31 25 26 27 28 29 30 SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY Jul 31 Aug 1 2 3 4 5 6 7:00pm City Council Meeting 7 8 9 10 11 12 13 7:00pm Parks 6:30pm BOZA 7:00pm Planning Commission 14 15 16 17 18 19 20 9:00am Lions Golf 5:00pm EDA Meets 9:00am Food Shelf Clay 7:00pm City Council Scramble (Oneka Meeting Shoot (Wildwings) Ridge) 7:00pm Historical Commission 21 22 23 24 25 26 27 5:00pm Burger Night 6:30pm BOZA 7:00pm Midyear Budget Review (Hugo Council (Hugo Legion) Chambers) 7:00pm Planning Commisison 28 29 30 31 Sep 1 2 3 Michele Lindau 2 6/30/2016 1:42 PM