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HomeMy WebLinkAbout2017.07.17 CC PacketAGENDA HUGO CITY COUNCIL JULY 17, 2017 - 7:00 PM HUGO CITY HALL A. CALL TO ORDER B. ROLL CALL C. PLEDGE OF ALLEGIANCE D. APPROVAL OF MINUTES 1. July 5, 2017 City Council Meeting E. APPROVAL OF AGENDA F. APPOINTMENTS/PRESENTATIONS 1. Presentation of 2016 Audit Report - Jason Miller, Smith Schafer & Associates 2. Swearing in of New Fire Department Engineers and Chief Engineer 3. Recognition of Bald Eagle Sportsmen's Association Donation to the YRN 4. Recognition of Planning Commissioner Bob Rosenquist 5. 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 Application for Lawful Gambling Exempt Permit for Family Pathways 3. Approve Resolution Approving an Encroachment Agreement for 13546 Fiona Circle North 4. Approve Proposal to Update the Alternative Urban Areawide Review for Everton Avenue 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. H. UNFINISHED BUSINESS 1. Update on the 2040 Comprehensive Plan 2. Update on the Beaver Ponds Sanitary Sewer Project 3. I. NEW BUSINESS 1. 2. J. VISITOR PRESENTATIONS 1. 2. K. COUNCIL PRESENTATIONS 1. Yellow Ribbon Network Update 2. L. ADMINISTRATIVE PRESENTATIONS 1. National Night Out Tuesday, August 1, 2017 2. Set Midyear Budget Review Meeting During Week of August 21-25 M. ADJOURNMENT BACKGROUND MEMO FOR THE CITY COUNCIL MEETING ON JULY 17, 2017 D.1 Approval of the July 5, 2017 City Council Meeting Staff recommends Council approve the above minutes as presented. F.1 Presentation of 2016 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 2016 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 2016 City Audit as recommended by Finance Director Ron Otkin. F.2 Swearing in of New Fire Department Engineers and Chief Engineer Firefighters Ron Gray, Rick Gregoire, Tom Kaspszak, and Roly Guareschi have been selected to fill engineering roles on the Hugo Fire Department, and Firefighter Doug Millard to fill the role of Chief Engineer. Fire Chief Kevin Colvard will perform the swearing in of the new engineers and chief engineer. F.3 Recognition of Bald Eagle Sportsmen's Association Donation to the YRN Bald Eagle Sportsmen's Association will present a donation to the Hugo Yellow Ribbon Network. BESA held an open house on Saturday, June 4, during which they collected donations for the YRN from the Club and guests who visited that day. F.4 Recognition of Planning Commissioner Bob Rosenquist At its June 19, 2017 meeting, Council accepted the resignation of Planning Commissioner Bob Rosenquist after 21 years of services. Bob began his service in June of 1973, when the City first incorporated and recalls working on the first Comprehensive Plan for the City. Meetings were held at the Hopkins Schoolhouse, which served as the town hall. Bob resigned after five years, and joined the Commission again in 2001. Bob is still currently serving on the Washington County Conservation Board. Council will recognize Bob for his years of volunteer public service. G.1 Approval of Claims Staff recommends Council approve the Claims Roster as presented. G.2 Approve Application for Lawful Gambling Exempt Permit for Family Pathways Family Pathways, 6413 Oak Street, North Branch, has applied for a Lawful Gambling Permit to hold raffles during a Sporting Clay Benefit to support Family Pathways. The benefit will be held at Wild Wings of Oneka on Friday, September 29, 2017. Staff recommends Council approve the Lawful Gambling Exempt Permit for the Sporting Clay Benefit on September 29, 2017. G.3 Approve Resolution Approving an Encroachment Agreement for 13546 Fiona Cir. N. Nathan Matchey. 13456 Fiona Circle North has applied for an encroachment agreement to allow construction of a 260 square foot accessory structure to be located within a drainage and utility easement on the property. Staff finds the structure would have no negative impacts on the drainage or utilities located in the easement. Staff recommends Council approve the Encroachment Agreement for 13546 Fiona Circle North. GA Approve Proposal to Update the Alternative Urban Areawide Review for Everton Avenue In January, 2002, the Council adopted the Everton Avenue Neighborhood Final Alternative Urban Areawide Review (AUAR) as part of the Everton Avenue Neighborhood Study. Minnesota Rules 4410.3 610, Subd. 7, requires the document to be reviewed and updated every five years until all development in the study area has received final approval. The AUAR was updated in the spring of 2007 and 2012. It is time to update the AUAR again. If the AUAR expires, any development within the AUAR area that requires an environmental review will need to complete a separate Environmental Assessment Worksheet. Staff recommends Council accept the proposal from WSB Engineering to update the AUAR and provide it for agency review. H.1 Update on the 2040 Comprehensive Plan Over the last few months there have been open houses, workshops and Commission meetings, on the 2040 Comprehensive Plan. Staff will provide Council with an update of those meetings and information on upcoming meetings. H.2 Update on the Beaver Ponds Sanitary Sewer Proiect Bids were received for the above -referenced project on Thursday, July 6, 2017, and were opened and read aloud. A total of five bids were received. The bids were checked for mathematical accuracy and tabulated and there are no errors made on the Proposal Form. The Engineer's Estimate was $258,466.00. The bid tabulation indicates the low bidder as Geislinger & Sons, Inc., Watkins, Minnesota, in the amount of $232,410.00. Due to the urgent nature of the project, council had previously authorized staff to proceed in an expedited fashion and have thus awarded a contract to Geislinger and Sons, Inc. Staff will provide Council with an update on the schedule for this 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 National Night Out Tuesday, August 1, 2017 National Night Out is scheduled for Tuesday, August 1, 2017. The Council is invited to ride along with the Fire Department to various neighborhood events. L.2 Set Midyear Budget Review Meeting During Week of August 21-25, 2017 Staff is recommending Council schedule the midyear budget review meeting during the week of August 21 -August 25, preferably sometime between 8a.m.-4:30 p.m. MINUTES FOR THE CITY COUNCIL MEETING ON WEDNESAY, JULY 5, 2017 Call to Order Mayor Weidt called the meeting to order at 5:00 p.m. PRESENT: Haas, Klein, Miron, Petryk, Weidt ABSENT: None ALSO PRESENT: City Administrator Bryan Bear, City Attorney Dave Snyder, Finance Director Ron Otkin, Accounting Clerk Anna Wobse, and City Clerk Michele Lindau June 13, 2017 Comprehensive Plan Workshop Petryk made motion, Klein seconded, to approve the minutes for the Comprehensive Plan Workshop on June 13, 2017, as presented. All Ayes. June 19, 2017 City Council Meeting Klein made motion, Petryk seconded, to approve the minutes for the City Council meeting on June 19, 2017, as presented. All Ayes. Motion carried. Approval of the Agenda Weidt made motion, Klein seconded, to approve the agenda as amended to add discussion on the Dream of Wild Health event scheduled for July 13, 2017. All Ayes. Motion carried. Approval of the Consent Agenda Haas made motion, Klein seconded, to approve the following Consent Agenda items. 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 Pay Request No 1 to T.A. Schifsky's for the North Sunset Lake Street Reconstruction Project 5. Approve Special Event Permit for Wilson Tool Company Picnic on Saturday, August 12, 2017 6. Approve Temporary Liquor License to Hugo Lions Club for the Wilson Tool Hugo City Council Meeting Minutes for July 5, 2017 Page 2 of 5 Employee Picnic on Saturday, August 12, 2017 7. Approve Temporary Liquor License to Hugo Lions Club for the Tough Mudder on July 14-16, 2017 8. Approve Resolution Adopting the MN General Records Retention Schedule 9. Approve Hiring of Dan Determan as a Probationary Firefighter on the Hugo Fire Department 10. Approve Hiring of Consultant to Provide Specifications for Fire Department Roof and Rooftop Units 11. Approve Time Change for the Historical Commission Meetings All Ayes. Motion carried. Approval of Claims Adoption of the Consent Agenda approved the Claims Roster as presented. 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 eleven years in the Public Works Department. Adoption of the Consent Agenda approved the annual performance review for Public Works Worker Jeff Maas. Approve Annual Performance Review for Community Development Assistant Rachel Leitz Rachel Leitz was hired as a Community Development intern on January 12, 2015, and became the new full-time Community Development Assistant in July, 2015. Adoption of the Consent Agenda approved the annual performance review for Community Development Assistant Rachel Leitz. Approve Pay Request No 1 to T.A. Schifsky's for the North Sunset Lake Street Reconstruction Proiect The City of Hugo had received Pay Request No. 1 from T.A. Schifsky's for the North Sunset Lake Street Reconstruction Project. City Engineer Mark Erichson and Senior Engineering Technician Steve Duff had reviewed the Pay Request and found it to be satisfactory for work completed to date on this project. Adoption of the Consent Agenda approved Pay Request No. to T.A. Schifsky in the amount of $144,660.06 for work completed to date on the North Sunset Lake Street Reconstruction Project. Approve Special Event Permit for Wilson Tool Company Picnic on Saturday, August 12, 2017 Wilson Tool had applied for a Special Event Permit for their annual company picnic on Saturday, August 12, 2017. A special event permit is required because they expect approximately 1,000 people to attend, there will an amplified sound system, and alcohol will be served. Adoption of the Consent Agenda approved the Special Event Permit for Wilson Tool to Hugo City Council Meeting Minutes for July 5, 2017 Page 3 of 5 hold their annual picnic at the Hanifl Fields and Shelter on Saturday, August 12, 2017. Approve Temporary Liquor License to Hugo Lions Club for the Wilson Tool Employee Picnic on Saturday, August 12, 2017 As in past years, the Hugo Lions Club had applied for a Temporary Liquor License to serve alcohol at the annual Wilson Tool picnic to be held at the Hanifl Shelter and Fields. The Lions Club had provided a Certificate of Liquor Liability Insurance, and Wilson Tool has secured two Washington County deputies to be on site during the event. Adoption of the Consent Agenda approved the Temporary Liquor License for the Wilson Tool picnic on August 12, 2017. Approve Temporary Liquor License to Hugo Lions Club for the Tough Mudder on July 14-16,2017 The Hugo Lions Club had applied for a Temporary Liquor License to serve beer at the Tough Mudder event to be held at Wild Wings Game Farm on July 14-16, 2017. The Lions Club had provided a Certificate of Liquor Liability Insurance, and Tough Mudder had secured Washington County deputies to be on site during the event. Adoption of the Consent Agenda approved the Temporary Liquor License for the Tough Mudder event on July 14-16, 2017. Approve Resolution Adopting the MN General Records Retention Schedule The City General Records Retention Schedule establishes minimum retention periods for city records based on their administrative, fiscal, legal and historical value. The State Disposition Panel (State Auditor, Office of Attorney General and State Archivist) recently approved the revised General Records Retention Schedule for MN Cities in April 2017. The City last adopted the Records Retention Schedule as part of the City's Data Practices Policy in 2008. Adoption of the Consent Agenda approved RESOLUTION 2017-22 ADOPTING THE MINNESOTA GENERAL RECORDS RETENTION SCHEDULE FOR CITY OF HUGO, WASHINGTON COUNTY, MINNESOTA. Approve Hiring of Dan Determan as a Probationary Firefthter on the Hugo Fire Department Fire Chief Kevin Colvard had requested Dan Determan to be hired as a probationary firefighter on the Hugo Fire Department. Adoption of the Consent Agenda approved the appointment of Dan Determan as a probationary firefighter pending the successful completion of a medical evaluation. Approve Hiring of Consultant to Provide Specifications for Fire Department Roof and Rooftop Units Staff had been working with the Fire Department on evaluation of the department's building roof and rooftop mechanical equipment, which has surpassed its serviceable life. To begin the process of replacement, it was necessary to hire a contractor to develop the plans and specs for the project. The City will then go through the competitive bidding process. Adoption of the Consent Agenda approved the hiring of a contractor to prepare the plans and specs for the replacement of the Fire Hall roof and rooftop mechanical equipment. Hugo City Council Meeting Minutes for July 5, 2017 Page 4 of 5 Approve Time Change for the Historical Commission Meetings The Hugo Historical Commission had held their meetings on the third Tuesday of the month at 6:30 p.m. Members of the Commission discussed the meeting time and whether it was the still the best time for everyone's schedule. The Commission elected to meet earlier in the day at 1 p.m. Adoption of the Consent Agenda approved the change in time for the meetings of the Historical Commission from 6:30 p.m. to 1 p.m. Public Hearing on the Issuance of Therapy Facilities Revenue Bonds — Minnesota Autism Center Proiect A public hearing was held on June 5, 2017 on the proposal to issue these bonds; however, the hearing was invalid due to lack of public notice. Finance Director Ron Otkin explained that at the June 19, 2017, City Council meeting, the Council adopted a resolution calling for a public hearing on a proposal to Issue Therapy Facilities Revenue Bonds in an amount of no more than $5.1 million, on behalf of the Autism Opportunities Foundation, a Minnesota nonprofit corporation doing business as the Minnesota Autism Center (the "Borrower"). The bond proceeds would be used to finance the acquisition, construction, and equipping of an intensive therapy center for children and adults ages 10 to 21 diagnosed with autism spectrum disorder ("ASD"). The project will be located at 2010 Silver Bell Road in Eagan, Minnesota. The Borrower had agreed to pay the City of Hugo an issuer's administrative fee of/a of 1% of the principal amount of the bonds. Briggs and Morgan, the City's bond counsel, had reviewed this request and found it to be a proper use of the City's bonding authority. The City would only be serving as the bond issuer and will have no obligations for repaying investors. Weidt opened the public hearing. There were no comments, and Weidt closed the public hearing. Haas made motion, Miron seconded, to approve RESOLUTION NO. 2017-23 APPROVING ISSUANCE AND SALE OF THERAPY FACILITIES REVENUE BONDS (Minnesota autism center Project) series 2017. All Ayes. Motion carried. Yellow Ribbon Network Update Council Members Chuck Haas and Phil Klein reported to Council on the City of Hugo's Yellow Ribbon Network activities. Burger night was held last Wednesday, and over 200 burger baskets were sold. Mark Schwope was the sponsor. Upcoming sponsors include the Hugo Public Works Department, Senate District Republicans, Mueller Mortuary, and Wilson Tool. On July 15, a YRN crew will be assisting a veteran move to Woodbury. The Hugo Lions Club will hold a golf outing on August 12, 2017, with proceeds going to the YRN. Dream of Wild Health Event on July 13, 2017 Petryk added this to the agenda to inquire whether the Council was interested in attending the presentation of the award of the Legacy Grant to the Dream of Wild Health on Thursday, July 13, 2017 11 a.m. The Dream of Wild Health is located at 16085 Jeffrey Avenue. Hugo City Council Meeting Minutes for July 5, 2017 Page 5 of 5 Haas made motion, Petryk seconded, to schedule the event at the Dream of Wild Health as a meeting of the Council. All Ayes. Motion carried. Adjournment Klein made motion, has seconded, to adjourn at 5:17 p.m. All Ayes. Motion carried. Respectfully Submitted, Michele Lindau, City Clerk SMITH+SCHAFER & ASSOCIATES, LTD. Certified Public Accountants and Consultants June 14, 2017 Honorable Mayor and Members of the City Council City of Hugo, Minnesota Members of American Institute of CPAs, Private Companies Practice Section, Minnesota Society of CPAs We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Hugo for the year ended December 31, 2016, and have issued our report thereon dated June 14, 2017. Professional standards require that we provide you with the following information about our responsibilities under generally accepted auditing standards as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter to you dated December 27, 2016. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City of Hugo are described in Note 1 to the financial statements. As described in Note 5 to the financial statements, the City adopted the provisions of GASB Statement No. 72, Fair Value Measurement and Application; GASB Statement No. 76, Hierarchy of Generally Accepted Accounting Principles of the State and Local Governments; GASB Statement No. 77, Tax Abatement Disclosures; and GASB Statement No. 82, Pension Issues — an Amendment of GASB Statements No. 67, No. 68, No. 73. Adoption of these statements does not affect net position or fund balance as of December 31, 2016. We noted no transactions entered into by the City during the year for which there is a lack of authoritative accounting guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: Depreciation of Capital Assets Management's estimate of the useful life of purchased, constructed or contributed capital assets is based on the estimated productive life of these assets. We evaluated the estimated useful lives assigned to capital assets and determined that these lives were reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Twin Cities Office • 7500 Highway 55 • Suite 350 • Minneapolis, MN 55427 • PH (952) 920-1455 • FAX (952) 920-6603 Offices in: Red Wing and Rochester • www.smithschafer.com "; PrimeGlobal Member of PrimeGlobal, A Global Association of Independent Accounting Firms Honorable Mayor and Members of the City Council City of Hugo, Minnesota Page Two Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We requested certain representations from management that are included in the management representation letter dated June 14, 2017. Management Consultation with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management's discussion and analysis, the schedule of city contributions to the General Employees Retirement Plan, the schedule of proportionate share of net pension liability for the General Employees Retirement Plan, the schedule of funding progress for the Hugo Firefighter's Relief Association and the schedule of employer contributions for the Hugo Firefighter's Relief Association, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. Honorable Mayor and Members of the City Council City of Hugo, Minnesota Page Three Other Matters (continued) We were engaged to report on combining and individual nonmajor fund financial statements and schedules, which accompany the financial statements but are not RSI. With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. Restriction on Use This information is intended solely for the use of the city council of the City of Hugo, Minnesota and the City's management and is not intended to be, and should not be, used by anyone other than those specified parties. Very truly yours, CITY OF HUGO, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016 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, 2016 TABLE OF CONTENTS REFERENCE PAGE INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement Elected and Appointed Officials Organizational Chart FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements Government -wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet - Governmental Funds Reconciliation of Net Position in the Government -wide Financial Statements and Fund Balances in the Fund Basis Financial Statements Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund Statement of Net Position - Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Fund Statement of Cash Flows - Proprietary Fund Notes to Financial Statements Required Supplementary Information Schedule of City Contributions General Employees Retirement Plan Schedule of Proportionate Share of Net Pension Liability General Employees Retirement Plan City of Hugo Firefighter's Relief Association Schedule of Funding Progress for the Fire Relief Association Schedule of Employer Contributions for the Fire Relief Association Combining and Individual Nonmajor Fund Financial Statements and Schedules Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Park Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -Firefighter's Relief Fund v vi vii 15 16 18 19 20 21 22 27 28 29 30 68 68 69 69 70 71 72 73 CITY OF HUGO, MINNESOTA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended December 31, 2016 TABLE OF CONTENTS (CONTINUED) REFERENCE PAGE FINANCIAL SECTION (CONTINUED) Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Tax Increment Financing Collection Fund 74 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Abatement Levy Offset Fund 75 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Obligation Bonds Fund 76 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Compensated Absences Fund 77 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Property and Equipment Acquisition Fund 78 Schedule of Revenues and Expenses - By Department - Proprietary Fund 79 Supplementary Information Schedule of Cash and Investments - All Funds 80 Schedule of Debt Service Requirements - All Funds 82 Schedule of Bonds Payable 83 STATISTICAL SECTION (UNAUDITED) Net Position by Component Schedule 1 84 Changes in Net Position Schedule 2 86 Fund Balances, Governmental Funds Schedule 3 90 Changes in Fund Balances, Governmental Funds Schedule 4 92 Tax Capacity and Estimated Actual Value of Taxable Property Schedule 5 94 Property Tax Rates and Tax Levies - Direct and Overlapping Property Tax Rates Schedule 6 95 Principal Property Taxpayers Schedule 7 96 Schedule of Property Tax Levies and Collections Schedule 8 97 Water and Sanitary Sewer Charges by Customer Schedule 9 99 Ratios of Outstanding Debt by Type Schedule 10 101 Ratios of General Bonded Debt Outstanding Schedule 11 103 Computation of Direct and Indirect General Obligation Bonded Debt and Legal Debt Margin Schedule 12 105 Legal Debt Margin Information Schedule 13 106 Pledged Revenue Coverage Schedule 14 108 Demographic and Economic Statistics Schedule 15 109 Principal Employers Schedule 16 110 Full -Time Equivalent Employees by Function Schedule 17 111 Operating Indicators by Function/Program Schedule 18 113 Capital Assets Statistics by Function/Program Schedule 19 115 OTHER REPORT SECTION Independent Auditor's Report on Minnesota Legal Compliance 116 CITY OF HUGO, MINNESOTA INTRODUCTORY SECTION December 31, 2016 This Page Left Blank Intentionally City of Hugo 14669 Fitzgerald Avenue North Hugo, MN 55038 PHONE: (651) 762-6300 FAX: (651) 426-2859 June 14, 2017 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, 2016. 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, 2016, 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 unmodified opinion that the City of Hugo's financial statements for the fiscal year ended December 31, 2016 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, 2016 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 14,576. 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 72. 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. Although the city's tax base, as measured by total tax capacity, decreased 1.8% from a year ago, it has increased a substantial 11 % 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 2016 (14,576), or a 129% increase over the 2000 census count. CITY OF HUGO, MINNESOTA Economic condition and outlook (continued) The city has continued to see strong residential development. From 2009 to 2016, an average of 81 housing units were constructed each year. During 2016, 99 new single-family housing units and 9 new townhome units were constructed with a value of $28,018,000. New residential development is expected to remain strong in 2017. Commercial development is also increasing in response to the growing population and increasing demand for goods and services. Over $27,000,000 in new commercial development has been constructed within the past five years, including health clinics, dental clinics, daycare facilities and other businesses located primarily along the newly improved CSAH 8 corridor. The city's tax base is comprised mainly of residential homestead (67.7%) and commercial/industrial property (14.6%). The balance consists of non -homestead residential property (11.3%), agricultural and seasonal recreational property (4.5%), and personal property (1.9%). The ten largest taxpayers make up 8.78% of the city's net tax capacity, providing the city with a 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 2016 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: 2040 Comprehensive Plan. The city has begun work on updating its comprehensive plan, which occurs on a 10 -year cycle. The plan will accommodate a population of 40,000 by the year 2040, and include development of a diverse mix of housing options, connected by a robust pedestrian trail network and ultimately a multi -modal transportation system. A major focus of the city council within this planning cycle is economic development. The city has set aside land for the development of multiple employment centers along transportation corridors, especially TH 61, CSAH 8 and CSAH 4. 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 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 2040. • Emerging Service and Entertainment Industries. With the anticipated stagnation of the retail market segment, the city is well positioned, as the retail sector has not been overbuilt in Hugo. Medical office buildings, service -based uses, professional office space and dining establishments have been constructed in recent years along the major traffic arterials. CITY OF HUGO, MINNESOTA Long-term financial planning (continued) • Downtown Redevelopment. With funding provided by the Metropolitan Council, the city completed a 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 funding for improvements to Trunk Highway 61. The city has also purchased several properties in the downtown area and is working with property owners interested in redeveloping their properties. Industrial Expansion and Cultivation of Home -Based Business. The city's industrial sector has seen substantial employment growth within the last 5 years. The city staff is working on several major building expansions within the city's industrial parks. Additionally, the city has created a regulatory environment that encourages small home-based businesses. Major expansion of high-speed internet connectivity is occurring in 2017 in the rural residential and agricultural sections of the city, leading to further growth potential of home-based business. Water Supply Sustainability. The city has made significant progress toward a city council goal of diversifying the city's water supply. The city has implemented a plan to use storm water as a major source of water for non -potable uses. Several large storm water irrigation systems have been constructed within the last 3 years, with several more planned for 2017. This program reduces the city's dependence on its primary water supply from an underground aquifer, and also reduces the peak summertime demand on the city's municipal water supply system. 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, 2015. This was the sixteenth 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 e pr Bryan J. Bear City Administrator Goverment Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Hugo Minnesota For its Comprehensive Annual Financial Deport for the Fiscal Year finded December 1, 2015 Executive DiretorlC'EO CITY OF HUGO, MINNESOTA ELECTED AND APPOINTED OFFICIALS December 31, 2016 POSITION NAME TERM EXPIRES ELECTED OFFICIALS City Council: Mayor Tom Weidt December 31, 2018 Council Member Ward I Becky Petryk December 31, 2018 Council Member Ward 11 Phil Klein December 31, 2020 Council Member Ward III Chuck Haas December 31, 2018 Council Member At Large Mike Miron December 31, 2020 APPOINTED OFFICIALS City Administrator Bryan J. Bear Continuous Finance Director Ronald J. Otkin Continuous City Clerk Michele Lindau Continuous M CITY OF HUGO, MINNESOTA ORGANIZATIONAL CHART December 31, 2016 Citv Council City Administrator Planning Commission City Engineer Parks Commission City Attorney Auditors City Clerk Finance I I Director )mmunity Dev. Director Public Works Director Community Dev. Assoc. Utility Billing Official Buildinq Inspector) I Assist. Office Su Senior Engineerinq Tech Lead Worker Workers M Public Enforcement This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA FINANCIAL SECTION December 31, 2016 This Page Left Blank Intentionally SMITH•SCHAFER. & ASS O C IAT E S, LTD. Certified Public Accountants and Consultants Members 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, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. r.win Cres Orrice . 7500 Hiway 55 » Sulfite 350 + Minneakrolls, MN SM27 . PH (952) 920.1455 • FAx {452} 920-6603 Offices In: Rrm Wing ©m€] Rvchester • wuaw,wmthschGf6r,cenn `` him Member sof Prwrw�(_ bcF A r_Assoclalicn of 1rvieperxkKd Aced kmzs 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, 2016, 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 accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis 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. Minneapolis, Minnesota June 14, 2017 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, 2016. 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. FINANCIAL HIGHLIGHTS • The assets of the City of Hugo exceeded its liabilities at the close of the most recent fiscal year by $78,298,032 (net position). Of this amount, $28,876,782 (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 $3,688,064, 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 property tax revenues received by governmental activities. • At the end of the current fiscal year, unassigned fund balance for the general fund was $2,603,086 or 60 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 $16,527,108. • The City of Hugo decreased general long-term debt obligations by $1,570,000 during the current fiscal year primarily as a result of scheduled debt service payments. • The City was again recognized in 2016 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: M 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 72), the firefighter's relief fund (page 73), the tax increment financing collection fund (page 74), the abatement levy offset fund (page 75), and the other debt service and capital project funds with a budget (pages 76-78) 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 79 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 30-67 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 70-78 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 $78,298,032 at the close of the most recent fiscal year. A significant portion of the City of Hugo's net position (56 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 2 percent from the prior year due primarily to the addition of capital assets. 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 2016 2015 Business -Type Activities 2016 2015 Total 2016 2015 $ 21,945,362 $ 21,616,812 $ 20,206,928 $ 19,257,201 $ 42,152,290 $ 40,874,013 30,208,303 29,201,788 16,735,066 16,679,906 46,943,369 45,881,694 52,153,665 50,818,600 36,941,994 35,937,107 89,095,659 86,755,707 737,470 145,730 145,294 31,474 882,764 177,204 9,213,400 10,148,889 381,105 249,735 9,594,505 10,398,624 1,764,932 1,662,474 92,050 72,581 1,856,982 1,735,055 10,978,332 11,811,363 473,155 322,316 11,451,487 12,133,679 188,468 157,245 40,436 32,019 228,904 189,264 26,906,049 26,217,435 16,735,066 16,679,906 43,641,115 42,897,341 5,780,135 6,569,231 5,780,135 6,569,231 9,038,151 6,209,056 19,838,631 18,934,340 28,876,782 25,143,396 $ 41,724,335 $ 38,995,722 $ 36,573,697 $ 35,614,246 $ 78,298,032 $ 74,609,968 7 CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS An additional portion of the City of Hugo's net position (7 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 12 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, 2016 ($28,876,782) may be used to meet the government's ongoing obligations to citizens and creditors. Unrestricted net position increased by 15 percent during the year due primarily to property taxes and 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 $2,728,613. The most significant factors accounting for this increase relate to property taxes and increased service revenue as a result of housing development within the City. Business -type activities. Business -type activities increased the City of Hugo's net position by $959,451. 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 Net position, end of year City of Hugo, Minnesota's Change in Net Position Governmental Activities Business -Type Activities Totals 2016 2015 2016 2015 2016 2015 $ 748,354 $ 599,373 317,012 342,514 963,391 2,618,455 5,858,093 5,930,619 $ 2,364,489 $ 2,536,840 606,704 1,041,058 $ 3,112,843 $ 3,136,213 317,012 342,514 1,570,095 3,659,513 5,858,093 5,930,619 12,343 12,987 12,343 12,987 77,557 89,291 622,529 317,129 700,086 406,420 7,976,750 9,593,239 3,593,722 3,895,027 11,570,472 13,488,266 1,197,701 1,122,799 1,557,907 1,766,538 1,693,873 2,798,767 95,450 44,810 691,817 629,830 120,457 245,855 5,357,205 6,608,599 2,619,545 2,984,640 109,068 107,839 2,728,613 3,092,479 38,995,722 35,903,243 $ 41,724,335 $ 38,995,722 M 2,525,203 2,257,189 2,525,203 2,257,189 1,068,519 1,637,838 (109,068) (107,839) 959,451 1,529,999 35,614,246 34,084,247 $ 36,573,697 $ 35,614,246 1,197,701 1,122, 799 1,557,907 1,766,538 1,693,873 2,798,767 95,450 44,810 691,817 629,830 120,457 245,855 2,525,203 2,257,189 7,882,408 8,865,788 3,688,064 4,622,478 3,688,064 4,622,478 74,609,968 69,987,490 $ 78,298,032 $ 74,609,968 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 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 ■ Program revenues ■ Expenses erg tri �e Ger a e\1 eel -a erg P`�os'-s 5 '011 .1 6e4e\°p' r�a� ar�ti� G° Revenues by Source - Governmental Activities Grants and contributions not Interestand other restricted to speciflr 10/ programs - less than 1 % Charc sery 9' Capital grants a contributions 12% Operating grants and contributions 4% Property taxes 73% 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 $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 17% Capital grants and contributions 17% 10 Charges for services 66% 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 $16,527,108, an increase of $690,970 from the prior year primarily as a result of decreased capital outlay and debt service expenditures as a result of the refunding of the 2004 and 2005 general obligation bonds in the prior year. 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 $2,603,086. 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 60 percent of total general fund expenditures. The general fund's total fund balance increased by $180,372 during the current fiscal year. This year's increase was primarily due to licenses and permit and charges for services revenues in excess of expectations related to increased building activity. Revenues in the general fund met or exceeded budget projections in all cases except investment earnings. General fund expenditures met or were less than budgeted projections in all departments. The general obligations bonds fund decreased its fund balance by $251,783 for the year due primarily to debt service payments in excess of property taxes and intergovernmental revenues allocated to this fund. The public improvements fund increased its fund balance by $767,650 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 decreased its fund balance by $84,279 for the year due primarily to capital outlay expenditures in excess of transfers from other funds. The special revenue funds increased their fund balances by $157,094 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 $854,313 as of December 31, 2016. These fund balances decreased by $78,084 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 79 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 $19,838,631 at December 31, 2016. The proprietary fund's net position increased by $959,451 due largely to one-time infrastructure fees for new development and noncash capital contributions from developers. Although metered water connections increased 2.8% in 2016, revenue from the sale of water decreased 1.0%. This was primarily due to a decrease in water sold for irrigation purposes due to record rainfall. Increasing calls for higher water conservation may lead to the need to adjust rates in 2017. Although sewer connections increased 2.7% in 2016, revenue remained relatively the same. The sewer utility had operating income of $73,682 in 2016, a decrease of $55,155 from 2015. This was primarily due to increasing sewage treatment costs imposed by the Metropolitan Council. Sewer utility rates were last adjusted in 2013 and may need to be readjusted in 2017. 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 $2.6 million is a substantial 60% 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 $283,475 due primarily to higher than budgeted building permit revenue as a result of increased construction in the City. • Charges for services revenue exceeded budget by $186,717 due primarily to various fees related to increased construction in the City. • General government expenditures were less than budget by $93,161 due primarily to lower than budgeted legal services and insurance premiums paid for governmental buildings. • Public safety expenditures were less than budget by $61,316 due primarily to lower than budgeted police and fire protection services. • Highways and streets expenditures were less than budget by $261,083 due primarily to lower than expected street materials and repairs and maintenance costs. • Parks expenditures were less than budget by $73,912 due primarily to lower than expected insurance premiums for park facilities and lower expenses for park programming activities. 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, 2016, amounts to $46,943,369 (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 $1,061,675, or 2.3 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 2016. 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 47-48 of this report. Long-term debt. At the end of the current fiscal year, the City of Hugo had $7,225,000 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 2016 2015 2016 2015 2016 2015 General obligation bonds $ 7,225,000 $ 8,795,000 $ $ $ 7,225,000 $ 8,795,000 13 Governmental Activities Business -Type Activities Totals 2016 2015 2016 2015 2016 2015 Land $ 4,631,808 $ 4,628,249 $ 259,560 $ 259,560 $ 4,891,368 $ 4,887,809 Construction in progress 48,245 48,245 48,245 48,245 Buildings 3,570,052 3,763,902 16,217,227 16,221,606 19,787,279 19,985,508 Improvements other than buildings 318,646 457,990 318,646 457,990 Machinery and equipment 2,474,360 2,175,999 210,034 150,495 2,684,394 2,326,494 Infrastructure 19,213,437 18,175,648 19,213,437 18,175,648 Total $ 30,208,303 $ 29,201,788 $ 16,735,066 $ 16,679,906 $ 46,943,369 $ 45,881,694 Additional information on the City of Hugo's capital assets can be found in Note 3:C. on pages 47-48 of this report. Long-term debt. At the end of the current fiscal year, the City of Hugo had $7,225,000 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 2016 2015 2016 2015 2016 2015 General obligation bonds $ 7,225,000 $ 8,795,000 $ $ $ 7,225,000 $ 8,795,000 13 CITY OF HUGO, MINNESOTA MANAGEMENT'S DISCUSSION AND ANALYSIS The City of Hugo's total bonds, certificates and notes payable decreased by $1,570,000 during the current fiscal year. A more detailed breakdown of these obligations can be found in Note 3:D., beginning on page 49. 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 2016 at 3.4 percent, up from 3.0 percent a year ago. This compares favorably to the State of Minnesota average unemployment rate of 4.1 percent and the United States average rate of 4.7 percent. • Hugo continues to see new construction growth, primarily in residential properties. Although the city's total market valuation of existing properties declined 2.3% for taxes payable year 2016, new construction added 0.9%, limiting the overall decline to 1.4%. All of these factors were considered in preparing the City of Hugo's budget for the 2017 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, 2016 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA STATEMENT OF NET POSITION December 31, 2016 Assets Cash and investments Receivables (net of allowance for uncollectibles) Deposits receivable Due from other governmental units Net pension asset Capital assets: Nondepreciable Depreciable, net Total Assets Governmental Business -Type Activities Activities Totals $ 18,149,119 $ 19,398,346 $ 37,547,465 1,253,006 2,031,386 511,851 4,631,808 25,576,495 52,153,665 Deferred Outflows of Resources Deferred outflows from pension activity 737,470 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 807,082 1,500 307,805 16,427,261 36,941,994 145,294 2,060,088 1,500 2,031,386 511,851 4,939,613 42,003,756 89,095,659 882,764 218,343 75,145 293,488 48,739 48,739 36,993 3,906 40,899 458,188 11,999 470,187 1,002,669 1,000 1,003,669 1,750,564 20,242 1,770,806 5,803,490 6,572 5,810,062 1,659,346 354,291 2,013,637 10,978,332 473,155 11,451,487 Deferred Inflows of Resources Deferred inflows from pension activity 188,468 40,436 228,904 Net Position Net investment in capital assets Restricted for: Creditors Regulations Unrestricted Total Net Position See Notes to Financial Statements 26,906,049 16,735,066 43,641,115 5,384,236 5,384,236 395,899 395,899 9,038,151 19,838,631 28,876,782 $ 41,724,335 $ 36,573,697 $ 78,298,032 15 CITY OF HUGO, MINNESOTA STATEMENT OF ACTIVITIES For the Year Ended December 31, 2016 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 Program Revenues Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions $ 1,197,701 $ 685,861 $ 31,827 $ 1,557,907 37,793 86,116 7,300 1,693,873 199,069 829,311 95,450 691,817 24,700 126,780 120,457 5,357,205 748,354 317,012 963,391 2,525,203 2,364,489 606,704 $ 7,882,408 $ 3,112,843 $ 317,012 $ 1,570,095 General revenues: General property taxes Grants and contributions not restricted to specific programs Investment earnings Net (decrease) in fair value of investments Miscellaneous Transfers Total general revenues and transfers Change in net position Net position - beginning Net position - ending 16 Net (Expense) Revenue and Changes in Net Position Governmental Business -Type Activities Activities Totals $ (480,013) $ $ (480,013) (1,426,698) (1,426,698) (665,493) (665,493) (95,450) (95,450) (540,337) (540,337) (120,457) (120,457) (3,328,448) (3,328,448) 445,990 445,990 (3,328,448) 445,990 (2,882,458) 5,858,093 5,858,093 12,343 12,343 57,287 65,119 122,406 (19,853) (22,568) (42,421) 40,123 579,978 620,101 109,068 (109,068) 6,057,061 513,461 6,570,522 2,728,613 959,451 3,688,064 38,995,722 35,614,246 74,609,968 $ 41,724,335 $ 36,573,697 $ 78,298,032 17 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA FUND FINANCIAL STATEMENTS December 31, 2016 CITY OF HUGO, MINNESOTA BALANCE SHEET GOVERNMENTALFUNDS December 31, 2016 Liabilities, Deferred Inflows of Debt Service Capital Project Resources, and Fund Balance 395,899 Fund Fund 1,864, 591 1,864,591 Liabilities 4,337,086 4,404,412 74,134 General Property and Other 2,603,086 Accounts payable $ 117,045 Obligation Public Equipment Governmental $ 218,343 Unearned revenue General Bonds Improvements Acquisition Funds Total Assets 36,993 36,993 Cash and investments $ 4,135,672 $ 2,845,511 $ 4,430,802 $4,402,154 $2,334,980 $ 18,149,119 Receivables (Net of Allowance for 1,612,995 98,110 2,315 2,773 1,716,193 Uncollectibles) Accounts 15,067 15,067 Accrued interest 3,956 2,389 4,394 4,573 2,417 17,729 Taxes 59,125 10,369 5,554 1,440 76,488 Special assessments 555,967 587,755 1,143,722 Due from other governmental units 61,386 1,970,000 593,309 1,440 2,031,386 TOTAL ASSETS $ 4,275,206 $ 5,384,236 $ 5,028,505 $4,406,727 $2,338,837 $21,433,511 Liabilities, Deferred Inflows of Fund Balance Resources, and Fund Balance 395,899 3,243,799 Committed 1,864, 591 1,864,591 Liabilities 4,337,086 4,404,412 74,134 8,815,632 Unassigned 2,603,086 2,603,086 Accounts payable $ 117,045 $ $ 98,110 $ 415 $ 2,773 $ 218,343 Unearned revenue 1,000,769 $ 21,433,511 1,900 1,002,669 Salaries payable 36,993 36,993 Due to other governmental units 458,188 458,188 Total Liabilities 1,612,995 98,110 2,315 2,773 1,716,193 Deferred Inflows of Resources Unavailable revenue: Property taxes 59,125 10,369 5,554 1,440 76,488 Special assessments 555,967 587,755 1,143,722 Due from other governmental units 1,970,000 1,970,000 Total Deferred Inflows of Resources 59,125 2,536,336 593,309 1,440 3,190,210 Fund Balance Fund Balance Restricted 2,847,900 395,899 3,243,799 Committed 1,864, 591 1,864,591 Assigned 4,337,086 4,404,412 74,134 8,815,632 Unassigned 2,603,086 2,603,086 Total Fund Balance 2,603,086 2,847,900 4,337,086 4,404,412 2,334,624 16,527,108 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCE $ 4,275,206 $ 5,384,236 $ 5,028,505 $4,406,727 $2,338,837 $ 21,433,511 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, 2016 Amounts reported for governmental activities in the statement of net position are different because: Total governmental fund balances (page 18) $ 16,527,108 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Governmental funds - capital assets $ 47,372,726 Less: Accumulated depreciation (17,164,423) Other long-term assets are not available to pay for current -period expenditures and, therefore, are unavailable in the funds. Delinquent property taxes $ 76,488 Deferred and delinquent special assessments 1,143,722 Due from other governmental units 1,970,000 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 $ (7,225,000) Net pension liability (asset), deferred outflows and inflows from pension activity (598,493) Compensated absences (322,204) Accrued interest (48,739) Unamortized bond premiums and discounts (6,850) 30,208,303 3,190,210 (8,201,286) Net position of governmental activities (page 15) $ 41,724,335 See Notes to Financial Statements 19 Revenues Property taxes Special assessments Licenses and permits Intergovernmental revenues Charges for services Court fines Other Revenue Investment earnings Net (decrease) in the fair value of investments Rent Contributions Developer fees 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, 2016 Debt Service Capital Project Fund Fund General Property and Other Obligation Public Equipment Governmental General Bonds Improvements Acquisition Funds Total $ 4,492,766 $ 611,599 $ 605,024 $ 1,086 $ 192,517 $ 5,902,992 119,447 251,309 370,756 388,743 1,014,614 1,549,208 388,743 128,144 492,732 698,996 25,708 264 1,345,844 266,392 (104) 375,433 137,007 (109,425) 266,392 37,793 1,128,270 668,105 168,548 1,964,923 531,015 1,570,000 37,793 14,044 7,593 12,852 15,101 7,697 57,287 (4,867) (2,631) (4,454) (5,234) (2,667) (19,853) 7,595 3,099,683 3,569,436 16,150 8,950 32,695 7,300 20,000 27,300 $ 2,603,086 $ 2,847,900 5,980 $ 4,404,412 100,800 106,780 32,600 32,600 5,370,510 1,228,740 1,569,707 52,811 327,561 8,549,329 1,014,614 1,014,614 1,549,208 1,549,208 1,182,129 218,493 1,182,129 76,355 29,422 76,355 375,433 (104) 375,433 137,007 (109,425) 137,007 (855,392) 1,128,270 668,105 168,548 1,964,923 531,015 1,570,000 1,570,000 126,237 126,237 2,675 2,675 4,334,746 1,698,912 1,128,270 668,105 168,548 7,998,581 1,035,764 (470,172) 441,437 (615,294) 159,013 550,748 See Notes to Financial Statements all 31,154 31,154 218,493 2,111,086 499,861 29,422 2,858,862 (855,392) (104) (1,784,873) (109,425) (2,749,794) (855,392) 218,389 326,213 531,015 (80,003) 140,222 180,372 (251,783) 767,650 (84,279) 79,010 690,970 2,422,714 3,099,683 3,569,436 4,488,691 2,255,614 15,836,138 $ 2,603,086 $ 2,847,900 $ 4,337,086 $ 4,404,412 $ 2,334,624 $ 16,527,108 See Notes to Financial Statements all 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, 2016 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds (page 20) 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 $ 2,595,796 Depreciation expense (1,329,554) The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins and donations) is to decrease net assets. 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 $ 3,190,210 Unavailable revenue, Beginning of year (3,800,420) 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 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 $ 1,570,000 Change in net pension liability 82,983 $ 690,970 1,266,242 (259,727) (610,210) (20,100) Change in accrued interest 7,718 Change in bond discounts and premium 737 1,661,438 Change in net position of governmental activities (pages 16 and 17) $ 2,728,613 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, 2016 REVENUES General Property Taxes Ad Valorem Franchise Total General Property Taxes Licenses and Permits Business Nonbusiness Total Licenses and Permits Intergovernmental Revenues Homestead and other tax credits Fire 2% insurance aid 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 (decrease) in the fair value of investments Penalties and interest Non -levy related taxes Contributions Rental income Total Miscellaneous Revenues TOTAL REVENUES See Notes to Financial Statements Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) $ 4,313,039 $ 4,313,039 $ 4,338,295 $ 25,256 148,730 148,730 154,471 5,741 4,461,769 4,461,769 4,492,766 30,997 18,315 18,315 19,180 865 86,953 86,953 369,563 282,610 105,268 105,268 388,743 283,475 79,675 79,675 266,392 186,717 35,925 35,925 37,793 1,868 1,944 1,944 23,500 23,500 14,044 (9,456) (4,867) (4,867) 9,000 9,000 10,201 10,201 81,540 81,540 80,916 (624) 30,376 30,376 30,376 7,300 1,451 1,451 1,451 1,605 2,500 2,500 5,200 2,700 115,867 115,867 128,144 12,277 79,675 79,675 266,392 186,717 35,925 35,925 37,793 1,868 1,944 1,944 23,500 23,500 14,044 (9,456) (4,867) (4,867) 9,000 9,000 22,931 13,931 8,433 8,433 7,725 (708) 7,300 7,300 5,990 5,990 7,595 1,605 46,923 46,923 56,672 9,749 $ 4,845,427 $ 4,845,427 $ 5,370,510 $ 525,083 (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, 2016 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 Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) $ 34,125 $ 34,125 $ 28,950 $ 5,175 6,287 6,287 2,727 3,560 4,100 4,100 1,606 2,494 44.512 44.512 33.283 11.229 67,834 67,834 68,408 (574) 7,385 7,385 7,095 290 44,596 44,596 44,970 (374) 50,390 50,390 53,849 (3,459) 2,000 2,000 113,678 $ 2,000 172,205 172,205 174,322 (2,117) 1,446 1,446 1,004 442 4,000 4,000 4,000 8,419 8,419 5,685 2,734 13,865 13,865 6,689 7,176 500 500 1,085 (585) 16,279 16,279 14,585 1,694 16,779 16,779 15,670 1,109 Personal services 85,686 85,686 78,330 7,356 Supplies 250 250 166 84 Other services and charges 42,174 42,174 35,182 6,992 Total Clerk/Treasurer $ 128,110 $ 128,110 $ 113,678 $ 14,432 See Notes to Financial Statements (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, 2016 Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) EXPENDITURES (CONTINUED) General Government (Continued) Finance Director Personal services $ 164,096 $ 164,096 $ 164,841 $ (745) Supplies 1,250 1,250 970 280 Other services and charges 62,354 62,354 59,184 3,170 Capital outlay Total Finance Director Assessing Planning and Zoning Personal services Supplies Other services and charges Professional services Capital outlay Total Planning and Zoning Engineering Personal services Supplies Other services and charges Professional services Capital outlay Total Engineering Legal Fees General Government Building 3,000 3,000 3,000 230,700 230,700 224,995 5,705 76,995 76,995 70,627 6,368 78,991 78,991 76,170 2,821 500 500 376 124 16,621 16,621 23,975 (7,354) 4,200 4,200 4,178 22 2,000 2,000 500 2,000 102,312 102,312 104,699 (2,387) 91,379 91,379 92,838 (1,459) 4,950 4,950 2,650 2,300 17,355 17,355 18,808 (1,453) 20,200 20,200 27,287 (7,087) 3,650 3,650 500 3,150 137,534 137,534 142,083 (4,549) 93,406 93,406 70,024 23,382 Personal services 7,580 7,580 6,880 700 Supplies 5,850 5,850 4,001 1,849 Other services and charges 72,927 72,927 45,382 27,545 Capital outlay 5,000 5,000 2,281 2,719 Total General Government Building 91,357 91,357 58,544 32,813 Total General Government $ 1,107,775 $ 1,107,775 $ 1,014,614 $ 93,161 (Continued) See Notes to Financial Statements CITY OF HUGO, MINNESOTA GENERALFUND Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Continued) For the Year Ended December 31, 2016 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 Budaeted Amounts Favorable Original Final Actual (Unfavorable) $ 874,853 $ 874,853 $ 836,438 $ 38,415 169,510 169,510 170,403 (893) 23,250 23,250 27,044 (3,794) 228,956 228,956 206,596 22,360 12,000 12,000 10,715 1,285 433,716 433,716 414,758 18,958 200,813 200,813 201,735 (922) 1,000 1,000 1,557 (557) 88,142 88,142 87,162 980 4,000 4,000 2,879 1,121 2,000 2,000 328,299 2,000 295,955 295,955 293,333 2,622 6,000 6,000 4,679 1,321 1,610,524 1,610,524 1,549,208 61,316 Highways and Streets Administration and Engineering Personal services 461,358 461,358 423,274 38,084 Supplies 485,618 485,618 328,299 157,319 Other services and charges 329,892 329,892 280,889 49,003 Capital outlay 2,500 2,500 5,300 (2,800) Total Administration and Engineering 1,279,368 1,279,368 1,037,762 241,606 Streets/Recycling 16,439 16,439 10,053 6,386 Street Lighting 147,405 147,405 134,314 13,091 Total Highways and Streets $ 1,443,212 $ 1,443,212 $ 1,182,129 $ 261,083 See Notes to Financial Statements (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, 2016 Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) EXPENDITURES (CONTINUED) Community Development Personal services $ 77,476 $ 77,476 $ 64,511 $ 12,965 Other services and charges 14,744 14,744 11,844 2,900 Capital outlay 2,000 2,000 2,000 Total Community Development 94,220 94,220 76,355 17,865 Parks Personal services 230,863 230,863 219,177 11,686 Other services and charges 216,482 216,482 156,256 60,226 Capital outlay 2,000 2,000 2,000 Total Parks 449,345 449,345 375,433 73,912 Other Unallocated Remittance to Fire Relief Association 81,540 81,540 80,916 624 Contributions 17,250 17,250 16,667 583 Miscellaneous 41,561 41,561 39,424 2,137 Total Other Unallocated 140,351 140,351 137,007 3,344 TOTAL EXPENDITURES Excess (deficiency) of revenues over (under) expenditures 4,845,427 4,845,427 4,334,746 510,681 1,035,764 1,035,764 OTHER FINANCING SOURCES (USES) Transfers Out (855,392) (855,392) Net Change in Fund Balance 180,372 180,372 FUND BALANCE, beginning 2,422,714 2,422,714 2,422,714 FUND BALANCE, ending $ 2,422,714 $ 2,422,714 $ 2,603,086 $ 180,372 See Notes to Financial Statements 0 CITY OF HUGO, MINNESOTA PROPRIETARY FUND Statement of Net Position December 31, 2016 ASSETS 354,291 Current Assets 145,294 Cash and cash equivalents $ 19,398,346 Receivables 25,335,762 Accounts receivable 554,680 Accrued interest 20,940 Special assessments (net of allowance for uncollectibles) 231,462 Deposits 1,500 Total Current Assets 20,206,928 Noncurrent Assets 354,291 Property and Equipment 145,294 Nondepreciable 307,805 Depreciable 25,335,762 Total Property and Equipment 25,643,567 Less: Accumulated depreciation 8,908,501 Net Property and Equipment 16,735,066 Total Assets 36,941,994 DEFERRED OUTFLOWS OF RESOURCES 354,291 Deferred outflows from pension activity 145,294 LIABILITIES 360,863 Current Liabilities 473,155 Current portion of long-term debt (compensated absences) 20,242 Accounts payable 75,145 Due to other governmental units 11,999 Salaries payable 3,906 Unearned revenue 1,000 Total Current Liabilities 112,292 Long-term Liabilities Net pension liability 354,291 Compensated absences, net of current portion 6,572 Total Long -Term Liabilities 360,863 Total Liabilities 473,155 DEFERRED INFLOWS OF RESOURCES Deferred inflows from pension activity 40,436 NET POSITION Net investment in capital assets 16,735,066 Unrestricted 19,838,631 Total Net Position $ 36,573,697 See Notes to Financial Statements M CITY OF HUGO, MINNESOTA PROPRIETARY FUND Statement of Revenues, Expenses and Changes in Fund Net Position For the Year Ended December 31, 2016 Operating Revenue 387,354 Water charges $ 858,525 Meter sales 32,770 Sewer charges 1,101,429 Total Operating Revenues 1,992,724 Operating Expenses Personal services 387,354 Engineering 61,673 Electricity 99,656 Repairs and maintenance 741,376 Sewer charges - MCES 514,502 Depreciation 606,578 Miscellaneous 114,064 Total Operating Expenses 2,525,203 Operating (Loss) (532,479) Nonoperating Revenue Future infrastructure charges 371,765 Rental income 30,874 Intergovernmental revenue 445,984 Investment earnings 65,119 Net decrease in the fair value of investments (22,568) Miscellaneous 103,120 Total Nonoperating Revenue 994,294 Net Income Before Transfers and Contributions 461,815 Capital contributions - special assessments 37,076 Noncash capital contributions 569,628 Transfers out (109,068) Change in net position 959,451 Net Position, Beginning of Year 35,614,246 Net Position, End of Year $ 36,573,697 See Notes to Financial Statements 9.1 CITY OF HUGO, MINNESOTA PROPRIETARY FUND Statement of Cash Flows For the Year Ended December 31, 2016 Cash Flows From Operating Activities $ (532,479) Cash received from customers $ 2,670,439 Cash paid to suppliers (1,512,597) Cash paid to employees (360,592) Other income received 579,978 Net Cash Provided By Operating Activities 1,377,228 Cash Flows From Noncapital Financing Activities 579,978 Transfers to other funds (109,068) Cash Flows From Capital and Related (82,438) Financing Activities 388,388 Acquisition of capital assets (92,110) Special assessments and property taxes received 43,018 Net Cash (Used In) Capital and Related Financing Activities (49,092) Cash Flows From Investing Activities 795 Investment earnings received 53,666 Net (decrease) in the fair value of investments (22,568) Net Cash Provided By Investing Activities 31,098 Net Increase in Cash and Cash Equivalents 1,250,166 Cash and Cash Equivalents, Beginning of Year 18,148,180 Cash and Cash Equivalents, End of Year $ 19,398,346 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating (loss) $ (532,479) Adjustments to reconcile operating (loss) to net cash provided by operating activities Depreciation 606,578 Change in net pension liability 23,369 Future infrastructure charges, included in nonoperating revenues 371,765 Other income 579,978 (Increase) Decrease In: Accounts receivable (82,438) Due from other governmental units 388,388 Increase (Decrease) In: Accounts payable 17,261 Due to other governmental units 1,413 Salaries payable 795 Estimated liability for compensated absences 2,598 Net Cash Provided By Operating Activities $ 1,377,228 Noncash Investing, Capital and Financing Activities Receipt of contributed property $ 569,628 See Notes to Financial Statements This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2016 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. 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) 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) 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) 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. 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 payables (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. Comaensated 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. 36 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/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA's fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA's fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit 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. The general fund is the only governmental fund that can report a positive unassigned fund balance. 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. 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, 2016 was $187,963. 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, 2016, the outstanding principal amount of these bonds was $20,985,000. fit CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. Summary of Significant Accounting Policies (Continued) G. Conduit Debt Obligations (continued) The City also issued lease revenue bonds during 2015 to provide funding to a nonprofit 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, 2016, the outstanding principal amount of these bonds was $8,800,000. 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. M CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2. Stewardship, Compliance, and Accountability Budctetary Information (continued) 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, 2016). 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, 2016. 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, 2016 were entirely covered by federal depository insurance or by collateral held by the City or its agent in the City's name. 41 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds A. Deposits and Investments (continued) 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. (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. 42 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 0 NO Detailed Notes on All Funds (Continued) Deposits and Investments (continued) Interest Rate Risk (continued) 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: Range of Investment Maturities Rating Value Cash N/A N/A $ 377,073 Non -Negotiable Certificates of Deposit January 2017 - November 2017 N/A 8,975,126 Money Market Funds N/A Unrated 19,061,732 U.S. Government Securities August 2018 - June 2022 AAA - AA+* 9,133,534 Total $ 37,547,465 N/A Not applicable or not available * Where rated A reconciliation of cash and temporary investments as shown on the Statement of Net Position for the City follows: Carrying amount of deposits $ 377,073 Investments 37,170,392 Total $ 37,547,465 ('.rarlit Rick 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. 43 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) A. Deposits and Investments (continued) 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, 2016 were as follows: Issuer Investment Type Value RBC Wealth Management Money Market Funds $ 19,061,732 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, 2016 all investments were insured or registered or the securities were held by the City or its agent in the City's name. Fair Value Measurements Fair value measurements are determined utilizing the framework established by the Governmental Accounting Standards Board. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the City has the ability to access. Level 2: Inputs to the valuation methodology include: o Quoted prices for similar assets or liabilities in active markets o Quoted prices for identical assets or liabilities in inactive markets o Inputs other than quoted prices that are observable for the asset or liability o Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specific (contractual) term, Level 2 input must be observable for substantially the full term of the asset or liability. CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) A. Deposits and Investments (continued) Fair Value Measurements (continued) • Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The City's investments within the fair value hierarchy at December 31, 2016 and 2015 were as follows: 45 As of December 31, 2016 Assets Measured at Fair Value Hierarchy Level Fair Value Level 1 Level 2 Level 3 U.S. Government Securities $ 9,133,534 $ $ 9,133,534 $ Total $ 9,133,534 $ $ 9,133,534 $ As of December 31, 2015 Assets Measured at Fair Value Hierarchy Level Fair Value Level 1 Level 2 Level 3 U.S. Government Securities $ 8,380,653 $ $ 8,380,653 $ Total $ 8,380,653 $ $ 8,380,653 $ 45 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) B. Due From and To Other Governmental Units Amounts due from other governmental units as of December 31, 2016 were as follows: Amounts due to other governmental units as of December 31, 2016 were as follows: Washington Ind. School Metropolitan Fund Type County District #624 Total Council Total General $ 61,386 $ $ 61,386 Debt Service $ 3,800 1,970,000 1,970,000 Total $ 61,386 $ 1,970,000 $ 2,031,386 Amounts due to other governmental units as of December 31, 2016 were as follows: Washington State of Metropolitan Fund Type County Minnesota Council Total General $ 439,627 $ 3,800 $ 14,761 $ 458,188 Proprietary 11,999 11,999 Total $ 439,627 $ 15,799 $ 14,761 $ 470,187 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, 2016 was as follows: Less accumulated depreciation for Buildings and improvements Beginning 205,530 Ending Governmental Activities Balance Increases Decreases Balance Capital assets, not being depreciated: 8,552,920 648,540 91,631 9,109,829 Land $ 4,628,249 $ 3,559 $ $ 4,631,808 Total capital assets, not being depreciated 4,628,249 3,559 527,517 4,631,808 Capital assets, being depreciated: 24,573,539 1,262,683 259,727 25,576,495 Buildings and improvements 6,237,678 11,680 $ 259,727 6,249,358 Land Improvements 1,566,117 1,566,117 Infrastructure 26,728,568 1,836,324 241,626 28,323,266 Machinery and equipment 6,403,562 744,233 545,618 6,602,177 Total capital assets, being depreciated 40,935,925 2,592,237 787,244 42,740,918 Less accumulated depreciation for Buildings and improvements 2,473,776 205,530 2,679,306 Land Improvements 1,108,127 139,344 1,247,471 Infrastructure 8,552,920 648,540 91,631 9,109,829 Machinery and equipment 4,227,563 336,140 435,886 4,127,817 Total accumulated depreciation 16,362,386 1,329,554 527,517 17,164,423 Total capital assets, being depreciated, net 24,573,539 1,262,683 259,727 25,576,495 Governmental activities capital assets, net $ 29,201,788 $ 1,266,242 $ 259,727 $ 30,208,303 47 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) C. Caaital Assets (continued) Depreciation expense was charged to functions/programs as follows: Governmental Activities: General government $ 79,351 Public safety 142,064 Highways and streets 885,861 Parks 216,779 Community development 5,499 Total $ 1,329,554 Business -Type Activities: Sewer and Water $ 606,578 Beginning Ending Business -type activities Balance Increases Decreases Balance Capital assets, not being depreciated: Land $ 259,560 $ $ $ 259,560 Construction in progress 48,245 48,245 Total capital assets, not being depreciated 307,805 307,805 Capital assets, being depreciated: Buildings and improvements 24,154,416 569,628 24,724,044 Machinery and equipment 519,608 92,110 611,718 Total capital assets, being depreciated 24,674,024 661,738 25,335,762 Less accumulated depreciation for: Buildings and improvements 7,932,810 574,007 8,506,817 Machinery and equipment 369,113 32,571 401,684 Total accumulated depreciation 8,301,923 606,578 8,908,501 Total capital assets, being depreciated, net 16,372,101 55,160 16,427,261 Business -type activities capital assets, net $ 16,679,906 $ 55,160 $ $ 16,735,066 Depreciation expense was charged to functions/programs as follows: Governmental Activities: General government $ 79,351 Public safety 142,064 Highways and streets 885,861 Parks 216,779 Community development 5,499 Total $ 1,329,554 Business -Type Activities: Sewer and Water $ 606,578 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, 2016 is as follows: 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. Range of Final Balance Issue Date Interest Rates Maturity 12/31/16 General obligation bonds: 2007 A Improvement Bonds 10/17/2007 4.00% - 4.15% 2023 $ 485,000 2009 A Improvement Bonds 7/21/2009 3.25% - 3.875% 2020 390,000 2009 B Tax Abatement Bonds 11/5/2009 3.00% 2020 425,000 2010 Capital Improvement Bonds 8/19/2010 2.25% - 2.50% 2018 265,000 2011 Improvement Bonds 11/9/2011 2.00% - 3.00% 2027 885,000 2013 Crossover Refunding Bonds 3/20/2013 0.65% - 1.15% 2020 4,775,000 Other Liabilities: Compensated Absences 349,018 Unamortized premium 20,546 Less: Unamortized (discount) (13,696) Total Long-term Debt $ 7,580,868 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. 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, 2016: Amounts Beginning Ending Due Within Balance Additions Reductions Balance One Year GOVERNMENTAL ACTIVITIES Bonds and Notes and Contracts Payable: General obligation bonds: 2007 A Improvement Bonds $ 565,000 $ $ 80,000 $ 485,000 $ 75,000 2009 A Improvement Bonds 485,000 95,000 390,000 95,000 2009 B Tax Abatement Bonds 520,000 95,000 425,000 100,000 2010 Capital Improvement Bonds 395,000 130,000 265,000 130,000 2011 Improvement Bonds 995,000 110,000 885,000 110,000 2013 Crossover Refunding Bonds 5,835,000 1,060,000 4,775,000 1,115,000 Other Liabilities: Compensated Absences 302,104 137,831 117,731 322,204 125,564 Unamortized premium 25,628 5,082 20,546 Less: Unamortized (discount) (18,041) (4,345) (13,696) Governmental Activities Long-term Liabilities 9,104,691 137,831 1,688,468 7,554,054 1,750,564 BUSINESS -TYPE ACTIVITIES Other Liabilities: Compensated Absences 24,216 20,879 18,281 26,814 20,242 Business -Type Activities Long-term Liabilities 24,216 20,879 18,281 26,814 20,242 Total $ 9,128,907 $ 158,710 $ 1,706,749 $ 7,580,868 $ 1,770,806 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. Debt Service Requirements Debt service requirements to maturity for long-term debt, excluding compensated absences, as of December 31, 2016 were as follows: $ 7,225,000 $ 325,066 51 General Obligation Debt Year Principal Interest 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 185,000 16,341 2022-2026 400,000 27,710 2027 45.000 675 $ 7,225,000 $ 325,066 51 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) E. Tax Increment Districts The City of Hugo enters into property tax abatement agreements through the use of tax increment financing districts with local businesses under various Minnesota Statutes. Under these statutes, the City annually abates taxes collected above the districts' base tax capacity which is established during adoption of the tax increment district. These agreements are established to foster economic development and redevelopment through creating jobs, removing blight and providing affordable housing. The City uses Minnesota Statutes 469.001 to 469.047 and 469.174 to 469.179 (The Tax Increment Act) to create these districts. 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 469.174 to 469.179 (The Tax Increment Act). 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: Original net tax capacity District No. 1-1 District No. 1-2 $ 429 $ 296,578 Current net tax capacity 82,356 244,991 Captured net tax capacity: Retained by authority Total general obligation tax increment bond issued Amounts redeemed 81,927 4,030,000 4,030,000 Outstanding bonds at December 31, 2016 $ $ The City did not abate any property taxes related to these tax increment districts during the year ended December 31, 2016. 52 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) F. 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, 2016 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 53 Transfers In Transfers Out $ $ 855,392 218,493 104 499,861 2,111,086 1,784,873 29,422 109,425 2,858,862 2,749,794 109,068 $ 2,858,862 $ 2,858,862 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Detailed Notes on All Funds (Continued) G. Fund Equity The City has committed and assigned portions of fund equity in the governmental funds. A summary at December 31, 2016 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, 2016 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 $ $ $ 2,847,900 $ 395,899 $ $ $ 2,847,900 $ 395,899 $ $ $ 5,384,236 $ 395,899 $ $ $ 5,384,236 $ 395,899 54 Property and Abatement Compensated Firefighter's Public Equipment Special Park Levy Offset Absences Relief Improvements Acquisition Committed Park improvement $ 1,010,278 $ $ $ $ $ Bond principal retirement 377,410 Compensated absences 476,903 Total Committed —T 1,010,278 $ 377,410 $ 476,903 $ $ $ Assigned Municipal contributions to fire relief $ $ $ $ 74,134 $ $ Public improvements 4,337,086 Property and equipment acquisition 4,404,412 Total Assigned $ $ $ 74,134 4,337,086 4,404,412 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, 2016 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 $ $ $ 2,847,900 $ 395,899 $ $ $ 2,847,900 $ 395,899 $ $ $ 5,384,236 $ 395,899 $ $ $ 5,384,236 $ 395,899 54 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 Continaencies 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, 2016. 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. 55 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans 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 Plan. General Employees Plan 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. General Employees Plan benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated 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. 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 A. Plan Description (continued) 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. 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 2016. The City was required to contribute 11.78% of pay for Basic Plan members and 7.50% for Coordinated Plan members in calendar year 2016. The City's contributions to the General Employees Fund for the year ended December 31, 2016 were $117,578. The City's contributions were equal to the required contributions as set by state statute. C. Pension Costs At December 31, 2016, the City reported a liability of $2,013,637 for its proportionate share of the General Employees Fund's net pension liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of $6 million to the fund in 2016. The State of Minnesota is considered a non -employer contributing entity and the state's contribution meets the definition of a special funding situation. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled $26,274. The net pension liability was measured as of June 30, 2016 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, 2015 through June 30, 2016 relative to the total employer contributions received from all of PERA's participating employers. At June 30, 2016, the City's proportion share was .0248% which was an increase of .0003% from its proportion measured as of June 30, 2015. 57 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) 1. Public Employees Retirement Association (PERA) - Defined Benefit (Continued) C. Pension Costs (continued) For the year ended December 31, 2016, the City recognized pension expense of $279,097 for its proportionate share of the General Employees Plan's pension expense. In addition, the City recognized an additional $7,834 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's contribution of $6 million to the General Employees Fund. At December 31, 2016, the City reported its proportionate share of the General Employees Plan's deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: $59,377 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, 2017. Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience $ $ 163,055 Changes in actuarial assumptions 394,272 Difference between projected and actual investment earnings 381,093 Changes in proportion 65,849 Contributions paid to PERA subsequent to the measurement date 59,376 Total $ 834,741 $ 228,904 $59,377 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, 2017. CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) C. Pension Plans (Continued) 1. Public Employees Retirement Association (PERA) - Defined Benefit (Continued) C. Pension Costs (Continued) Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Pension Expense Year ending June 30: Amount 2017 $ 137,878 2018 137,878 2019 197,970 2020 72,736 D. Actuarial Assumptions The total pension liability in the June 30, 2016 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Active Member Payroll Growth 3.25% per year Investment Rate of Return 7.50% Salary increases were based on a service -related table. Mortality rates for active members, retirees, survivors and disabilitants were based on RP 2014 tables for males or females, as appropriate, with slight adjustments. Cost of living benefit increases for retirees are assumed to be 1 % per year for all future years. Actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the General Employees Plan was completed in 2015. 59 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. X Other Information (Continued) Pension Plans (Continued) Public Employees Retirement Association (PERA) - Defined Benefit (Continued) D. Actuarial Assumptions (continued) The following changes in actuarial assumptions occurred in 2016: • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 7.5%. • Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 geometrical 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 Total Target Allocation 45% 15% 18% 20% 2% 100% Long -Term Expected Real Rate of Return 5.50% 6.00% 1.45% 6.40% 0.50% 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) E. Discount Rate The discount rate used to measure the total pension liability in 2016 was 7.50%, a reduction from the 7.9% used in 2015. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Fund was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 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 one percentage point lower or one percentage point higher than the current discount rate: General Employees Fund 1% Higher 6.50% $ 2,859,961 Current Discount Rate 7.50% 2,013,637 1 % Lower 8.50% 1,316,496 G. Pension Plan Fiduciary Net Position Detailed information about the 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. 61 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, 2016, the plan covered 32 active firefighters and 7 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, 2016 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 $3,300 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 $83,852 in state aid to the plan on behalf of the Association for the year ended December 31, 2016, 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 2016, 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, 2016, the City reported a net pension asset of $511,851 for the plan. The net pension asset was measured as of December 31, 2016. 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, 2016. 62 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 12/31/15 Changes for the Year Service cost Interest on pension liability Assumption changes Plan changes Contributions (state) Net investment income Benefit payments Administrative expenses Net Changes Balance End of Year 12/31/16 Plan Total Fiduciary Net Pension Pension Net Position Liability Liability (a) (b) (Asset) (a -b) $ 811,636 $1,185,873 $ (374,237) 29,273 Deferred 29,273 55,403 Resources 55,403 4,702 4,702 13,296 13,296 83,852 (83,852) (63,446) 102,440 (165,886) (40,248) (40,248) (9,450) 9,450 (1,020) 136,594 (137,614) $ 810,616 $1,322,467 $ (511,851) During 2016, the benefit level for participants changed from $3,200 to $3,300 per year. For the year ended December 31, 2016, the City recognized pension expense (benefit) of $(194,617). At December 31, 2016, 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 63 Deferred Deferred Outflows of Inflows of Resources Resources $ 48,023 $ $ 48,023 $ CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. X Other Information (Continued) 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 2017 $ 11,444 2018 11,444 2019 11,446 2020 13,689 E. Actuarial Assumptions The total pension liability at December 31, 2016 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 6.50% • Inflation rate 0% The following changes in actuarial assumptions occurred in 2016: the discount rate changed from 6.75% to 6.50% and the inflation rate changed from 4.0% to 0.0%. F. Discount Rate The discount rate used to measure the total pension liability was 6.50%. 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. CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. X Other Information (Continued) 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 (5.50%) (6.50%) (7.50%) Net pension liability (asset) $ (491,961) $ (511,851) $ (530,740) 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. 65 CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. X Other Information (Continued) 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: Long -Term Expected Target Real Rate of Asset Class Allocation Return Cash 5.00% 2.25% Fixed income 17.00% 3.30% Equities 75.00% 7.50% Other 3.00% 6.00% Total 100% 6.50% 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 During 2016, the Plan increased its target allocation for investments in equity securities from 66% to 75% and decreased its target allocation for investments in fixed income securities from 27% to 17%. I. Pension Plan Fiduciary Net Position Detailed information about the Hugo Firefighter's Relief Association plan's fiduciary net position as of December 31, 2016 is available in a separately -issued financial report that includes financial statements and required supplementary information. CITY OF HUGO, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. Other Information (Continued) 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 top postemployment benefits would be immaterial to these financial statements as of December 31, 2016 5. Implementation of New Accounting Principles The City adopted the provisions of Governmental Accounting Standards Board Statement No. 72, Fair Value Measurement and Application. This statement generally requires investments to be measured at fair value and requires disclosures to be made about fair value measurements including the level of hierarchy and the valuation techniques utilized by the City. The City adopted the provisions of Governmental Accounting Standards Board Statement No. 76, Hierarchy of Generally Accepted Accounting Principles of the State and Local Governments. This statement established the order and priority of pronouncements and other sources of accounting and financial reporting guidance that governments should apply. This statement did not impact the preparation of these financial statements. The City adopted the provisions of Governmental Accounting Standards Board Statement No. 77, Tax Abatement Disclosures. This statement requires the disclosure of information related to tax abatement agreements entered into by the City, such as the financial statement impact, amount of taxes the City has promised to forego, and commitments made under the agreements. The City adopted the provisions of Governmental Accounting Standards Board Statement No. 82, Pension Issues — an Amendment of GASB Statements No. 67, No. 68, No. 73. The objective of this statement is to improve consistency in the application of pension accounting and financial reporting requirements by addressing certain issues that have been raised during implementation of the three standards listed above. One of the significant changes included in this statement clarifies the presentation of covered payroll in the required supplementary information to reflect the amount of payroll in which contributions made to the pension plan are based. 67 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA REQUIRED SUPPLMENTARY INFORMATION December 31, 2016 This Page Left Blank Intentionally Year Ended December 31 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 CITY OF HUGO Schedule of City Contributions PERA General Employees Retirement Plan December 31, 2016 CITY OF HUGO Schedule of Proportionate Share of Net Pension Liability PERA General Employees Retirement Plan December 31, 2016 Contributions Proportionate in Relation to Statutorily Statutorily Share (Amount) of Contributions as a Required Required Contribution Covered Percentage of Contribution Contribution Deficiency Employee Covered Payroll (a) (b) (Excess) (a -b) Payroll (d) (b/d) $ 103,560 $ 103,560 $ $ 1,428,404 7.3% 111,569 111,569 1,487,583 7.5% 117,578 117,578 1,567,687 7.5% CITY OF HUGO Schedule of Proportionate Share of Net Pension Liability PERA General Employees Retirement Plan December 31, 2016 Note: These schedules are intended to provide information for ten years. The City will include that information as it becomes available. Proportionate Share (Amount) of the Net Pension Proportionate Proportionate Liability (Asset) Plan Fiduciary (Percentage) of Share (Amount) of as a Percentage of Net Position as a Net Pension the Net Pension Covered- its Covered Percentage of the Fiscal Year Liability Liability (Asset) Employee Employee Payroll Total Pension Ended June 30 (Asset) (a) Payroll (b) (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 0.0248% 2,013,637 1,567,687 128.4% 68.9% 2017 2018 2019 2020 2021 2022 2023 Note: These schedules are intended to provide information for ten years. The City will include that information as it becomes available. CITY OF HUGO, MINNESOTA Schedule of Funding Progress for the Fire Relief Association December 31, 2016 Actuarial Valuation Date Actuarial Accrued Liability (AAL) Valuation of Plan Assets (a) Actuarial Valuation of Plan Assets (b) Net Pension Liability (Asset) (a -b) 12/31/2015 $ 811,636 $ 1,185,873 $ (374,237) 12/31/2016 810,616 1,322,467 (511,851) CITY OF HUGO, MINNESOTA Schedule of Employer Contributions for the Fire Relief Association December 31, 2016 and 2015 2016 2015 Actuarially determined contributions Actual contributions paid Contributions deficiency (excess) Note: These schedules are intended to provide information for ten years. The City will include that information as it becomes available. AR CITY OF HUGO, MINNESOTA COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES December 31, 2016 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA NONMAJOR FUNDS December 31, 2016 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, 2016 Special Revenue Debt Service Firefighter's Tax Increment Abatement Total Nonmajor Special Relief Financing Levy Compensated Governmental Park Fund Fund Collection Fund Offset Absences Fund Assets Cash and investments $ 1,012,017 $ 74,062 $ 395,505 $ 376,984 $ 476,412 $ 2,334,980 Receivables (Net of Allowance for Uncollectibles) Accrued interest 1,034 72 394 426 491 2,417 Taxes - delinquent 1,267 173 1,440 TOTAL ASSETS $ 1,014,318 $ 74,307 $ 395,899 $ 377,410 $ 476,903 $ 2,338,837 Liabilities, Deferred Inflows of Resources, and Fund Balance Liabilities Accounts payable $ 2,773 $ $ $ $ $ 2,773 Deferred Inflows of Resources Unavailable revenue: Property Taxes 1,267 173 1,440 Fund Balance Fund Balance Restricted 395,899 395,899 Committed 1,010,278 377,410 476,903 1,864,591 Assigned 74,134 74,134 Total Fund Balance 1,010,278 74,134 395,899 377,410 476,903 2,334,624 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCE $ 1,014,318 $ 74,307 $ 395,899 $ 377,410 $ 476,903 $ 2,338,837 70 CITY OF HUGO, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2016 71 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 REVENUES Property taxes $ 99,906 $ 12,195 $ 80,416 $ $ $ 192,517 Intergovernmental revenues 235 29 264 Other Revenue Investment earnings 3,252 228 1,281 1,396 1,540 7,697 Net (decrease) in the fair value of investments (1,127) (79) (444) (484) (533) (2,667) Rent 8,950 8,950 Contributions 20,000 20,000 Developer fees 100,800 100,800 TOTAL REVENUES 232,016 12,373 81,253 912 1,007 327,561 EXPENDITURES Capital outlay 104,013 64,535 168,548 Excess (deficiency) of revenues over(under)expenditures 128,003 12,373 16,718 912 1,007 159,013 OTHER FINANCING SOURCES (USES) Transfers in 29,422 29,422 Transfers out (109,425) (109,425) Net change in fund balances 128,003 12,373 16,718 (108,513) 30,429 79,010 FUND BALANCES, beginning 882,275 61,761 379,181 485,923 446,474 2,255,614 FUND BALANCES, ending $ 1,010,278 $ 74,134 $ 395,899 $ 377,410 $ 476,903 $ 2,334,624 71 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, 2016 Variance with Total Expenditures Budgeted Amounts Original Final Actual Final Budget Favorable (Unfavorable) REVENUES Net Change in Fund Balances 16,302 16,302 128,003 Property taxes $ 99,378 $ 99,378 $ 99,906 $ 528 Intergovernmental revenues 235 235 Other revenues Investment earnings 3,252 3,252 Net (decrease) in the fair value of investments (1,127) (1,127) Rent 8,950 8,950 8,950 Contributions 20,000 20,000 Developer fees 100,800 100,800 Total Revenues 108,328 108,328 232,016 123,688 EXPENDITURES Capital Outlay McCollar Park 70,000 70,000 84,157 (14,157) Lions Park 17,000 17,000 15,968 1,032 Bernin property 5,026 5,026 3,888 1,138 Total Expenditures 92,026 92,026 104,013 (11,987) Net Change in Fund Balances 16,302 16,302 128,003 111,701 Fund Balance, January 1 882,275 882,275 882,275 Fund Balance, December 31 $ 898,577 $ 898,577 $1,010,278 $ 111,701 1150 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, 2016 Variance with Final Budget Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES Property taxes Intergovernmental revenues Other revenues Investment earnings Net (decrease) in the fair value of investments Total Revenues Net Change in Fund Balances Fund Balance, January 1 Fund Balance, December 31 $ 12,107 $ 12,107 $ 12,195 $ 88 29 29 228 228 (79) (79) 12,107 12,107 12,373 266 12,107 12,107 12,373 266 61,761 61,761 61,761 $ 73,868 $ 73,868 $ 74,134 $ 266 73 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, 2016 Variance with Final Budget Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES Property taxes $ 80,416 $ 80,416 $ 80,416 $ Other revenues Investment earnings 1,281 1,281 Net (decrease) in the fair value of investments (444) (444) Total Revenues 80,416 80,416 81,253 837 EXPENDITURES Capital outlay 79,779 79,779 64,535 15,244 Net Change in Fund Balances 637 637 16,718 16,081 Fund Balance, January 1 379,181 379,181 379,181 Fund Balance, December 31 $ 379,818 $ 379,818 $ 395,899 $ 16,081 ILI 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, 2016 Variance with Final Budget Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES Other revenues Investment earnings Net (decrease) in the fair value of investments Total Revenues Other Financing Sources (Uses) Transfers out Net Change in Fund Balances Fund Balance, January 1 Fund Balance, December 31 $ $ $ 1,396 $ 1,396 (484) (484) 912 912 (109,425) (109,425) (109,425) (109,425) (109,425) (108,513) 912 485,923 485,923 485,923 $ 376,498 $ 376,498 $ 377,410 $ 75 912 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, 2016 REVENUES Property taxes Special assessments Intergovernmental revenue Other revenues Investment earnings Net (decrease) in the fair value of investments Total Revenues EXPENDITURES Debt service Principal retirement Interest on bonds Fiscal charges Total Expenditures Excess (deficiency) of revenues Variance with Final Budget Budgeted Amounts Favorable Original Final Actual (Unfavorable) $ 604,981 $ 604,981 $ 611,599 $ 6,618 97,958 97,958 119,447 21,489 491,301 491,301 492,732 1,431 7,593 7,593 (2,631) (2,631) 1,194,240 1,194,240 1,228,740 34,500 1,570,000 1,570,000 1,570,000 126,237 126,237 126,237 25,275 25,275 2,675 22,600 1,721,512 1,721,512 1,698,912 22,600 over (under) expenditures (527,272) (527,272) (470,172) 57,100 OTHER FINANCING SOURCES (USES) Transfers in 218,493 218,493 218,493 Transfers out (104) (104) TOTAL OTHER FINANCING SOURCES (USES) 218,493 218,493 218,389 (104) Net Change in Fund Balances (308,779) (308,779) (251,783) 56,996 Fund Balance, January 1 3,099,683 3,099,683 3,099,683 Fund Balance, December 31 $ 2,790,904 $ 2,790,904 $ 2,847,900 $ 56,996 76 CITY OF HUGO, MINNESOTA COMPENSATED ABSENCES Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended December 31, 2016 REVENUES Other revenues Investment earnings Net (decrease) 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 Budgeted Amounts Oriainal Final Actual Variance with Final Budget Favorable (Unfavorable) $ $ $ 1,540 $ 1,540 (533) (533 1,007 1,007 29,422 29,422 30,429 30,429 446,474 446,474 446,474 $ 446,474 $ 446,474 $ 476,903 $ 30,429 Note: The City adopted a $0 activity budget in this fund for the year ended December 31, 2016. FAA 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, 2016 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 Total Revenues EXPENDITURES Capital outlay Property and equipment acquisition Miscellaneous Total Expenditures $ $ $ 1,086 $ 1,086 25,708 25,708 15,101 15,101 (5,234) (5,234) 16,150 16,150 Fund Balance, January 1 4,488,691 52,811 52,811 868,523 868,523 659,299 209,224 22.002 22.002 8.806 13.196 890,525 890,525 668,105 222,420 Excess (deficiency) of revenues over (under) expenditures (890,525) (890,525) (615,294) 275,231 OTHER FINANCING SOURCES (USES) Sale of capital assets 31,154 31,154 Transfers in 499,861 499,861 499,861 Total Other Financing Sources (Uses) 499,861 499,861 531,015 31,154 Net Change in Fund Balances (390,664) (390,664) (84,279) 306,385 Fund Balance, January 1 4,488,691 4,488,691 4,488,691 Fund Balance, December 31 $ 4,098,027 $ 4,098,027 $ 4,404,412 $ 306,385 W CITY OF HUGO, MINNESOTA PROPRIETARY FUND Schedule of Revenues and Expenses - By Department For the Year Ended December 31, 2016 Operating Revenue Sale of water Meter sales Sewer charges Total Operating Revenues Operating Expenses Compensation 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 $ 858,525 $ $ $ 858,525 32,770 32,770 1,101,429 1,101,429 891,295 1,101,429 1,992,724 193,677 193,677 Rental income 387,354 7,460 445,984 54,213 61,673 90,555 9,101 Miscellaneous 99,656 201,152 28,838 511,386 741,376 514,502 514,502 377,154 229,424 606,578 59,130 52,205 2,729 114,064 929,128 1,027,747 568,328 2,525,203 $ (37,833) $ 73,682 $ (568,328) (532,479) Future infrastructure charges 371,765 Rental income 30,874 Intergovernmental revenue 445,984 Investment earnings 65,119 Net (decrease) in the fair value of investments (22,568) Miscellaneous 103,120 Total Other Revenue (Expense) 994,294 Net Income Before Transfers and Contributions 461,815 Capital contributions - special assessments 37,076 Noncash capital contributions 569,628 Transfers (109,068) Change in Net Position $ 959,451 79 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA SUPPLEMENTARY INFORMATION December 31, 2016 CITY OF HUGO, MINNESOTA SCHEDULE OF CASH AND INVESTMENTS - ALL FUNDS December 31, 2016 INVESTMENTS Certificates of Deposit - Goldman Sachs Bank of New York CD Interest Book 01/11/17 Yield Maturity Value CASH: 0.600% Change funds Open $ 200 Petty cash 50 Checking - US Bank Open 376,823 Total Cash $ 377,073 INVESTMENTS Certificates of Deposit - Goldman Sachs Bank of New York CD 2.050% 01/11/17 100,034 - American Express Centurion Bank CD 0.600% 01/30/17 245,012 - Sterling Bank of Poplar Bluff MO CD 0.600% 01/30/17 245,000 - Peoples United Bank CD 0.550% 02/03/17 245,000 - Synchrony Bank Retail CD 0.650% 02/06/17 245,000 - Bank Hapoalim of New York CD 0.850% 02/17/17 245,000 - Bank of China New York Branch CD 0.750% 02/17/17 245,000 - Santander Bank National Association CD 0.800% 02/17/17 245,080 - TCF National Bank CD 0.700% 02/17/17 245,080 - Old National Bank of Evansville IN CD 0.750% 02/22/17 245,107 - Apple Bank for Savings of New York CD 0.650% 02/24/17 245,036 - Commonwealth Business Bank of LA CD 0.650% 02/24/17 245,000 - Katandin Trust Co of Patten MD CD 0.700% 02/24/17 245,092 - Berkshire Bank of Pittsfield MA CD 0.500% 03/03/17 245,000 - Transportation Alliance Bank CD 0.700% 03/06/17 245,000 - BMW Bank North American of Salt Lake UT C 0.700% 03/17/17 100,000 - Gorham Savings Bank of ME CD 0.550% 03/17/17 245,000 - Bank India of New York NY CD 0.700% 03/22/17 245,000 - Customers Bank of Phoenixville PA CD 0.700% 03/30/17 245,000 - Homestreet Bank of Seattle WA CD 0.600% 04/10/17 245,000 - Bank Baroda of New York CD 0.700% 04/13/17 245,000 - Oregon Community Bank of WI CD 0.600% 04/17/17 245,000 - Bear State Bank of Little Rock AR CD 0.500% 05/18/17 245,000 - Horizon Bank National of Michigan City MI CD 0.550% 05/18/17 245,000 - Worlds Foremost Bank of Sydney NE CD 0.750% 05/26/17 200,000 - Volunteer State Bank of Portland TN CD 0.600% 08/17/17 245,000 - Frederick County Bank of Frederick MD CD 0.600% 08/23/17 245,000 - Summit Community Bank of WV CD 0.700% 08/24/17 245,000 - Bank Financial of IL CD 0.700% 09/11/17 244,835 - Horatio State Bank of Horatio AR CD 0.700% 09/11/17 244,851 - Everbank of Jacksonville FL CD 0.750% 11/15/17 245,000 - Discover Bank CD 0.750% 11/16/17 245,000 - Enterprise Bank of Allison Park PA CD 0.750% 11/16/17 245,000 L: 1 CITY OF HUGO, MINNESOTA SCHEDULE OF CASH AND INVESTMENTS - ALL FUNDS December 31, 2016 Interest Book Yield Maturity Value INVESTMENTS: Certificates of Deposit - First Foundation Bank of Irvine CA CD 0.650% 11/17/17 245,000 - Partners Bank of CA CD 0.700% 11/17/17 245,000 - Washington Trust of Westerly RI CD 0.750% 11/17/17 245,000 - Univest National Bank & Trust of PA CD 0.700% 11/22/17 245,000 - Harborone Bank of Brockton MA CD 0.750% 11/28/17 245,000 Total Certificates of Deposit $ 8,975,126 Money Market Funds - RBC Wealth Management 0.01% Open $19,061,732 Total Money Market Funds $19,061,732 U.S. Government Securities: Federal Home Loan Mortgage 0.750% 08/24/18 498,130 Federal Home Loan Mortgage 0.800% 03/29/19 499,600 Federal National Mortgage Association 0.750% 07/26/19 499,210 Federal Home Loan Banks 0.875% 08/15/19 497,925 Federal Home Loan Mortgage 0.750% 08/28/19 497,500 Federal National Mortgage Association 0.750% 11/26/19 323,909 Federal Home Loan Bank 1.000% 12/30/19 498,220 Federal National Mortgage Association 1.000% 12/30/19 494,830 Federal Home Loan Mortgage 0.850% 06/24/20 499,220 Federal Home Loan Mortgage 1.000% 08/24/20 491,580 Federal Home Loan Mortgage 1.125% 10/29/20 397,380 Federal Home Loan Mortgage 1.250% 05/28/21 493,445 Federal National Mortgage Association 1.500% 06/30/21 481,945 Federal Home Loan Banks 1.000% 07/27/21 491,320 Federal Home Loan Mortgage 1.150% 08/24/21 490,930 Federal Home Loan Bank 1.250% 11/08/21 490,060 Federal Home Loan Bank 1.000% 11/23/21 492,665 Federal Home Loan Mortgage 1.000% 11/23/21 496,750 Federal Home Loan Bank 1.000% 06/16/22 498,915 Total U.S. Government Securities $ 9,133,534 Total Investments $ 37,170,392 Total Cash and Investments $37,547,465 CITY OF HUGO, MINNESOTA SCHEDULE OF DEBT SERVICE REQUIREMENTS - ALL FUNDS DECEMBER 31, 2016 L -1B General Obligation Bonds and Certificates Year Principal Interest 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 185,000 16,341 2022 180,000 10,913 2023 85,000 6,739 2024 45,000 4,658 2025 45,000 3,375 2026 45,000 2,025 2027 45,000 675 $ 7,225,000 $ 325,066 L -1B CITY OF HUGO, MINNESOTA SCHEDULE OF BONDS PAYABLE DECEMBER 31, 2016 E7 Balance - Bonds Final Maturity Beginning of Bonds Outstanding - Paying Rates Dates Issue Date Date Annual Amount Payment Years Year Retired End of Year Agent G.O. Refunding Bonds 2013 Crossover Refunding Bonds 0.65-1.15 2-1 3/20/2013 2/1/2020 $ 1,115,000 2017 $5,835,000 $1,060,000 $ 4,775,000 1 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 2017-2021 $ 995,000 $ 110,000 $ 885,000 1 115,000 2022 40,000 2023 45,000 2024-2027 G.O. Property Tax Bonds 2010 Capital Improvement Bonds 2.25-2.50 2-1; 8-1 8/1/2010 2/1/2018 $ 130,000 2017 $ 395,000 $ 130,000 $ 265,000 1 135,000 2018 G.O. Special Assessment Bonds 2009A Improvement Bonds 3.25-3.875 2-1; 8-1 7/21/2009 2/1/2020 $ 95,000 2017-2018 $ 485,000 $ 95,000 $ 390,000 1 100,000 2019-2020 G.O. Tax Abatement Bonds 2009B Tax Abatement Bonds 3.00 2-1;8-1 11/5/2009 2/1/2020 $ 100,000 2017 $ 520,000 $ 95,000 $ 425,000 1 105,000 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 $ 75,000 2017-2021 $ 565,000 $ 80,000 $ 485,000 1 65,000 2022 45,000 2023 E7 This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA STATISTICAL SECTION (UNAUDITED) December 31, 2016 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. 84 Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. 94 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. 101 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. 109 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. 113 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 2016 $ 43,641,115 2015 $ 39,660,986 2014 5,780,135 6,569,231 7,022,529 Unrestricted 28,876,782 $ 26,906,049 $ 26,217,435 $ 23,454,304 5,780,135 6,569,231 7,022,529 9,038,151 6,209,056 6,092,481 $ 41,724,335 $ 38,995,722 $ 36,569,314 $ 16,735,066 $ 16,679,906 $ 16,206,682 19,838,631 18,934, 340 18,100,305 $ 36,573,697 $ 35,614,246 $ 34,306,987 Net investment in capital assets $ 43,641,115 $ 42,897,341 $ 39,660,986 Restricted 5,780,135 6,569,231 7,022,529 Unrestricted 28,876,782 25,143,396 24,192,786 Total primary government net position $ 78,298,032 $ 74,609,968 $ 70,876,301 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. Schedule 1 2013 2012 2011 2010 2009 2008 2007 $ 21,367,621 $ 21,481,371 $ 21,076,493 $ 22,085,591 $ 19,521,661 $ 20,958,423 $ 19,467,781 13,519,890 8,465,178 3,380,316 (1,175,995) 3,835,653 8,416,890 10,776,350 11,217,879 7,923,894 8,592,657 $ 33,711,516 $ 33,782,202 $ 32,873,699 $ 32,861,941 $ 30,739,540 $ 28,882,317 $ 28,060,438 $ 15,928,980 $ 16,152,741 $ 15,987,237 $ 15,946,269 $ 13,768,023 $ 13,788,320 $ 13,380,563 16,828,249 16,235,027 14,173,388 13,395,948 14,976,026 13,966,966 12,574,574 $ 32,757,229 $ 32,387,768 $ 30,160,625 $ 29,342,217 $ 28,744,049 $ 27,755,286 $ 25,955,137 $ 37,296,601 $ 37,634,112 $ 37,063,730 $ 38,031,860 $ 33,289,684 $ 34,746,743 $ 32,848,344 13,519,890 8,465,178 3,380,316 15,652,254 20,070,680 22,590,278 24,172,298 26,193,905 21,890,860 21,167,231 $ 66,468,745 $ 66,169,970 $ 63,034,324 $ 62,204,158 $ 59,483,589 $ 56,637,603 $ 54,015,575 L -*R 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 2016 2015 2014 $ 1,197,701 $ 1,122,799 $ 1,134,472 1,557,907 1,766,538 1,605,641 1,693,873 2,798,767 1,652,444 95,450 44,810 29,743 691,817 629,830 695,534 120,457 245,855 420,400 5,357,205 6,608,599 5,538,234 2,525,203 2,257,189 1,980,909 $ 7,882,408 $ 8,865,788 $ 7,519,143 $ 685,861 $ 533,119 $ 537,526 37,793 41,554 36,835 24,700 24,700 26,407 317,012 342,514 260,534 963,391 2,618,455 1,964,258 2,028,757 3,560,342 2,825,560 Business -type activities: Charges for services: Water and sewer 2,364,489 2,536,840 2,388,668 Capital grants and contributions 606,704 1,041,058 818,017 Total business -type activities program revenues 2,971,193 3,577,898 3,206,685 Total primary government program revenues $ 4,999,950 $ 7,138,240 $ 6,032,245 2013 2012 2011 2010 2009 2008 Schedule 2 2007 $ 1,065,863 $ 1,067,927 $ 1,053,948 $ 1,085,789 $ 1,248,415 $ 1,539,156 $ 1,244,357 1,604,478 1,564,118 1,530,435 1,404,480 1,503,033 1,419,224 1,209,781 2,542,320 2,433,615 2,672,496 4,981,297 2,467,723 2,927,427 3,069,610 30,483 28,593 194,508 194,704 202,069 195,102 227,969 628,316 578,792 598,387 548,569 451,118 613,217 552,174 536,639 515,183 494,872 687,954 630,395 645,538 636,428 6,408,099 6,188,228 6,544,646 8,902,793 6,502,753 7,339,664 6,940,319 1,914,195 1,720,993 1,922,499 2,101,368 2,162,573 1,743,071 1,600,040 $ 8,322,294 $ 7,909,221 $ 8,467,145 $ 11,004,161 $ 8,665,326 $ 9,082,735 $ 8,540,359 $ 371,013 $ 478,209 $ 292,519 $ 368,515 $ 453,546 $ 1,135,846 $ 660,862 31,477 39,092 50,068 56,813 47,892 57,326 62,515 17,696 17,097 27,020 29,113 36,514 112,433 24,516 24,258 17,568 779,206 741,340 775,350 569,054 778,401 406,259 335,573 176,212 420,143 74,332 3,691,149 841,942 68,418 1,154,456 1,384,928 1,707,897 1,228,783 4,797,964 2,146,297 1,709,803 2,248,071 2,339,417 2,784,960 2,276,159 2,337,983 2,544,390 2,775,372 3,296,303 97,613 149,899 8,927 66,755 18,501 65,831 22,013 2,437,030 2,934,859 2,285,086 2,404,738 2,562,891 2,841,203 3,318,316 $ 3,821,958 $ 4,642,756 $ 3,513,869 $ 7,202,702 $ 4,709,188 $ 4,551,006 $ 5,566,387 L;h 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 Governmental activities Business -type activities Total primary government Fiscal Year 2016 2015 2014 $ (3,328,448) $ (3,048,257) $ (2,712,674) 445,990 1,320,709 1,225,776 $ (2,882,458) $ (1,727,548) $ (1,486,898) $ 5,858,093 $ 5,930,619 $ 5,169,220 12,343 12,987 8,351 57,287 63,745 97,122 (19,853) 14,946 165,934 40,123 10,600 21,566 109,068 107,839 108,279 6,057,061 6,140,736 5,570,472 65,119 74,066 98,298 (22,568) 17,670 194,271 579,978 225,393 139,692 (109,068) (107,839) (108,279) 513,461 209,290 323,982 $ 6,570,522 $ 6,350,026 $ 5,894,454 $ 2,728,613 $ 3,092,479 $ 2,857,798 959,451 1,529,999 1,549,758 $ 3,688,064 $ 4,622,478 $ 4,407,556 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. Schedule 2 (continued) 2013 2012 2011 2010 2009 2008 2007 $ (5,023,171) $ (4,480,331) $ (5,315,863) $ (4,104,829) $ (4,356,456) $ (5,629,861) $ (4,692,248) 522,835 1,213,866 362,587 303,370 400,318 1,098,132 1,718,276 $ (4,500,336) $ (3,266,465) $ (4,953,276) $ (3,801,459) $ (3,956,138) $ (4,531,729) $ (2,973,972) $ 4,957,502 $ 5,164,809 $ 5,254,269 $ 5,770,883 $ 5,506,486 $ 5,330,462 $ 4,808,497 7,692 9,278 3,753 3,770 213,564 443,941 214,033 123,271 117,355 173,136 338,671 380,820 555,189 598,016 (249,734) 9,657 40,171 67,721 9,093 8,101 7,875 56,060 104,097 104,475 (171,258) 104,813 104,708 114,273 (332,841) 4,952,485 5,436,088 5,327,621 6,227,230 6,213,679 6,451,740 5,343,765 5,033 141,153 140,422 140,036 7,181 25,504 9,734 129,708 119,149 190,576 300,479 451,949 609,365 544,584 (286,689) 107,704 998,603 93,987 94,099 92,870 40,999 92,440 (104,097) (104,475) 171,258 (104,813) (104,708) (114,273) 332,841 (153,374) 1,013,277 455,821 294,798 588,445 702,017 1,119,635 $ 4,799,111 $ 6,449,365 $ 5,783,442 $ 6,522,028 $ 6,802,124 $ 7,153,757 $ 6,463,400 $ (70,686) $ 955,757 $ 11,758 $ 2,122,401 $ 1,857,223 $ 821,879 $ 651,517 369,461 2,227,143 818,408 598,168 988,763 1,800,149 2,837,911 $ 298,775 $ 3,182,900 $ 830,166 $ 2,720,569 $ 2,845,986 $ 2,622,028 $ 3,489,428 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 CITY OF HUGO, MINNESOTA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting) 2016 2015 2014 2013 2012 2,603,086 2,422,714 2,316,449 2,186,178 2,109,985 2,603,086 2,422,714 2,316,449 2,186,178 2,109,985 3,243,799 3,478,864 9,193,397 9,567,219 3,940,302 1,864,591 1,814,672 1,591,779 1,432,846 1,518,457 8,815,632 8,119,888 7,160,986 6,943,377 6,716,756 Total all other governmental funds 13,924,022 13,413,424 17,946,162 17,943,442 12,175,515 Total governmental funds $ 16,527,108 $15,836,138 $20,262,611 $ 20,129,620 $ 14,285,500 Note: The City implemented GASB Statement No. 54 in 2011; therefore, classifications of fund balance changed in 2011 and subsequent years. .E Schedule 3 2011 2010 2009 2008 2007 $ $ 2,181,107 $ 2,111,128 $ 2,067,361 $ 1,947,046 2,160,273 2,160,273 2,181,107 2,111,128 2,067,361 1,947,046 100,000 251,142 837,142 436,572 1,806,400 610,038 1,566,606 3,168,547 2,895,071 2,164,718 1,636,187 6,820,406 6,930,513 5,586,276 5,063,294 3,380,316 714,894 7,679,292 11,774,502 10,425,525 11,731,984 8,612,174 9,103,229 $ 13,934,775 $ 12,606,632 $13,843,112 $ 10,679,535 $11,050,275 91 CITY OF HUGO, MINNESOTA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST FISCAL TEN YEARS (Modified Accrual Basis of Accounting) EXPENDITURES 2016 2015 2014 2013 2012 Revenues 1,014,614 979,788 986,220 973,069 958,965 Property taxes $ 5,902,992 $ 5,969,315 $ 5,180,422 $ 5,005,479 $ 5,318,041 Special assessments 370,756 932,172 345,508 290,505 406,071 Licenses and permits 388,743 297,071 248,642 213,255 302,752 Intergovernmental revenues 1,345,844 1,315,406 1,206,757 1,003,735 769,373 Charges for services 266,392 207,890 248,497 145,558 159,122 Court fines 37,793 41,554 36,835 31,477 39,092 Other Revenue 1,570,000 7,070,000 1,570,000 1,515,000 1,260,000 Investment earnings 57,287 63,745 97,122 123,271 117,355 Net change in the fair value of investments (19,853) 14,946 165,934 (249,734) Developer fees 106,780 11,975 404,041 9,102 48,967 Land sales 59,468 Rent 32,695 24,540 31,976 19,525 16,765 Insurance settlement 1,964,923 2,011,111 2,135,570 855,610 1,403,591 Miscellaneous 59,900 236,603 326,104 240,127 202,573 Total Revenues 8,549,329 9,103,242 8,291,838 6,823,198 7,331,144 EXPENDITURES General government 1,014,614 979,788 986,220 973,069 958,965 Public safety 1,549,208 1,571,184 1,420,115 1,375,303 1,355,607 Highways and streets 1,182,129 1,204,844 1,204,207 1,199,078 1,157,640 Community development 76,355 43,498 20,345 17,515 22,797 Parks 375,433 337,316 349,113 321,655 317,301 Unallocated 137,007 137,210 124,799 134,590 104,377 Debt service Bond principal retirement 1,570,000 7,070,000 1,570,000 1,515,000 1,260,000 Interest on bonds 126,237 272,283 450,981 430,069 463,374 Miscellaneous Fiscal charges 2,675 11,975 5,776 9,102 48,967 Issuance costs 59,468 Advance refunding escrow Capital outlay 1,964,923 2,011,111 2,135,570 855,610 1,403,591 Total Expenditures 7,998,581 13,639,209 8,267,126 6,890,459 7,092,619 Excess (deficiency) of revenues over (under) expenditures 550,748 (4,535,967) 24,712 (67,261) 238,525 OTHER FINANCING SOURCES (USES) Issuance of debt 5,835,000 Premium (Discount) on issuance of debt (27,716) Payment to bond escrow agent Sale of property 31,154 1,655 7,725 Transfers in 2,858,862 959,688 1,029,021 518,621 2,076,262 Transfers out (2,749,794) (851,849) (920,742) (414,524) (1,971,787) Total other financing sources (uses) 140,222 109,494 108,279 5,911,381 112,200 Net change in fund balances $ 690,970 $ (4,426,473) $ 132,991 $ 5,844,120 $ 350,725 Debt service as a percentage of noncapital expenditures 31.40% 60.97% 34.93% 29.42% 29.40% 92 Schedule 4 2011 2010 2009 2008 2007 $ 5,223,887 $ 5,563,298 $ 5,474,995 $ 5,278,287 $ 4,722,736 624,953 316,848 536,069 330,382 634,279 167,373 210,829 348,343 1,022,525 470,342 792,938 3,372,522 1,345,592 840,100 834,501 120,308 146,107 86,072 153,692 169,830 50,068 56,813 47,762 57,026 61,505 173,782 338,671 380,820 555,189 598,016 476,157 676,857 7,752 44,343 37,093 24,364 29,310 30,697 31,238 34,887 204,763 361,557 33,136 35,694 71,270 7,382,436 10,395,955 8,291,238 8,348,476 7,634,459 900,935 911,625 964,806 1,336,479 1,017,392 1,333,944 1,195,244 1,300,168 1,236,755 1,021,815 1,166,248 1,307,156 1,073,741 1,264, 979 1,045,845 181,021 183,342 175,409 157,234 167,518 297,422 252,874 182,051 161,881 167,084 119,753 109,741 100,323 94,055 90,862 1,120,000 2,425,000 785,000 700,000 950,000 476,157 676,857 608,321 631,185 625,731 52,333 48,463 29,403 5,643 6,064 225,080 1,575,007 4,832,777 2,600,215 3,245,278 3,771,751 7,222,820 12,168,159 7,819,437 8,833,489 8,864,062 159,616 (1,772,204) 471,801 (485,013) (1,229,603) 1,325,000 1,340,000 2,570,000 1,270,000 5,185 20,772 17,068 7,690 (929,861) 9,600 705,068 2,333,972 1,478,522 2,429,789 1,018,776 (876,326) (2,229,159) (1,373,814) (2,315,516) (1,351,617) 1,168,527 535,724 2,691,776 114,273 944,849 $ 1,328,143 $ (1,236,480) $ 3,163,577 $ (370,740) $ (284,754) 25.82% 30.31% 23.00% 19.40% 21.22% 93 SCHEDULE5 CITY OF HUGO, MINNESOTA TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS 94 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 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 2016 1,532,535,200 15,086,691 293,209 15,379,900 14,294,114 36.323 0.01 (1) Tax Capacity adjusted for captured tax increment, fiscal disparities, and transmission lines. NOTE -Valuations are determined as of January1 of year preceding tax collection year. The County determines a propertys taxcapacity by multiplying a propertys estimated market value times the propertys class rate which is determined byits 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 capacityto determine the taxamount. 94 Source: Washington County Taxation Division Note: The Citys direct propertytax rate is determined bydividing the amount oftaxlevied bythe City Council bythe Citys total tax capacity. 'Overlapping rates are those oflocal and county governments that applyto properlyowners within the City of Hugo. Notall overlapping rates applyto all CityofHugo propertyowners. Although the property tax rates applyto all city property owners, some cityproperties lie within the geographical boundaries ofdifferent school and watershed districts. 95 Schedule 6 CITY OF HUGO, MINNESOTA PROPERTY TAX RATES AND TAX LEVIES DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (Percent of Tax Capacity) City of Hugo Overlapping Rates Operating Debt Total Operating Debt Total Range of Tax Rates Tax Service City Tax Service City for Independent Range of Tax Rates Special Range of Total Fiscal Rate Tax Rate Tax Rate Rate Tax Rate Tax Rate School Districts Washington for Taxing Direct and Ovelapping Year Rural Rural Rural Urban Urban Urban 624, 831, 832 & 834 County Watershed Districts Districts Tax Rates 2007 26.912% 5.242% 32.154 % 29.902% 5.242% 35.144 % 12.299 - 22.628 % 25.673 % 1.315 - 4.580 % 2.331 % 73.772 - 90.356 2008 27.875 3.968 31.843 30.973 3.968 34.941 15.137 - 22.691 25.936 1.608 - 4.532 2.367 76.891 - 90.467 2009 28.660 2.598 31.258 31.845 2.598 34.443 13.455 - 24.480 26.371 1.545 - 4.002 2.351 74.980 - 91.647 2010 27.975 3.191 31.166 31.083 3.191 34.274 12.895 - 26.389 27.775 1.511 - 4.153 2.558 75.905 - 95.149 2011 27.874 3.265 31.139 30.971 3.265 34.236 15.411 - 34.330 29.772 1.725 - 4.275 2.664 80.711 - 105.277 2012 29.403 3.828 33.231 32.669 3.828 36.497 17.331 - 38.360 31.939 2.340 - 4.906 2.909 87.750 - 114.611 2013 29.326 3.927 33.253 32.585 3.927 36.512 22.018 - 37.105 34.225 2.517 - 5.307 3.163 95.176 - 116.312 2014 30.152 2.915 33.067 33.502 2.915 36.417 23.150 - 39.770 32.811 2.387 - 5.066 3.127 94.542 - 117.191 2015 30.612 2.304 32.916 34.013 2.305 36.318 21.124 - 34.496 30.186 2.185 - 4.769 2.826 89.237 - 108.595 2016 30.972 1.910 32.882 34.413 1.910 36.323 19.849 - 34.107 30.564 2.192 - 5.111 3.195 88.682 - 109.300 Source: Washington County Taxation Division Note: The Citys direct propertytax rate is determined bydividing the amount oftaxlevied bythe City Council bythe Citys total tax capacity. 'Overlapping rates are those oflocal and county governments that applyto properlyowners within the City of Hugo. Notall overlapping rates applyto all CityofHugo propertyowners. Although the property tax rates applyto all city property owners, some cityproperties lie within the geographical boundaries ofdifferent school and watershed districts. 95 CITY OF HUGO, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2016 (1) Source: Washington County Taxation Division SCHEDULE? 2007 Percentage Taxable Percentage Tax Taxpayers (1) Capacity Rank NSP/Xcel Energy $ 359,056 1 Wilson Tool International 211,040 2 Victor Hugo Blvd LLC 164,366 3 Schwieters Properties 129,316 4 Martin Prop LLC 82,356 5 Lake Area Bank 69,182 6 14688 Everton LLC 63,728 7 Team Two Investments LLC 60,328 8 JWF Victor LLC Etal 58,816 9 4L LLC 57,238 10 Victor Marketplace Holding 0.48 POA -Scherer LLC 0.45 Pulte Homes of MN Corp Woodlands Toy Store LP E & G Development LLC 0.41 Nor -Lakes Holding Co LLC 0.40 POAC Investments LLC TOTAL $ 1,255,426 4 (1) Source: Washington County Taxation Division SCHEDULE? 2007 Percentage Percentage of Total City of Total City Tax Taxable Tax Capacity Tax Capacity Value Capacity Rank Value 2.51 % $ 254,296 1 2.01 % 1.48 203,340 2 1.60 1.15 0.90 139,492 3 1.10 0.58 0.48 0.45 0.42 0.41 0.40 91,404 4 0.72 85,379 5 0.67 82,382 6 0.65 82,156 7 0.65 75,525 8 0.60 56,328 9 0.44 52,310 10 0.41 8.78 % $ 1,122, 612 8.85 % M This Page Left Blank Intentionally 97 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 2007 $ 4,652,080 $ 4,424,824 $ 4,282,780 96.79 $ 141,455 2008 5,190,509 4,947,318 4,790,304 96.83 153,239 2009 5,330,059 4,985,828 4,842,016 97.12 139,352 2010 5,218,217 4,932,445 4,742,253 96.14 185,110 2011 4,839,717 4,528,339 4,363,947 96.37 157,498 2012 4,960,596 4,950,356 4,860,849 98.19 88,124 2013 4,750,286 4,740,403 4,659,447 98.29 77,108 2014 4,940,809 4,931,497 4,862,330 98.60 64,552 2015 5,717,021 5,703,010 5,654,146 99.14 35,535 2016 5,634,071 5,620,517 5,588,004 99.42 (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 Tax Increment Districts. 97 Schedule 8 Delinquent Total Collections to Date Total Taxes As A Percentage Delinquent % Of Total Amount of Net Levy Taxes (2) Net Tax Levy 4,424,235 99.99 $ 589 0.01 4,943,543 99.92 3,775 0.08 4,981,368 99.91 4,460 0.09 4,927,363 99.90 5,082 0.10 4,521,445 99.85 6,894 0.15 4,948,973 99.97 1,383 0.03 4,736,555 99.92 3,848 0.08 4,926,882 99.91 4,615 0.09 5,689,681 99.77 13,329 0.23 5,588,004 99.42 32,513 0.58 CITY OF HUGO, MINNESOTA WATER AND SANITARY SEWER CHARGES BY CUSTOMER LAST TEN FISCAL YEARS Water (in millions of gallons) Type of Customer 2016 2015 2014 2013 2012 2011 Residential 275.255 249.290 248.144 282.765 299.950 243.366 Commercial Service 15.121 12.334 11.318 11.251 11.616 11.090 Industrial Service 10.466 9.534 7.599 7.166 7.211 7.159 Irrigation Service 56.511 72.262 54.870 83.198 104.747 73.703 Institutional Service 1.624 1.701 1.375 1.720 1.926 1.465 Total gallons 358.977 345.121 323.306 386.100 425.450 336.783 Total direct rate per 1,000 gallons $ 2.525 $ 2.515 $ 2.519 $ 2.553 $ 2.468 $ 2.553 Sanitary Sewer ( in millions of gallons) Type of Customer 2016 2015 2014 2013 2012 2011 Residential 275.255 249.290 248.144 282.765 299.950 243.366 Commercial 15.121 12.334 11.318 11.251 11.616 11.090 Industrial 10.466 9.534 7.599 7.166 7.211 7.159 Institutional 1.624 1.701 1.375 1.720 1.926 1.465 Total gallons 302.466 272.859 268.436 302.902 320.703 263.080 Total direct rate per 1,000 gallons $ 3.641 $ 4.049 $ 3.901 $ 3.447 $ 3.435 $ 4.279 Schedule 9 2010 2009 2008 2007 252.179 271.084 271.084 243.067 243.067 245.376 245.376 11.861 11.861 11.462 11.715 7.989 6.644 6.487 8.291 6.644 7.539 8.291 2.025 7.539 89.290 106.387 72.778 290.678 93.495 264.830 2.025 263.295 1.488 $ 3.647 1.757 2.391 361.842 397.065 337.608 356.790 $ 2.477 $ 2.541 $ 2.593 $ 2.542 2010 2009 2008 2007 252.179 271.084 243.067 245.376 11.861 11.462 11.715 7.989 6.487 6.644 8.291 7.539 2.025 1.488 1.757 2.391 272.552 290.678 264.830 263.295 $ 3.647 $ 3.019 $ 3.282 $ 2.932 100 CITY OF HUGO, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Other Governmental Activities Debt 101 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 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 2016 1,766,676 1,102,916 4,362,258 7,231,850 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. 101 Schedule 10 Business -Type Activities 0.03 $ Total Total Utility Business Primary Percentage Revenue Activities Government of Personal Bonds Debt Debt Income $ 2,305,000 $ 2,305,000 $ 2,120,000 2,120,000 1,925,000 1,925,000 Per Capita 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 0.01 613 7,231,850 N/A 496 102 CITY OF HUGO, MINNESOTA RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS General Bonded Debt Outstanding 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. 103 Special Tax Lease Certificates Capital Tax Utility Fiscal Assessment Increment Revenue of Improvement Abatement Revenue Year Bonds Bonds Bonds Indebtedness Bonds Bonds Bonds Total 2007 $ 1,237,690 $ 1,560,000 $ 2,090,000 $ 180,000 $ 2,226,745 $ 7,825,356 $ 2,305,000 $ 17,424,791 2008 1,187,339 1,465,000 1,910,000 2,084,974 7,763,790 2,120,000 16,531,103 2009 2,044,406 1,360,000 1,720,000 1,943,326 9,212,261 1,925,000 18,204,993 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 2016 1,766,676 1,102,916 4,362,258 7,231,850 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 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. 103 Schedule 11 104 Net Less: General Percentage Available Bonded of Actual in Debt Debt Market Value Per Service Outstanding of Property Capita $ (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 (2,847,900) 4,383,950 0.29% 301 104 Schedule 12 CITY OF HUGO, MINNESOTA COMPUTATION OF DIRECT AND INDIRECT GENERAL OBLIGATION BONDED DEBT AND LEGAL DEBT MARGIN December 31, 2016 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable (a) Debt Debt repaid with property taxes Independent School District #624 $ 86,195,000 Independent School District #831 162,965,000 Independent School District #832 53,720,033 Independent School District #834 113,990,000 Other debt Washington County 177,010,000 Regional Transit 189,226,614 Subtotal, overlapping debt 14.28% $ 3.28% 4.37% 0.88% 12, 308, 646 5,345,252 2,347,565 1,003,112 5.12% 9,062,912 0.48% 908,288 30,975,775 City direct debt 7,231,850 7,231,850 Total direct and overlapping debt $ 38,207,625 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. 105 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 2016 2015 2014 2013 2012 $ 42,502 $ 43,322 $ 36,634 $ 34,940 $ 36,356 558 $ 41,944 1.31% 809 1,094 1,391 1,767 $ 42,513 $ 35,540 $ 33,549 $ 34,589 1.87% 2.99% 3.98% 4.86% 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 special assessment, tax increment and tax abatement bonds. 106 Schedule 13 Legal Debt Margin Calculation for the Fiscal Year 2016 Taxable Market Value $ 1,416,731,700 Debt Limit (3% of market value) 42,501,951 Debt applicable to limit: General obligation bonds 1,100,000 Less: Amount set aside for repayment of general obligation debt (542,268) Total net debt applicable to limit 557,732 Legal debt margin $ 41,944,219 2011 2010 2009 2008 2007 $ 39,099 $ 42,332 $ 43,873 $ 43,092 $ 29,411 2,179 2,537 2,891 3,263 3,740 $ 36,920 $ 39,795 $ 40,982 $ 39,829 $ 25,671 5.57% 5.99% 6.59% 7.57% 107 12.72% 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 financial statements. WE Utility Revenue Bonds Net Fiscal Gross Operating Available Debt Service (3) Year Revenue (1) Expenses (2) Revenue Principal Interest Coverage 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 2016 3,024,094 1,918,625 1,105,469 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 financial statements. WE 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 109 PERSONAL INCOME PER CAPITA STATE CITY (thousands of PERSONAL UNEMPLOYMENT UNEMPLOYMENT YEAR POPULATION (1) dollars) INCOME (2) RATE (3) RATE (3) 2007 12,022 571,033 47,499 4.8 4.1 2008 12,573 615,235 48,933 6.6 6.0 2009 13,140 603,888 45,958 7.5 7.0 2010 13,332 628,644 47,153 7.0 6.1 2011 13,536 683,609 50,503 5.7 5.2 2012 13,739 715,761 52,097 5.3 4.7 2013 13,878 736,214 53,049 4.5 3.9 2014 14,201 795,554 56,021 3.8 3.1 2015 14,352 834,755 58,163 3.7 3.0 2016 14,576 N/A N/A 4.1 3.4 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 109 CITY OF HUGO, MINNESOTA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 2016 (1) Telephone survey of individual employers, May 2017 (2) Telephone survey of individual employers, April 2007 (3) City staff estimate based on Metropolitan Council estimate of employment 110 SCHEDULE16 2007 Percentage of Total City Employees (2) Rank Employment (3) 700 1 32.8% 228 2 10.7% Percentage of 3 5.4% 80 Total City Employer Employees (1) Rank Employment (3) Wilson Tool 405 1 14.4% JL Schwieters 195 2 6.9% Schwieters Companies Inc 119 3 4.2% Lametti & Sons, Inc. 130 4 4.6% Festival Foods 80 5 2.8% Independent School District No. 624 66 8 2.4% Blue Heron Grille 65 7 2.3% Northland Pallet 61 6 2.2% Glamos Wire/Donner Industries 45 9 1.6% Wild Wings Game Farm 35 10 1.2% Pearson Mechanical Granger's Inc. Imperial Tool, Inc. Nor -Lakes Services Industrial Painting Specialists (1) Telephone survey of individual employers, May 2017 (2) Telephone survey of individual employers, April 2007 (3) City staff estimate based on Metropolitan Council estimate of employment 110 SCHEDULE16 2007 Percentage of Total City Employees (2) Rank Employment (3) 700 1 32.8% 228 2 10.7% 115 3 5.4% 80 4 3.7% 40 6 1.9% 45 5 2.1% 30 7 1.4% 25 8 1.2% 23 9 1.1% 20 10 0.9% This Page Left Blank Intentionally CITY OF HUGO, MINNESOTA FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS Function 2016 2015 2014 2013 2012 2011 City Administrator 1.00 1.00 1.00 1.00 1.00 1.00 City Clerk 1.00 1.00 1.00 1.00 1.00 1.00 Finance 2.00 2.00 2.00 2.00 2.00 2.00 Planning and Zoning 1.00 1.00 1.00 1.00 1.00 1.00 General Government Buildings 0.00 0.00 0.00 0.00 0.00 0.36 Engineering 1.00 1.00 1.00 1.00 1.00 1.00 General Government 6.00 6.00 6.00 6.00 6.00 6.36 Fire 2.50 2.50 2.50 2.50 2.50 2.50 Building Inspections 3.00 3.00 3.00 3.00 3.00 3.69 Public Safety 5.50 5.50 5.50 5.50 5.50 6.19 Streets and Roadways 6.34 6.34 6.34 6.34 6.34 6.34 Public Works 6.34 6.34 6.34 6.34 6.34 6.34 Parks 4.52 4.52 4.52 4.52 4.52 4.52 Parks and Recreation 4.52 4.52 4.52 4.52 4.52 3.09 Community Development 1.50 1.50 0.50 0.50 0.50 2.00 1.50 1.50 0.50 0.50 0.50 2.00 Total Governmental Activities 23.86 23.86 22.86 22.86 22.86 25.41 Water Utility 1.33 1.33 1.33 1.33 1.33 1.33 Sewer Utility 1.33 1.33 1.33 1.33 1.33 1.33 Total Business Activities 2.66 2.66 2.66 2.66 2.66 2.66 Totals for Organization 26.52 26.52 25.52 25.52 25.52 28.07 Source: City's Adopted Budgets 111 Schedule 17 2010 2009 2008 2007 2.00 1.95 1.91 1.00 1.00 1.00 1.00 1.00 2.00 2.00 1.00 1.00 1.00 1.00 2.00 1.75 0.50 0.50 0.50 0.50 1.00 1.00 1.00 1.00 7.50 7.45 7.41 6.25 2.50 2.50 2.50 2.50 4.00 4.00 4.00 5.75 6.50 6.50 6.50 8.25 6.34 6.34 6.34 6.34 6.34 6.34 6.34 6.34 3.09 3.09 2.29 1.25 3.09 3.09 2.29 1.25 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 25.43 25.38 24.54 24.09 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 2.66 2.66 2.66 2.66 28.09 28.04 27.20 26.75 112 113 CITY OF HUGO, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program 2016 2015 2014 2013 2012 2011 Planning and Zoning Conditional use permits 3 5 2 5 1 6 Minor subdivisions 2 0 1 1 0 4 Plats/Planned unit developments 12 9 4 9 1 2 Rezonings 0 0 0 0 0 1 Site plans 2 3 4 2 5 3 Variances 5 5 10 4 3 2 Fire Total emergency responses 238 467 607 601 573 537 EMS responses 120 317 478 440 356 371 Fire responses 118 150 129 161 217 166 Building Inspections Residential permit valuations 30,359 20,664 27,140 12,398 18,083 11,160 (thousands of dollars) Commercial permit valuations 4,074 928 13,759 5,246 10,482 783 (thousands of dollars) New dwelling units 108 69 49 52 89 50 Water Utility Number of customers 3,352 3,259 3,195 3,163 3,109 3,077 Average daily consumption 983 946 886 1,058 1,166 923 (thousands of gallons) Sanitary Sewer Utility Number of customers 3,490 3,397 3,331 3,298 3,248 3,119 Average daily flow 829 748 735 830 879 721 (thousands of gallons) Sources: Various City Department's annual budget workload measurements 113 Schedule 18 2010 2009 2008 2007 6 4 2 10 1 1 1 1 3 3 8 5 1 0 1 1 3 0 5 4 6 4 11 12 609 550 496 433 437 402 362 315 172 148 134 118 16,254 26,625 59,953 34,132 1,042 2,739 6,925 5,244 86 147 184 250 2,973 2,880 2,774 2,611 991 1,088 925 978 3,098 3,005 2,894 2,732 747 796 726 721 114 Function/Program Fire Stations Public Works Bituminous streets (miles) Gravel streets (miles) Street lights Storm sewer (miles) Park & Recreation Acres of parkland Number of parks Water Utility Miles of watermain Number of fire hydrants Sanitary Sewer Utility Miles of sanitary sewer Sources: Various City Department's annual financial report statistics and budget workload measurements 115 Schedule 19 CITY OF HUGO, MINNESOTA CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 1 1 1 1 1 1 1 1 1 1 74 72 71 70 70 69 68 68 68 68 20 20 20 20 20 21 21 21 21 21 932 926 918 910 910 910 899 881 869 845 37 36 35 33 33 33 33 33 33 32 390.7 389.5 385.0 385.0 385.0 385.0 385.0 385.0 260.0 260.0 16 15 14 14 14 14 14 14 13 13 59 58 57 56 55 55 54 54 54 54 699 688 680 668 666 661 653 640 631 625 53 53 52 51 51 51 50 50 50 50 Sources: Various City Department's annual financial report statistics and budget workload measurements 115 CITY OF HUGO, MINNESOTA OTHER REPORT SECTION December 31, 2016 This Page Left Blank Intentionally A - --- 5 S D C I A T E S. L 7 D. uertined Public ArC011l(jtants and Qan$ultants M carriers Qf Anwean kwhahjto of CPW& RWafa Canpar ies Rock -G Section, MkToesoto society of CPK.9 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, 2016, and the related notes to the financial statements which collectively comprise the City of Hugo, Minnesota's basic financial statements, and have issued our report thereon dated June 14, 2017. 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. 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. 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. , .P Am���.o.QSte. Minneapolis, Minnesota June 14, 2017 lvvin CAfim Me * 75M HV way 55 t Sub 334 • MinroWeb, MN 65V7 a PH M2) M-1455 • FAX i4'52j 724-6603 Offices In; Reed Wog ❑rvd Roccheitei www.undhschafer.com cd knueGKk5ok A Skoa ALsac gthcn of kidependent Arcorntwg fam This Page Left Blank Intentionally City of Hugo Claims July 17, 2017 G. 1 Vendor Invoice Amount Description Department Anoka Countp S17-101 $ 50.00 Tour de Hugo Special Event Application Fee Parks Dept Bound Tree Medical LLC 82534196 $ 283.98 AED Batteries Fire Dept Century Link 651653-1154 $ 57.33 SCADA Lines Water & Sewer Century Link 651 429-3212 $ 68.83 Fire Station Phone Lines Fire Dept Century Link 651426-8763 $ 60.74 911 Ememency Line Administration Cities Dicital 40618 $ 2,924.10 Laserfiche Project - Document Scanning Administration Clarey's Safety Equipment Inc 172250 $ 100.00 Monthly Calibration of Gas Monitors Fire Dept Comcast 6/26/2017 $ 150.92 Business Internet (thru August 5) Public Works Comcast 6/18/2017 $ 148.77 Business Internet (thru July 27) Fire Dept Dan's Towing 68366 $ 125.00 Towing - Antique Fire Engine Fire Dept Earl F. Andersen 0114810 -IN $ 190.60 Street Sign Plates Street Dept Earl F. Andersen 0114834 -IN $ 1,240.00 Traffic Cones Street De;: t Envirotech Services Inc CD201716043 $ 10,762.14 Chloride Application (Dust Control Project) Street Dept Finance & Commerce Inc 743344684 $ 270.42 Ad for Bids - Beaver Bonds Sewer Rehabilitation Pro;ect Sewer UtiIit:; Fire Safety USA Inc 101793 $ 315.00 Ladder Fire Dept Forest Lake Napa June $ 230.12 Auto Parts and Shop Supplies Various Frattallone's Hardware Store 112324 $ 1.29 Irrigation Hardware - CSAH 8 Street Dept Frattallone's Hardware Store 112353 $ 2.28 Hardware - Well No. 6 Water Utility Gene's Disposal Service Inc 307985 $ 1,292.48 June Waste Hauling - PW Facility Public Works Gene's Disposal Service Inc 307985 $ 148.60 June Waste Hauling - Fire Station Fire Dept Gene's Disposal Service Inc 307985 $ 66.34 June Waste Hauling - City Hall Gen Gov't Bldgs Gopher State One Call 7060456 $ 400.95 June Service Charges Water & Sewer Hawkins Inc 4106156 RI $ 4,029.93 Water Chemicals Water Utility Home Depot Credit Services 7022377 $ 3.77 Lumber Parks Dei t Hotsy Equipment of Minnesota 56087 $ 652.18 Bulk Soap, Parts & Repairs for Washbay Public Works Jimmy's Johnnys Inc 118478 $ 194.00 Portable Toilet Rental - Lions Park Parks Dept Jimmy's Johnnys Inc 118479 $ 151.00 Portable Toilet Rental - Oakshore Park Parks Dept Jimmy's Johnnys Inc 118480 $ 151.00 Portable Toilet Rental - Oneka Lake Park Parks Dept Jimmy's Johnnys Inc 118481 $ 127.00 Portable Toilet Rental - Beaver Ponds Park Parks Dept Jimmy's Johnnys Inc 118482 $ 127.00 Portable Toilet Rental - Diamond Point Park Parks Dept Jimmy's Johnnys Inc 118483 $ 127.00 Portable Toilet Rental - Frog Hollow Park Parks Dept Jimmy's Johnnys Inc 118484 $ 508.00 Portable Toilet Rental - Hanifl Park Parks Dept Jimmy's Johnnys Inc 118485 $ 127.00 Portable Toilet Rental - Val'ean Park Parks Dept Jimmy's Johnnys Inc 118486 $ 127.00 Portable Toilet Rental - Arbre Park Parks Dept Jimmy's Johnnys Inc 118487 $ 127.00 Portable Toilet Rental - Heritage Ponds Park Parks Dept Jimmy's Johnnys Inc 118488 $ 67.00 Portable Toilet Rental - Compost Site Recycling Jimmy's Johnnys Inc 118489 $ 127.00 Portable Toilet Rental - McCollar Park Parks Dept Kath Fuel Oil Service Co. 12320094 $ 5,216.70 June Unleaded Gas & Diesel Purchases Various Loffler Companies Inc 2558953 $ 253.80 July Coder Service Payment Administration Menards 56252 $ 136.67 Fire Department Supplies Fire Dept Metering & Technology Solutions 9332 $ 10,218.00 Water Meters & Hardware Water Utility Metering & Technology Solutions 9333 $ 1,450.00 Water Meters & Hardware Water Utility Midwest Events 758 $ 1,045.00 Tour de Hugo Advertising Parks Dept Minnetonka Community Education Tour de Hugo $ 75.00 Vendor Fair - Tour de Hugo Parks Dept M -R Sign Cc Inc 196179 $ 74.15 All Way Signs Street Dept North Country Auto Body & Mechanical 17062 $ 594.25 Repairs - Antique Fire En?ine Fire Dept Oxygen Service Company 3377668 $ 20.40 Welding Supplies Public Works Performance Plus LLC 4744 LF $ 297.00 Pre -Placement Medical & Screenings - Determan Fire Dept Rapid Press Printing & Co,,)y Center Inc 48752 $ 88.00 Tour de Hugo Supplies Parks De_at Ricoh USA, Inc 99013960 $ 123.18 Copier Lease Payment Public Works Ricoh USA, Inc 99013960 $ 13.00 Overae Charges Public Works SiteOne Landscape Supply LLC 81289007 $ 24.50 Irrigation Hardware Parks Dept Smith, Schafer & Associates 50170 $ 1,625.00 2016 Audit Interim Billinc Finance Dept Smith, Schafer & Associates 50170 $ 1,050.00 Accounting Assistance Finance Dept S! Cloud State University Registration $ 215.00 MCAA Registration - Michele Lindau City Clerk Verizon Wireless 9787750093 $ 40.02 Cellular Phone Charges Fire Dept !Washington County 123451 $ 4,100.82 800 Radio User Fees - April thru June Fire Dept G'Vashington County Sheriff 124241 $ 7.624.11 Good Neighbor Days Security Law Enforcement Total Claims for July 17, 2017 $ 59,820.37 Page 1 MINNESOTA LAWFUL GAMBLING LG220 Application for Exempt Permit 4/17 Page 1 of 2 An exempt permit may be issued to a nonprofit Application Fee (non-refundable) organization that: Applications are processed in the order received. If the application conducts lawful gambling on five or fewer days, and is postmarked or received 30 days or more before the event, the awards less than $50,000 in prizes during a calendar application fee Is $100; otherwise the fee is $150. year. If total raffle prize value for the calendar year will be Due to the high volume of exempt applications, payment of $1,500 or less, contact the Licensing Specialist assigned to additional fees prior to 30 days before your event will not expedite your county by calling 651-539-1900. service, nor are telephone requests for expedited service accepted. ORGANIZATION INFORMATION Organization Previous Gambling Name: Family Pathways Permit Number: Minnesota Tax ID Federal Employer ID Number, if any. 27913 Number (FEIN), if any: 41-1332828 Mailing Address: 6413 Oak St City: North Branch State: MN Zip: 55056 County: Chisago Name of Chief Executive Officer (CEO): Rich Smith Daytime Phone: 651.674.8040 Email: rich_Ofamilwathways.ora NONPROFIT STATUS Type of Nonprofit Organization (check one): Fraternal = Religious Veterans Other Nonprofit Organization Attach a copy of one of the following showing proof of nonprofit status: (DO NOT attach a sales tax exempt status or federal employer ID number, as they are not proof of nonprofit status.) 0 A current calendar year Certificate of Good Standing Don't have a copy? Obtain this certificate from: MN Secretary of State, Business Services Division Secretary of State website, phone numbers: 60 Empire Drive, Suite 100 www.sos.state.mn.0 St. Paul, MN 55103 651-296-2803, or toll free 1-877-551-6767 �✓ IRS income tax exemption (501(c)) letter in your organization's name Don't have a copy? To obtain a copy of your federal income tax exempt letter, have an organization officer contact the IRS toll free at 1-877-829-5500. IRS - Affiliate of national, statewide, or international parent nonprofit organization (charter) If your organization falls under a parent organization, attach copies of both of the following: 1. IRS letter showing your parent organization is a nonprofit 501(c) organization with a group ruling, and 2. the charter or letter from your parent organization recognizing your organization as a subordinate. GAMBLING PREMISES INFORMATION Name of premises where the gambling event will be conducted (for raffles, list the site where the drawing will take place): Wild Wings of Oneka Physical Address (do not use P.O. box): 14814 Irish Ave City or Township: Hugo Zip: 55038 County: Washington Date(s) of activity (for raffles, indicate the date of the drawing): September 29 2017 Check each type of gambling activity that your organization will conduct: Bingo Paddlewheels Pull -Tabs =Tipboards Raffle (total value of raffle prizes awarded for the calendar year, including this raffle: ; ) Gambling equipment for bingo paper, bingo boards, raffle boards, paddlewheels, pull -tabs, and Upboards must be obtained from a distributor licensed by the Minnesota Gambling Control Board. EXCEPTION: Bingo hard cards and bingo ball selection devices may be borrowed from another organization authorized to conduct bingo. To find a licensed distributor, go to www.mn.gov/gcb and click on Distributors under List of Licensees, or call 651-539-1900. L6220 Application for Exempt Permit 4/17 Page 2 of 2 LOCAL UNIT OF GOVERNMENT ACKNOWLEDGMENT (required before submitting application to the Minnesota Gambling Control Board) CITY APPROVAL COUNTY APPROVAL for a gambling premises for a gambling promises located within city limits located in a township =The application is acknowledged with no waiting period. [=]The application is acknowledged with no waiting period. =The application is acknowledged with a 30 -day waiting he application is acknowledged with a 30 -day waiting period, and allows the Board to issue a permit after 30 days period, and allows the Board to issue a permit after (60 days for a 1st class city). 30 days. =The application is denied. a application is denied. Print City Name: Print County Name: Signature of City Personnel: Signature of County Personnel: Title:, _ Date: Title: Date: Information, the Board may not be able to TOWNSHIP (if required by the county) which law or legal order authorizes a new use or On behalf of the township, I acknowledge that the organization address which will remain public. Private data is applying for exempted gambling activity within the township The city or county must sign before limits. (A township has no statutory authority to approve or E Submitting application to the deny an application, per Minn. Statutes, section 349.213.) Gambling Control Board. print Township Name: requested, the Board will be able to process the Signature of Township Officer: Title: Date: CHIEF EXECUTIVE OFFICER'S SIGNATURE (required) The information provided in this application is complete and accurate to the best of my knowledge. I acknowledge that the financial report will be completed and returned to the Board within 30 days of the event date. Chief Executive Officer's Signature: Date: (Signature must be CEO's signature; designee may not sign) Print Name: REQUIREMENTS MAIL APPLICATION AND ATTACHMENTS Complete a separate application for: Mall application with: • all gambling conducted on two or more consecutive days, or a copy of your proof of nonprofit status, and • all gambling conducted on one day. application fee (non-refundable). If the application is Only one application is required if one or more raffle drawings are postmarked or received 30 days or more before the event, conducted on the same day. the application fee is $100; otherwise the fee is $150. Financial report to be completed within 30 days after the Make check payable to State of Minnesota. gambling activity is done: A financial report form will be mailed with your permit. Complete To: Minnesota Gambling Control Board 1711 West County Road B, Suite 300 South and return the financial report form to the Gambling Control Roseville, MN 55113 Board. Questions? Your organization must keep all exempt records and reports for Call the Licensing Section of the Gambling Control Board at 3-1/2 years (Minn. Statutes, section 349.166, subd. 2(f)). 651-539-1900. Data privacy notice: The information requested application. Your organization's name and ment of Public Safety; Attorney General; on this form (and any attachments) will be used address will be public information when received Commissioners of Administration, Minnesota by the Gambling Control Board (Board) to by the Board. All other information provided will Management & Budget, and Revenue; Legislative determine your organization's qualifications to be private data about your organization until the Auditor, national and International gambling be involved in lawful gambling activities in Board issues the permit. When the Board issues regulatory agencies; anyone pursuant to court Minnesota. Your organization has the right to the permit, all information provided will become order; other individuals and agencies specifically refuse to supply the information; however, if public. If the Board does not issue a permit, all authorized by state or federal law to have access your organization refuses to supply this Information provided remains private, with the to the information; individuals and agencies for Information, the Board may not be able to exception of your organization's name and which law or legal order authorizes a new use or determine your organization's qualifications and, address which will remain public. Private data sharing of information after this notice was as a consequence, may refuse to Issue a permit. about your organization are available to Board given; and anyone with your written consent. If your organization supplies the information members, Board staff whose work requires requested, the Board will be able to process the access to the information; Minnesota's Depart - This form will be made available In alternative format (i.e. large print, braille) upon request. An equal opportunity employer 2869 �S+ I]epRrtment of the Tran r l�?nlartrn! e+�enna!¢, " P.O, Box 2508 Cincinnati OH 45201 FAMILY PATHWAYS i In reply refer ta.a 024$132325 May 05, 20I.; LTR 416'8C EO 41-1332825 ; i 0009.80:00 00'020084 BODC; TE Family Pathways Central Office 6413 teak St North Branch, MN 55056 Employer Identification Number: 41-1332828 Person to Contact: Paul. M Perry Toll Free Telephone Numbert 1-877-829-550.0 Dear Taxoayart This is in response to your Apr. 26, 2011, request for information regarding your tax-exempt status. Our records indicate that you were recognized as exempt.under section 5a1(c)(3) of the Internal revenue Code in a determination letter issued in December 1978, Our records also indicate than you are not a private foundation within the meaning of section Sa9Ca) of the Code because you are described in sectionCs) 509(a)(1) and 170(b)ClJ(A)(vi). Donors may deduct 'contributions to you as provided in section 170 of the Cade. Bequests, lega ies, devises, transfers, or gifts to you or for your use are deduct3g-le for Federal estate and gift tax purposes if they meet the applicable provisions of sectlons 2055, 2106, and 2522 of the Code. Please refer to our website www.irs.gov/eo for information -regarding filing requirements. Specifically$ section 6D33(j) of the Code provides that failure to file an annual information return for three consecutive years results in revocation of tax-exempt ste'tus as 'of the filing due data of,the third return for organizations required to file: We will pu-bush a list of organizations whose tax-exempt status was ravaked under section 6033(j) of the -Cade on aur- websi.ts beginning in early 2011. Sporting Clays Benefit Family Pathways—Helping people meet their basic needs by providing a safety -net of essential services. Gather your friends for a fun afternoon to benefit Family Pathways. Be a part of this vital community program. RESERVE YOUR TEAM OR SHOOTING STATION TODAY! / For more information, contact Michelle at michlet@familypathways.org, 651.674.8040 or go online to familypathways.org • Registration Fees: • $95 / Shooter $85 / Sponsor's Shooter Your Registration Includes: . 2 Boxes of Steel Shells (Steel Required) . 50 Birds /10 Stations Sporting Clay Shoot • Individual & Team "Top Gun" Award . Hors d'oeuvres After Shoot . Gun Raffle Contests: . White Clay Raffle Contest . Bonus "Duck Flurry" Shooting Station Much More! Hunger Relief Domestic Violence Youth ami r, PATHWAYS Aging Services Thrift Stores Sporting Clays Benefit Family Pathways' Aging services SPONSORSHIP LEVELS Providing services to older adults and their families to help them maintain ❑Awards Reception Sponsor --$1,500 independence. 2 Shooters Registration Fees: • $95 / Shooter $85 / Sponsor's Shooter Your Registration Includes: 2 Boxes of Steel Shells (Steel Required) • 50 Birds /10 Stations Sporting Clay Shoot • Individual & Team "Top Gun" Award Hors d'Oerves After Shoot • Gun Raffle Contests White Clay Raffle Contest Bonus "Duck Flurry" Shooting Stz now`Michelle at 651 647-8040 or michellet@familypathways.org or go to familypathways.org Large sign at Awards Reception Logo on Family Pathways' Website Exclusive Thrift Store Recognition (1 month) Product Display (if desired) Prominent Logo Recognition in both Shooter's Course Guides Recognition in all Event Press Releases & Marketing Materials ❑ Shotgun Raffle Sponsor -- $1,000 Raffle Sponsor Sign at Registration & Award Reception Logo on Family Pathways' Website Prominent Logo Recognition in both Shooter's Course Guides Recognition in all Event Press Releases & Marketing Materials ❑ Jungle Sporting Clays Course -- $800 ❑ Oaks Sporting Clays Course -- $800 Prominent Recognition in Shooter's Course Guides Logo Sign on Course Recognition at all 10 Jungle or Oaks Shooting Stations Recognition in Event Press Releases & Marketing Materials ❑ Duck Flurry Sponsor -- $600 Prominent Recognition in Shooter's Course Guides Logo Sign at Shooting Station Recognition in Event Press Releases & Marketing Materials ❑ Shooting Station Sponsor -- $250 Sign at Shooting Station Logo in Shooter's Course Guide Listing in Marketing Matierals YES, sign me up! Return to michellet@familypathways.org or Family Pathways, Attn: Clays, 6413 Oak St. North Branch, MN 55056 Company Name/Contact Address Telephone _ State Email Method of Payment ❑ Check Enclosed ❑ Credit Card Name on Card Card # Zip ❑ Please invoice me Expires Hunger Relief Domestic Violence Youth fMa,' ttj PATH WAYS Aging Services Thrift Stores 3 -Digit Code Hunger Relief Domestic Violence Sporting Clays Benefitfa,'M Youth PATHWAYS Aging Services Thrift Stores a m i ly Pathways SHOOTER REGISTRATION M AM Friday, September 29, 2017 $95 per Shooter ($110 event day) $85 Sponsor's Shooters ($95 event day) Bring your employees, clients, friends, family, and join us for a fun afternoon! All experience levels w have a great time. New station for beginners. Two boxes of 12 or 20 gauge steel loads will be provided. Additional shells may be purchased from the club. No lead allowed. Eye/ear protection is required—will be provided if needed. (Family Pathways reserves the right to use photos/video taken at event for any publicity purpose) Location: Wild Wings of Oneka 14841 Irish Ave N Hugo, MN 55038 Registration Opens: 1:00pm Safety Briefing: 1:45pm Shoot Begins: 2:00pm Your Registration Includes: • 2 Boxes shells (steel) per shooter • 10-Station/50-Shot Sporting Clay Shoot • Individual "Top Gun" award • Top team award • Hors d'oeuvres after shoot pmww,— Drawing for shotgun Contests: *White Clay Birds Raffle Contest *Bonus "Duck Flurry" Shooting Station Shooting Station for Beginners 5 targets/$10 Questions? Michelle at 651.674.8040 or michellet@familypathways.org YES, sign me up! Return to michellet@familypathways.org or Family Pathways, Attn: Sporting Clays, 6413 Oak St. North Branch, MN 55056 Team Captain Name: Address State Zip Shooters # x $95 = Email Phone ($110 event day) Shooter 2 Name: Address State Zip Email Phone Shooter 3 Name: Address State Zip Email Phone Shooter 4 Name: Address State Zip Email Phone Shooter 5 Name: Address Email State Zip Phone Sponsor rate x $85 = ($95 event day) Total registration $39 tax deductible contribution I am unable to attend but would like to be part of the work of Family Pathways! Please accept my donation of: ❑ $25 ❑ $50 ❑ $100 ❑ $150 Please make check payable to Family Pathways Sporting Clays or include credit card information (visa, MC/Discover/AmEx) Name on Card Card # Expires 3 -Digit Code Agenda Number CITY OF HUGO COMMUNITY DEVELOPMENT DEPARTMENT Memorandum TO: Bryan Bear, City Administrator FROM: Rachel Leitz, Community Development Assistant SUBJECT: Nathan Matchey. Encroachment agreement to locate an accessory structure within a drainage and utility easement on the property located at 13546 Fiona Circle North. DATE: July 10, 2017 for the Council Meeting of July 17, 2017 1. PROPOSED MOTION: Receive approval of an encroachment agreement for Nathan Matchey for an accessory structure located at 13546 Fiona Circle North for signature by Mayor and City Clerk. 2. OVERVIEW: The applicant is requesting to construct a 260 square foot accessory structure to be located in the rear yard. This property is a large residential property at .67 acres and has a drainage and utility easement that covers the majority of the rear yard. The drainage and utility easement covers a storm sewer pipe that connects two ponds to the north and south of the property. The accessory structure would be located approximately 30 feet from the rear property line and approximately 20 feet from the north side property line. Staff finds that the placement of the accessory structure would have no negative impact on utilities or drainage in the area. 3. STAFF RECOMMENDATION: Staff recommends that the City Council approve an encroachment agreement for Nathan Matchey for signature by the Mayor. ATTACHMENTS: 1. Location map 2. Resolution 3. Site Survey 4. Encroachment Agreement moi , fj n 4' go RESOLUTION 2017 - APPROVING AN ENCROACHMENT AGREEMENT FOR NATHAN MATCH EY TO ALLOW CONSTRUCTION OF AN ACCESSORY STRUCTURE WITHIN A DRAINAGE AND UTILITY EASEMENT ON THE PROPERTY LOCATED AT 13546 FI ONA CIRCLE NORTH WHEREAS, an application has been filed by Nathan M atchey that requests approval of an encroachment agreement to al low construction of an accessory structure to be located within a drainage and utility easement on the property located at 13546 Fiona Circle N orth, I egal I y descri bed as fol I ows; Lot 13, Block 2, Country Ponds, Washington County, Minnesota WHEREAS, the City Council has fully considered the request for the encroachment agreement, with the following conditions: 1. The exi sti ng accessory structure shal I be torn down and removed from the property. 2. A building permit must be submitted, reviewed, and approved by the Building Department, pri or to i nstal I ati on. NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF H U GO, MINNESOTA, that it should and hereby does approve the encroachment agreement for Nathan Matchey on the property located at 13546 Fiona Ci rcl e North. ADOPTED by the City Council this 17th day of July, 2017 Tom Weidt, Mayor ATTEST: Michele Lindau, City Clerk I HY LAND SURVEYING INVOICE No. 1845 f, e. NO. I RQ I R9 LAND SURVEYORS SCALE i" _ .. in, 937,8 Proposed Top of Block o Denotes Iron Monument 937-3 Proposed Garage Floor 13 Denotes Wood Hub Set 97845 Brooklyn Blvd. Brooklyn Park, Minnesota 55445 For Excavation Only 34_,3 Proposed Lowest Floor 560F1984 x000.0 Denotes Existing Elevation Type of Building - C �) Denotes Proposed Elevation \&J k J r_ 0009gals sed"Imte Denotes Surface Drainage SWIFT CONSTRUCTION NOTE: Property located in part of Section 29 , Township 31 Range 21 . WASHINGTON CO., MN The minlmum lowest floor Nevari het show the 100 year flood maw above life high grourrdiovW mark wrYCnym is prester. I V � 1 ~�y6i SpI�k o ! �g' 98. 13544 1' T,`- g_-- 037.3 OT \ y I i PRIG, 'oRESIDENCEN 3 r ,f`, 20%-o,, 4 -� _0 CV- ............ I l y i �;wa��� o f Qf �l •fy \ � 0 Q / � r� cM r 7 Go.Q: 933.: r�g0. �$ � � "� ;1 kl.v,935.0 2'0 "J 1 Lo 13 5AI i APPROVED 9ya Datb 2 - 2.0- 94 - 9'f,.o6 �� ��i,mut usS.riY � CITY OF HUC JIM 27 u , �a LOT 13, BLOCK 2, COUNTRY PONDS L, y: The only easements shown are from plats of record or information provided by client. I hereby certify that this survey was prepared by me or ower my direct and that t ee o - duty Land the Minnesotstered Surveyor order she -laws of the State of Minnesota. under Signed &xvsyadbyusMk 14TH ygpf FEBRUARY 19 96 Milton E. Hyland, M' eq. No, 20262' 21 X r Z- ENCROACHMENT AGREEMENT THIS AGREEMENT is made this day of , 2017, by and between the CITY OF HUGO, a Minnesota municipality (hereinafter "City") and Nathan Matchey (hereinafter "Owners"), and their successors in title. WHEREAS, the City has an easement for drainage and utility purposes (the "Easement") along the westerly portion of Owner's property, which property is legally described as Lot 13, Block 2, Country Ponds, Washington County, Minnesota; and, WHEREAS, Owner is desirous of constructing an accessory structure within the easement area as shown in Exhibit A; and, WHEREAS, the City will permit the placement of an accessory structure in the area described herein subject to the terms and conditions hereof. NOW, THEREFORE, in consideration of the premises and for good and valuable consideration, the receipt of which is acknowledged, the City will permit the encroachment on its easement as set forth herein and subject to the conditions set forth below: 1. The Owner and their successors in title may install and maintain an accessory structure within the Easement, and the accessory structure shall not be installed or maintained closer than fifteen (15) feet from the storm sewer. The accessory structure will be constructed in accordance with City approved plans. 2. No plantings, trees, permanent improvements or structures other than the accessory structure may be maintained or placed in the easement area. -1- 3. The Owner shall maintain the accessory structure in good repair and shall not permit it to be expanded, lengthened or to impair the City's easement or its rights thereunder in any respect. 4. The encroachment granted to Owner herein is subject to the existing easement rights of the City as granted in various easements. 5. The City will notify the Owner if it requires removal or relocation of the accessory structure or any part of it. Thereafter, the Owner shall remove the accessory structure according to the direction of the City and if the Owner fails to do so, the City may enter upon the land and remove as much of the accessory structure as required and cast it upon the adjoining lands. In such an event, the City shall not be liable to the Owner for any costs, loss or damage whatsoever, and may assess the property for all of its costs incurred in removing the accessory structure, and the Owner waives all formalities, requirements and defenses arising from or relating to Minnesota Statutes Section 429 relating to or arising from the work done by the City. 6. To the fullest extent permitted by law, the Owner agree to release, defend, protect, indemnify, save and hold harmless the City, its agents, directors, employees, shareholders and contractors against any and all claims, costs and liabilities, including the costs of defense for damages, injury or death arising from or in any way connected to the installation, maintenance, repair, removal and/or presence of the accessory structure, regardless of whether such harm is to the Owner, the City, the employees or officers, guests or invitees of either or any other person or entity, except the Owner shall not be liable under this paragraph for loss or damage to the extent resulting from the negligence of the indemnified parties. 7. The permission granted herein is limited exclusively to the proposed accessory structure within the specified portion of the easement area of the City's Easement. The Owner -2- shall not alter the grade or permit such alteration anywhere upon the land upon which the City has reserved its easement rights without proper express written consent of the City. 8. The Owner shall, at all times, use their best efforts to conduct all of their activities on said Easement in such a manner as to not interfere with or impede the operation of the City's Easement and related activities in any manner whatsoever, and shall follow the direction of the City. 9. This Agreement shall run with the land and inure to the benefit and be binding upon the parties hereto, their heirs, successors and assigns. 10. Owner shall be responsible for the costs of recording this Agreement with the Washington County Recorder. WHEREUPON, the parties have set their hands this day of , 2017. CITY OF HUGO I: Tom Weidt, Mayor STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON) Michele Lindau, City Clerk On this day of , 2017, before me, a Notary Public, personally appeared TOM WEIDT, Mayor, and MICHELE LINDAU, City Clerk, of the City of Hugo, a Minnesota municipality within the State of Minnesota, and that said instrument was signed on behalf of the City of Hugo by the authority of the City Council of the City of Hugo, and TOM WEIDT and MICHELE LINDAU acknowledge said instrument to be the free act and deed of said City of Hugo. Notary Public -3- Nathan Matchey STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON) (Individual Notary) On this day of , 2017, before me, a Notary Public, personally appeared Nathan Matchey, who signed the foregoing instrument and acknowledged said instrument to be their free act and deed. Notary Public THIS INSTRUMENT DRAFTED BY: City of Hugo 14669 Fitzgerald Ave N Hugo, MN 55038 937,8 Proposed Top of Block 937,3 Pro posed Garage Floor 934_,3 Proposed Lowest Floor Type of Building - �Jti'�`� 9"'.(•o6 Exhibit "A" HY-LAND SURVEYING LAND SURVEYORS 7845 Brooklyn Blvd, Brooklyn Park, Minnesota 55445 56(-1994 . Hegar% Oiedtfimte SWIFT CONSTRUCTION 338 rrV�� F'1 INVOICE NO-220- F. 07846 f, 0. NO. I RQ I R9 SCALE i" : .. in, o Denotes Iron Monument 13 Denotes Wood Hub Set For Excavation Only It000.0 Denotes Existing Elevation C) Denotes Proposed Elevation Denotes Surface Drainage NOTE: Property located in part of Section 29 , Township 31, Range 21 . WASHINGTON CO., MN a�y6'\ � Splik 1 �g' 'kle. 13544 T, o, g_ 937.3 j 1 1 9353 4 ..... ... ® ti 1 cz d 93CM6 0 tn; way. 2ID APPROVED gyth 2 - 2. o - ?4 LOT 13, BLOCK 2, COUNTRY PONDS The only easements shown are from plats of record or information provided by client. I hereby certify that this survey was prepared by ale or ower my direct supervlslon, and that I ae a -duly -Registered Land surveyor under the laws of the State of Minnesota. &xvsyadbyuSihk 14TH day at FEBRUARY 19 96 A�F %1 kLv,935.0 SPI'4 Milton E. Hyland, Mi eq. No, 20262 � lPi � r 91tu6 915.0 .. � i 'oRESIDENC N 5 2O °` _ e. 1 1 9353 4 ..... ... ® ti 1 cz d 93CM6 0 tn; way. 2ID APPROVED gyth 2 - 2. o - ?4 LOT 13, BLOCK 2, COUNTRY PONDS The only easements shown are from plats of record or information provided by client. I hereby certify that this survey was prepared by ale or ower my direct supervlslon, and that I ae a -duly -Registered Land surveyor under the laws of the State of Minnesota. &xvsyadbyuSihk 14TH day at FEBRUARY 19 96 A�F %1 kLv,935.0 SPI'4 Milton E. Hyland, Mi eq. No, 20262 A L1 SB 701 Xenia Avenue South I Suite 300 1 Minneapolis, MN 55416 1 (763) 541-4800 Memorandum To: Rachel Juba, City of Hugo From: Andi Moffatt, WSB Date: June 92, 2097 Re: Everton Avenue AUAR Update As you are aware, to remain valid for the required environmental review pursuant to Minnesota Rules 4410, the Everton Avenue AUAR needs to be updated every five years until development has been approved. The AUAR Update was last completed in 2012. The study area is about half developed and there are areas that are undeveloped that would benefit from the AUAR update. As in previous years, our approach will not be to re -write the AUAR, but rather to provide updates as applicable. Since 2012, the following changes have occurred: .• Additional development has occurred. This needs to be identified in the AUAR Update. • An area was rezoned to Planned Unit Development (PUD). This still conforms to the 2030 Comp Plan land use, but should be noted in the AUAR Update. • Local and regional trails have been implemented and planned. This needs to be noted in the AUAR Update. • New threatened and endangered species have been listed. A new DNR Natural Heritage Database request should be obtained. • Rice Creek Watershed implemented new rules in 2017. This needs to be recognized in the plan. With this scope, we will use the 2012 AUAR Update as the base and update the five areas noted above in the text and figures of the AUAR Update. No additional analysis is anticipated to be completed with this Update. This work includes: • Drafting the report for City Staff review. • One round of revision comments with the City. • Submitting the report to the agencies for the 10 -working day review. • Responding to comments (4 hours of time). If a significant level of comments above this 4 -hour allotment are received, additional scope will be discussed with the City. • Preparing Council packet documentation for adoption of the AUAR Update. • Sending the final approval documents back out to the agencies. The cost estimate for this work is $4150. If attendance at a council meeting is needed, it will be billed on a time and materials basis not to exceed $708 per meeting. If you wish to move forward with this scope, let us know. We could complete a draft for the City Staff to review by July 7, 2017 if approval of the scope is provided this week. Feel free to call me at 763-287-7196 if you have questions. Building a legacy —your legacy. Equal Opportunity Employer I wsbeng.com KIPeaonahAndi MoRattNarketing Doc HugolEverton AUAR Update 201-AMEMO - 001217 - duba.dor July 0 July a August 2017 Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 1 2 3 4 5 2 3 4 5 6 7 8 6 7 8 9 10 11 12 910 11 12 13 14 15 13 14 15 16 17 18 19 16 17 18 19 20 21 22 20 21 22 23 24 25 26 23 24 25 26 27 28 29 27 28 29 30 31 30 31 SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY Jun 25 26 27 28 29 30 Jul 1 2 3 4 5 5:00pm City Council Meeting 6 7 8 City Hall Closed 9 10 11 12 13 14 15 11:00am Dream of Wild Health 6:30pm_aQZA 7:00pm Planning_ 16 17 7:00pm City Council Meeting 18 19 20 21 22 1:00pm Historical 7:OOpm Parks 5:00pm EDA Meets 23 24 25 26 27 28 29 5:00pm Burger Night (Hugo Legion) 6:30pm BOZA 7:00pm Planning Commasmson 30 31 Aug 1 2 3 4 5 Meetings in geen are scheduled/posted meetings. 1 7/13/2017 1:00 PM A �� O August 2017 September 2017 Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 1 2 6 7 8 9 10 11 12 3 4 5 6 7 8 9 13 14 15 16 17 18 19 10 11 12 13 14 15 16 20 21 22 23 24 25 26 17 18 19 20 21 22 23 27 28 29 30 31 24 25 26 27 28 29 30 SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY Jul 30 31 Aug 1 2 3 4 5 6 7 8 9 10 11 12 7:00pm Comp Plan 6:30pm BOZA 7:00pm City Council Meeting Workshop 7:00pm Planning Commission 13 14 15 16 17 18 19 7:00pm Parks 1:00pm Historical Commission 5:00pm EDA Meets 20 21 22 23 24 25 26 5:00pm Burger Night 6:30pm BOZA 7:00pm City Council Meeting (Hugo Legion) 7:00pm Planning Commisison 27 28 29 30 31 Sep 1 2 Meetings in geen are scheduled/posted meetings. 2 7/13/2017 1:00 PM