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2006-04-17 CC Agenda PacketsAlbertville SnKW Town u&qj,. 911g thy cur.. ALBERTVILLE CITY COUNCIL AGENDA APRIL 17, 2006 7:00 PM 1. PLEDGE OF ALLEGIANCE 2. CALL TO ORDER — ROLL CALL — ADOPT AGENDA 3. MINUTES A. April 3, 2006 City Council minutes (pgs. 3-12) B. April 5, 2006 Special City Council Workshop minutes (pgs. 13-15) 4. CITIZEN FORUM — (10 Minute Limit) 5. CONSENT AGENDA A. Approve payment of claims check numbers 22717 to 22754 (pgs. 17-21) • B. Approve S.E.H.'s recommendation for Application for Payment No.I 1 for WWTP to Gridor Construction in the amount of $121,719.75 (pgs. 23-24) C. Approve Bonestroo's recommendation for Application for Payment No. 2 for City Hall Construction to Brietbach Construction in the amount of $405,270 (pgs. 25-27) D. Approve the Application to Lawful Gambling LG220 Application for Exempt Permit for Bingo, Raffles, Paddewheels, Pull -Tabs, and Tipboards to be held on July 16, 2006 at the St. Albert Parish Center E. Approve Application for 3.2% Malt Beverage Liquor License for the Albertville Lions for the Lioness Spaghetti Dinner to be held on May 18, 2006 at the St. Albert Parish Center F. Approve Resolution No. 2006-xx entitled (Resolution Authorizing to Write Off the 1998 STMA Ice Arena Short -Term Loan) (pg. 29) G. Approve Resolution No. 2006-xx entitled (Resolution Closing Certain Funds) (pg. 31) H. Approve Resolution No. 2006-xx entitled (Resolution Approving Reclassification of the Park Fund from a Special Revenue Fund to a Capital Fund) (pg. 33) I. Approve Resolution No. 2006-xx entitled (Resolution Approving Reclassification of the Sewer Access Charges from a Special Revenue Fund to a Capital Fund) (pg. 35) J. Approve Resolution No. 2006-xx entitled (Resolution Approving Reclassification of the Water Access Charges from a Special Revenue Fund to a Capital Fund) (pg. 37) K. Approve Application for 3.2% Malt Beverage Liquor License for the St. Albert Parish Center for the St. Albert Parish Festival to be held on July 16, 2006 at the St. Albert Parish Center L. Approve Bolton and Menk developing a concept plan for a small parking lot on the south side of City Hall on an hourly rate with a total amount at approximately $500 • M. Approve Application for 3.2% Malt Beverage Liquor License for the Albertville Lions for • the Albertville Friendly City Days to be held on June 9, June 10, and June 11 of 2006 at the Lions Pavilion Shelter located within Central Park N. Approve Application for 3.2% Malt Beverage Liquor License for the Knights of Columbus, Council No. 4174 for the Albertville Friendly City Days to be held on June 9, June 10, and June 11 within the Albertville Central Park area 6. ACTION ON PULLED CONSENT ITEMS 7. 2005 AUDIT — KDV (attachment) 8. DEPARTMENT BUSINESS A. Building Department 1). Monthly Status Report (pg. 39) B. Public Works -Parks Department 1). General Update (pg. 41) 2). Parks Department Request for Council Action to Authorize installation of a fence at Villas Park at a cost not to exceed $4,100 with funds from Park Dedication, which has an estimated unreserved available fund balance of $189,000 (pg. 43) 3). Public Works -Streets Maintenance Request for Council Action to Approve a partial 50th Street NE Overlay Project at a cost not to exceed $10,000 using funds from Street Overlay Account, which has funds available in the budget in the amount of • $125,000 with the City of St. Michael paying for the overlay and City of Albertville reimbursing $10,000 to St. Michael (pg. 45) C. Planning 1). Downtown Parking Study (for your information notice) (pg. 47) D. Engineering 1). Flood Study Update (discussion item) E. Legal 1). Albertville — STMA School District #885 Option Agreement (pgs. 49-58) 2). Albertville — St. Michael Agreement (pgs. 59-65) 3). Knechtl Property Purchase Agreement (pgs. 67-74) F. City Clerk 1). Albertville Friendly City Days (pg. 75) G. Administration 1). Written Report - includes S.E.H. Status Report (pgs. 77-82) 2). Set Workshop to discuss consultant billings 9. ADJOURNMENT 0 2 A an Amertville •Snmv Townt.Btu urs. ALBERTVILLE CITY COUNCIL April 3, 2006 Albertville City Hall 7:00 PM PRESENT: Mayor Don Peterson, Council members John Vetsch, LeRoy Berning, Ron Klecker, and Tom Fay, City Attorney Mike Couri, City Planner Al Brixius, City Engineer Mark Kasma, Assistant City Engineer Adam Nafstad, City Administrator Larry Kruse, Finance Director Tina Lannes, Public Works Supervisor Tim Guimont, and City Clerk Bridget Miller ABSENT: none Mayor Peterson called the Albertville City Council meeting to order at 7:00 p.m. followed by the Pledge of Allegiance. ADOPT AGENDA MOTION BY Council member Klecker, seconded by Council member Berning to approve the agenda as amended and on file in the office of the City Clerk. Motion carried unanimously. Add: Public Works — City Truck to pull the Albertville Float Engineering — Silt Fence )!MINUTES MOTION BY Council member Fay, seconded by Council member Klecker to approve the March 1.4, 2006 Special City Council Workshop minutes and March 20, 2006 regular City Council minutes as amended and on file in the office of the City Clerk. Mayor Peterson abstained from approval of the March 14, 2006 Special City Council Workshop, as he was not present. Motion carried unanimously. CONSENT AGENDA MOTION BY Council member Vetsch, seconded by Council member Fay to approve the consent agenda pulling item E. to be placed under Engineer and check numbers 22701 and 22713. Motion carried unanimously. A. Approve payment of claims check numbers 22668 to 22716 B. Approve transfer of On -Sale Liquor License and Special Sunday Liquor License from Cedar Creek Golf Course Inc. to Cedar Creek Golf Course, LLC. effective April 1, 2006 C. Authorize the Fire Department to Obtain Quotes for a New Air Compressor; Award the Low Quote, and Authorize the Purchase of the Air Compressor with Designated Funds 3 from the Fire Department Budgeted in the amount of $13,000 and the remainder would come from Department Donations • D. Accept a Donation of Gambling Funds from the Albertville Lions in the amount of $600 and make a donation to the Albertville Queens Committee in the amount of $600 E. Approve City Engineer's (Bolton and Menk, Inc.) recommendation to reduce the Letter of Credit for Towne Lake 2nd Addition from $138,781.00 to no less than $57,407.40 ACTION ON PULLED CONSENT ITEMS Check Number 22701 No motion made to approve payment of check number 22701. Denied. Check Number 22713 MOTION BY Council member Berning, seconded by Council member Klecker to approve payment of check number 22713. Motion carried unanimously. BRENT JOHNSON — 3 ON 3 HOCKEY TOURNAMENT DURING ALBERTVILLE FRIENDLY CITY DAYS Brent Johnson informed the Council he would like to coordinate a 3 on 3 Hockey Tournament during the Albertville Friendly City Days. There would be a youth division consisting of two (2) different age groups. One group would be for those 12-13 years of age and the second group would be for the 14-15 year olds. The games will be played on half ice and run approximately 30-minutes. The adult division will consist of 16 teams and will be divided into two brackets, 16-29 year olds and 30+ years old. Each team will be guaranteed three 30-minute games, which will be played on the full sheet of ice. Mr. Johnson inquired as to the contact person for the Albertville Friendly City Days would be so we could hold the hockey tournament. Mayor Peterson informed Mr. Johnson the person to contact regarding Albertville Friendly City Days is LeRoy Berning. ADVANCED FITNESS PRESENTATION — Adrian Haid Mike Johnson, representative from Advanced Fitness explained that Everwell, Inc. is the parent company of Advance Fitness, which is proposing to construct its first 168,000 square -foot state -of - the art family oriented fitness -wellness center. Mr. Johnson stated Advance Fitness's proposal of building a health club facility and establishing an on -going business will provide economic and social benefits to Albertville that will enhance the city's revenue and economic stability. • 2 • On the economic side, the facility will create over 60 jobs for the community and additional income will filter throughout Albertville enhancing the sales of the local businesses. The citizens of Albertville will enjoy membership discounts and non-member daily passes for the outdoor aquatic center in the summer, which will provide a platform of greater community involvement. As far as the social benefits relating to the facility, it would provide community rooms for activities and open classes to the public. School system athletic cross -training programs are available to enhance students' athletic skills. The programs offered at the facility will involve the youth of the community creating stronger family relationships resulting in a stronger community of citizen involvement. The facility will grow with the community becoming a destination for family activities. It will become a community facility that the city can be proud of. Council inquired if there would be sufficient residents or surrounding communities to support the facility. Mike Johnson informed the Council the facility would be built as one -project, which would be completed in approximately 15-months. Council had a couple of concerns, one being the land another being the additional traffic created by the facility. Mayor Peterson reminded the Council and staff the results of the survey conducted there was an interest in the community for a YMCA or other facility like the one before us. Council appeared to be supportive of the project, but would like staff to work with Advanced Fitness to obtain additional information and to research other possible sites, if any, within Albertville. DEPARTMENT BUSINESS PUBLIC WORKS DEPARTMENT Naming Park within Albert Villas Development (RCA) Public Works Supervisor Guimont reported that at the Parks and Recreation Committee that it was noted the park located within the Albert Villas Development does not have a name. The recommendation from the Parks and Recreation Committee was to name the park Villas Park. Staff is looking for Council's approval to name the park located in the Albert Villas Development as Villas Park. MOTION BY Mayor Peterson, seconded by Council member Berning to approve naming the park located within the Albert Villas Development as Villas Park. Motion carried unanimously. Re -naming City Park (RCA) PW Supervisor Guimont informed the Council the Parks and Recreation Committee discussed the name of City Park. It appears there is some confusion as to which park is City Park and which one is Lions Park. The committee recommends re -naming the entire area as Central Park, the open pavilion located off of Main Avenue would be known as the Lions Pavilion Shelter and the building located off of Lander Avenue would be known as the City Park Shelter. 5 MOTION BY Council member Fay, seconded by Council member Klecker to approve renaming City Park to Central Park as the entire site; Lions Pavilion Shelter and City Park Shelter located S within Central Park. Motion carried unanimously. Re -opening the Skateboard Park (RCA) There was no motion made to approve re -opening the Skateboard Park that was located within the Albertville City Park. It was recommended to sell the skateboard park equipment. Clean-up Albertville PW Supervisor Guimont made a recommendation regarding the garbage and trash throughout Albertville. The City has been fining contractors for dumpster violation and the City has collected approximately $600 for these violations. With these funds, the PW Department would like to make a donation to a non-profit organization; such as the Boys Scouts, Cub Scouts, or Girls Scouts, to pick up the trash that has blown out of the dumpsters. MOTION BY Council member Klecker, seconded by Mayor Peterson to authorize the Public Works Department to contact some non-profit organizations to clean up the trash and make a donation to their group. Motion carried unanimously. Parks and Recreation Committee PW Supervisor Guimont inquired about amending the Parks and Recreation Committee Rules, if one of the committee members could take the minutes. MOTION BY Mayor Peterson, seconded by Council member Klecker to amend the Parks and is Committee Rules allowing a committee member to record the notes or minutes of the meeting. Motion carried unanimously. Street Signage Council questioned the street signs within the Prairie Run residential development as to why some of the signs are blue and some are green. PW Supervisor Guimont informed the Council the signs that are blue are private drives and the green are public streets. City Truck — Albertville Float Council brought up the use of the City truck to pull the Albertville Float and wanted to work on the details prior to the parade season. Council member Berning will provide dates of when the parades are scheduled for the Summer of 2006 to the PW Supervisor Guimont. PW Supervisor Guimont will notify Arlan Middleton with Middleton Insurance to ensure the City will be covered under the Insurance Policy. FINANCE DEPARTMENT Monthly Accounts Receivable Status Report • 3 • Finance Director Lannes confirmed that the main outstanding accounts receivable is the amount due from Edina Development. Project Status Update Finance Director Lannes reported briefly on the Project Status stating that the total contracted amount is $13,603,038.95 for various projects such as I-94 Project, NW Commercial Park, Hockey Rink, and City Hall construction. As of March 27, 2006, the amount paid out totals was $11,628,357.31, for a difference of $3,743,932.52. Budget - Quarterly Re ort Finance Director Lannes informed the Council of the first quarter budget update. The City of Albertville, as of March 27, 2006, current revenue amount is 6.1% of its annual budgeted revenue for the General Fund. The expenses for the un-audited first quarter are estimated at 12.3% of the budget. PLANNING AND ZONING Shoppes at Towne Lakes Two - Final Plat According to the City Clerk, Granite City Real Estate, LLC submitted an application for Final Plat for the development of the Shoppes at Towne Lakes Two within the City of Albertville. The proposed plat is located north off of County Road 19, between West Laketowne Drive NE and 69th Street NE. iCity Planner Brixius reported that the site is currently zoned B-2A, Special Business. The zoning is to provide for high quality, limited retail and service commercial development, which would serve both local and regional needs. There are five lots, with one outlot proposed for the site area. Within the site, two (2) of the lots are proposed for restaurants with the remaining three (3) lots to contain a combination or retail and commercial uses. Access to the site will be provided by a private drive system that will run north -south via West Laketowne Drive NE in the south and 69th Street NE in the north. The private drive is proposed to be 20-feet wide and no parking shall be allowed along any of the private drives. The applicant has provided drainage and utility easements over all private drives. Size and location of the easements is subject to approval by the City Engineer. City Planner Brixius noted that the final plat for Shoppes at Towne Lakes Two has been modified per the conditions for preliminary plat approval in October 2005. The applicant, just this evening, has revised the plat to satisfy all but one of the conditions attached to preliminary plat approval. Staff recommends approval of the final plat for the Shoppes at Towne Lakes Two subject to the three following conditions: 1. Cross access and parking easements shall be required for each of the lots within the development to allow for common use of parking in the event of overflow. Said easements • are subject to approval by the City Attorney and shall be recorded with the final plat. 7 2. The applicant shall be required to extend the right-of-way, previously widened for the • turning lanes, easterly along West Laketowne Drive NE to the east side of Private Drive "A". With the additional right-of-way, the applicant shall increase the curb width of West Lake Towne Drive NE, east of Private Drive "A", from 22-feet to a minimum of 28-feet. 3. Drainage plan is subject to review and approval by the City Engineer. The Council addressed the issue with the extra soil located on the site. Council wanted to make sure that the dirt is removed when the site has been graded or completed. The applicant asked the Council if they are open to relocating the sit-down restaurant to lot 5. Granite City Properties is working with a potential sit-down restaurant establishment. The restaurant would only require a 5,000 square -foot building, not the 8,000 square -foot which is proposed. City Planner Brixius clarified what the Council's intentions were for the area site. In 2005, the applicant for the Shoppes at Towne Lakes One asked for an amendment to the plat to allow a bank to be constructed on the lot which was intentionally proposed for a fast-food restaurant. The Council approved the amendment with the restrictions that in Shoppes at Towne Lakes Phase Two would include two (2) restaurant establishments. City Planner Brixius asked if the Council would be comfortable allowing staff to work with the applicant to ensure that the final plat includes the one (1) sit-down restaurant, whether it is located on lot 3 or lot 5. Or, is it the Council's intention, for staff to work with the applicant to revise the area site and bring the amended plat back for Council's approval with the amendment to the Planned Unit Development. Brixius brought to the Council's attention that either way it is handled with regards to the restaurant location, when the applicant applies for the site and building plan, the Council would then identify that there is indeed a sit-down restaurant located within the plat. MOTION BY Council member Berning, seconded by Council member Vetsch to approve the Final Plat for the Shoppes at Towne Lakes Two with the recommendations for staff to work with the applicant to locate within the plat a site for the sit-down restaurant. Motion carried unanimously. LEGAL Shoppes at Towne Lakes Two — Developer's Agreement City Attorney Couri noted that the zoning for the site is B-2A, Special Business District in which minimum setbacks shall apply to all buildings in Said Plat, except as follows: i. For Lot 1, Block 1 a minimum building setback of 20 feet from Linwood Drive NE and all private streets shall apply; 0 • ii. For Lot 2, Block 1 a minimum building setback of 25 feet from County State Aid Highway ("CSAH") 19/LaBeaux Avenue NE right-of-way shall apply; iii. For Lot 3, Block 1 a minimum building setback of 25 feet from CSAH19/LaBeaux Avenue NE right-of-way shall apply; iv. For Lot 4, Block 1 a minimum building setback of 20 feet from Linwood Drive NE and all private streets shall apply; and v. For any of the lots on Said Plat, if a minimum building setback along one of the private streets has not been otherwise specified, such minimum setback shall be at least 20 feet. 4. Developer agrees that no illuminated roofs shall be permitted on the buildings and no illuminated structures shall be permitted on the building roofs on Said Plat. 5. Developer agrees that no HVAC equipment shall be located on the side of any buildings on Said Plat facing Wright County State Aid Highway No. 19 ("CSAH 19"). 7. Developer agrees that all building and design standards as set forth in "The Shoppes at Towne Lakes Planning and Design Guidelines" dated February 4, 2003 shall apply to all is using in Said Plat. The buildings constructed on Said Plat shall be of the highest quality using a combination of a minimum of 20% stone and brick throughout each building. The specific percentage shall be determined by the Planning Commission and City Council. The same architectural standards shall be required for all monument signage within the site. • City Attorney Couri went on to note that in the development agreement under permitted uses, it defines the uses on Lot 2, Block 1 and Lot 3, Block Iof Said Plat shall be limited to a restaurant permitted under the City's B-2A zoning district. The section of the agreement will be amended to reflect the possible relocation of the one 8,000 sit-down restaurant. City Attorney Couri reported that the developer shall maintain all private streets on Said Plat in a commercially reasonable manner such that the streets are paved and plowed at all times and such that cars and emergency vehicles can safely pass on said roads at all times. In the event the private streets are not maintained in accordance with the Agreement such that said private streets pose a safety hazard to the general public, the City shall provide forty-eight hours notice of deficient maintenance to the owners of all the lots in Said Plat, after which time the City may immediately require that commercial business not be transacted on any lot in Said Plat to which access remains impaired or unsafe. The Council wanted to bring to staff s attention Section 11 of the Developer's Agreement regarding keeping the site maintained during construction. E MOTION BY Council member Vetsch, seconded by Mayor Peterson to approve the Developer's is for the Shoppes at Towne Lakes Two noting the recommendations to work with staff in locating a site for the proposed sit-down restaurant and amending the Developer's Agreement to reflect the changes. Motion carried unanimously. ENGINEERING Reed Bed Quote Recommendation (S.E.H.) John Stodola, with S.E.H. informed the Council that two quotes were obtained for the materials and services related to planting reeds for bio-solids treatment in the reed assisted drying beds at the Albertville Wastewater Treatment Plant. Staff recommends awarding the bid to Reed Bed System, Inc. for Option 1 (5 reed beds), due to the potential of not being able to keep all reed beds wet with bio-solids during the initial years of operation. MOTION BY Council member Klecker, seconded by Mayor Peterson to approve the quote from Reed Bed Systems, Inc. for Option 1 (5 reed beds) in the amount not to exceed $25,600 designating funds from the WWTP account. Motion carried unanimously. 52nd Street NE Industrial Park (attachment) - Approve Resolution No 2006-13 entitled a Resolution Accepting Feasibility Study for Municipal Improvements Proposed Albertville Industrial Propertv City Engineer Kasma reported that staff had expanded the 2005 Feasibility Study for 52nd Street NE Improvements to include lot grading and possible pad corrections, as well as platting of the parcels adjacent to 52nd Street NE. • Should the City want to incorporate into the project design, mass grading of the site would minimize the amount of material that would need to be hauled in and off of the site, maximize buildable area by allowing for greater regional ponding capabilities, improve lot drainage, and would provide lot grades suited for typical industrial lots. Council directed staff to prepare an updated Feasibility Study for 52nd Street NE Improvements for the May 1, 2006 City Council meeting. The report presented in the packet is the same report that was prepared in May 2005. MOTION BY Council member Berning, seconded by Mayor Peterson to approve Resolution No. 2006-13 entitled a Resolution Accepting the Feasibility Study for Municipal Improvements proposed in the Barthel Industrial Park Development within the City of Albertville and to hold a public hearing for said improvements to be held on Monday, May 1, 2006 at 7:00 p.m. or soon there after at City Hall located at 5975 Main Avenue NE. Motion carried unanimously. 57th Street NE Sidewalk Assistant City Engineer Nafstad stated that staff was directed to propose a sidewalk to continue along the south side of 571h Street NE from Lambert Avenue NE to Main Avenue NE within Albertville. Staff prepared a topographic survey for Council's review to implement the proposed sidewalk. • 10 • Assistant City Engineer Nafstad reported that staff has notified the property owners that would be affected by the proposed sidewalk. Staff received a good response from the majority of the property owners. Council directed staff to work with the residents to obtain the right-of-way easement documentation to construct a 5-foot sidewalk on the south side of 57`h Street NE from Lambert Avenue NE to Main Avenue NE within Albertville. Lachman Avenue NE Update As directed by the City Council, staff conducted a study to align Lachman Avenue NE running north -south from 57th Street NE to 601h Street NE. Assistant City Engineer Nafstad stated that in order to construct the street, it will require a ratio of 2:1 for wetland mitigation. Assistant City Engineer Nafstad has been working with the TEP panel to address the wetland issues. The TEP panel will not consider the options of wetland credits. Approve City Engineer's (Bolton and Menk. Inc.l recommendation to reduce the Letter of Credit for Towne Lakes 2nd Addition from $138.781.00 to no less than $57,407.40 Assistant City Engineer Nafstad presented a letter from Contractor Properties Development Community (CPDC) requesting a Reduction in the Letter of Credit for Towne Lakes 2nd Addition. After reviewing the Master Planned Unit Development Agreement, it appears the developer has met the necessary construction of the public improvements during the second year of the warranty . period. Therefore, Bolton and Menk, Inc. is recommending a Reduction in the Letter of Credit for Towne Lakes 2nd Addition from $138,781.00 to no less than $57,407.40 for the balance of the warranty period. MOTION BY Council member Klecker, seconded by Council member Vetsch to approve the recommendation to reduce the Letter of Credit for Towne Lakes 2nd Addition from $138,781.00 to no less than $57,407.40. Motion carried unanimously. Silt Fence Council directed staff to investigate the removal of silt fences in developments that are complete. It appears that the silt fences are installed prior to construction or shortly after construction has begun. The project is then constructed and complete, but the silt fence remains on the site. CITY ADMINISTRATOR City Administrator Kruse brought to the Council's attention the agenda for Wednesday, April 5 Special Council Workshop. City Administrator Kruse addressed payment of check no. 22701. The City is required to make payments within 30-days. The pay request is for work the City directed staff to complete. Mr. Kruse reported he would work with S.E.H. to obtain an updated list of outstanding or potential ongoing projects such as the I-94 Project. Included with the list will be approximate dates of completion for a future meeting. 0 11 MOTION BY Mayor Peterson, seconded by Council member Klecker to approve payment of check number 22701. Mayor Peterson, Council members Klecker, Vetsch, and Fay voting aye. • Council member Berning voting nay. Motion carried. OTHER BUSINESS Chris Sauer, with the Cedar Creek Golf Course introduced himself to the City Council stating he is the new owner. He is excited and looks forward to a successful golf course. ADJOURNMENT MOTION BY Council member Vetsch, seconded by Council member Berning to adjourn at 10:16 p.m. Motion carried unanimously. • • 12 •Albertville Sums Toum UVL-W ft City UFA is ALBERTVILLE CITY COUNCIL WORKSHOP APRIL 5, 2006 Albertville City Hall 6:00 PM PRESENT: Mayor Don Peterson, Council members John Vetsch, LeRoy Berning, Ron Klecker, and Tom Fay, City Attorney Mike Couri, City Planner Al Brixius, Assistant City Engineer Adam Nafstad and City Administrator Larry Kruse Others Present: S.E.H. Engineer Jaimison Sloboden and Scott MacBride. ABSENT: none Mayor Peterson called the Albertville City Council Workshop to order at 6:00 p.m. I-94 PHASING PLAN The purpose of the workshop was to review the I-94 Phase I Plan, seek City Council concurrence on the preferred option and strategize funding. Also authorize City staff to begin discussions with Otsego staff to see if the two cities can reach agreement on a design and funding. S.E.H. Engineer Jamision Sloboden reviewed the proposed plan showing how the Interchange will function. The cost is estimated to be $14.6 million dollars. Throughout the presentation Sloboden cautioned the Council regarding the preliminary estimates stating a number of other larger metropolitan projects were coming in way above the engineer's estimate. In some cases the increases are 100% over the engineer estimate. Sloboden stated that the Environmental Assessment and Interstate Access Request is 95% complete. Sloboden also mentioned the possible need for wetland mitigation along the lake. The full build design is estimated to cost $21 to $25 million dollars, with the first phase estimated to cost $11 to $15 million dollars. Preliminarily Otsego staff is saying this option appears to meet their needs. The Council unanimously supported the proposed Phase I Plan. Council directed staff to begin negotiating with Otsego staff to see if they are willing to support the plan and financially contribute towards its construction. S.E.H. was directed to continue to complete the EA and IAR. 13 BOARDER ROAD AGREEMENTS • City Administrator Kruse shared the following summary information regarding several boarder road agreements. Although the agreements are conceptually still in draft form, Albertville and Otsego staff agree with the language and now both Councils are being asked for input and to negotiate the scheduling. If there are minor changes or staff needs additional help negotiating items, Council member Fay and Klecker volunteered to assist and meet with two members of the Ostego Council. 1. CSAH 19 North Project: a. Scope of I-94 to approximately 1500 feet north of 70t' Street NE b. Three party agreement (Albertville, Otsego and Wright County) c. Albertville to design and construct project d. Both cities pay for their share of the costs in their respective City less the County's share based on their cost share formula e. Both cities may carry the County's share of the cost for up to five years f. Method of financing include assessments, development agreement proceeds, municipal state aid, and general levy g. Construction schedule ASAP 2006-07 Following discussion, the City Council stated they supported the three party agreement and would be willing to wait until 2007 or 2008 to complete the project. However, felt the agreement should be signed at the same time the 70t' Street NE Agreement is signed. It was even mentioned that the two agreements might be combined into one. 2. 70" Street NE a. Scope of CSAH 19 to MacIver Avenue NE b. Albertville to design and construct c. Cost will be split 50150 between the two cities d. Method of financing would be primarily funded by developers through previous agreements with some minor municipal state aid or general levy e. Construction schedule ASAP 2006-07 f. Future maintenance via a Maintenance Agreement with each city paying it's respective share based on city front footage Following the discussion, the City Council reported they supported the agreement and conditioned it approval on the signing of the CSAH 19 agreement. 3. MacIver Avenue NE a. Scope of MacIver Avenue NE has already been completed by Otsego b. Albertville to pay $487,000 c. Future maintenance via an Maintenance Agreement with each city paying it's respective share based on city frontage d. Otsego to pay 50% of a trail, if Albertville decides it is necessary e. Method of financing would be developer fees through development agreement, SAC fees, and general levy • 14 • Following new MacIver Avenue NE discussion, the City Council informed staff they support the agreement suggesting that the agreement should be signed at the same time the MacIver Avenue NE Agreement is signed. 4. Old MacIver Avenue NE a. Scope of Albertville Sewer Plant east to MacIver Avenue NE b. Albertville to design and construct, as we need to include utilities c. Current alignment is 100% in Albertville d. Albertville and Otsego to share equally the cost of the street based on city frontage e. Road can be constructed 100% in Albertville with Otsego paying for 50% of the right-of-way or provide right-of-way for realignment. Discount is provided for cash payment at 70% to encourage current alignment. f. Future maintenance via a Maintenance Agreement with each city paying their respective share based on city front footage g. Construction schedule is based on development (when either city has development the other will agree to proceed Following discussion the City Council stated they supported the agreement and suggested that it be approve along with the previous MacIver agreement. 5. CSAH 37 a. Scope of I-94 ramp to 1300 feet east of MacIver Avenue NE b. Cost share based on City front footage c. Method of financing joint City, County, developer fees through developer agreement, general levy, with the Cities carrying the County's cost for up to five years. d. Future maintenance done by the County e. Construction schedule based on development The following discussion, City Council stated they supported the three party agreement. ADJOURNMENT MOTION BY Council member Fay, seconded by Council member Berning to adjourn at 7:30 p.m. Motion carried unanimously. Don Peterson, Mayor Larry Kruse, City Administrator is 15 f •A�Ibertvillc f • • City of Albertville Check Detail Register April 17, 2006 10100 Premier Bank Paid Chk# 022717 4/17/2006 ACTION RADIO & COMMUNICATIONS E 101-42000-404 Repair/Maint - $55.00 30103 repair pager Total ACTION RADIO & COMMUNICATIONS $55.00 Paid Chk# 022718 4/17/2006 ALBERTVILLE FIRE RELIEF ASSOC. R 101-00000-34950 Other Revenues $141.00 Fire Relief Assoc. Supplementa R 101-00000-33422 Other State Aid Grants $1,800.00 Firefighter Relief Assoc pmt f Total ALBERTVILLE FIRE RELIEF ASSOC. $1,941.00 Paid Chk# 022719 4/17/2006 ASLESON, DARRICK E 101-42000-212 Motor Fuels $21.20 Fuel Total ASLESON, DARRICK $21.20 Paid Chk# 022720 4/17/2006 BOLTON & MENK, INC E 101-41710-303 Engineering Fees $160.50 93272 Hunter's Pass E 101-41710-303 Engineering Fees $960.00 93273 LaBeaux Station E 482-49300-303 Engineering Fees $40.50 93276 City hall E 101-42400-303 Engineering Fees $975.00 93278 Lot Surveys E 604-49960-300 Professional Srvs (GENERAL) $9,390.50 93279 flood study E 473-49000-303 Engineering Fees $1,093.50 93281 Prairie Run E 101-41710-303 Engineering Fees $1,242.50 93282 Shoppes at Towne Lakes II E 101-41710-303 Engineering Fees $607.50 93283 State bank of long lake E 101-41700-303 Engineering Fees $3,679.00 93285 57th St Sidewalk Improv E 101-41700-303 Engineering Fees $40.50 93287 Boarder Rds Agreemetns E 101-41710-303 Engineering Fees $81.00 93287 K. Hovnanian Temp Trailer Loca R 204-00000-37270 SAC Fees $40.50 93287 Portable Genset Review E 101-41700-303 Engineering Fees $40.50 93287 Rd restrictions E 101-41700-303 Engineering Fees $40.50 93287 MnDOT needs survery E 101-41700-303 Engineering Fees $40.50 93287 Lawnscare Inc dev req E 101-41710-303 Engineering Fees $121.50 93287 Snap Fitness E 101-41700-303 Engineering Fees $40.50 93287 As-Builts for L1 62 Barthel's E 101-41700-303 Engineering Fees $162.00 93287 Mtg with Otsego E 101-41700-303 Engineering Fees $267.78 93287 CSAH 37 & Bridge Lane Config E 101-41710-303 Engineering Fees $364.50 93287 Albertville Clinic E 101-41700-303 Engineering Fees $107.00 93287 NW Quadrant build out mtg E 101-41700-303 Engineering Fees $40.50 93287 City Auditor needs E 492-49000-303 Engineering Fees $40.50 93287 Barhel Soil borings 52nd st. P E 101-41700-303 Engineering Fees $567.00 93287 Region 7W TAC mtg E 101-41700-303 Engineering Fees $577.00 93287 mtg with Wright Co. E 101-41710-303 Engineering Fees $40.50 93287 Albert Villa's 6th Blk 1 Its 8 E 604-49960-300 Professional Srvs (GENERAL) $40.50 93287 Meeting with Sam Montgomery FI E 604-49960-300 Professional Srvs (GENERAL) $81.00 93287 Albert Villa's EOF's Flood E 101-41700-303 Engineering Fees $1,446.00 93287 Staff meetings E 604-49960-300 Professional Srvs (GENERAL) $81.00 93287 STMA School Site - Flood E 491-49000-303 Engineering Fees $243.00 93287 Low Opening Review E 101-41700-303 Engineering Fees $605.00 93288 CSAH 19 from 67th to 70th E 492-49000-303 Engineering Fees $5,046.78 93291 52nd St Prelim Eng Rpt E 101-41700-303 Engineering Fees $9,415.50 93293 Lachman Ave Prelim eng rpt Total BOLTON & MENK, INC $37,720.06 Paid Chk# 022721 4/17/2006 BRAUN INTERTEC CORP E 482-49300-300 Professional Srvs (GENERAL) $2,172.25 260095 concrete testing, mgmt, earthw Total BRAUN INTERTEC CORP $2,172.25 17 April 17, 2006 — Payment of Claims - page 2 r Check Amt Invoice Comment Paid Chk# 022722 4/17/2006 BREITBACH CONSTRUCTION CO E 482-49300-300 Professional Srvs (GENERAL) $405,270.00 Pmt # 2 CH Total BREITBACH CONSTRUCTION CO $405,270.00 Paid Chk# 022723 4/17/2006 BROTHERS FIRE PROTECTION CO E 101-43100-405 Repair/Maint Buildings $445.36 72424 annual inspection fire protect E 101-42000-405 Repair/Maint - Buildings $445.36 72425 annual inspection fire protect Total BROTHERS FIRE PROTECTION CO $890.72 Paid Chk# 022724 4/17/2006 CARQUEST E 101-43100-404 Repair/Maint- $11.87 80 W 90 E 101-43100-404 Repair/Maint - $17.63 D4011 U 7pt recept plastic, gasket E 101-43100-404 Repair/Maint - $31.47 D4230 Bar lamp, sealed beam, marker E 101-42400-446 C/O - Vehicles $40.09 D4339 brk clnr non-chlor, belts E 101-43100-404 Repair/Maint - $22.88 D4607 trans fluid E 101-43100-404 Repair/Maint - $2.11 D4617 muffler sealer E 101-43100-404 Repair/Maint- $1.01 D4626 full circle clamp E 601-49450-404 Repair/Maint- $86.82 D4689 bulbs, mini -strobe, oil filter E 101-43100-404 Repair/Maint - $70.13 D4781 Battery, side lens Total CARQUEST $284.01 Paid Chk# 022725 4/17/2006 CENTER POINT ENERGY E 601-49450-383 Gas Utilities $1,629.05 54075742030 6440 Maclver E 101-43100-383 Gas Utilities $2,280.99 54214424030 6461 Maclver Total CENTER POINT ENERGY $3,910.04 Paid Chk# 022726 4/17/2006 CHARTER COMMUNICATIONS E 101-42000-321 Telephone $86.00 FD Internet Total CHARTER COMMUNICATIONS $86.00 Paid Chk# 022727 4/17/2006 COURT & MACARTHUR E 101-41610-304 Legal Fees $1,196.25 LaBeaux Station E 101-41610-304 Legal Fees $36.25 Hunters Pass E 101-41600-304 Legal Fees $1,397.50 ordinance, packet, council mtg E 101-41610-304 Legal Fees $688.75 Prairie Run - Gold Key E 101-41600-304 Legal Fees $652.50 golf course E 101-41610-304 Legal Fees $422.50 Edina development default G 101-22827 TIF Escrow Negaard $357.50 Eull concrete TIF E 101-41610-304 Legal Fees $290.00 Clinic bldg E 101-41600-304 Legal Fees $162.50 Liquor E 101-41610-304 Legal Fees $108.75 Shoppes at towne lakes 2nd E 101-41610-304 Legal Fees $72.50 State bank of long lake E 486-49300-304 Legal Fees $390.00 1-94 E 101-41610-304 Legal Fees $108.75 Albertville Crossings E 604-49960-300 Professional Srvs (GENERAL) $2,145.00 Albert Villa's Flood Total COURT & MACARTHUR $8,028.75 Paid Chk# 022728 4/17/2006 DAMA METAL PRODUCTS INC. E 101-42000-560 Furniture and Fixtures $4,094.93 8642 FD Lock Boxes Total DAMA METAL PRODUCTS INC. $4,094.93 Paid Chk# 022729 4/17/2006 DAVIS, JEFF E 101-42000-200 Office Supplies (GENERAL) $142.47 Shop air supplies FD Total DAVIS, JEFF $142.47 • • April 17, 2006 - Payment of Claims - page 3 Check Amt Invoice Comment Paid Chk# 022730 4/17/2006 DJ'S TOTAL HOME CARE CENTER E 101-45100-210 Operating Supplies $1.07 10049 spray paint teal E 101-43100-226 Sign Repair Materials $27.89 10095 reflective vinyl, flat washers E 101-41940-210 Operating Supplies $71.71 10221 ppr towel, 56 fasteners E 602-49400-445 C/O - Tools $327.20 10362 drill, plug angl, connctr clam E 601-49450-210 Operating Supplies $0.52 10367 Connector E 101-43100-405 Repair/Maint - Buildings $52.42 10437 liner drum, hanger strge tool, E 101-41940-210 Operating Supplies $62.74 10562 Bath tissue, cleaner, mop E 601-49450-405 Repair/Maint Buildings $80.60 9792 ace pole nail40D, bags, ppr to E 101-45100-405 Repair/Maint - Buildings $21.27 9895 trash bags, drill bit rotary E 602-49400-210 Operating Supplies $25.53 9899 drill bits, rule tape E 602-49400-210 Operating Supplies $6.37 9900 10-12 X 1 ribbed w/screw E 101-43100-215 Shop Supplies $4.17 9911 clip wire rpes Total DJ'S TOTAL HOME CARE CENTER $681.49 Paid Chk# 022731 4/17/2006 DON'S AUTO & REPAIR E 101-42000-212 Motor Fuels $43.86 38776 fuel E 101-42000-212 Motor Fuels $22.05 39133 fuel Total DON'S AUTO & REPAIR $65.91 Paid Chk# 022732 4/17/2006 EGGEN'S DIRECT SERVICE, INC. E 101-42400-212 Motor Fuels $40.70 111206 fuel E 101-45100-212 Motor Fuels $62.50 111247 fuel E 601-49450-212 Motor Fuels $8.05 111248 fuel E 602-49400-212 Motor Fuels $11.22 111252 fuel E 602-49400-212 Motor Fuels $76.50 111253 fuel • E 101-43100-212 Motor Fuels $65.60 111264 fuel E 602-49400-212 Motor Fuels $15.00 111265 fuel E 601-49450-212 Motor Fuels $73.00 111266 fuel E 101-43100-212 Motor Fuels $75.00 111267 fuel Total EGGEN'S DIRECT SERVICE, INC. $427.57 Paid Chk# 022733 4/17/2006 GAMETIME E 101-45100-210 Operating Supplies $48.01 727950 graffiti remover Total GAMETIME $48.01 Paid Chk# 022734 4/17/2006 GCI BUILDERS R 206-00000-37171 WAC - JPB $60.67 reimb overpmt JP WAC Snap Fitn R 206-00000-37170 WAC - City ($8.67) reimb overpmt City WAC Snap Fi Total GCI BUILDERS $52.00 Paid Chk# 022735 4/17/2006 GRIDOR CONSTRUCTION E 491-49000-300 Professional Srvs (GENERAL) $121,719.75 WWTF Pmt # 11 Total GRIDOR CONSTRUCTION $121,719.75 Paid Chk# 022736 4/17/2006 JOINT POWERS BOARD R 602-00000-37166 Safe Water Penalty $17.74 Fed Wtr Test Pen R 206-00000-37171 WAC - JPB $2,497.20 JP WAC R 602-00000-37105 Water Sales - JPB $778.05 JP Dist Pen R 602-00000-37105 Water Sales - JPB $24,492.24 JP Dist R 602-00000-37105 Water Sales - JPB $21.00 JP Access R 602-00000-37130 Safe Water Test Fees $698.77 Fed Wtr Test Total JOINT POWERS BOARD $28,505.00 • 19 April 17, 2006 — Payment of Claims - Paid Chk# 022737 4/17/2006 LARSON PUBLICATIONS E 101-41100-351 Legal Notices Publishing E 101-41100-351 Legal Notices Publishing E 101-41100-351 Legal Notices Publishing E 101-41100-351 Legal Notices Publishing E 101-41100-351 Legal Notices Publishing E 101-41100-351 Legal Notices Publishing E 101-41100-351 Legal Notices Publishing E 101-41100-351 Legal Notices Publishing Total LARSON PUBLICATIONS Check Amt Invoice Comment $41.38 01527900-00 Bids generator $81.26 01527991-00 Ord 2006-03 $128.84 01528052-00 Dist No 1 TID $33.29 01528106-00 Ord 2006-06 $51.71 01528107-00 Ord 2006-05 $88.65 01528108-00 Ord 2006-04 $40.68 01528188-00 Ord Chpt 2200 $39.40 01528189-00 Med clinic pre plat $505.21 page 4 Paid Chk# 022738 4/17/2006 LIBSON TWIN CITY E 101-43100-404 Repair/Maint - $401.25 214550 steering gear rack Total LIBSON TWIN CITY $401.25 Paid Chk# 022739 4/17/2006 MONTICELLO, CITY OF E 101-42700-309 Animal Control Contract $232.00 10042 Animal Control Service Total MONTICELLO, CITY OF $232.00 Paid Chk# 022740 4/17/2006 MUNICIPAL EMERGENCY SERVICES E 101-42000-585 C/O - Air Packs $455.72 337275 mounting brackets for new air E 101-42000-200 Office Supplies (GENERAL) $76.43 339218 4 litre mexi fog fluid Total MUNICIPAL EMERGENCY SERVICES $532.15 Paid Chk# 022741 4/17/2006 N. A. C. E 101-41915-306 Planning Fees $163.00 15303 State bank of long lake E 101-41915-306 Planning Fees $739.80 15303 St Michael/Albertville Clinic E 101-41915-306 Planning Fees $195.60 15303 Hunters Pass G 101-22827 TIF Escrow Negaard $120.90 15303 Eull concrete retail dev E 101-41915-306 Planning Fees $323.70 15303 Shoppes at towne lakes II fina Total N. A. C. $1,543.00 Paid Chk# 022742 4/17/2006 NORTHLAND CHEMICAL CORP. E 101-41940-405 Repair/Maint - Buildings $117.12 99176 sani flush, sani bathroom clea Total NORTHLAND CHEMICAL CORP. $117.12 Paid Chk# 022743 4/17/2006 OXYGEN SERVICE COMPANY E 101-43100-215 Shop Supplies $52.19 07066677 argon/carbon dioxide Total OXYGEN SERVICE COMPANY $52.19 Paid Chk# 022744 4/17/2006 PAT'S 66 E 101-42400-212 Motor Fuels $66.83 11055 fuel E 101-43100-212 Motor Fuels $48.00 11150 fuel Total PAT'S 66 $114.83 Paid Chk# 022745 4/17/2006 RED'S PORTABLE TOILETS E 101-45100-415 Other Equipment Rentals $90.53 10422 Rental -Portable Bathrooms Total RED'S PORTABLE TOILETS $90.53 Paid Chk# 022746 4/17/2006 S.E.H. E 491-49000-303 Engineering Fees $21,846.60 142691 VWVfF Total S.E.H. $21,846.60 • • • 20 • April 17, 2006 — Payment of Claims - Check Amt Invoice Comment Paid Chk# 022747 4/17/2006 SCHARBER & SONS E 101-45100-404 Repair/Maint - $123.81 352511 packing, wheels, kno Total SCHARBER & SONS $123.81 Paid Chk# 022748 4/17/2006 SPRINT - IL E 101-41940-321 Telephone Total SPRINT - IL Paid Chk# 022749 4/17/2006 STAR TRIBUNE E 101-41300-433 Dues and Subscriptions Total STAR TRIBUNE Paid Chk# 022750 4/17/2006 VERIZON E 101-42000-321 Telephone Total VERIZON Paid Chk# 022751 4/17/2006 WASTE MANAGEMENT E 101-41940-384 Refuse/Garbage Disposal Total WASTE MANAGEMENT $60.39 Idst $60.39 $215.80 1033990206 Annual subscription $215.80 $5.48 cell phone rescue truck $5.48 $98.70 1334523-159 Refuse Waste Hauler $98.70 Paid Chk# 022752 4/17/2006 WRIGHT COUNTY HIGHWAY DEPT, E 101-43100-221 Ice Removal $914.25 4838 sand & salt mix Total WRIGHT COUNTY HIGHWAY DEPT. $914.25 Paid Chk# 022753 4/17/2006 WRIGHT CTY SHERIFFS PATROL E 101-42110-307 Police Contract Fees $36,500.00 patrol-06-4 April sheriff patrol Total WRIGHT CTY SHERIFFS PATROL $36,500.00 Paid Chk# 022754 4/17/2006 XCEL ENERGY E 101-43160-381 Electric Utilities $27.61 5700 LaBeaux Signal Total XCEL ENERGY $27.61 Fund Summary 101 GENERAL FUND 204 SEWER ACCESS 206 WAC FUND 473 PRAIRIE RUN 482 CITY HALL 2004-5 486 PARKSIDE 5th ADD 491 WWTF Phase 2 492 52nd st Industrial Park 601 SEWER FUND 602 WATER FUND 604 STORM WATER 10100 Premier Bank $679,497.08 10100 Premier Bank $78,958.84 $40.50 $2,549.20 $1,093.50 $407,482.75 $390.00 $143,809.35 $5,087.28 $1,878.04 $26,469.62 $11,738.00 $679,497.08 page 5 21 • SEN TRANSMITTAL TO' CITY OF ALBUTVILLP- 5975 XlArN AVE NE Po BOX 9 ALIJrRI-VtLLE N4N,55.101 LJ 0 APRU, 5,2006 SE;14 Pgo N&t N�ALBM512.W Rel OWNER'S FIR0;ECTNUMBEk_----'l, APPLICATTON FOR PAYNMEINTNUMBER it, COMMACT FOR WASTENAT Ek TIMATMEN7 FACHITY UpGkADE. We are: 0 EndoOV 0 it tear wider s"We Caw E) sar4m as lequosw TWO COMS OF'rHE ABOVE REFERENCED APPLICATION FOR Pxmr:Nm SEII RECOMWNM PAYMENT OF PAY REQUESTNUMBER. I I N THE NiAOUNT OF, $121,7 t q-75 TO CIRB)ORCONS-MIUMN, INC, By'- LQfflN. S�ql?%Nd- 23 4/0612,06 M 9:13 Fff 761550 3736 OIDOR CON g , WnW. ,b MI, I O.. MALMNTRACTAMMW DE►` C' OR_- a kRWSMCON7IACTAMOUW 5 VALUE CMOLEMTODATE MXrMMSTORED AMOUNr tar .p jj #.: -M 11 •.. Ok'w xzff�KIM 0 • 24 Rosene ffke. 651-636-4600.m Fax 651-636131t •Associates Eragirtetrs 4 Atthit is April 7,2006 Mr. Kzus City of Albcrtvifle 5975 Main Avenue Al crtVl] , N 55301. Re: AlberivAle City Hall o e it P t No' W 10 -05 i 00-0 qy Request - Dew N r: , Transmitted benwit i are tour (4) copies of Rcqucst for Pa- yment No. 2, Wc haw rcvi,-,wrd,thc roquest Lind bereby retornmerrd ter v l for pa.Nmcnt in the amount of 40,2 70-0 , Flvw execute thedocuments mW d tutc a,5 fQt]Qw; 0 1 Copy City of Albertvilltl 2 COPiUS Breithach Consmwtion, Ate. Mr. Ryan Br ithac 1 copy Horkcswroo, o nc. )Wdcrlik &AssociaWs Iw,, atm, Richard Hjelle htzuLd you have questions rcgarding this projcvt, l feet .fee to i ll tne at 651-` . 91 4. 'our yen" tly� �d - Enclosure • St. Paul, St, C40,v 1, ROK fietter,, W4 r MOveWkees t 'W� Chicago, .. )t, � 25 1,9776 D5 FwPeK,,od! M" • COWRACTOR'S REQUEST FOR PAYMENT ALBERTvILLE CITY HALL BRA, FtLf NO, C01 025-051 CO-0 SUWAARY i trj i nall Co n tracl Amount 2 Charge *-der - Addilion G. t11D 3 Charge Order - D-odudion 0, W 4 Remsed Cow.ractAnrourA 6 VaJue Urroeted to Date 0 Malo6*,on Hand 7 Ama u n t Larne d 10 -Iess Arrount P&d Previousfy 11 Liquidelecl darnages - 12 AMOUNT 00JE THIS REQUEST FOR PAYMENT NO, 2 attached 1orst4m, Speeffied 03ntfsd CoMpWion Date sm 0 RE4, T < fER) ; €, T Y OF 0 ALBERTVILLE In' ks-1101 t lt' t: VA LM hi"rRiia% ai' =NTNX7Tt'A'$ APPfl'.TrA7XIN Pico PAYMEN --------------- -1-------------------- , OVG/ D AD"K4cATTW Wit 2 s x ank; zing wA, p V311'sc 5>h V A f;�T F'AYMM-x &S ShCW'B fdtICV, ifl 6xA""➢"Llt:Li LV _.x_A.....__--»_..----_-,.._._.._,--- _-...»,_»_.__._, �iAi ClC S�^xck�� Fi3tsLCES��i �{yN�� " . ... ......, ..------- ---------------------------. ».....----.».-,, -.. ., ».». j f1snngt r1rdeTe AT-r-roved In Wlrle E � e rg®rss k e Fr ee --------------- M.-_-___,-»_----- � 1 l i P I 9 MM I I s .._..__-,.__ --------w».-_---,._..----------- by� Th.4 mr*-gnw9 C"- t-rArCrrr -r=VTt AC�os t,CAt [C Neat Of Litt €:x"T-itr rtor"e know;. 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V3W'aOKA9, AMd S:Tsr Ct-i'E:CrE'.`:.Crr C"wp.Bxthlp CC-.'y r.r:. .r�vT*:,'"C%fiKL•`:T'::ama4.. I'i:d<min, tov,A&1YL.e,:: .i'by ciL sr mn't .e Lluj t:a: pryinont zt tbo AWW-M.- =m'r8ri'L�"oon, cif;.ts pr'Wj U&L'tz LL arl :aght,ae s:G thm cvr-vr •-t- 5: tror,tor unrimr this. ,'rmi-rrr-,,. -"."."....»"-.-..__-----,.. I -_ .,.__-__-----_---,.-------»--.. .---- »."... ,.____- n.:. .»._ -»» ,_,.,.,...<.r.....-....�..-.»»a ",,.�-......_�. ,.".� 27 • CITY OF ALBERTVILLE COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO.2006-xx A RESOLUTION AUTHORIZING TO WRITE OFF THE 1998 STMA ICE ARENA SHORT-TERM LOAN WHEREAS, the Albertville City Council has reviewed its annual audit; and WHEREAS, the City's auditing firm has recommended the City of Albertville write off the 1998 STMA Ice Arena loan. NOW, THEREFORE, BE IT RESOLVED by the Albertville City Council that the STMA Ice Arena short-term loan be removed from the 604 (Storm Water Fund). Adopted by the City Council of the City of Albertville this 171h day of April, 2006. • Don Peterson, Mayor Bridget Miller City Clerk • 29 CITY OF ALBERTVILLE COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO.2006- A RESOLUTION CLOSING CERTAIN FUNDS WHEREAS, the Albertville City Council has reviewed its annual audit; and WHEREAS, the City's auditing firm has recommended elimination of some unnecessary funds. NOW, THEREFORE, BE IT RESOLVED by the Albertville City Council that the following actions are implemented: • Fund 322 (1992A G O Improvement) is closed to Fund 300 (Closed Bond Issues Fund) • Fund 324 (1993A G O Improvement Refunding) is closed to Fund 300 (Closed Bond Issues Fund) • Fund 341 (City Hall Bonds) is closed to Fund 300 (Closed Bond Issues Fund) • Fund 433 (TIF # 7) is closed to Fund 407 (TIF # 7) • Fund 442 (TIF # 9) is closed to Fund 409 (TIF # 9) • Fund 469 (Wright County Transportation) is closed to Fund 400 (Closed Capital Projects Fund) • Fund 481 (Wright -Hennepin Substation) is closed to Fund 400 (Closed Capital Projects Fund) • Fund 493 (CSAH 19 & 57th Intersection) is closed to Fund 400 (Closed Capital Projects Fund) • Fund 494 (CSAH 19 & 50th Street) is closed to Fund 400 (Closed Capital Projects Fund) • Fund 495 (Wright County Shop Property) is closed to Fund 400 (Closed Capital Projects Fund) • Fund 465 (2003 CSAH 19 Widening) is closed to Fund 400 (Closed Capital Projects Fund) Adopted by the City Council of the City of Albertville this 17th day of April, 2006. Don Peterson, Mayor Bridget Miller City Clerk 31 • CITY OF ALBERTVILLE COUNTY OF WRIGHT STATE OF MINNESOTA • RESOLUTION NO.2006- A RESOLUTION APPROVING MOVE PARK FUND FROM A SPECIAL REVENUE FUND TO A CAPITAL FUND WHEREAS, the Albertville City Council has reviewed its annual audit; and WHEREAS, the City's auditing firm has recommended a separate capital park fund. NOW, THEREFORE, BE IT RESOLVED by the Albertville City Council that the park fund be removed from the 201 (Park Fund) and placed into a capital fund of their own (501 Park Fund). Adopted by the City Council of the City of Albertville this 171h day of April, 2006. Don Peterson, Mayor Bridget Miller City Clerk 33 . CITY OF ALBERTVILLE COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO.2006- A RESOLUTION APPROVING RECLASSIFICATION OF SEWER ACCESS CHARGES FROM A SPECIAL REVENUE FUND TO A CAPITAL FUND WHEREAS, the Albertville City Council has reviewed its annual audit; and WHEREAS, the City's auditing firm has recommended a separate capital sewer access charge fund. NOW, THEREFORE, BE IT RESOLVED by the Albertville City Council that the sewer access charges be removed from the 204 (SAC Fund) and placed into a capital fund of their own (504 SAC). Adopted by the City Council of the City of Albertville this 17th day of April, 2006. • Don Peterson, Mayor Bridget Miller City Clerk 0 35 • CITY OF ALBERTVILLE COUNTY OF WRIGHT STATE OF MINNESOTA • • RESOLUTION NO.2006- A RESOLUTION APPROVING RECLASSIFICATION OF WATER ACCESS CHARGES FROM A SPECIAL REVENUE FUND TO A CAPITAL FUND WHEREAS, the Albertville City Council has reviewed its annual audit; and WHEREAS, the City's auditing firm has recommended a separate capital water access charge fund. NOW, THEREFORE, BE IT RESOLVED by the Albertville City Council that the water access charges be removed from the 206 (WAC Fund) and placed into a capital fund of their own (506 WAC). Adopted by the City Council of the City of Albertville this 17th day of April, 2006. Don Peterson, Mayor Bridget Miller City Clerk 37 1 1; i Ih="Ju1 : e E • YEAR, 2 39 A�Ibc!Villewn Ul TO: City Council FROM: Tim Guimont DATE: April 6, 2006 RE: Public Works Department Update Street Maintenance Adam and I have been going over the project list this year. It appears we will be focusing on the older part of the city. As usual we will be doing some crack filling. Through my experience and discussion with City Engineers, as other maintenance representatives, I have learned that our method of crack filling is not the best way. The method we use for crack filling is to blow out the cracks with an air compressor. Then fill the crack with the hot asphalt into the crack to fill. Another method that can be done is routing out the cracks in order to make them larger. This would allow for more material to be placed in the area then in the winter it will allow for expansion. • Our tar kettle is considerable out of date and considering the possibility of purchasing a used kettle. I would either rent or buy a router. I will present this for Council action at a later meeting once I obtain the amount and other additional information. I am in the process of obtaining a price on subcontracting out some of the crack filling for 2006, where they would take care of the whole process of routing out the cracks and filling them. The problem I am running into is that the company I would subcontract with cannot rout cracks on streets that have already been sealed. So the City would have to continue to do those streets ourselves until we do a street overlay. Again, once I obtain the information I will report for Council action. TG:bmm • iim • 1bcrtvi -e Small Toren Uving. Big City Ufa. TO: City Council FROM: Tim Guimont DATE: April 6, 2006 RE: Parks Department Update Request for Council Action (RCA) Parks Maintenance In Villas Park on the north-west side of the soccer field, I would like to have a fence installed to keep the soccer balls off the street. We may need to install a fence on the other end of the soccer field, as well, to keep the balls from going into the brush and potentially into the creek. However, at the present they are using the field the short way to create two (2) fields instead of one (1). So the south-east side may not as crucial to install a fence. I have received three (3) quotes to install 215 feet of 6-foot fencing as follows: D & H Fence Towne and Country Fence Countryside Fence RECOMMENDATION: $3,995 $4,550 $4,100 Staff recommends move to authorize Countryside Fence to install the 215 feet of 6-foot fencing within the Villas Park at a cost not to exceed $4,100 with funds from Park Dedication, which has an estimated unreserved available fund balance of $189,000. The City has worked with Countryside Fence in the past and has been pleased with the work they do. TG:bmm • 43 ■ lbcrty� c Small T�iwn Living. Big City Life. TO: City Council FROM: Tim Guimont DATE: April 6, 2006 RE: Public Works Department Update REQUEST FOR COUNCIL ACTION (RCA) Street Maintenance It has come to the attention that a portion of 501h Street NE, east of Barthel Industrial Drive NE, should be overlaid due to the detouring of Hwy. 241. The City of St. Michael feels the road will not make it through the summer in its present condition. St. Michael suggested that a 3" over lay for about 1,100-feet in both lanes at $38.85 per ton, with a cost estimate of $20,000 would be best. City of Albertville would reimburse City of St. Michael for one-half of the expense or $10,000, whichever is smaller. RECOMMENDATION Move to approve a partial 50`h Street NE Overlay Project at a cost not to exceed $10,000 using funds from Street Overlay Account, which has funds available in the budget in the amount of $125,000 with the City of St. Michael paying for the overlay and City of Albertville reimbursing $10,000 to St. Michael. TG:bmm • !R • A�Ibcrtvillc smal TOUM UAM. Stu ku Ufa. April 10, 2006 Downtown Business Owner Downtown Area Resident To Whom It May Concern: You are invited to attend an Open House to discuss the Albertville Downtown Parking Study prepared by Northwest Associated Consultants. The Open House will be held on Thursday, April 20, 2006 at 6:30 p.m. at the Albertville City Hall, 5975 Main Avenue NE, Albertville, MN. The discussion will include locations for new parking lots and redevelopment in the downtown area. We look forward to seeing you there. Sincerely, Larry Kruse City Administrator 47 0 TO: City Council FROM: Mike Couri, City Attorney DATE: April 13, 2006 RE: STMA School District No. 885 Option Agreement Attached is the Draft of the Option and Utility Services Agreement between City of Albertville and Independent School District 885 for the Council's review. .• • DRAFT DATE April 10, 2006 OPTION AND UTILITY SERVICES AGREEMENT BETWEEN CITY OF ALBERTVILLE AND INDEPENDENT SCHOOL DISTRICT 885 THIS AGREEMENT, entered into this day of , 2006 by and between the City of Albertville, County of Wright, State of Minnesota referred to herein as "Albertville" and Independent School District 885, hereinafter referred to as "ISD 885"; WITNESSETH: . WHEREAS, Albertville owns an option to purchase certain real property within the City of St. Michael, said option is attached as Exhibit A ("Land Option"). This real property which is subject to the option is proposed to be used to alleviate a drainage control problem in Albertville, and is described on the attached Exhibit B ("Land Option Property"); WHEREAS, ISD 885 provides public education services for students residing in Albertville and St. Michael; WHEREAS, ISD 885 is planning to construct two new educational facilities (one high school and one elementary school) on real property located within the boundaries of St. Michael, as described on the attached Exhibit C, hereinafter referred to as the "Subject Property"; WHEREAS, in order for ISD 885 to construct the educational facilities in accordance with its plans ISD 885 will need to utilize the real property described on Exhibit B. NOW, THEREFORE, IT IS HEREBY AND HEREIN MUTUALLY AGREED, in consideration of each party's promises and considerations herein set forth, as follows: 1. Option Agreement: Albertville hereby assigns its Land Option to ISD 885 for consideration of $5,000 and the other terms and conditions as set out in this Agreement. ISD 885 shall exercise the option prior to its expiration and use ISD 885 funds to purchase the property described in Exhibit • B. In addition, the parties agree to the following terms: 51 A. ISD 885 shall grant Albertville a five-year option to obtain a drainage and utility easement • over land within the area described in Exhibit D for the purpose of constructing storm water ponds ("Easement Option"). The approximate size, location, dimensions, and area of such easement is shown on Exhibit D, which is attached hereto and incorporated herein by reference. If Albertville exercises the Easement Option, Albertville will be solely responsible for maintaining such ponds as are needed by Albertville and are contained within the drainage and utility easement area. Said maintenance by Albertville shall include all landscaping, mowing and other similar maintenance of the ground cover of the land around the ponds in the Easement Option acquired by Albertville. Albertville shall not be responsible for the maintenance or construction of ponds which retain storm water originating only from the educational facilities under the control of ISD 885. B. ISD 885 shall have the Land Option Property delineated for the presence of wetlands in accordance with the Wetland Conservation Act and shall determine the total acreage of such property which is not determined to be wetlands. In the event Albertville exercises the Easement Option, Albertville shall be entitled to purchase all or part of the easement area shown on Exhibit D at a per acre price consisting of the purchase price paid by ISD for the Land Option Property divided by the total amount of non -wetland acreage existing on such property at the time of purchase by ISD. Such per acre price shall not apply to wetland acreage which may be contained within the easement areas purchased by Albertville. Such easement purchase amounts due from Albertville may be offset against any trunk line fees due to Albertville from ISD 885. In the event the trunk line fees then due are less than the easement purchase price, Albertville shall pay the difference between the two to ISD 885. In the event the trunk line fees then due are greater than the easement purchase price, ISD 885 shall pay Albertville the difference between the two. 2. Sanitary Sewer and Municipal Water Services: Albertville shall provide municipal water and sanitary sewer services to the Subject Property in sufficient amounts as to provide for a maximum capacity of 2,750 students. ISD 885 shall construct, at ISD 885's sole expense, all utility lines and any lift stations which may be necessary to serve the Subject Property. In addition, the parties agree to the following terms: A. Development of the Subject Property shall be subject to Albertville's Sanitary Sewer Trunk Line Fees and Municipal Water Trunk Line Fees. Payment of such fees may be deferred by Albertville until such time as Albertville decides whether it will exercise the Easement Option, at which time such Trunk Line Fees will be offset against the purchase price of the easement as set out in paragraph I.B. above. The combined Sanitary Sewer Trunk Line Fee and Municipal Water Trunk Line Fee applicable to the Subject Property shall be $3,000 per acre. Such fee shall apply to no more than 115 acres of the Subject Property. B. Development of the Subject Property shall be subject to Albertville's Sewer Access Charge ("SAC") and Water Access Charge ("WAC") in effect at the time of development, except that Albertville shall charge only one-half of the WAC fee applicable to the construction of the high school building. Albertville and ISD 885 52 expect that the City of St. Michael will collect the other half of the WAC fee (at St. Michael's WAC rate) related to the high school construction. 3. Ponding/Wetlands: Albertville and ISD 885 agree that if feasible, ponding shall occur on the Land Option Property in coordination with the construction of the schools. In addition, the parties agree to the following terms: A. Albertville may construct a dike to increase the ponding capacity of any wetlands contained within the Subject Property, provided such action is permitted under the Wetlands Conservation Act and approved by the City of St. Michael. In the event that Albertville's actions in modifying the existing wetlands for ponding purposes or in creating new ponding increases the amount of wetlands on the Subject Property, Albertville shall purchase additional easement for said expanded wetlands from ISD 885 at the per acre purchase price for ponding easement as determined under paragraph I.B. above. B. ISD 885 and Albertville agree that engineers hired by both parties in connection with the terms of this Agreement shall work in a cooperative manner and shall share all topographic, soil boring and other relevant data in order to place ponds in the most beneficial location for both parties. Albertville shall reimburse ISD 885 for the cost of any soil borings which are requested by Albertville and are not needed for ISD 885 purposes. C. In the event that ISD 885 requires borrow in order to develop the Subject Property, ISD 885 agrees to utilize borrow material from the pond easement area described in Exhibit D is before using borrow from any other location, provided the borrow is of an acceptable quality. Albertville agrees to reimburse ISD 885 for the amount, if any, in excess of what it otherwise would have cost ISD 885 to move such borrow if it were taken from another location on the Subject Property. D. In the event that Albertville approves the storm water ponding project and there is construction of storm water ponds, ISD 885 and Albertville agree to work cooperatively and attempt to coordinate the pond construction with the construction of the high school. The purpose of coordinating said projects will be to enable Albertville and ISD 885 to bid the excavation work for both projects in one bid, with Albertville paying the portion of the bid to cover additional costs associated with the storm water pond. E. If Albertville constructs the storm water ponds on a timetable which does not coincide with construction of the high school, ISD 885 agrees to allow Albertville to spread soil excavated from the storm water ponds over the Subject Property, provided the spreading of soil is performed pursuant to a grading plan which has been approved by ISD 885. F. In the event that Albertville is required to mitigate any wetlands on the Subject Property for purposes associated with constructing storm water ponds, ISD 885 agrees to allow Albertville to mitigate such wetland area within the Subject Property in a location acceptable to ISD 885 and the local wetland authorities. Albertville further agrees to • compensate ISD 885 at the per acre purchase price for ponding easement as determined under paragraph I.B. above for any non -wetland areas on the Subject Property that are 53 converted to wetland for mitigation purposes described in this paragraph. • 4. Road Construction. A. ISD 885 agrees to coordinate with the Albertville City Engineer regarding road construction on the Subject Property and connection with the Albertville street system. B. Albertville and ISD 885 anticipate that the City of St. Michael will require a road extension and water line extension from the eastern -most north -south road planned by ISD 885 on the Land Option Property as shown on Exhibit D to the south border of the Land Option Property. In the event St. Michael requires such a road extension and water line extension, Albertville shall pay for the construction of such road and water line extension from the south border of the Land Option Property north to the westerly extension of 52°d Street as extended from Albertville. ISD 885 shall provide the right of way for such road extension and water line extension. ISD 885 and Albertville shall coordinate the location of such road extension and water line extension with each other and the City of St. Michael. 5. Future Road Reconstruction Assessments. In the event Albertville exercises the Easement Option, Albertville shall reimburse ISD 885 for all assessments and charges imposed by the City of St. Michael for future reconstruction of the Road Extension, based on the amount of lineal feet of the land used for the Easement Option abutting the Road Extension. 6. Severability. If any portion, section, subsection, sentence, clause, paragraph or phrase of this Contract is for any reason held invalid by a Court of competent jurisdiction, such decision shall not Is affect the validity of the remaining portion of this Contract 7. Title. This Contract shall run with the land and shall be recorded against the title to the property. 8. Integration Clause, Modification by Written Agreement Only. This Agreement represents the full and complete understanding of the parties and none of the parties is relying on any prior agreement or statement(s), whether oral or written. Modification of this Agreement may occur only if in writing and signed by a duly authorized agent of all parties. 9. Notification Information. Any notices to the parties herein shall be in writing, delivered by hand (to the City Clerk for Albertville) or registered mail addressed as follows to the following parties: City of Albertville c/o City Clerk P.O. Box 9 Albertville, MN 55301 Telephone: (763) 497-3384 Independent School District 885 c/o Superintendent • 54 • St. Michael -Albertville Senior High School 11343 50th St. NE Albertville, MN 55301 Telephone: (763) 497-2192 U • 9. Agreement Effect. This Agreement shall be binding upon and extend to the representatives, heirs, successors and assigns of the parties hereto. 10. Jointly Drafted Agreement. For purposes of interpreting this Agreement, both parties shall be deemed to have jointly drafted this Agreement. CITY OF ALBERTVILLE, By Don Peterson, Its Mayor By Bridget Miller, Its Clerk INDEPENDENT SCHOOL DISTRICT 885 UZZ Its: Superintendent Its: 55 STATE OF MINNESOTA ) ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of , 2006, by Don Peterson as Mayor of the City of Albertville, a Minnesota municipal corporation, on behalf of the city and pursuant to the authority of the City Council. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of , 2006, by Bridget Miller, as Clerk of the City of Albertville, a Minnesota municipal corporation, on behalf of the city and pursuant to the authority of the City Council. Notary Public • • 56 • • STATE OF MINNESOTA ) ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me , 2006, by , as District 885. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before , 2006, by , as District 885. DRAFTED BY: Couri, MacArthur & Ruppe PLLP P.O. Box 369 705 Central Avenue East St. Michael, MN 55376 (763) 497-1930 Notary Public this day of of Independent School me this day of of Independent School 57 EXHIBIT A • Option Agreement EXHIBIT B Land Subject to Option Agreement EXHIBIT C Subject Property EXHIBIT D Land within Albertville Easement for Storm Water Ponds C] 0 • TO: City Council FROM: Mike Couri, City Attorney DATE: April 13, 2006 RE: City of Albertville — City of St. Michael Agreement Attached is the Draft of an Agreement between City of Albertville and the City of St. Michael for the Council's review. P� 59 • AGREEMENT This Agreement, entered into this day of April, 2006, by and between the city of St. Michael, a Minnesota municipal entity (hereafter "St. Michael"), and the city of Albertville, a Minnesota municipal entity (hereafter "Albertville") RECITALS: RI. Albertville owns an option to purchase an approximate forty acre parcel of real property located within St. Michael, which land is legally described as set forth on Exhibit A attached ("40 Acre Parcel"). R2. Albertville intends to enter into an agreement with Independent School District No. 885 ("School District") whereby the School District will acquire Albertville's option to purchase the 40 Acre Parcel. Pursuant to the agreement between Albertville and the School District, Albertville will have a five year option to purchase from the School District a drainage and utility easement over a part of the 40 Acre Parcel for the purpose of constructing storm water ponds to alleviate a drainage control problem in Albertville. R3. The School District will use part of the 40 Acre Parcel to facilitate the construction of educational facilities on land owned by the School District ("School District Property") lying adjacent to the 40 Acre Parcel. R4. St. Michael and Albertville desire to work cooperatively for the benefit of the parties to this Agreement and for the mutual benefit of St. Michael, Albertville and the School District with regard to the construction of the educational facilities by the School District and the possible acquisition of the drainage and utility easement by Albertville to alleviate a drainage control problem in Albertville. NOW, THEREFORE, in consideration of the promises and covenants set forth herein, the parties agree as follows. 1. St. Michael agrees that a portion of the 40 Acre Parcel (the precise amount of acreage thereof is not yet determined) may be used by Albertville for storm water pond purposes, contingent on the School District and Albertville entering into an agreement as stated in R2 above and that all storm water pond construction is substantially consistent with the School District's Site Plan shown on Exhibit B attached. Any storm water pond construction and use shall be subject to • and in accordance with all St. Michael storm water ordinances and regulations. Storm Water 61 Calculations (modeling upstream and downstream) must be completed by Albertville and approved • by St. Michael to insure that any storm water pond construction undertaken by Albertville is in compliance with St. Michael's storm water ordinances and regulations. In amplification of the foregoing, Albertville expressly acknowledges and agrees that nothing herein shall be construed to limit the regulatory authority of St. Michael as the RGU/LGU authority for the 40 Acre Parcel. 2. Any storm water pond construction undertaken by Albertville shall not allow water to back up west of Jamison Avenue. Albertville may be permitted to locate additional ponding structures not to exceed an area of eight acres on the property to the South of the 40 Acre Parcel provided: 1) Albertville owns or has a drainage easement over such land, and 2) such drainage is consistent with a grading and drainage plan approved by St. Michael which complies with St. Michael's storm water ordinances and regulations, including storm water modeling calculations. 3. Although the educational facilities to be constructed by the School District on the • School District Property is located in St. Michael, the parties agree that Albertville shall provide municipal sanitary sewer and water services to the School District Property in sufficient amounts as to provide for a maximum capacity of approximately 2,750 students, except that 50% of the municipal water services for the high school to be constructed on the School District Property will be looped by St. Michael from Jamison Avenue. Therefore, the parties agree that one-half of the Water Access Charges ("WAC Fees") attributable to the high school shall be payable by the School District to the City of St. Michael. The other one-half of the WAC Fees, and all of the Sewer Access Charges (for both the high school and the elementary school to be constructed on the School District Property) and the sanitary sewer trunk line fees and water trunk line attributable to the development of the School District Property, shall be payable by the School District to Albertville. Except for the one-half of the WAC Fees to be payable to St. Michael as set forth above, St. • 62 . Michael agrees that the development of the School District Property shall be exempt from all other St. Michael WAC / SAC Fees, sanitary sewer trunk line fees, water trunk line fees and storm water access fees. Furthermore, the ongoing utility billing for sewer and water for both the elementary and high schools shall be done by Albertville with 50% of the water charges for the high school being paid to St. Michael. 4. In conjunction with the development of the educational facilities on the School District Property, the School District will be required by St. Michael to construct a north/south collector road that will begin at County Road #18 and terminate at the intersection with the proposed 52nd Street extension from Albertville. Albertville acknowledges and agrees that the School District will also be required by St. Michael to dedicate the right-of-way for the entire collector road, to the south boundary line of the School District Property, as part of the School isDistrict's initial plat and that the initial site/grading improvements for the elementary school shall be completed in a manner that will reasonably accommodate proper grades for that part of the collector road not initially constructed by the School District. Because the development of the educational facilities upon the School District Property is anticipated to be completed ahead of St. Michael's land use phasing plans for that area of the City of St. Michael in which the School District Property is located, the north/south collector road to be constructed by the School District in conjunction with the development of the School District Property will not be connected to the St. Michael street system until an undetermined time in the future. Therefore, Albertville shall be responsible for snow plowing the north/south collector road to be constructed by the School District in conjunction with the development of the educational facilities on the School District Property until such time as the road is connected to the St. Michael • street system. When the 40 Acre Parcel to the south develops, St. Michael shall require it to 63 connect to the north/south connector located on the 40 Acre Parcel. Albertville shall not be required to provide crack sealing and seal coating maintenance services for the road. • p g g 5. Albertville understands, acknowledges and agrees that: (i) the School District will be required by St. Michael, as a condition of plat approval, to agree to a waiver of assessment for the portion of the collector road and a water line extension lying south of 52nd Street which will not be constructed initially by the School District; (ii) that St. Michael shall have the discretion to construct the portion of the collector road , and the water line extension, lying south of 52°d Street as a city project and assess 100% of the costs to that part of the School District Property lying west of the collector road on a lineal foot basis; (iii) in the event the land lying adjacent to the collector road is improved in any manner (i.e. residential development, ball fields, storm water ponding, etc.) prior to the construction by St. Michael of the collector road and water line improvements described herein, St. Michael may require , at its discretion, the owner to construct the collector road and water line improvements concurrently with the development improvements or make a payment in lieu of assessment to St. Michael; and (iv) the School District will be required as a condition of plat approval to agree in writing with St. Michael that St. Michael shall have the right to assess 100% of any future collector road reconstruction costs in its entirety to the land lying west of the collector road on a lineal foot basis. IN WITNESS WHEREOF, the parties have signed this agreement effective the day and year first above written. City of St. Michael an Attest: Jerry Zachman, Mayor U 0 Carol Beall, Clerk Attest: Bridget Miller, Clerk • City of Albertville R-Im Don Peterson, Mayor 65 TO: City Council FROM: Mike Couri, City Attorney DATE: April 13, 2006 RE: Knechtl Property Purchase Agreement Attached is a revised Draft of the Knechtl Property Purchase Agreement for the Council's review. • 67 . COMMERCIAL PURCHASE AGREEMENT THIS AGREEMENT is made as of , 2006, between DDr. Gerhard Knechtl ("Seller") and the City of Albertville, Minnesota ("the City"). In consideration of this Agreement, Seller and the City agree as follows: 1. Sale of Property. Seller agrees to sell to the City, and the City agrees to buy from Seller, the following property (the "Property"): The real property located in Wright County, Minnesota, described on the attached Exhibit A ("Land") together with (1) all easements and rights benefiting or appurtenant to the Land (collectively the "Real Property"). 2. Purchase Price. The total purchase price ("Purchase Price") to be paid by the City to Seller for the Property shall be Six Hundred Twenty-five Thousand Three Hundred and Seventy- eight Dollars and 00/100 Dollars ($625,378.00) which equals $13.00 per square foot by check on the Closing Date. 3. Closing. The closing (the "Closing") shall occur on or before the later of June 30, 2006 or 60 days after the contingencies have been satisfied (the "Closing Date"). The Closing shall • take place at the office of Albertville City Hall, or at such other place and at such time as may be designated by the City. 4. Possession. Seller agrees to deliver possession of the Real Property to the City on the date of closing. a. Seller's Closing Documents. On the Closing Date, Seller shall execute the following (collectively, "Seller's Closing Documents"): (1) Deed. A Warranty Deed, in form reasonably satisfactory to the City, conveying marketable title to the Real Property to the City, free and clear of all encumbrances. (2) Termination of Leases. Terminations of Leases, in form reasonably satisfactory to the City, signed by all tenants of the Property. (3) Closing Documents. An affidavit of Seller as may reasonably be required by the City's title insurer. (4) Well Certificate. A Well Certificate in the form required by Minn. Stat. 1031.235. is Stat. Storage Tanks. An affidavit with respect to storage tanks pursuant to Minn. Stat. 116.48. (6) Other Documents. All other documents reasonably determined by the City • to be necessary to transfer the Property to the City free and clear of all encumbrances. 5. Closing Costs. The City will pay all closing fees, title insurance fees, abstracts, deed tax, and recording costs. Seller must pay real estate taxes up to the Closing Date, all levied special assessments, and all unpaid real estate taxes. All operating costs (utilities, etc.) of the Property will be allocated between Seller and the City as of the Closing Date. 6. Operation Prior to Closing. Until the Closing Date, Seller shall operate and maintain the Property in the ordinary course of business, including the maintenance of adequate liability insurance and property insurance. 7. Representations and Warranties by Seller. Seller represents and warrants to the City as follows: a. Title to Real Property. Seller owns the Real Property, free and clear of all encumbrances. b. Leases. Seller has made available to the City a correct and complete copy of each Lease and all amendments. There are no other leases or possessory rights of others regarding the Real Property. 0 C. Environmental Laws. To the best knowledge of Seller after due inquiry, no toxic g or hazardous substances or wastes, pollutants or contaminants, petroleum products, any hazardous substances or pollutants as defined by state or federal law, are located on or in the Property. Seller shall not be released from any liability for any environmental contamination of the Property for which Seller is a responsible party. To the best knowledge of Seller after due inquiry, no above ground or underground tanks are located in or about the Property, or have been located under, in or about the Property and have subsequently been removed or filled. There are no known wells within the meaning of Minn. Stat. § 1031.005 on the Property except as described on Exhibit B attached hereto and made a part hereof. Seller has disclosed to the City all environmental reports and studies with respect to the Property which are in Seller's possession. There are no septic systems located on the Property. 8. Damage. If the Property is materially damaged by fire or other casualty prior to the Closing Date, the City may cancel this Purchase Agreement. 9. Contingencies. Buyer's performance under this purchase agreement is contingent upon the following: 0 70 • A. The completion of a Phase II environmental investigation in which no hazardous substances or pollutants as defined by state or federal law are found to be on or in the Property. Buyer shall diligently pursue the completion of the Phase 11 environmental investigation at Buyer's expense. Buyer may waive this contingency at any time via written waiver delivered to Seller. B. Approval by the City of Albertville and the State of Minnesota for the removal of the existing billboard located on the Property and the construction of a new billboard at least square feet in size and feet in height to be located on Seller's remaining property in the approximate location shown on the attached Exhibit C. 10. Subdivision of Property. Seller shall cooperate with Buyer in complying with the City of Albertville's subdivision requirements necessary to subdivide the Property as a separate parcel for conveyance to Buyer. Buyer shall pay all application and processing fees required by the City of Albertville to process the subdivision. 11. Right to Enter Property: Indemnification; Reports. The City shall have access to the Real Property for purposes of performing surveys, engineering borings, and other testing. The City will be responsible for any damage to Seller's personal property and other claims resulting from the City's entry onto the Real Property. • 12. Survival. All of the terms f this willenforceable t sot s Agreement wi survive and be after the Closing. 13. Entire Agreement; Modification. This written Agreement constitutes the complete agreement between the parties and supersedes any prior oral or written agreements between the parties regarding the Property. There are no verbal agreements that change this Agreement and no waiver of any of its terms will be effective unless in writing executed by the parties. This agreement binds and benefits the parties and their successors and assigns. This Agreement has been made under the laws of the State of Minnesota and such laws will control its interpretation. Seller and the City have executed this Agreement as of the date first written above. DDr. Gerhard Knechtl, Seller E 71 CITY OF ALBERTVILLE, MINNESOTA Buyer I0 ATTEST: Bridget Miller City Clerk THIS INSTRUMENT DRAFTED BY: Court, MacArthur & Ruppe, P.L.L.P. P.O. Box 369 St. Michael, MN 55376 763-497-1930 Don Peterson Its Mayor 0 • 72 • • EXHIBIT A REAL PROPERTY DESCRIPTION Also known as Parcel #1 of the I-94 Ramp Project. attach a copy of the ROW plan showing this parcel> 73 EXHIBIT B LOCATION OF WELLS (NONE, IF LEFT BLANK) :7 • • 74 A�Ibc!Villewn Uif TO: City Council FROM: Bridget Miller DATE: April 10, 2006 RE: Albertville Friendly City Days Last Fall, during the St. Michael Heritage Days, St. Michael City Council members wanted to challenge the City of Albertville's City Council members and staff to a potential softball game. After further consideration it became a sumo -wrestling tournament between the Mayors, which was held at the STMA High School during a football game. At the time, there was discussion that during the Albertville Friendly City Days, the City of Albertville would host a similar challenge against the St. Michael's City Council members and staff. Albertville staff wanted to get City Council members to begin thinking about what Albertville would like to consider for a challenge to be held during Friendly City Days. Albertville Friendly . City Days is a couple months away; does the Council want to do something? 40 75 Albertville sn"M Town uvkkg.. ft City UJIL MEMORANDUM Date: April 12, 2006 To: City Council From: Larry R. Kruse, City Administrator Re: General Update I-94: Enclosed in your packet is a proposed Purchase Agreement on the Knechtl property. Mr. Knechtl rejected the $10.50 per square foot price, plus the cost to relocate the sign. What staff is proposing would be to pay $13.00 per square foot, which includes the cost to move the bill board sign. Hoey Advertising is suggesting the need for a variance to raise the height of the bill board, from 30 feet to 40 feet, to maintain the same visibility along I-94. Staff will work with Hoey to verify if the need is justified, and will report back to the Council. Mr. Knechtl will be in Minnesota on April 25 to complete negotiations and hopefully sign a Purchase Agreement. 2005 Audit: KDV will be presenting the 2005 Annual Audit. I encourage the Council not to be afraid to question the audit if there are areas you don't understand. Think about this as a learning opportunity. Downtown Parking Study: A meeting with the downtown neighborhood has been set for Thursday, April 20 at 6:00 p.m. to be held at City Hall to review the parking study and receive feedback. City Hall: The contractor anticipates erecting most of the pre -cast concrete in the next couple weeks. After that, backfill operations will commence. I have reviewed the keying of the various locks and recommend two additional electronic card readers; one on the exterior of the break room and one allowing volunteer groups to access the storage area in the basement. Building Official Sutherland has been working with the contractor on safety fencing along Main Avenue NE. A safe construction area is paramount for us. I have placed an item on the City Council agenda under Consent to have Bolton and Menk, Inc. develop a parking lot concept plan for the southern area of City Hall to see if we can exchange Jamie Steven's land moving it to abut with the railroad tracks and create a small lot there. The cost to explore this will be about $500. 77 S.E.H. Engineering: • Bob Moberg has completed a summary of all the outstanding work they have going, which is included in the packet. Please review and let me know if you have any questions. St. Michael/Albertville/STMA school Ponding: We learned that the St. Michael City Council did not approve the Agreement allowing us to pond on the new Elementary School site. Further, they want to link the approval to the extension of Main Avenue NE. We met at length, and it appeared we were headed towards having as Special Joint Council meeting, but based on a conference call with Mayor Peterson and Vice Mayor Berning; we declined a Joint Council meeting if it involved the discussion pertaining to extending Main Avenue NE. However, I did convey to the STMA School District that the City does intend to transfer the Land Purchase Option and pass the STMA/Albertville Agreement. City Attorney Couri will be recommending the City purchase the land and not transfer the option to the school as he feels the City will lose our legal standing to pond on the school site. Attorney Couri has a very good point however; it may be trumped by the City's desire for the school to move forward. Couri will present a letter at Monday's council meeting providing his guidance on the matter. :7 0 NKI 0 A SEH MEMORANDUM TO: Larry Kruse Albertville City Administrator FROM: Robert Moberg, PE Project Manager DATE: April 11, 2006 RE: Albertville, MN Engineering Transition Plan Status Report SEH No. A-ALBEV0501.00 At your request, I have prepared a summary of activities for the various projects identified in the engineering transition plan for SEH. The summary is as follows: . 1. CSAH 37 Pedestrian Trail — Placement of final wear course on the westerly segment is to be completed by June 30, 2006. Resurfacing of the existing trail between 60I' Street and Kalland Avenue, along with any punch list work, also is to be completed by June 30, 2006. 2. 2004 Prairie Run — A construction punch list (copy attached) was forwarded to the contractor on November 2, 2005. Punch list work, as well as placement of final wear course and trail correction work is scheduled to be completed this year. Record drawings for the City (commercial) portion of the project have been completed. We are waiting for final revisions to the record drawings on the developer (residential) portion of the project. Once received, we will combine them into one set of record drawings for the City's files. The developer has an obligation to Bob Heuring to complete turf restoration where the farm buildings once stood. 3. WWTP Expansion — The City approved a quote for reed bed plantings on April 3, 2006. Plantings are to be completed by June 30, 2006. Final completion date for the main contract with Gridor also is June 30, 2006. 4. Ice Arena Expansion — Punch list work includes the front canopy, sealing of exterior block, parking lot striping, and completion of interior painting. The contractor anticipates completing the punch list work by May 15, 2006, weather permitting. 79 5. 2003 CSAH 19 Upgrade — The contractor is to address removal of silt fence, backfill of • easterly curb south of 60th Street, and replacement of a broken valve box on the north end of the project. Negotiations for a contract deduction related to a seal coat failure are ongoing. Once an agreement with the contractor is reached, a final payment application will be processed and the project will be closed out. 6. 501h Street NE Pedestrian Trail — Final payment was approved on February 21, 2006. The warranty period for the project (2 years) began when final payment was made. Record drawings have been completed and forwarded to City staff and to St. Michael. 7. Primary School Ballfield — Grading contractor was notified on December 28, 2005 of warranty work that remains to be completed. Seeding contractor was also notified on December 28, 2005 of warranty work that remains to be completed. 8. Albert Villas - The developer is responsible for a number of items that must be completed before the existing letter of credit can be released. These items include turf and driveway restoration in areas of sidewalk repair, removal of construction debris and silt fence along County Ditch No. 9, and turf restoration in areas disturbed to access wetland mitigation sites. 9. Other Projects — Other projects that have been completed and closed out include: a. 2004 Street Overlay b. 2004 Seal Coat Improvement c. CSAH 37 / 60'h Street NE Storm Sewer . d. 2003 Seal Coat Improvement (warranty work completed in 2005) e. 1-94 / CSAH 37 Traffic Signal f. 2004 School Pedestrian Trail (retaining wall construction) g. Public Works Building h. Frontage Avenue (LaCentre Avenue NE) Improvements Please call me at 651.490.2147 if you have questions. Attachment �J M. _;;k 46EH PUNCH LIST r L 4 Owner: City of Albertville, Minnesota Date of Current Issue: November 2, 2005 Project: 2004 Prairie Run Date of Original Issue: August 29, 2005 City Project No: Contract Completion Date: Substantial Final Contractor: Dennis Fehn Gravel "& Excavating, Inc. SEH File: A-ALBEV0409 Date(s) of Inspection(s): August 29, 2005; November 2, 2005 Below is a List of Items which must be completed or corrected prior to final acceptance of the subject project. Item No. Item Description Current Status Date Accepted (a) Backfill curb returns with topsoil and reseed as necessary. (b) Plant six hard maple trees at staked locations on Robert Heuring property. (c) Install sod on Heuring property as directed by Engineer. d) Remove excess dirt from ditch behind Meadow Court, Lot 26. (e) Flush and clean sanitary manholes and sewer lines. (f) Replace curb and sidewalk as needed prior to wear course. (g) Adjust iron to grade (1/2" below finished wear) prior to wear course. Place bituminous material to protect iron through the coming winter. (h) Ensure all gate valves are in working order (coordinate with City utility dept). (i) Correction of trail along CR 19 as directed by Engineer. 0) Touch up grout on manholes and catch basins as needed prior to wear course. (k) Remove all construction debris from site. (1) Repair boulevard silt fence as needed. (m) Correct low spots in field north of 5 1 " Street. (n) Some seeding did not take from original application, reseed bare spots. (o) Clean storm sewer as needed prior to placement of wear course. (p) Locate all gate valves at hydrants and raise as needed. q) Replace slab at lift station over wet well — settled and broken. Item No. Item Description Current Status Date Accepted (r) All gate valves need nut risers on them. (s) Repair generator plug on lift station. (t) Furnish City with spare parts kit and 4 O&M manuals for lift station. (u) Fill and paint bollards at lift station. (v) Remove existing field entrance along Jason Avenue. (w) Remove perimeter silt fence. (x) Repair lift station as directed by City utility dept. Please provide 48-hour notice prior to the start of this work. This work should be completed in accordance with the provisions of Article 3 (Contract Time) of the Agreement. Remarks: Issued By: Title: c: Dennis Fehn Gravel & Excavating, Inc. Robert L. Moberg, SEH Russell Bly, SEH Larry Kruse, City Administrator John Middendorf, City of Albertville Tim Guimont, City of Albertville • • M. MEMORANDUM TO: ALBERTVILLE CITY COUNCIL MEMBERS; LARRY KRUSE, CITY ADMINISTRATOR. FROM: MIKE COURI, CITY ATTORNEY SUBJECT: POTENTIAL PURCHASE OF 40 ACRE PROPERTY FOR ALBERTVILLAS PONDING. DATE: APRIL 17, 2006 As the City Council may recall, as part of the Albertvillas flood study, the City Engineer believes that the storm water ponding constructed with the Albertvillas subdivisions have been significantly undersized from what is required to properly pond storm events required by the City's ordinances. This undersizing appears to be a major cause of the flooding which occurred in Albertvillas in the past few years. Further details related to this undersizing are expected to be presented at the April 17t' City Council meeting when the entire flood study is formally presented. There have been cases in Minnesota where the courts have allowed property owners who have been flooded as a result of improperly designed storm sewer facilities to sue cities for the damage the property owners sustained as a result of flooding. While I do not have enough information at this point to determine whether Albertville would be liable for flooding which may occur in the Albertvillas subdivisions, I recommend that the City keep its options open in terms of possible solutions to the flooding problem in the event that the City later determines that it is required to correct the flooding problem to minimize potential liability. The City Engineer has identified two parcels of property adjacent to the Albertvillas subdivision that could be used to alleviate the ponding problem in Albertvillas. One property consisting of 40 acres is owned by a company named ATL. About 55 days ago, the City of Albertville paid $5,000 for a 60-day option to purchase ATL's 40 acre tract located immediately west of the Albertvillas subdivision for $40,000 per acre. This option runs out on or about April 20tn The other parcel of property that would work for ponding is located west of Albertvillas but south of the ATL property. Currently, it is configured as an 80 is acre property owned by Sam Montgomery. Staff has approached Mr. 1 • Montgomery regarding the possible purchase of some of the Montgomery property for ponding purposes. At this point, Mr. Montgomery wants significantly more for his property than $40,000 per acre (most likely in the $60,000 per acre range), and will only agree to sell some of the property if Albertville agrees to provide sanitary sewer and water service to the entire 80 acre parcel as part of the purchase. Both of these properties are located in the City of St. Michael, which means that St. Michael would have full land use authority over the properties in question, including zoning, site plan and wetland approvals. In short, Albertville would need approval from St. Michael in order to construct the ponds to alleviate the drainage problem in Albertvillas. Over the past several weeks, City staff has been working with the architects and engineers from ISD 885 and with the St. Michael City Engineer and St. Michael City Attorney to reach an agreement that would allow the School District to purchase the 40 acre ATL property west of the Albertvillas subdivision and yet reserve an option for ponding in favor of the City of Albertville as part of a future solution to the Albertvillas ponding problem. After much work, City Staff and the School District have hammered out an agreement that would allow the school to use approximately 25 acres of the 40 acre tract to construct an elementary school, with the remaining 15 acres to be used for ponding for the Albertvillas subdivision (an additional 8 acres of ponding may be needed to fully correct the Albertvillas drainage problem —if needed, it would likely have to come from the Montgomery property in the future). That agreement is on the April 17th City Council agenda for approval. At the same time, City Staff has been working with St. Michael's City Engineer and Attorney to craft an agreement that would allow the pond to be constructed on the ATL property, subject to St. Michael's approval of the design and engineering data related to the ponds. Albertville's staff and St. Michael's staff agreed upon a draft agreement that would go to each City Council for approval. That agreement is also on the April 17th Albertville City Council agenda. On April IIth, the Albertville/St. Michael agreement went to the St. Michael City Council for approval. Unfortunately, St. Michael's City Council did not approve the agreement. The indications we have received from St. Michael's City Staff are that the City Council will not agree to allow Albertville to pond in the City of St. Michael unless Albertville agrees to allow St. Michael's Edgewood Drive to be connected to Main Street. 2 In checking with Assistant Albertville City Engineer Adam Nafsted, Adam has confirmed that the ATL and the Montgomery properties are the only two properties adjacent to the Albertvillas subdivision that would work for ponding. He also confirmed that constructing the ponds with the high school planned for 2007-2008 would significantly reduce the cost of the ponds as it would allow the City to spread the excess dirt on the adjacent 120 acres of School District property rather than truck the dirt out. The School District is willing to allow this as part of the agreement that will allow the School District to purchase the 25 acres of the ATL property that the City would otherwise have used to spread the excavated dirt. From a legal perspective, Albertville has several different options it could take in an effort to preserve its ability to adequately pond for the Albertvillas subdivision. OPTION ONE Have Albertville exercise the option on the ATL property, do not let the School District construct the elementary school on the property and ultimately seek to detach the property from St. Michael and annex it into Albertville. In light 19 of St. Michael's unwillingness to allow Albertville to pond as agreed by Albertville and the School District, I strongly recommend the City choose this option to best preserve its ability to correct the flooding problem in the future. Advantages: • By retaining all 40 acres, Albertville will ensure that it has enough land to completely solve the Albertvillas problem in the future. • Without St. Michael's approval, Albertville would likely not be able to spread the dirt from the ponds on any land in St. Michael. This would significantly increase the cost of the ponds. By retaining all 40 acres, Albertville could conceivably spread the excavated soil on the remaining portion of the 40 acres in a manner that would permit the later development of this property as residential homes. This would keep the ponding costs down and allow the City to contour the remaining residential property in a manner such that the ponds would be a significant amenity, thus allowing the City to sell the remaining land for development in the future, further lowering the cost of the ponds and potentially making the ponding project more feasible. • By annexing the property into the City of Albertville, Albertville would have sole zoning control over the property and could then permit the 3 construction of the necessary ponds. While annexation is never assured, I anticipate that given the public health concerns that flooding raises and St. Michael's unwillingness to cooperate in allowing Albertville to alleviate such public health concerns, annexation would likely be granted after a contested case hearing. • If Albertville determined that the ponds were not feasible to construct, the entire 40 acre tract could be sold at any time in the future. Given the location of the school immediately to the north, it is likely that the City will always be able to get back what it paid for the property, if not significantly more. Disadvantages: • The School District would not be able to locate on the 40 acre tract. This would set the school back some time in its engineering and site design and will make it harder for the School District to meet its deadline to construct the primary school. To date, both the School District and Albertville have a substantial amount of engineering time devoted to locating both the elementary school and the ponding on this 40 acre parcel of property. S• Going it alone would very likely mean that no pond excavation would occur with either the elementary school or the high school construction. While plans are not solidified at this point, preliminary information indicates that the School District may need to raise the primary school building pad by a foot or so, which would likely result in a significant amount of excavation work being done on the 40 acre site (presumably from the area where the ponds would be located), thus lowering the City's costs of constructing the ponds if it ever received approval from St. Michael. By going it alone, this potential cost savings would be lost. • Both Albertville and St. Michael would likely incur annexation expenses in excess of $100,000 each to detach and annex the 40 acre tract via contested case hearing. Virtually all of these hearings are extremely contentious and usually create a deep, long-term resentment between the communities involved. While I believe Albertville would likely be successful in its annexation attempt, it would come at a significant price in both dollars and community relations. • The annexation attempt could fail, in which case Albertville would have little chance of gaining approval from St. Michael for the ponding. E OPTION TWO Assign the option to the School District and take a pond easement option/land purchase option in the approximately 15 acres that would become future ponding in the hopes that Albertville and St. Michael can work out the ponding issue before the high school construction begins in 2007. Advantages: • Potentially avoids a costly and divisive annexation fight with St. Michael. • If St. Michael's approval can be obtained in a timely fashion, it allows the construction of the ponds with the construction of the high school, keeping ponding costs lower than if Albertville went it alone. • If St. Michael's permission cannot be obtained, Albertville may still challenge St. Michael's denial on zoning grounds in District Court. However, even if Albertville wins, the victory may come too late for construction with the high school. • The School District can proceed with its current plans to place the elementary school on the 40 acre parcel. Disadvantages: • If St. Michael does not grant approval, the ponds may never be constructed on this land. • Given the limited size of the ponding area and its irregular shape, annexation into Albertville would likely be more difficult than annexing the entire 40 acre parcel. • If Albertville misses the window of opportunity to develop with the construction of the schools, it will have nowhere to spread the dirt and will have to truck all of the dirt off the site, dramatically increasing the cost of the ponds with the resulting risk that the pond construction would be so expensive as to not be feasible. OPTIO9 N THREE 5 Assign the land option to the School District and do not take an option for ponding. Advantages: • Completely avoids a contentious issue with St. Michael. Disadvantages: • Likely completely eliminates the ATL property as a ponding site, leaving only the Montgomery property as a potential ponding site in the future. At this point, the Montgomery property is not for sale without the City committing to providing sewer and water to the entire parcel and it is impossible to tell when it may be for sale without this requirement. At this time it is unclear whether the City would have the wastewater treatment capacity to serve both the 120 acres of school property and the 80 acre Montgomery property with sewer service. • Does not do anything to facilitate the elimination of potential liability for the City related to Albertvillas flooding. • Passes up the cheapest source of land that would be necessary to correct the Albertvillas ponding problem. Early indications from Sam Montgomery are that if his property were for sale, he would ask at least $50,000 to $60,000 per acre. I expect this price to rise once it is confirmed that the elementary school would be located immediately to the north of the Montgomery property. Given the uncertainty facing Albertville in the future regarding the Albertvillas flooding situation, it is my recommendation that Albertville keep all of its options as open as possible. Accordingly, I recommend Option One, keeping the 40 acre property for future ponding use and not allowing the School District to build on this property. I realize this option would impose a hardship on the School District and would likely lead to considerable consternation in both Albertville and St. Michael. However, without control of ATL's 40 acre property, Albertville will be entirely at the mercy of St. Michael and may never get approval for ponding which may later be determined to be necessary. If the City Council chooses to go with Option One, I suggest that the City pass the agreement with the School District and the agreement with the City of St. Michael with the stipulation that the agreement with the School District is C contingent upon St. Michael approving the Albertville/St. Michael agreement. Albertville should alternatively authorize City staff to exercise and close on the option in the event St. Michael fails to pass the Albertville/St. Michael agreement. Action in this manner by Albertville places the ball in St. Michael's court as to whether it will effectively kill the agreement between Albertville and the School District. If the City chooses Option Two, it should still pass the agreement with the School District and the Albertville/St. Michael agreement. • 0 BOl_TON & MINK, Consulting Engineers & Surveyors 12224 Nicollet Avenue • Burnsville, MN 55337-1649 Phone (952) 890-0509 • FAX (952) 890-8065 April 17, 2006 Mr. Larry Kruse, City Administrator City of Albertville 5975 Main Avenue NE PO Box 9 Albertville, MN 55301 Re: 2006 County Ditch No. 9 Flood Study City of Albertville BMI Project No. T15.21766 Honorable Mayor and City Council Members: 1 N C. Transmitted herewith is the 2006 County Ditch No. 9 Flood Study. The study analyzes the recent flooding that has occurred within the County Ditch 9 watershed, the hydraulic design of developments within the watershed, and the 2004 Flood Study Report. We have modeled the watershed to simulate existing conditions and have developed design alternatives to address the flooding issues. The stormwater model shows that a 100-year, 24-hour, storm event will cause flooding of homes in the Albert Villa Additions. The study identifies additional storage volume, for the excess stormwater, upstream of the Albert Villas development as the most feasible solution to the flooding. It is our recommendation that, when possible, the City of Albertville secure land and construct a detention basin(s) to provide the storage necessary to mitigate the flooding condition. Mark Kasma, William Douglass and myself will be at your April 17, 2006, City Council Meeting to present this study and will be glad to address questions at any time. Respectfully Submitted, BOLTON & MENK, INC. AkX1;kC( Adam Nafstad, P.E. Albertville Assistant City Engineer AN/11 Enclosure C:\Docume0XaA S,T8j 0kr,na�Ivlylpo� �ts IBERTV�Cixy�rpi�cts\�lopd. tucJ�\jjepp'& �'809KA, MN M VCAIU MIV r/�Il•V�WILLMAIVR, MNL • RAtMYSEYY,,IVMN - AMIVEJS, ILALt www.bolton-menk.com An Equal Opportunity Employer i i A�Ibcrtv ill Smnll Town Living. Big ' Life. I 2006 COUNTY DITCH NO. 9 FLOOD STUDY City of r Albertville, MN BMI PROJECT NO. T15.21766 1. C CERTIFICATION SHEET C I herebycertify that this report was prepared b me or under m direct supervision, and that I am a fY P P P Y Y P duly Licensed Professional Engineer under the laws of the State of Minnesota. Lanol L. c ty ' Date:Lic. No. 20846 TABLE OF CONTENTS CERTIFICATION SHEET TABLE OF CONTENTS PAGE 1. INTRODUCTION............................................................................................................ 4 2. BACKGROUND............................................................................................................. 4 3. METHODOLOGY...........................................................................................................5 4. FINDINGS....................................................................................................................... 6 5. EXISTING UTILITIES..................................................................................................... 8 6. POLICY ISSUES............................................................................................................. 9 7. OPTIONS.......................................................................................................................10 8. RECOMMENDATION.................................................................................................11 9. ESTIMATED COSTS...................................................................................................12 APPENDIX A — 2005 Rainfall Data APPENDIX B — Option Figures 1-4 APPENDIX C — Cost Estimate Tables APPENDIX D — County Ditch No. 9 Agreement ' 2006 COUNTY DITCH #9 FLOOD STUDY ' ALBERTVILLE, MINNESOTA BMI PROJECT NO. T15.21766 INTRODUCTION In the past several years there have been flooding issues in Albertville, particularly in the Albert Villas development, and properties along County Ditch No. 9. The City of Albertville desires to look at opportunities to improve this situation to prevent " 2006 CountoccD tch No. 9 Flood ences of similar magnitudes from causing similar damage. This study, entitled Study" is intended to find viable solutions to existing flooding problems in the study area. iscus opportunities to mitigate or reduce the flooding problems he City atof Alberted andvile to undertake This ' report should not be construed as an obligation on the part of Y any of the alternatives discussed. 2, BACKGROUND ' In June of 2003 there was an 8.5" rainfall event that caused flooding in Albertville. After this storm, the City of Albertville ordered a flood study to look into lgmits woeneral od hage f solutions, flooding particularly what effects a diversion channel along the we City events in excess of a 100-year rainfall were to occur in the future. st llas developmeoding caused by extreme storm events would be reduced in he Albert t by constructing an upstream diversion, but that the bypassed flow could potentially cause downstream flooding problems in St. Michael. In the summer of 2005 there were several storm events, in the 2-5rainfall rangOctober that 31, caused storm water ponds to overflow their banks. Rainfall data from April is shown in Appendix A. On a few of these occasions the City protect adjacent hoags and brought ght out pumps to lower the water levels of a few key ponds top ms were in the depth range typical of events in the 5-year to 50-year, 24-hour event range. In the fall of 2005 the City ordered this study to look at various options for reducing the flooding associated ' with County Ditch No. 9. ' 2006 County Ditch No. 9 Flood Study BMI Project No. T15.21766 Page 4 3. METHODOLOGY Data collection was initiated to determine what information existed pertaining to County Ditch No. 9. In the fall of 2005 a field reconnaissance was conducted to determine the condition of the ' drainage infrastructure and channel banks along County Ditch No. 9. This report builds upon past engineering efforts analyzing the drainage problems associated with County Ditch No. 9. The following procedure was followed in developing the study: ' 1) Interview City staff to obtain history and background of past flooding events. 2) Review storm sewer system maps and as -built construction plans currently in the City's possession. ' 3) Collect survey data to establish critical features of the watershed. 4) Review topography maps and storm sewer maps to establish sub -basin areas and overland flow routes. 5) Create a hydrologic/hydraulic model of the study area. 6) Review the original Albert Villas drainage calculations. 7) Review the previous flood study of 2003. ' 8) Develop alternatives for detention and diversion to reduce the water surface elevation flooding at significant locations. 9) Prepare cost estimates for each option. 1 The study area consists of all land that contributes runoff to the culvert where County Ditch No. 9 crosses County Road (CR)119. The drainage area above this culvert includes property in both ' Albertville and St. Michael (see Exhibit 1). Wright County two -foot topographic maps, United States Geological Survey Quadrangle maps and construction as -built plans were used to determine the watershed and subwatersheds for the study area. The contributing drainage area ' was determined by inspecting the various topographic maps and verified by subsequent site visits during both dry and wet conditions. ' Using SCS methods and HydroCAD, a computer modeling program by HydroCAD Software Solutions LLC, various storms were modeled and calibrated to match the pond elevations and ' overtopping conditions observed during known rainfall events. In particular, the 8.5-inch, 4-hour storm event was used to calibrate the model. An SCS runoff curve number of 80 was used for the agricultural land to the west of Albertville. This corresponds to an agricultural land use with ' straight row, small grain with crop residue and sandy clay soils (SCS type C soils). The calibrated model produced flood levels north of CSAH 18 consistent with what was experienced by homeowners during the 2003 flood event. ' The 100-year, 24-hour storm event was then modeled to determine the resulting high water elevations for ponding locations and flow rates at critical locations. The 100-year, 24-hour storm ' event is typically used for insurance protection purposes. Typically, houses determined to be 2006 County Ditch No. 9 Flood Study BMI Project No. T15.21766 Page 5 it r v < ►r "` �y �� eJ f_ - I � I G - �\ f�A•� it �lii'♦ r--' �«�{ � } �� '� F + � ' ',� it v � � • `-k ;`_' -.,. j� � 'aj rr �Sa` ��."• p.>tS i tl r' 't - i �•�` �! n 1 51 y , ,to L M.�. Aic '�'�"' i. Io0 0 100 sra E veEr ©Bolton & Menk, Inc. 2006, All Rights Reserved CITY OF ALBERTVILLE A BOLTON 8& MENK, iNc. Consulting Engineers & Surveyors STUDY AREA BOUNDARY MANKATO, MN FAIRMONT, MN SLEEPY EYE, MN WILLMAR, MN WATERSHED BURNSVILLE, MN CHASKA, MN RAMSEY, MN AMES, IA MARCH, 2006 EXHIBIT NO. 1 H'\ALBT\TI521766\eounda,y_Exb,b.tdwg U4-la-L 11— subject to flooding for the 100-year event will need flood insurance as part of a home loan. Consequently, the 100-year event has become the standard for evaluating flood prone conditions. Common subdivision design includes handling the 100-year event with emergency overflows built into the system to handle more extreme events. The intent of the extreme flood criteria is to prevent flood damage from larger, less frequent storm events. The 100-year event is defined at that event likely to occur on the average once every 100-years. This is not to say that a 100-year rainfall cannot occur in consecutive years or even twice in the same year. In reality, the 100-year storm has a 1% chance of occurring in any given year. The following table shows the chance occurrence for 1, 2, 10 and 100-year, 24-hour storm events with the expected rainfall amount. STORM FREQUENCY _ CHANCE rN ANY YEAR _24 HOUR RAINFALL TOTALS_ j 1-Year i 1 out of 1 2.3 inches 2-Year _ J 1 out of 2 j 2.7 inches —_� 10-Year 1 out of 10 4.1 inches _j 100-Year 1 out of 100 5.8 inches j Source: United States Weather Bureau Technical Paper 40 Most of the storm sewers outlets that enter into County Ditch No. 9 are not much higher in elevation than the bottom ditch elevation. As such, these outlets along County Ditch No. 9 cannot fully convey stormwater flows without backing up for all but the lower frequency storms. This backwater affect at the storm sewer outlet, which often reduces the flow capacity of storm sewers, is one of the restrictions that can contribute to local flooding. 4. FINDINGS ' Flooding along County Ditch No. 9 is caused by many factors including building elevations, storage capacity of ponds/wetlands and ditch backwater. The stormwater infrastructure and development in the study area were reviewed to understand the changes that have occurred in the ' recent past. The upstream watershed area west of Albertville, located in St. Michael, has remained virtually ' unchanged and is in agricultural land use. Since the year 2000, extensive development has occurred adjacent to County Ditch No. 9 in Albertville. The growth has occurred mainly through the development of the Cedar Creek First through Seventh Additions and Albert Villas First ' through Sixth Additions. The two major changes to infrastructure in County Ditch No. 9 occurred in 2001 and 2005. In ' 2001 the existing 10-ft by 8-ft box culvert was replaced with a 12-ft by 8-ft box culvert at County ' 2006 County Ditch No. 9 Flood Study BMI Project No. T15.21766 Page 6 E ' Road 18. In 2005 the existing 54-inch diameter culvert was replaced with a 5-11 by 8-ft box culvert at County Road 119. ' The stormwater model shows that flooding of homes would occur in the Albert Villas development from a 100-year, 24-hour storm event. A review of the original drainage ' calculations for the Albert Villas development revealed several problems that would contribute to flooding in the study area. They include: 1) Upstream watershed area; A watershed describes an area of land that drains down slope to the lowest point. The ' watershed for the study area was identified as all of the land that contributes drainage to the CSAH 119 culvert on County Ditch No. 9. The watershed area used in the original drainage ' calculations for Albert Villas assumed that the upstream watershed stopped at Jamison Avenue on the west and paralleled 53rd Street on the north side, which amounted to 102 acres of land (see Exhibit 2). The actual watershed extends west of Jamison Avenue and north of St. Michael's 65th Street NE, which includes a total of 637 acres. This difference between the two drainage areas is over 500 acres of land in the watershed that was omitted from the original drainage calculations for Albert Villas. ' 2) Storage volume available within the large Albert Villas wetland; There was a large storage volume difference for the large wetland in the Albert Villas development between the original drainage calculations and what the 2006 study determined. The original calculations determined stage -storage data from the culvert outlet of the wetland to a 950.0 contour. Using the latest County 2-foot topography the storage volume was determined to be 13.5 acre-feet, or over three (3) times less than used in the original stormwater drainage calculations. It should be noted that the most accurate method to determine the actual storage in this basin would be by a topographic survey. Original Albert Villas 2006 Flood Study Drainage Calculations Albert Villas Wetland Storage 42 6* 13.5* Volume in Acre -Feet *Storage from culvert outlet to 9w.0 elevation. ' The main noticeable difference between our 2006 stormwater model and the model in the 2004 study is the amount of available flood storage volume in the large wetland surrounded by the Albert Villas development. The following table shows the storage volume for each ' model between the culvert outlet of the wetland and the 951.7 elevation, which is the low opening elevation designed for structures around the large wetland. ' 2006 County Ditch No. 9 Flood Study Page 7 BMI Project No. T15.21766 i IR *41 4 7,1Al l#S.i�� .� ,�• � � �� 1 44.E � . -;� � ✓ '�+�,•� ,�� . ©B I & Menk, c.` 200E,'AIIRights- Reser, CITY OF ALBERTVILLE A BO L_TO N COMPARISON OF UPSTREAM WATERSHED MANKATO, MN FAIRMONT. MN SLEEPY EYE, MN WILLMAR, MN AREAS DRAINING TO ALBERT VILLAS BURNSVILLE. MN CHASKA. MN AMES, IA MARCH, 2006 EXHIBIT NO. 2 H:\ALBT\TI521766\BoUldory_C0MP isi,n.dlg 03-25-2006 12'.39 0 r, 1 2004 Flood Study 2006 Flood Study ' Albert Villas Wetland Storage 110.1 * 45.8* Volume in Acre -Feet *Storage from culvert outlet to 951.7 elevation. 3) Free discharge of water from the ponds/wetlands into County Ditch No. 9, assuming no tailwater effects; The original drainage calculations for Albert Villas assumed free discharge ofwater from the ' culverts outletting into the drainage system. Tailwater effects were not taken into account. That is, the Albert Villas model assumed that the outlet pipes would not be submerged by ' water within County Ditch No. 9. As mentioned earlier, having a submerged outlet can have a significant impact on the pipe flow rate. The fact that the water elevation in County Ditch No. 9 covers the outlet pipe from any upstream pond would cause the 100-year high water levels in the adjacent ponds/wetlands to be higher than the original calculations show. Submerged outlet conditions should be figured into the design of culverts that outlet into County Ditch No. 9. Increasing the size of storm sewer pipes to pass more stormwater through the Albert Villas development does little to improve the drainage problem. Because of the small difference ' between the existing low floors in Albert Villas and the elevation of County Ditch No. 9, very little change in water elevation is possible in the large wetland. This limits the amount of storage allowed in the ponds and large wetland. Increased pipe design through the system would pass the stormwater through the system at a higher rate. Although this may meet the needs of the City of Albertville, it would only pass the problem downstream to the City of St. Michael with higher ditch flowrates. Also, this option is not feasible from a hydraulic and construction perspective. This study concludes that the two main factors contributing to the level of flooding experienced ' are: 1) The large upstream drainage area that was not considered during the design of the Albert Villas development; ' 2) The unavailable storage volume that was assumed to be present in the large wetland in the Albert Villas development; 3) And, the tailwater effects in County Ditch No. 9. 5. EXISTING UTILITIES There is an existing overhead high power electric line along the western City limits that travels in a north -south direction. A drainage and utility easement is over this area, which may allow expansion of the existing ponds within the 240-foot easement with no land costs associated with 2006 County Ditch No. 9 Flood Study BMI Project No. T15.21766 Page 8 ' this work. Due to the constraints of the overhead utility, the extent of the improvements within this easement, are yet to be determined. Further coordination with the utility company is needed. ' There is an 8-inch petroleum pipeline covered by a 50-foot wide utility easement that runs in a northwesterly, southeasterly direction. This pipeline was installed in the late 1940's. It may be ' necessary to relocate or lower this pipeline depending on the layout and configuration of potential ponding and diversion channel layouts. 6. POLICY ISSUES ' In September of 2002 the Cities of Albertville and St. Michael entered into an agreement entitled "County Ditch 9 Agreement". The agreement transferred the ditch authority from Wright County ' to Albertville and St. Michael. The length of County Ditch No. 9 covered in the agreement starts its upstream beginning in Albertville to its outlet into County Ditch No. 21 in St. Michael. ' Some of the recommended alternatives in this study will require some decisions concerning policy, so that they can clearly and fairly be applied during its implementation. The issues that have been identified include: ' • Land acquisition • Ditch and culvert maintenance ' • Infill development/expansion to existing homes • Ditch high water elevation establishment for adjacent development • Hydraulic analysis of future development runoff impacts within the watershed study ' area with relationship to flowrates at the County Ditch No. 9 culvert at CR 119. Securing land options upstream of Albert Villas is essential in providing an area where future flood storage volume can be established prior to this area becoming developed. If development occurs first, there will be little opportunity left to provide a feasible solution to this problem. Providing stormwater ponding areas within the storm drainage system reduces the required ' capacity of the downstream conveyance system. The decrease in discharge rate results in smaller pipes, reduced overland flow and a more cost effective drainage system. ' Though not all of these policy issues will need decisions before the recommendations of this study can be implemented, land will need to be acquired in order to construct and implement the recommended improvement. Any changes to the current policy regarding maintenance of the ditch can be made whether the study is implemented or not. Regulations regarding infill and existing home expansion is also independent of implementation of the study recommendations. ' 2006 County Ditch No. 9 Flood Study BMI Project No. T15.21766 Page 9 1 7. OPTIONS ' Identifying a solution to the flooding associated with County Ditch No. 9 was met with several constraints. Since most of the watershed study area within the City of Albertville is developed, there is little opportunity to provide sufficient ponding within the City limits. Other constraints are the existing elevations of the homes adjacent to County Ditch No. 9, Albert Villas wetland and ponds. Various options were looked at along with their associated costs. Each option evaluated deals with providing upstream flood storage. There are many variations to the locations of where the storage could be located, but the most adventitious spot to locate storage is in St. Michael, west of the Albert Villas development. The study considered several options to improve the drainage within the study area. The appendix contains figures of the studied options to improve the drainage conditions. ' All options considered involve expanding the existing ponds adjacent to the western border of Albertville, beneath the overhead power lines. This would maximize the available land in Albertville that could be used for ponding that is currently in easement and in an optimal location. Unfortunately, the available storage from expanding these existing ponds is not sufficient to provide storage for the 100-year, 24-hour storm event. Supplementary ponding is ' needed in addition to volume the easement area can provide. All options also allow the low flows to continue flowing through the Albert Villas wetland. Otherwise, the wetland would probably be lost and need to be mitigated at a 2 to 1 ratio. An emergency overflow ditch is recommended with each option. This would allow extreme rainfall events greater than the 100-year, 24-hour storm to bypass Albert Villas. The following options take into account expansion of these ponds with discussion centering around the layout and location of where the additional ponding would occur. tion # 1 ' This option places the additional storage volume on the 80-acre and 40-acre parcels in St. Michael, on what is currently agricultural land (see Figure 1). This option expands the existing pond in Albertville toward the west. The high water level of this pond is limited by the ' existing elevation of the homes on the east side of the pond. Option #2 This option is similar in layout to Option #1, except that a dike would separate the large pond in St. Michael from the expanded pond in Albertville (see Figure 2). The dike would allow the water level in the westerly pond to rise to a higher elevation, without the existing homes being ' the limiting factor for how high the water could rise. This option results in less excavation than Option #1 in order to meet the required storage volume. C ' 2006 County Ditch No. 9 Flood Study BMI Project No. T15.21766 Page 10 H ' Option #3 With this option additional storage would occur to the west in the 40-acre parcel that has a ' wetland located in the middle of it (see Figure 3). A berm would be built around the downstream perimeter of the parcel to provide storage and limit the flow rate from this area to acceptable levels able to meet the 100-year, 24-hour event for downstream development. The ' advantage to this option is that it would use a portion of the land that is unbuildable from a land us perspective. The disadvantage is that wetland impacts would occur that would have to be mitigated at a 2:1 ratio. tion #4 This option coordinates the additional ponding with the proposed school site on the 40-acre parcel in St. Michael (see Figure 4). The ponds would be configured to accommodate the schools proposed building and roadway network. A berm would be constructed around the wetland located on the parcel to the west of the school property. The berm would allow flood storage to occur in the wetland and would be designed such that no major impacts would result per the Wetland Conservation Act rules. The quality and size of potential wetlands to be impacted by each option are unknown at this time. If an option is explored in further detail, the wetland parameters will need to be established ' in order to determine the full potential of the improvement and its associated cost. 1 8. RECOMMENDATION To reduce the flooding problems experienced in the study area, there are two general approaches that can be applied: 1) Increasing conveyance capacity (enlarging storm sewer pipes); and 2) Storage of excess stormwater (detention storage). Increasing existing pipe capacities upstream of the CSAH 119 culvert in County Ditch No. 9 and ' through the Albert Villas development would have an adverse effect on the property in St. Michael below this culvert by increasing the peak flows downstream. Due to the elevation of the ' existing homes and the limited storage capacity of the wetland, enlarging culverts through the development merely passes the flows through the system quickly into County Ditch No. 9. The ditch was not sized to handle flows of this magnitude, which would cause flooding along the ditch corridor and downstream flows would be increased. Given this situation, this option is not considered feasible and was not further evaluated. An ultimate solution requires adding storage volume upstream of the Albert Villas development, in St. Michael. Additional ponding and storage upstream of Albert Villas appears to be the most feasible solution, as it would improve the flooding conditions throughout the study area. Ideally 2006 County Ditch No. 9 Flood Study BMI Project No. T15.21766 Page 11 H the City of Albertville should seek opportunities as they arise in St. Michael to provide the storage necessary to solve the flooding conditions. ' The City is strongly encouraged to continue a routine maintenance program of storm sewer and catch basin/inlet cleaning of their drainage infrastructure. Also, the responsibilities in the ' existing County Ditch No. 9 Agreement should be followed. The Agreement calls for an annual report to be made by the City Engineers that includes an annual inspection of the ditch condition and a report of all development activities, which have occurred in the County Ditch No. 9 ' drainage basin. Routine maintenance, including ditch and culvert cleaning is essential if the existing system and any proposed systems are to perform as designed. ' It should be recognized that proposed improvements to the storm sewer pipe system typically are designed for a 10-year storm event and that any rainfall exceeding this frequency will result in the inability of the storm sewer to convey the entire flow. Retention ponds are typically located to store excess runoff from events greater than the 10-year event but not greater than the 100-yer event. New developments should be designed such that events larger than a 10-year pipe system ' flow and a 100-year detention basin storage will have overflow routes established and maintained to protect the property without damage to land or structures. The Public Works Department and Engineering Department should update and continue the procedure whereby flooding complaints are accurately logged, indicating property address and owner information, date and time of flooding, and extent of flooding. This information will be ' used for performance monitoring to indicate if newly constructed storm water improvements have been successful. This documentation will also highlight problem areas for additional improvements. The City may want to develop a rapid -response program to flooding in order to minimize damage to property. ' 9. ESTIMATED COSTS Proposed construction costs for each option are itemized in the tables located in Appendix B and ' are summarized below. These cost estimates are based upon public construction cost information. Since the consultant has no control over the cost of labor, materials, competitive ' bidding process, weather conditions and other factors affecting the cost of construction, all cost estimates are opinions for general information of the client and no warranty or guarantee as to the accuracy of construction cost estimates is made. Land and potential utility relocation costs are not included in the total project cost for each option. Estimated construction costs presented in the following table include a 25 percent contingency factor. Overhead costs, estimated at 25 percent, include legal, engineering and administrative costs. Costs are for comparative purposes ' only. It is recommended that costs for project financing should be based upon actual, competitive bid prices with reasonable contingencies. ' 2006 County Ditch No. 9 Flood Study BMI Project No. T15.21766 Page 12 ESTIMATED PROJECT COSTS Option 1 Subtotal $1,596,260.00 Contingencies (25%) $399,065.00 Engineering and Administration (25%) $399,065.00 Total Project Costs $2,394,390.00 Option 2 Subtotal $ 1,153,335.00 Contingencies (25%) $ 288,334.00 Engineering and Administration (25%) $ 288,334.00 Total Project Costs (1) $1,730,003.00 Option 3 Subtotal $1,784,400.00 Contingencies (25%) $446,096.00 Engineering and Administration (25%) $446,096.00 Total Project Costs $2,676,577.00 Option 4 Subtotal $1,675,460.00 Contingencies (25%) $418,865.00 Engineering and Administration (25%) $418,865.00 Total Project Costs (1) $2,513,190.00 1 Total costs do not include land acquisition, easements or utility relocation. n H ' 2006 County Ditch No. 9 Flood Study BMI Project No. T15.21766 Page 13 APPENDIX A 2005 RAINFALL DATA 11 11 7 I 2005 WRIGHT COUNTY RAINFALL DATA Target Location: Township 120, Range 24, Section 1 monthly mon dy, year precip. station No. precip dist (inches) (inches) Apr 1, 2005 0 212500 1.44 0 mi. Apr 6, 2005 .08 Apr 11, 2005 .41 Apr 12, 2005 .37 Apr 18, 2005 .45 Apr 26, 2005 .10 Apr 27, 2005 .03 May 1, 2005 0 212500 3.93 0 mi. May 2, 2005 .04 May 9, 2005 .28 May 10, 2005 .28 May 13, 2005 .50 May 16, 2005 .25 May 18, 2005 1.05 May 19, 2005 .55 May 20, 2005 .01 May 23, 2005 .08 May 25, 2005 .02 May 26, 2005 .67 May 31, 2005 .20 Jun 1 2005 0 212500 6.92 0 mi. Jun 6, 2005 1.57 Jun 8, 2005 1.10 Jun 10, 2005 .91 Jun 13, 2005 .45 Jun 15, 2005 .21 Jun 21, 2005 1.61 Jun 27, 2005 .15 Jun 28, 2005 .72 Jun 30, 2005 .20 Jul 1 2005 0 212500 1.71 0 mi. Jul 20, 2005 .29 Jul 23, 2005 .98 Jul 26, 2005 .44 Aug 1, 2005 0 212500 4.11 0 mi. Aug 4, 2005 .17 Aug 10, 2005 .07 Aug 17, 2005 1.23 Aug 22, 2005 .07 Aug 26, 2005 1.90 Aug 29, 2005 .67 Sep 1 2005 0 212500 13.40 0 mi. Sep 6, 2005 3.17 Sep 8, 2005 .39 Sep 13, 2005 4.92 Sep 19, 2005 1.55 Sep 22, 2005 2.45 Sep 26, 2005 .69 Sep 28, 2005 .23 Oct 1 2005 m 212500 m 0 mi. Oct 3, 2005 .15 Oct 4, 2005 .08 Oct 5, 2005 4.00 Oct 6, 2005 .20 Oct 13, 2005 .28 Oct 17, 2005 .09 Oct 24, 2005 .12 oct 31, 2005 .23 APPENDIX A 7 11 I APPENDIX B 0 OPTION FIGURES 1-4 11 11 Im m m m m m m m = = m = m m = m m m m Q O LLJ W V LL- .w YS a 'Me8 LLJ aer V l Z Al k ' Of �! 1 1 1 O m F - ..' Y4w � , �} � 4 .,� LL. l✓ o-t 0 it , Aua '� LLI LL- k aw 0 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ a*: .t t� +w x �R! - — N cr- s Q U� CY- m LLJ } U Z Z _ Q J J Y �Q L U) Z'' N Q W W� wZ N > m J (n N N Q L = d {Z m Z � Z � C O t, i Zw 0 c W Z 2= Z : m fn c O 0 U Y 0 Z a m : I• • 30 W Q O Q 0 3 U (D V) bL- 0 0 ;.i w L LJ L.L 7) E O a i rn N r 0 U) N O 0 � O � O � N L LJ Q O _ Q c0 3 O () 0 (n ' Z U O � a — O � U N / c�e N O j p m m 4 O / S m H H 0 i E APPENDIX C C COST ESTIMATE TABLES Fj ALBERTVILLE FLOOD STUDY OPTIONS COST ESTIMATE OPTION #1 EXPAND EXISTING PONDS WITH ADDITIONAL PONDING TO THE WEST IN THE 40 & 80 ACRE PARCELS ITEM MOBILIZATION POND EXCAVATION 27" RCP DES 3006 CL III 30" RCP DES 3006 CL III 27" RCP APRON WITH TRASH GUARD 30" RCP APRON WITH TRASH GUARD RANDOM RIPRAP FIELD STONE SEED MIX #250GR, FERTILIZER & MULCH SOD EROSION CONTROL OVERFLOW DITCH WETLAND MITIGATION SUBTOTAL ENGINEERING & ADMINISTRATION CONTINGENCIES TOTAL" *Costs do not include land purchase or easements. ESTIMATED BID UNIT QUANTITY - UNIT PRICE TOTAL 1 LS $10,000.00 $10,000.00 393100 Cy $3.50 $1,375,850.00 195 LF $38.00 $7,410.00 930 LF $50.00 $46,500.00 6 EA $1,100.00 $6,600.00 6 EA $1,200.00 $7,200.00 60 Cy $70.00 $4,200.00 29 ACRE $500.00 $14,500.00 4000 Sy $2.25 $9,000.00 1 LS $15,000.00 $15,000.00 1 LS $50,000.00 $50,000.00 1 ACRE $50,000.00 $50,000.00 $1,596,260.00 25% $399,065.00 25% $399,065.00 $2,394,390.00 APPENDIX C ALBERTVILLE FLOOD STUDY COST ESTIMATE OPTION #2 EXPAND EXISTING PONDS WITH ADDITIONAL PONDING TO THE WEST IN THE 40 & 80 ACRE PARCELS WITH A BERM BETWEEN THE NEW AND EXISTING PONDS. ITEM ESTIMATED BID UNIT QUANTITY UNIT PRICE TOTAL MOBILIZATION 1 LS $10,000.00 $10,000.00 POND EXCAVATION 266550 CY $3.50 $932,925.00 27" RCP DES 3006 CL III 195 LF $38.00 $7,410.00 30" RCP DES 3006 CL III 930 LF $50.00 $46,500.00 27" RCP APRON WITH TRASH GUARD 6 EA $1,100.00 $6,600.00 30" RCP APRON WITH TRASH GUARD 6 EA $1,200.00 $7,200.00 RANDOM RIPRAP FIELD STONE 60 CY $70.00 $4,200.00 SEED MIX #250GR, FERTILIZER & MULCH 29 ACRE $500.00 $14,500.00 SOD 4000 SY $2.25 $9,000.00 EROSION CONTROL 1 LS $15,000.00 $15,000.00 OVERFLOW DITCH 1 LS $50,000.00 $50,000.00 WETLAND MITIGATION 1 ACRE $50,000.00 $50,000.00 SUBTOTAL $1,153,335.00 ENGINEERING & ADMINISTRATION 25% $288,333.75 CONTINGENCIES 25% $288,333.75 TOTAL* $1,730,002.50 *Costs do not include land purchase or easements. APPENDIX C H L r�, I ALBERTVILLE FLOOD STUDY OPTIONS COST ESTIMATE OPTION #3 EXPAND EXISTING PONDS WITH ADDITIONAL PONDING TO THE WEST IN THE WETLAND AREA BY EXCAVATING ESTIMATED BID UNIT ITEM QUANTITY UNIT PRICE TOTAL MOBILIZATION 1 LS $10,000.00 $10,000.00 CLEAR & GRUB 20 ACRE $5,000.00 $100,000.00 COMMON EXCAVATION 230150 CY $3.50 $805,525.00 27" RCP DES 3006 CL III 195 LF $38.00 $7,410.00 30" RCP DES 2006 CL III 930 LF $50.00 $46,500.00 27" RCP APRON WITH TRASH GUARD 6 EA $1,100.00 $6,600.00 30" RCP APRON WITH TRASH GUARD 6 EA $1,200.00 $7,200.00 RANDOM RIPRAP FIELD STONE 45 CY $70.00 $3,150.00 SEED MIX #250GR, FERTILIZER & MULCH 38 ACRE $500.00 $19,000.00 SOD 4000 SY $2.25 $9,000.00 EROSION CONTROL 1 LS $20,000.00 $20,000.00 OVERFLOW DITCH 1 LS $50,000.00 $50,000.00 WETLAND MITIGATION 14 ACRE $50,000.00 $700,000.00 SUBTOTAL $1,784,385.00 ENGINEERING & ADMINISTRATION 25% $446,096.25 CONTINGENCIES 25% $446,096.25 TOTAL* $2,676,577.50 *Costs do not include land purchase or easements. APPENDIX C ALBERTVILLE FLOOD STUDY OPTIONS COST ESTIMATE SCHOOL OPTION OPTION #4 ' EXPAND EXISTING PONDS WITH ADDITIONAL PONDING TO THE WEST IN THE 40 ACRE PARCEL WITH PONDING ' IN THE WETLAND AREA BY BERMING ESTIMATED BID UNIT ITEM QUANTITY UNIT PRICE TOTAL ' MOBILIZATION 1 LS $10,000.00 $10,000.00 POND EXCAVATION 401300 CY $3.50 $1,404,550.00 27" RCP DES 3006 CL 111 195 LF $38.00 $7,410.00 30" RCP DES 2006 CL 111 930 LF $50.00 $46,500.00 ' 27" RCP APRON WITH TRASH GUARD 6 EA $1,100.00 $6,600.00 30" RCP APRON WITH TRASH GUARD 6 EA $1,200.00 $7,200.00 ' RANDOM RIPRAP FIELD STONE 60 Cy $70.00 $4,200.00 SEED MIX #250GR, FERTILIZER & MULCH 20 ACRE $500.00 $10,000.00 SOD 4000 Sy $2.25 $9,000.00 ' EROSION CONTROL 1 LS $20,000.00 $20,000.00 OVERFLOW DITCH 1 LS $50,000.00 $50,000.00 ' WETLAND MITIGATION 2 ACRE $50,000.00 $100,000.00 1 SUBTOTAL ENGINEERING & ADMINISTRATION 25% $1,675,460.00 $418,865.00 CONTINGENCIES 25% $418,865.00 TOTAL* $2,513,190.00 *Costs do not include land purchase or easements. 0 IAPPENDIX C APPENDIX D Fl COUNTY DITCH No. 9 AGREEMENT u ' FROM CITY OF ALBERTVILLE FAX NO. : 7634973210 Oct. 12 2005 10:21AM CCT-12-05 38:51AM FRCM-CITY OF ST MIKE +76349T5306 T-943 P.01/05 F-716 I COUNTY DITCH 9 AGREEMENT 2002, by da of �Michael'-,andthcCit`YOf 'CH'iS �,.Q1tEEMENT is entered into this d [ S and between the City of St. Michael, hereinafter referrc it Albertvillc, thereinafter refereed to as "Albertville, hereinafter referred to as Ditch 9, flows through and serves as 9 WHEREAS: County Ditch , i a surface water drainage basin for St, Michael; and VJIREAS: Ditch 9 also flows through and serves as a surface water drainage basin foT Albertville; and ' WHEREAS: Discharges from a tributary area in st. Michael flow into a segment of Ditch 9 located in. Albertville: and 1,`; HEP EAS: Discharges from Ditch 9 its Albertville flow into Ditch 9 in St. Michael; and yiERF;AS: It is in the interest of both parries to regulate, maintain+ and repair Ditch 9, NOW, Tl-T.EREFORE, the games hereto agree as follows: i p cooperative The purpose of this Agreemettt is to develop a 1Tia3e g p ler=t a Pla'A for the proced�.rr a ;Qr Si. Michael and Albertville to repave andP .uin in Section regulation, maintenance, and repair of Ditch 9 from its upstream o in Section 10, 2, �4'At, T1,2ON in Albertville to its outlet to County 1 j R24W, T12ON in St. Michael. 90 days following the effective date of this j 2 p Pic atian Within l�inety f referred " as described Agreement, the Ditch 9 Autharity,rheter�nseVe clan hereinafter Aref reed to as "Ditch 9 in Section 3, shall Prepare a camp e Plan," foz there lotion, maintenance and air of the attire en o Ditch 9 Plan shall include the following,: e design patameters for all development j 2:1 Establishment of surface water drainage and rural land uses located and redevelopment ro ects, Public in the Ditch 9 drainage basin. 'evv of the hydxology of the watershed to determine the flow capacity for ' 2,2 A rsvi will i the Ditch 9 doss -sections and profile. The r Ee ch City belresplons ble i the capacity of existing strueta=s on Ditch 9 tY rfor reviewing its portion of the watershed' P2 11 ROM CITY OF ALBERTVILLE CCT-12-06 03:56AM FR^,Y-CITY OF iT MIKE 1 3. 7 ' 4 2.3 A 2.4 FAX NO. : 7634973210 Oct. 12 2005 1O:21AM +T614975306 T-14$ P 52/05 F-!h6 ;xistin Condition of Ditch 9 and an jtern:xation Of any pr The City Engineerscurrv�'ill prove the the other ll serve Y s ata utypc�►,..&'s intb.Cirrespective Cities with°Ydrguj1enand ce structural City. Existing structures will be reviewed for integrity. .4 description of the applicable ditch tegulstsous of the aPPrOpr'aie pe1mitting BWSR COEand 'WCSWCD. The City agencies, including the DNR, , et►cies. Engineers will meat with representatives from these ag Cost estimates for Current maintenance: anall opaexrCad cos�tsesuch 85 legal) shall include estimate all construction costs Plus engineeruic, and administration costs. on of the 2.6 Easmntnt needs shall be determined for the ditch and desired buffer zones. "fhe Ditch 9 flan shall b+~ prepared cooperatively by Pla Ado i d mom' i ointly agree on the Ditch 9 Plan before the Cary Engineers. The City Engineers must, shall be ch submitting it. to the Authority for review and approvai. The Authority composed of two Council tsons an provide tPY►etc bn: al asssi talsceene; bythe o�—u^�, e Ciry Engineers sha p p a ma�aflh, vote of the members of 3utbonty. The Ditch 9 Plan shall be ado Y ybY vote of rbe members of tlhe the Authority and may be amended annuall b a majority 4uthority. lion by the Authority, ply jle e anon. Following Hitch 9 plan review and aciop p lement1txon of Ditab 9 _ lan. Each each City shall arrange for and adminis.er >h1e imp on the segments of the ditch located in theix City will perform all work necessary erformance of maintenance and/or respective jurisdiction. All contracts for the p applicablee with statutory repair projects shall be noticed and awardeci in acw mgt� be erfor ned privately by requirements- Work inel,Aded in the Ditch 9 Plat: may P .for partial owners of lands tributary to Ditch 9 and such work n=aY be eligible necessurY for reimbursement when is accordancewith Diu h 99,lwil be secure by the Authurity- Tnaintenance and/or repair prod ects ct na Rev' w.Anym�erofthe,A.uthoritym4Yreviewand?nspectanyand In 9 tQ ursuant to the Ditch 9 Plaz, ar d may all work, services, and activities undertaken p relating to � irnplemcntiatiotl, If any inspect discrepancies ands audit ineffi ciencies eaoed-notd, the Authority shall w otk out their discrcpancie differences. 2 P3 P, IFRALBERTVILLE FAX NO. : 7634973210 Oct. 12 2005 10:22AM P4 TT-L=♦16349"5306 1-64? P.03/0°� F-756 CCT-12-05 0837AM FPCIM-CITY OF ST VIKE and tecnenting the Ditch 9 Plan shall be 6, Cosc Afl_�� The costs for pTep�ng an P allocated to and paid by the respective City on the basis of the following. nister and admiing the Ditch 9 plan 6.1 The payment for the costs of preparingandarea of the Ditch shall be allocated to each City based on their prop 9 drainage basil'. ' a ent for the costs of a maintenance or hair project on any segment 6.2 The p Y� based on their proportionate areo ri of Ditch 9 will be allocated to a bag Cit y u stream of the lower most p that part of the Ditch 9combined om� n d ptojec sgea h segment will be calculated of the segment. On separately. ent ' shall undertake a maintenance or repair PTOjeCt On any Seg;ttthe 63 Neither Cityof Ditch th8t will rcguire reimbucsetncnt from the other Ctty without prime approval of the other City. ' 60 days follawing the completion of a Ditch 9 7, Cost R•; Ub rsemcnt- Wtihm sixty ( ) y air project done in accordance with tl� Ditch 9 Plan, the maintenance and/or rep P J the costs v��hich have been Authority shall transmit a statementto each City dwell geiinbsrse its portion of the ' o ro eet. The appropriate City the recei t of the incurred in doino the p J days follorvmg P costs to the City with the project within thirty (SO) i u o,K. An annual inspection ofthe conditionEngineers hall aspect those kfacilitieS segments AW—' will be =nadc by the City Engineers. The City report to the of Ditch 9 located in their respective City and then submit a surnma'Y • P ort� will also include all development activities which have Authority. The iep a basin The annual inspection and development report ' occurred in the Ditch 9 drainage shall be submitted to the Authority two weeks in advance of the annual meeting o the Authority. ' , of the kuthority shall be at 9.00 p.m. on g, Ann .,,�✓[Si1U8. The first annual meeting 'Vi7ednesda in October in 2002 at the St. Michael City Hall. Subsequent the last ayes and sites shall be set by the Authorlry- annual Meeting S;t The Authority shall establish anational bank n account it' sti f�£ ids b ag 10, D�6-illm deposits of monies and to Oct as a eP authorized to receive dep mayact to disburse monies for the administration of the bitch 9 Plan. The Authority ' 3 ffFROI`1 CITY OF ALBERTUILLE GCT-12.05 lgtHAM Fp,,M-CITY OF >T MIKE FAX NO. : 7634973210 47V4975306 Oct. 12 2005 10:23Af1 P5 7-94S P,04/05 f-16 [a u 0 sad signature of one Councilperson member from this account on the authorization frotr, each City. urchage property and liability insurance for the 11. sur in implementing . The Authority may P the Ditch 9 Plan. The purpose of protecting the imerests of the Cities costs of such insurance shall be funded in accordance with Section 6.1 ma within tho acaPe of this Agreement, �sra is d L 'The Authority Y from the United 12. 1 for and use grants or loans or other roperty or any accept gifts, apply artmcuts or agencies, Wright County, Steles, the State of Minnesota, or its dep may enter into anY person or entity for the proposes described herein. The Authority Yshall comPlY ssouable agreement required in connection therewith. a hold,The and dispose OT Te livable thereto, to y loan, or with all laws and replaf 0 accordance with the terms of the gift' grant' such money or properly in agreement relating thereto. 13. A o�:z ' . On or before December 1, of each y ear, the Anthony shall submit an ccouxitin of the monies expended for ministration of the flitch 9 Plan to each City a g for review. This report shall include the following: 13.a The financial activities of the Authority aver the Previous year; 13,b The status of ali projects and work pursuant to the Dinh 9 Plan; 13.e Any other matters 'which affect the interests of the City ill the Ditch 9 Plan. 14. TIR S ea e e . The Authority hereby ages to aye their best efforts to secure Wright Couary's Participanan in the Stream Ma►ntenance rogram eS established pursuant to Minnesota of ihel�iinnC1ot& Depa=en1 ofNatural ResourC Statutes 103C�•70l _ .�nmoney secured from this program Shall be used to reduce the costs of the member f r performing the Ditch 9 Plan. di ute, claim, question or disagreement arising from 1 S. In the event of Etry sP ement, the pan1eS hereto Shall use their best efforts to settle the of relating to his Afire nt. To this effect, they should consult or di9pute; claim, question or disagreerne attempt to reach a just and equitable negotiate with the other party in good faith and criod solution satisfactory to both Cities . if they do not reach such solution within a n er to s then the engineer for each City shall jointly select a third engineer of sixty days, claim, question or review and act as arbitrator with regard to such dispute, a FROM CITY OF ALBERTVILLE FAX NO. : 7634973210 Oct. 12 2005 10:23AM P6 �Zr"'rz'us '78''�SRI�I" rRGll-C I I Y OF S I N I Ili w,, • 1 ••• ' arbitrator so selected shall be final ar.d binding disagreement, The decision of the ' upon each City. dtt3�. Amendments to this Agreement may be made only by wn tea 16. cam._en instrument executed by the parties hereto, i 17. Effective Dom. This Agreement shall be in force and effect after all of the folloNving events have occurred: Councils of both rnrmber Cities; 16.a passage by the City 16.b Execution of this Agreement by authorized Tepreserttativa of bosh of the members hereto. the Wright Count 13aarQ of r i e passage of a resolution of eoaveyance by orlon of County Ditch C==jssioners conveying to the member Cites that p j No. 9 described in pa>;agMPh one of this Agreement - a Pursuant o S ial Le ' It is the intention of the parses hereto ve gWrightCoun Board of Commissioners of that portlor. w take conveyance �m the wag ry dement ursuant to of County Ditch No. 9 described in paragraph one of this Al r the �� i3this Chapter 432 of the Minnesota 2000 Session Laws, AC.:ordfmg P . Agreement, agree', 1 &a To accept the conveyance of the Cities of those portions of County Ditch No. 9 described in paragraph one of this Agreement- ' eewVftt, all of the rights, title and 1 s.b. To assume, as ofthe effeetiv'eu t�1►a oft �n County Ditch No. 9 described M interests of Wright Cowsty P tin and assutnM such paragraph one of this Agreement, with each City accep S unt ➢itch Na. 9 ' rights, title and interests to that pordon of the c�tveyed Co y lying within the respective City's jurisdiction. ' 18.c. To assume responsibility, under each City's respective municipal authority, for management of the surface water within each C'tty's respective jurisdiction wi nag the >;tYs f served by that portion of County Ditch No. 9 described in ' paragraph one of this Agreement. 5 FROM CITY OF ALBERTVILLE FAX NO. : 7634973210 Oct. 12 2005 10;24AM P7 ,QL.l`IL'•JJ JO-JVAM rrum-�.lil Vr a MiAB -wv4fIVYY• ..• • IN WITNESS WHEREOF,the undersigned governmental units, by action of their governing ' bodies, have caused this Agreement to be executed. Approved by the City Council City of St. Michael App ved by she City Council ,2002 : 9 H By.� 9 H H 0 CITY OF ALBERTVILLE Wright County, Minnesota Management Letter For the Year Ended December 31, 2005 1 1 �I 1 r C H 1 KERN • DEWENTER•VIERE February 17 2006 Honorable Mayor and City Council City of Albertville Albertville, Minnesota The accompanying memorandum includes financial trend information for your City and suggestions for improvement of accounting procedures and internal accounting control measures that came to our attention as a result of our audit of the basic financial statements of the City of Albertville, Minnesota, for the year ended December 31, 2005. The matters discussed herein were considered by us during our audit and they do not modify the opinion expressed in our Independent Auditors' Report dated February 17, 2006, on such statements. In planning and performing our audit of the basic financial statements of the City of Albertville, Minnesota, for the year ended December 31, 2005, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the City's ability to initiate, record, process and report financial data consistent with the assertions of management in the basic financial statements. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the basic financial statements being audited may ' occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we do not believe the reportable condition described in this letter is a material weakness. n I -""V KERN •DEWENTER•VIERE H This report is intended solely for the information and use of the City Council, management and others within the City and is not intended to be and should not be used by anyone other than these specified parties. ' We would like to express our appreciation for the cooperation extended to us by the representatives of the City of Albertville during our audit. ' KERN, DEWENTER, VIERE, LTD. St. Cloud, Minnesota 11 P F F H 1 CITY OF ALBERTVILLE Wright County, Minnesota FINANCIAL ANALYSIS GENERAL FUND General Fund revenues increased from $ 2,320,678 in 2004 to $ 2,780,042 in 2005. Property tax revenues decreased 3% from 2004 receipts and totaled $ 1,370,573. Licenses and permits increased 19% and totaled $ 683,448 as a result of increased development and additional permits purchased due to hail storm reconstruction. Charges for services and miscellaneous revenues increased 63% and 297%, respectively, while intergovernmental revenues decreased 13%. The increase in charges for services is the result of allocating administrative fees and increased developer fees in response to more development. The increase in miscellaneous revenues is primarily due to a developer prepayment for 70t" Street construction, increased interest revenue and a change in recording developer reimbursements. Previously, the City recorded the reimbursements against the expenditures. Starting in 2005, reimbursements and related expenditures are recorded at gross amounts. The graph below and on the following page present the General Fund revenues by source in a graph and pie chart formats. General Fund Revenues) $3,000,000 - $2,750,000 - s41z,ro9 $2,500,000 — _ _.. -.—__—... 5103,756 _.. $n,7o6 52,250,000 — S81,739 --- _ - 346,038 SR9,689 523QI36 598,229 $145,171 555,943 $572,230 $683,448 5691,839 $1,409,832 _--- 51,370,573 s 1,zs 1,3 u 2004 2005 ❑ Intergovemmental © Misceil... $2,000,000 -.. $92,198 g201,191 $67,345 $1,750,000 5272,892 $1,500,000 ---- $69,947 $567,020 51,250,000 ----- $306,699 $1,000,000 -- $750,000 .. -.. $500,000 -_-.-- S1,039,058 — $1,177,380 $250,000 ---- $- . 2001 2002 2003 ❑Taxes ■ Licenses and Pemils ■ Charges for Services 3 GENERAL FUND CITY OF ALBERTVILLE Wright County, Minnesota FINANCIAL ANALYSIS 2005 General Fund Revenues $ 2,780,0421 Miscellaneous 15% 2004 General Fund Revenues $ 2,320,678 Miscellaneous 4% Charges for Services 6% Licenses and Permits 25 ovemmental 3% Licenses and Permits 25% Intergovernmental 4% 4 CITY OF ALBERTVILLE Wright County, Minnesota FINANCIAL ANALYSIS GENERAL FUND General Fund expenditures increased from $ 2,005,118 in 2004 to $ 2,421,755 in 2005, which represents a change of 21 %. For governmental fund types, capital outlay items are included in total expenditures. For 2004, capital outlay expenditures totaled $ 131,019 compared to $ 76,373 in 2005. Without taking into consideration capital outlay, total General Fund expenditures increased 25%. All departments posted increased activity except for Culture and Recreation and Economic Development. General Government expenditures increased as a result of the purchase of land and change in recording of developer reimbursements, as previously presented. A graph depicting the expenditures for the General Fund for each of the past five years is illustrated below. The following page presents the expenditures for 2004 and 2005 using a pie chart design. General Fund Expenditures) $3,000,000 T $2,500,000 +— - $2,000,000 ^ - F 77Y�I $203,077 $1,500,000 — _. $314,353 $646,296 7 $117,628 $382,172 $1,000,000 $822,875 — 5564.671 $500,000 $336,287 ---- $512.513 1 5571,826 5568.405 - $121,166 $425,733 2001 2002 2003 2004 2005 ■ General Government ■ Public Safety ❑ Public Works ❑ Culture and Recreation ■ Economic Development ■ Miscellaneous 5 GENERAL FUND CITY OF ALBERTVILLE Wright County, Minnesota FINANCIAL ANALYSIS 2005 General Fund Expenditures $ 2,421,755I Culture andl Recreation 5°/n Public Works 18% Public Saf 33% Economic Development 0% General `Government 44 2004 General Fund Expenditures $ 2,005,118I Economic Development Culture and 30/ Recreation go/ Public Works 20% Miscellaneous I% General Government 34 Public Safety 34% 6 CITY OF ALBERTVILLE Wright County, Minnesota FINANCIAL ANALYSIS GENERAL FUND Overall, revenues exceeded expenditures by $ 358,287 in 2005. A five-year summary of revenues, expenditures and fund balance follows. This graph does not reflect transfer activity to and from other funds occurring during the year. It also does not reflect other financing sources and uses such as the proceeds from sales of fixed assets. $2,800,000 $2,600,000 $2,400,000 $2,200,000 $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- General Fund 2001 2002 2003 2004 2005 ■ Revenues ❑ Expenditures ■ Fund Balance The 2005 Fund balance of $ 2,110,581 is comprised of $ 1,000,000 designated for working capital and $ 1,110,581 ofundesignated amounts. 7 CITY OF ALBERTVILLE Wright County, Minnesota FINANCIAL ANALYSIS SEWER FUND The following graph provides a history of operating income (or loss) for the past five years for the Sewer Fund. The yellow bar represents a true measurement of operations to be used as a factor in determining whether sewer rates are sufficient to cover operating costs. As the graph indicates, rates for the past four years were sufficient to cover operating costs, which includes depreciation of fixed assets. Revenues that are sufficient to cover operating costs, including depreciation, allow for an accumulation of cash to help fund replacement of depreciable assets. Sewer Fund $520,000 S480,000 $440,000 S400,000 $360,000 $320,000 $280,000 $240,000 $200,000 $160,000 S120,000 $80,000 S40,000 S- - $459,342 2001 2002 2003 2004 2005 ❑ Operating income ■ Operating Income without Depreciation For the past five years, rates were sufficient not only to cover all operating costs, but the nonoperating expenses as well. The Sewer Fund generated net income (after nonoperating revenues and expenses) of $ 174,801 in 2005 and $ 48,595 in 2004; thereby increasing retained earnings to $ 5,625,442. At December 31, 2005, the Fund had a cash balance of $ 1,480,736 compared to $ 585,454 at December 31, 2004. 8 CITY OF ALBERTVILLE Wright County, Minnesota FINANCIAL ANALYSIS WATER FUND Operating revenues, excluding Water Access Charges (WAC) fees, for the Water Fund experienced a 3% decrease from $ 250,026 in 2004 to $ 242,873 in 2005. Operating expenses increased 41 % from $ 117,010 to $ 164,850 in 2005 as a result of increased repairs and maintenance expenses. Even with a large decrease in WAC fee revenue, the Water Fund showed operating income of $ 157,902. 300,000 250,000 200,000 150,000 100,000 50,000 Water Fund 2002 2003 2004 2005 ■ Operating Revenues ■ Operating Expenses ❑ Operating Income 9 CITY OF ALBERTVILLE Wright County, Minnesota FINANCIAL ANALYSIS MARKET VALUE, TAX CAPACITY AND TAX CAPACITY RATES The two graphs on this and the following page provide significant information about the growth experienced by the City to help you continue to analyze your tax rate position. The graph below depicts market value of all taxable property within the City limits, along with tax capacity generated by such growth. As is evident from the graph, property market value has increased from $ 174,270,900 in 2001 to $ 473,920,000 in 2005. During the same time, tax capacity has increased from $ 2,674,160 in 2001 to $ 5,675,982 in 2005. When reviewing this ' information, it is important to note that during this time frame the tax capacity rate structure did change. ' Tax Capacity and Market Valuel 5525,000,000 -. -.. - - 16,100,001 $5,675,982 5490,000,000 - - 5455,000,000 -_. $5,000.000 S420,000,000 bt73,920,000 - $385,000,000 5350,000,000 __._ 5390,062,100 -. 54.000.000 $315,000,000 j $280,000,000 _..... _. �._ _ - o. _ - - - 53,000.000 n $245.000,000 -. $2,674,160 g2,624,867 5293,416.600 F $210,000,000 --. —_ - --- $175,00Q000 -_.- -. - 5225 - - $2,000,000 $140,000,000 '-8174,270,900 - _ 51,000,000 $70,000,000 535,000,000 S- ___ _. _ _.. S- 2001 2002 2003 2004 2005 ■ Marka, Value ■Tax Capacity 10 1 ' CITY OF ALBERTVILLE Wright County, Minnesota IFINANCIAL ANALYSIS MARKET VALUE, TAX CAPACITY AND TAX CAPACITY RATES The graph below provides insight as to the impact the legislative class rate changes have had on tax capacity. As you are well aware, the state has changed conversion factors used to convert market value to tax capacity. As a result, tax capacity rates have had to increase to generate the same level of levy dollars on a fixed market value. Tax Capacity as a Percent of Market Valuel 1.6 1.4 1.2 1.0 0.8 - 0.6 0.4 -- 0.2 - 0.0 2001 J J 1.21 2002 2003 2004 2005 a 1 CITY OF ALBERTVILLE Wright County, Minnesota REPORTABLE CONDITION During our audit, we noted a condition that is considered to be a "reportable condition" as defined by standards established by the American Institute of Certified Public Accountants. LACK OF SEGREGATION OF ACCOUNTING DUTIES During the year ended December 31, 2005, the City had a lack of segregation of accounting duties due to a limited number of office employees. Although this meets the definition of a "reportable condition," it may not be practical to correct since the costs of obtaining desirable segregation of accounting duties may exceed benefits that could be derived. The Finance Director receives the bank statement and initiates and posts journal entries. She also initiates and posts wire transfers without approval or review. The Finance Director receives the investment statements, records maturities and issuances of new investments and posts entries into the accounting system for interest receivable, revenue and market value changes in investments. The Finance Director maintains and reviews vacation time, sick time and comp time accrual accounts. The Finance Director enters invoices into the accounting system, maintains the invoices for payment and matches check summary with summary of invoices. The Finance Director matches the purchase requisition and invoice, approves invoices for payment, posts the payments to the general ledger and is responsible for the signature stamp. This list is not all-inclusive. Further analysis can be provided upon request by the City. I t t 1 12 Id CITY OF ALBERTVILLE Wright County, Minnesota LEGAL COMPLIANCE FINDINGS ALL CITY DISBURSEMENTS MUST BE PUBLIC PURPOSE EXPENDITURES During our audit, we noted there was an expenditure made to purchase employee gift certificates. Expenditures by a city should meet a public purpose test. The Minnesota Attorney General's Office has the opinion that payments for employee appreciation do not qualify as public purpose expenditures. We recommend the City refrain from paying for items that are not for a public purpose. ADD VERBIAGE FOR PROMPT PAYMENT TO SUBCONTRACTORS Minnesota Statute 471.425, Subd. 4a, requires contracts of a municipality to have the prime contractor pay any subcontractor within ten days of the prime contractor's receipt of payment. The contract also must require that the prime contractor pay interest at the rate of 1.5% per month or any part of a month to the subcontractor for any undisputed amount not paid to the subcontractor within the ten days. We recommend the required verbiage be added in order to be in compliance with state statutes. DISBURSEMENTS SHOULD NOT BE IN EXCESS OF APPROPRIATIONS Minnesota Statute 412.271, states that no order shall be approved for payment unless there is a sufficient unexpended balance left in the budget. We noted that the General Fund expended more than their budget in 2005. We recommend that the City amend its budget, as necessary, to properly authorize any disbursements before funds expended exceed budgeted amounts. 1 I 1 13 CITY OF ALBERTVILLE Wright County, Minnesota MANAGEMENT SUGGESTIONS In our judgment, the following comments are matters which are not reportable conditions as defined by standards established by the American Institute of Certified Public Accountants; however, we feel these observations and suggestions regarding activities will benefit management. APPROVE JOURNAL ENTRIES AND RETAIN DOCUMENTATION During our audit, we noted the Finance Director drafts, approves and posts all journal entries into the finance system. No supporting documentation is maintained on file for most entries. We recommend the Finance Director require another employee to post the entries into the finance system if she is the one drafting them. To accomplish this recommendation, we suggest creating a journal entry form which includes signature blocks for the approving official and the W data entry clerk. Once the journal entry is posted, adequate documentation and description of the journal entry for further reference should be provided. Journal entries should be filed sequentially and maintained by the Finance Director. By completing these steps, there is less possibility for inappropriate adjustments to the City's financial statements. RECONCILE WITHHOLDING ACCOUNTS During our audit, we noted the payroll withholding accounts on the City's financial records are not reconciled. All payroll withholding accounts should be reconciled on a regular basis to S ensure proper withholding amounts are posted to the general ledger and paid. We recommend the Finance Director reconcile the payroll withholding accounts monthly to ensure the proper balances are recorded. The monthly reconciliations should be reviewed for accuracy by another City employee (City Clerk or City Administrator). The reconciliations should include signature blocks for the preparer and the reviewer. VACATION ACCRUAL PROCESS SHOULD AGREE TO PERSONNEL POLICY During our audit, we noted the current personnel policy states an employee shall not carry over vacation time from one vacation year to another vacation year as established by the employee's anniversary date unless prior approval has been granted by the City Council. A maximum of 150% of vacation time is allowed to be carried over if approved. The maximum carry over is not written in the personnel policy. It is a verbal agreement between City Council and the employee. This practice can create confusion and potential for unauthorized carryover of vacation balances. We recommend the City staff update the personnel policy to include the maximum carry over allowed by the City Council. The changes to the personnel policy should be presented to the Council for approval. I 1 14 r ■ CITY OF ALBERTVILLE Wright County, Minnesota MANAGEMENT SUGGESTIONS CHANGE TIMECARD APPROVAL PROCESS During our audit of payroll, it was noted a time card did have an approval signature but no date was written next to the approval signature. A date should be written next to the approval signature to ensure the time card was approved prior to a paycheck being issued and the approval .... was in the proper pay period. UPDATE PAYROLL INFORMATION During our audit of payroll, it was noted an employee's W-4 withholding information did not match the information in the payroll accounting system. This information should match to ensure appropriate withholdings are being taken in accordance with employees' decisions. We recommend the Finance Director update employee information in the payroll accounting system as new W-4's are completed with updated information. ` REVIEW AND APPROVE CASH RECONCILIATION We noted the cash reconciliation is not reviewed and approved by a second individual on a monthly basis. A second person should review this reconciliation to ensure it is done g timely and that it is accurate. We recommend City staff adopt a process to have a second individual review the cash reconciliations on a monthly basis. 15 CITY OF ALBERTVILLE Wright County, Minnesota Audited Financial Statements For the Fiscal Year Ended December 31, 2005 CITY OF ALBERTVILLE Wright County, Minnesota TABLE OF CONTENTS ELECTED OFFICIALS AND ADMINISTRATION....................................................... 1 INDEPENDENT AUDITORS' REPORT......................................................................... 2 MANAGEMENT'S DISCUSSION AND ANALYSIS ..................................................... 5 BASIC FINANCIAL STATEMENTS: Government -Wide Financial Statements: Statementof Net Assets................................................................................................... 13 Statementof Activities..................................................................................................... 14 Fund Financial Statements: Balance Sheet — Governmental Funds............................................................................. 15 Reconciliation of the Balance Sheet to the Statement of Net Assets — GovernmentalFunds..................................................................................................... 17 Reconciliation of the Statement of Net Assets — Business -Type Activities .................... 18 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds..................................................................................................... 19 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities — Governmental Funds ......................... 21 Reconciliation of the Revenues, Expenses and Changes in Net Assets — Business -Type Activities.............................................................................................. 22 Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual — General Fund........................................................................................... 24 Statement of Net Assets — Proprietary Funds.................................................................. 25 Statement of Revenues, Expenses and Changes in Net Assets — Proprietary Funds............................................................................................................................. 25 Statement of Cash Flows — Proprietary Funds................................................................. 26 Statement of Fiduciary Net Assets................................................................................... 27 Notes to the Financial Statements.......................................................................................... 29 ' SUPPLEMENTARY INFORMATION: Combining Balance Sheet — Nonmajor Governmental Funds ............................................... 55 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds.......................................................................................... 60 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN ' AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ......................... 66 ' REPORT ON LEGAL COMPLIANCE ....................................... ............... 68 ...................... SCHEDULE OF FINDINGS ON LEGAL COMPLIANCE ............................................ 69 CITY OF ALBERTVILLE Wright County, Minnesota ELECTED OFFICIALS AND ADMINISTRATION December 31, 2005 Elected Officials Don Peterson Tom Fay Ron Klecker LeRoy Berning John Vetsch Administration Larry Kruse Position Mayor Council Member Council Member Council Member Council Member City Administrator Term Expires December 31, 2006 December 31, 2006 December 31, 2006 December 31, 2008 December 31, 2008 Appointed 1 V\DV ' KERN •DEWENTER•V1ERE INDEPENDENT AUDITORS' REPORT F11, February 17, 2006 Honorable Mayor and City Council City of Albertville Albertville, Minnesota 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 Albertville, Minnesota, as of and for the year ended December 31, 2005, which collectively comprise the City's basic financial statements as listed in the Table of Contents. These basic financial statements are the responsibility of the City's management. Our ' responsibility is to express opinions on these basic financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards and the ' standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating ' the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Albertville, Minnesota, as of December 31, 2005, and the results of its operations and cash flows, where applicable, ' thereof and the budgetary comparison for the General Fund for the year then ended in conformity with U.S. generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated February 17, 2006, on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That ' report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. I --"'V ' KERN-Dr:WENTE.R VIERE The Management's Discussion and Analysis, which follows this report letter, is not a required part of the basic financial statements but is supplementary information required by U.S. generally accepted accounting principles. We have applied certain limited procedures, which consisted primarily of management inquiries regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. Our audit was performed for the purpose of forming opinions on the financial statements that ' collectively comprise the City's basic financial statements. The accompanying supplementary information identified in the Table of Contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. FJ i i 11 KERN, DEWENTER, VIERE, LTD. St. Cloud, Minnesota 11 1 CITY OF ALBERTVILLE Wright County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 As management of the City of Albertville, we offer readers of the City of Albertville's financial statements this narrative overview and analysis of the financial activities of the City of Albertville for the fiscal year ended December 31, 2005. Financial Highlights The assets of the City of Albertville exceeded its liabilities at the close of the most recent fiscal year by $38,724,130 (net assets). Of this amount, $5,306,112 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. As of the close of the current fiscal year, the City of Albertville's governmental funds reported combined ending fund balances of $10,356,870. At the end of the current fiscal year, unreserved, undesignated fund balance for the general fund was $1,110,581, or 46% of total general funds 2005 expenditures. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City of Albertville's basic financial statements. The City of Albertville's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) funds financial statements, and 3) notes to the financials statements. This report also contains other supplementary information in addition to the basic financial statements themselves. ' Government -wide financial statements. The government -wide financial statements are designated to provide readers with a broad overview of the City of Albertville's finances, in a manner similar to a private -sector business. There are two government -wide statements, the Statement of Net Assets and Statement of Activities. The statement of net assets presents information on all the City of Albertville's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Albertville is improving or deteriorating. The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs; regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City of Albertville ' 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 Albertville include general government, public safety, public works, culture and recreation and economic development. The business -type activities of the City of Albertville include a Water, Sanitary Sewer and Storm Water distribution and/or operation. 5 CITY OF ALBERTVILLE Wright County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 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 Albertville, 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 Albertville can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflow and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact 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 the government -wide perspective. The City of Albertville adopts an annual budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. Proprietary funds. The City of Albertville maintains three individual proprietary funds. Enterprise funds are used to report the same functions presented as business -type activities in government -wide financial statements. The City of Albertville uses enterprise funds to account for its Water, Sanitary Sewer and Storm Water distribution and operation. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statement because the resources of those funds are not available to support the City of Albertville's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. 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. 1� 1 CITY OF ALBERTVILLE Wright County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 '! Government -wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Albertville, assets exceeded liabilities by $38,724,130 at the iclose of the most recent fiscal year. i By far the largest portion of the City of Albertville net assets (55 %) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City of Albertville uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Albertville'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. Statement of Net Assets 1 Governmental Activities Business -Type Activities Total 2004 2005 2004 2005 2004 2005 Current and other assets 4,780,686 9,451,310 7,735,746 9,641,105 12,516,432 19,092,415 Capital assets 20,955,481 25,772,972 7,909,981 11,296,561 28,865,462 37,069,533 Total assets 25,736,167 35,224,282 15,645,727 20,937,666 41,381,894 56,161,948 Long -Term liabilities 6,185,000 8,924,863 2,166,718 5,676,331 8,351,718 14,601,194 Other liabilities 1,292,171 1,914,498 511,043 922,126 1,803,214 2,836,624 Total liabilities 7,477,171 10,839,361 2,677,761 6,598,457 10,154,932 17,437,818 Net assets: Invested in capital assets, net of related debt 14,185,481 16,171,687 5,500,764 5,219,804 19,686,245 21,391,491 Restricted 2,189,395 7,131,515 4,347,300 4,895,012 6,536,695 12,026,527 Unrestricted 1,884,120 1,081,719 3,119,902 4,224,393 5,004,022 5,306,112 Total net assets 18,258,996 24,384,921 12,967,966 14,339,209 31,226,962 38,724,130 An additional portion of the City of Albertville's net assets (32 %) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets, $5,306,112, may be used to meet the government's ongoing obligations to citizens and creditors. I I CITY OF ALBERTVILLE Wright County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 Change in Net Assets The increase in net assets occurs as a result of the City's revenues and transfers being more than its expenses for the year ended December 31, 2005. REVENUES Program Revenues - Charges for Services Operating Grants and Contributions Capital Grants and Contributions General Revenues - Taxes Aids and Payments from State Other Sources Total Revenues EXPENSES General Government Public Safety Public Works Culture & Recreation Economic Development Sanitary Sewer Water Storm Sewer Interest on Long -Term Debt Total Expenses Governmental Activities 2004 2005 Business -type Activities 2004 2005 2004 Total 932,579 1,332,518 2,140,346 1,922,727 3,072,925 64,227 57,704 - - 64,227 576,846 2,964,230 110,877 181,278 687,723 1,692,023 1,801,168 - - 1,692,023 29,192 24,860 - - 29,192 97,067 168,573 94,637 119,174 191,704 3,391,934 6,349,053 2,345,860 2,223,179 5,737,794 I I I I I I I I I I 2005 3,255,245 57,704 3,145,508 1,801,168 24,860 287,747 8,572,232 1,690,979 1,347,789 - - 1,690,979 1,347,789 720,984 831,158 - - 720,984 831,158 827,220 654,660 - - 827,220 654,660 37,013 781,043 - - 37,013 781,043 142,382 98,603 - - 142,382 98,603 - - 450,777 555,858 450,777 555,858 - - 184,438 194,918 184,438 194,918 - - 2,486 101,160 2,486 101,160 267,894 65,895 - - 267,894 65,895 3,686,472 3,779,148 637,701 851,936 4,324,173 4,631,084 Change in Net Assets, Before Transfers (294,538) 2,569,905 1,708,159 1,371,243 1,413,621 3,941,148 , Transfers 525,000 - (525,000) - - - Net Assets - Beginning, Restated 18,028,534 21,815,016 11,784,807 12,967,966 29,813,341 34,782,982 Net Assets - Ending 18,258,996 24,384,921 12,967,966 14,339,209 31,226,962 38,724,130 Ml I 1 1 r CITY OF ALBERTVILLE Wright County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 The net cost of governmental activities is their total costs less program revenues applicable to each category. General Government Public Safety Public Works Culture and Recreation Economic Development Interest on Long -Term Debt Sanitary Sewer Water Storm Sewer Total Expense Total Cost of Services Net Cost of Services 2004 2005 2004 2005 1,690,979 1,347,789 (1,031,458) (153,904) 720,984 831,158 (595,196) (729,572) 827,220 654,660 (245,288) 2,320,844 37,013 781,043 169,398 (697,566) 142,382 98,603 (142,382) (98,603) 267,894 65,895 (267,894) (65,895) 450,777 555,858 1,032,387 1,036,377 184,438 194,918 487,533 183,321 2,486 101,160 93,602 32,371 4,324,173 4,631,084 (499,298) 1,827,373 Financial Analysis of the Government's Funds As noted earlier, the City of Albertville uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental Activities. The focus of the City of Albertville'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 Albertville's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. The General fund expenditures increased roughly 20%, increases in expenses of approximately 21 % closely paralleled inflation and growth in the demand for services. As of the end of the current fiscal year, the City of Albertville's governmental funds reported combined ending fund balances of $10,356,870. Approximately $931,348 constitutes unreserved undesignated fund balance. The remainder of the fund balance is reserved to indicate that it is not available for new spending because it has already been committed for a variety of purposes such as capital assets and debt service. The general fund is the chief operating fund of the City of Albertville. 9 CITY OF ALBERTVILLE Wright County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 Revenues and Expenditures — Governmental Funds Revenue General 2,780,042 Capital Project Funds: Sewer Access 821,945 Closed Capital Projects 376,416 Prairie Run 399,050 City Hall 1,527 Ice Arena Locker Rooms - Other Non -major funds 1,316,256 Other Financing Expenditures Sources (Uses) 2,421,755 (470,650) (242,330) 266,271 2,267,435 326,799 - 270,734 3,623,066 590,768 - Fund Balance Increase (Decrease) (112,363) 579,615 2,377,580 72,251 3,353,859 (590,768) 1,946,761 (1,794,435) (2,424,940) 1 Totals 5,695,236 5,823,088 3,383,086 3,255,234 , General Fund Budgetary Highlights The original budget was not amended during fiscal year 2005. Differences between the final ■ budget and actual operations are briefly summarized as follows: General Government increase of $321,805 was due mostly to a land purchase, an increase in City Assessor contract with Wright County, and some miscellaneous items. The increase of $3,770 in public safety was due to increased police service coverage plus an increase in City Police contract with Wright County, and some miscellaneous items. The under budget items for Public Works, Culture and Recreation, Economic Development and Capital outlay were primarily due to insurance costs being less than expected, filed for tax exempt status on all city owned parcels, and to put monies away for capital outlay for planned purchases in the near future. The revenues were over what was projected by the budget due to the extra permits not expected due to the storm that caused damage in September 2005, more fines for violations given then projected, better interest rates and investing opportunities were available than what was projected. During the year, revenues exceeded budgetary estimates and expenditures were less than budgetary estimates thus resulting in a positive change in fund balance. 10 1 H CITY OF ALBERTVILLE Wright County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 Capital Assets and Debt Administration Capital Assets: The City of Albertville's investment capital assets for its governmental and business type activities include land, buildings, systems, improvements, machinery, equipment, park facilities, roads and some miscellaneous items. Total capital assets for the City amounts to $37,069,533 (net of accumulated depreciation). Major Capital asset events during the current fiscal year included the following: Waste Water Treatment Facility Expansion and new City Hall Facility. During the current fiscal year, the government issued a general obligation bond to finance the Waste Water Treatment Facility Expansion and the new City Hall Facility. At December 31, 2005 the City has $2,921,980 in commitments outstanding for capital expenditures. Long-term Debt: At the end of the current fiscal year, the City had total bonded debt outstanding of $16,781,652 (net of unamortized bond costs). The City of Albertville maintains an "AT' rating. Economic Factors and Next Year's Budget The City of Albertville expects to continue its residential and commercial growth at the same rate experienced the past couple of years. Capital Projects 2006-2007: Requests for Information City Hall 52" a Street Industrial Park Storm Water 70' Street The financial report is designed to provide a general overview of the City of Albertville's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Albertville, 5975 Main Ave NE, PO Box 9, Albertville, MN 55301. I11 CITY OF ALBERTVILLE Wright County, Minnesota STATEMENT OF NET ASSETS December 31, 2005 ASSETS: Current Assets: Cash and Investments (Including Cash Equivalents) Cash in Trust Restricted Cash in Trust Property Taxes Receivable - Delinquent Special Assessments Receivable - Deferred Special Assessments - Delinquent Accounts Receivable Interest Receivable Due from Other Governments Notes Receivable Total Current Assets Noncurrent Assets: Capital Assets: Land Sewer Plant and Lines Water Mains Storm Sewer Lines Buildings Infrastructure Improvements Other than Buildings Vehicles and Machinery Other Equipment Construction in Progress Less Accumulated Depreciation Total Capital Assets, Net of Depreciation Total Assets LIABILITIES AND NET ASSETS: Liabilities: Current Liabilities: Accounts and Contracts Payable Accrued Salaries and Benefits Payable Accrued Interest Payable Deferred Revenue Current Bond Principal Payable, Net of Unamortized Charges Total Current Liabilities Noncurrent Liabilities: Bond Principal Payable, Net of Unamortized Charges Compensated Absences Less Amounts Due Within One Year Total Noncurrent Liabilities Total Liabilities Net Assets: Invested in Capital Assets, Net of Related Debt Restricted for: Debt Service Capital Asset Acquisition Other Purposes Unrestricted Total Net Assets Total Liabilities and Net Assets Governmental Business -Type Activities Activities Total $ 4,936,405 $ 9,052,723 $ 13,989,128 899,403 - 899,403 77,963 - 77,963 40,171 - 40,171 2,690,156 96,413 2,786,569 214 - 214 574,040 489,376 1,063,416 28,810 - 28,810 147,570 2,593 150,163 56,578 - 56,578 9,451,310 9,641,105 19,092,415 3,675,315 190,269 3,865,584 - 7,742,312 7,742,312 - 436,894 436,894 - 71,251 71,251 2,622,939 - 2,622,939 19,316,608 19,316,608 518,391 - 518,391 992,802 236,270 1,229,072 260,260 - 260,260 5,838,623 4,360,637 10,199,260 (7,451,966) (1,741,072) (9,193,038) 25,772,972 11,296,561 37,069,533 $ 35,224,282 $ 20,937,666 $ 56,161,948 1 ri $ 1,098,248 $ 477,743 $ 1,575,991 7,101 2,162 9,263 105,394 41,795 147,189 571 - 571 703,184 400,426 1,103,610 1,914,498 922,126 2,836,624 ' 9,601,285 6,076,757 15,678,042 26,762 - 26,762 (703,184) (400,426) (1,103,610) 8,924,863 5,676,331 14,601,194 10,839,361 6,598,457 17,437,818 16,171,687 5,219,804 21,391,491 1,557,893 - 1,557,893 5,517,044 - 5.517,044 56,578 4,895,012 4,951,590 1,081,719 4,224,393 5,306,112 24,384,921 14,339,209 38,724,130 $ 35,224,282 $ 20,937,666 $ 56,161,948 The Notes to the Financial Statements are an integral part of this statement. 13 1 1 I C4z 11 .,t r ) N�1.0 � t� •--� •--� a, M a1 a, O M 7 vl 00 N Cl N O O [� C1 �O O U O t� N l� C,o Q\ Ul 00 o0 M M M en. O M l- V' o0 V' M l- �•^ O\ O Cl M O\ O l� a0 V'j V1 �O M N r- O\ V' N kn M -•� "O �O N r M 00 M In N O O, N cM vi In oo N O --M lO kn o0 [- N O\ N v) tl- [- F-' M M M b4 69 y M M M O O N Cl 17 N �O M N N N D; Ol [l- l- O1 M o0 M kn wn r 1.0 IC M •� O N N M C� O1 M V N V �o M v> 'IT7 _ 41 O M ClC) \O Cl�O _ O tr-- It CD O O m M N� N �n O O a\ N N v, :1 Vl oo - l0 oo M cn [- " o0 7 -� \O O, O\ O O C1 v m a\ O [l- oo kn v) kn O1 V N �O It O, oo 1.0 V1 V kn N N O� C,�c r.- Vl r- kn O 01 N M m�I-C 0� In w) In - N Vl 00 oo M N N O ¢ 69 69 ti OM O r- O oo In a. oo U ac. o N N M U 69 69 C v ^- v, v, p cli 0�U oq s9 v� bn � 77) o ' ' 'oo O O M � h N >O ('-' M r �i' N W M wn M N I w) M M N V1 G N > t0.. cu 0. n 00 a, kf) 00 M � V N Z$ N rn U c�+� ONi C�+ �. Ri M > U 69 a) G N C C W _C y K� � N y �� •G C O\ o0 O M M in o0 o0 o0 O l0 It 712 O U ate,, N 0o vl O a\ 'ct In \O M oo > U C.7 O Z ¢ -� \O O �O o0 .-• oo O� .--� O1 O tea/) ❑ x. m F r--i rn O r-+ oo �n o" wn �t .--� .-� W p, U Qi a> C Y . Y O m kn r � kn O� O oo � O O y O N aIn t' 00 �o v�0D v�i cNn ;O.F Q O¢ En zaz z N U U cC U Q N N O � c ti a E �, > O y U O •� E N > c > 4, C C7 C > U; ,x x �0 o U 3 Y o w `o +�+ cd cC • V O a7 CIO OO, cd F Fy U O O O G G ce U C7 a a U w c cn vz C7 W 14 I I CITY OF ALBERTVILLE Wright County, Minnesota BALANCE SHEET - GOVERNMENTAL FUNDS December 31, 2005 ASSETS: Cash and Investments (Including Cash Equivalents) Cash in Trust Restricted Cash in Trust Taxes Receivable - Delinquent Special Assessments Receivable - Deferred Special Assessments - Delinquent Accounts Receivable, Net of Allowance Interest Receivable Due from Other Governments Notes Receivable Total Assets LIABILITIES AND FUND BALANCES: Liabilities: Cash Overdraft Accounts and Contracts Payable Accrued Salaries and Related Benefits Deferred Revenue Total Liabilities Fund Balances: Reserved for Capital Projects Fund Reserved for Debt Service Funds Unreserved: Designated: General Fund Debt Service Funds Capital Projects Funds Undesignated: General Fund Special Revenue Funds Debt Service Funds Capital Projects Funds Total Fund Balances Total Liabilities and Fund Balances Capital Projects 101 204 , 400 Sewer Closed General Access Capital Projects $ 1,170,982 $ 4,815,762 $ - 885,965 - - 33,182 - - 96,413 343,142 140,343 - 428,446 28,810 - - 25,464 - 118,782 $ 2,284,746 $ 4,912,175 $ 890,370 $ - $ - $ 450,280 133,312 17,163 172,954 7,101 - - 33,752 96,413 343,142 174,165 113,576 966,376 1,000,000 - - 1,525,000 - 1,110,581 - - - 3,273,599 (76,006) 2,110,581 4,798,599 (76,006) $ 2,284,746 $ 4,912,175 $ 890,370 I I I I The Notes to the Financial Statements are an integral part of this statement. 15 Capital Projects 473 482 71 488 Ice Arena Other Total Locker Governmental Governmental Prairie Run City Hall Rooms Funds Funds $ $ 3,372,920 $ $ 3,654,109 $ 13,013,773 m _ 13,438 899,403 - - - 77,963 77,963 - _ = 6,989 40,171 1,610,992 736,022 2,786,569 - - - 214 214 5,251 574,040 = _ = 28,810 3,324 147,570 - - - 56,578 56,578 $ 1,610,992 $ 3,372,920 $ $ 4,553,888 $ 17,625,091 - $ 1,421,277 $ - $ 163,206 $ 1,226,843 $ 3,261,606 64,074 20,577 427,562 279,769 1,115,411 7,101 1,610,992 799,804 2,884,103 3,096,343 20,577 590,768 2,306,416 7,268,221 - 3,352,343 - 18,401 3,370,744 - - - 1,117,397 1,117,397 - - - - - - - 83,941 1,000,000 83,941 - - - 2,328,440 3,853,440 - 1,110,581 118,952 118,952 - - - (222,616) (222,616) (1,485,351) - (590,768) (1,197,043) (75,569) I (1,485,351) 3,352,343 (590,768) 2,247,472 10,356,870 $ 1,610,992 $ 3,372,920 $ - $ 4,553,888 $ 17,625,091 16 1 CITY OF ALBERTVILLE Wright County, Minnesota RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS - GOVERNMENTAL FUNDS December 31, 2005 Total Fund Balances - Governmental Funds S 10,356,870 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported as assets in governmental funds. Cost of Capital Assets 33,224,938 Less Accumulated Depreciation (7,451,966) Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported as liabilities in the funds. Long-term liabilities at year-end consist of: Bond Principal Payable (9,885,000) Compensated Absences Payable (26,762) Governmental funds report debt issuance discounts and costs as an other financing use and a current expenditure, respectively, at the time of issuance. Discounts and issuance costs are reported as an unamortized asset in the government -wide financial statements. 283,715 Delinquent receivables will be collected this year, but are not available soon enough to pay for the current period's expenditures and, therefore, are deferred in the funds. Delinquent Property Taxes 40,171 Delinquent Special Assessments 214 Deferred receivables are not available to pay for current expenditures and, therefore, are deferred in the funds. Deferred Special Assessments Receivable 2,690,156 Notes Receivable 56,578 Sewer Access Special Revenue Fund is proprietary in nature and, therefore, reported in the business -type activities in the Statement of Net Assets. (4,798,599) Governmental funds do not report a liability for accrued interest until due and payable. (105,394) Total Net Assets - Governmental Activities $ 24,384,921 Ll The Notes to the Financial Statements are an integral part of this statement. 17 1 CITY OF ALBERTVILLE Wright County, Minnesota RECONCILIATION OF THE STATEMENT OF NET ASSETS - BUSINESS -TYPE ACTIVITIES December 31, 2005 Total Fund Net Assets - Business -Type Activities Amounts reported for governmental activities in the Statement of Net Assets are different because: The Sewer Access Capital Projects Fund is proprietary in nature and relates to the sewer access charges for the Sanitary Sewer Fund. Therefore, it is included as a business -type activity. The Sewer Access Capital Projects Fund recorded deferred special assessments receivable. In the fund statements, deferred special assessments are not available in the current period and therefore are deferred in the funds. This revenue is recognized when earned as a business -type activity, Total Net Assets - Business -Type Activities $ 9,444,197 4,798,599 96,413 $ 14,339,209 II The Notes to the Financial Statements are an integral part of this statement. :. r CITY OF ALBERTVILLE Wright County, Minnesota STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS ' For the Year Ended December 31, 2005 Capital Projects 101 204 400 473 Sewer Closed Capital General Access Projects Prairie Run REVENUES: Taxes $ 1,370,573 $ - $ - $ - Special Assessments - 40,683 177,782 396,196 Licenses and Permits 683,448 - - - Intergovernmental 77,706 - - - Charges for Services 236,136 717,051 198,634 2,854 Fines and Forfeitures 3,414 - - - Miscellaneous 408,765 64,211 - - Total Revenues 2,780,042 821,945 376,416 399,050 EXPENDITURES: Current: General Government: 1,070,698 - - - Public Safety 768,887 - - - Public Works 386,964 - - - Culture and Recreation 115,614 - - - Economic Development 3,219 - - - Capital Outlay: General Government 13,045 - - - Public Safety 19,007 - - - Public Works 38,769 - 266,271 326,799 Culture and Recreation 5,552 - - - Debt Service - - - - Total Expenditures 2,421,755 - 266,271 326,799 Excess of Revenues Over (Under) Expenditures 358,287 821,945 110,145 72,251 OTHER FINANCING SOURCES (USES): Issuance of Bonds _ _ _ _ Bond Discounts _ _ Sale of Capital Assets 2,350 - - - Transfers In - - 2,302,547 - Transfers Out (473,000) (242,330) (35,112) - Total Other Financing Sources (Uses) (470,650) (242,330) 2,267,435 - Excess of Revenues Over (Under) Expenditures and Other Financing Sources (Uses) (112,363) 579,615 2,377,580 72,251 FUND BALANCES: Beginning of Year, as Previously Stated 2,222,944 4,218,984 (2,453,586) (1,557,602) Prior Period Adjustments _ _ Beginning of Year, Restated 2,222,944 4,218,984 (2,453,586) (1,557,602) End of Year $ 2,110,581 $ 4,798,599 $ (76,006) $ (1,485,351) The Notes to the Financial Statements are an integral part of this statement. 19 Capital Projects 482 488 Ice Arena Other Total Locker Governmental Governmental City Hall Rooms Funds Funds 430,051 $ 1,800,624 - - 286,477 901,138 - - - 683,448 - - 4,858 82,564 - - 240,959 1,395,634 - - - 3,414 1,527 - 353,911 828,414 1,527 - 1,316,256 5,695,236 - - - 1,070,698 - - - 768,887 - - - 386,964 - - 99,708 215,322 - - 95,384 98,603 249,488 - - 262,533 - - - - - 682,367 19,007 1,314,206 - 590,768 237,595 833,915 21,246 - 831,707 852,953 270,734 590,768 1,946,761 5,823,088 (269,207) (590,768) (630,505) (127,852) 3,700,000 - - 3,700,000 (76,934) - - (76,934) - 2,350 119,827 2,422,374 - - (1,914,262) (2,664,704) 3,623,066 - (1,794,435) 3,383,086 3,353,859 (590,768) (2,4247940) 3,255,234 (1,516) - 4,450,974 6,880,198 - - 221,438 221,438 (1,516) 4,672,412 7,101,636 $ 3,352,343 $ (590,768) $ 2,247,472 $ 10,356,870 20 CITY OF ALBERTVILLE Wright County, Minnesota RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS For the Year Ended December 31, 2005 Total Net Change in Fund Balances - Governmental Funds $ 3,255,234 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital Outlays Depreciation Expense 2,188368 (926:897) Principal payments on long-term debt are recognized as expenditures in the governmental funds but as an increase in net assets in the Statement of Activities. 585,000 Compensated absences are recognized as paid in the governmental funds but recognized as the expense is incurred in the Statement of Activities. (4,589) Interest payments on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized ' as an expenditure in the funds when it is due, and thus requires the use of current resources. In the Statement of Activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. (4,723) y Proceeds from long-term debt are recognized as another financing source in the governmental funds but as a decrease in net assets in the Statement of Activities. (3,700,000) Governmental funds report debt issuance costs and debt issuance premiums and discounts as an expense when the debt is first issued, whereas these amounts are deferred and amortized over the term of the debt in the Statement of Activities. 300,284 Bond discounts and issuance costs are amortized in the Statement of Activities, whereas governmental funds record the discount and issuance cost as an expenditure at the time of issuance. (16,569) Delinquent receivables will be collected this year, but are not available soon enough to pay for the current period's expenditures and, therefore, are not revenues in the funds. Delinquent Special Assessments (93,219) Delinquent Property Taxes 545 Certain revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Deferred Special Assessments 1,580,581 Notes Receivable (14,495) Sewer Access Special Revenue Fund is proprietary in nature and, therefore, is reported with business -type activities. (579,615) Change in Net Assets - Governmental Activities $ 2,569,905 The Notes to the Financial Statements are an integral part of this statement. 21 CITY OF ALBERTVILLE Wright County, Minnesota RECONCILIATION OF THE REVENUES, EXPENSES AND CHANGES IN NET ASSETS - BUSINESS -TYPE ACTIVITIES For the Year Ended December 31, 2005 Total Change in Fund Net Assets - Business -Type Activities $ 823,531 Amounts reported for governmental activities in the Statement of Activities are different because: Recognize current year activity from the Sewer Access Capital Projects Fund with the business -type activities. 579,615 Deferred special assessments from the Sewer Access Capital Projects Fund are not available in the current period and, therefore, are deferred in the Funds. (31,903) Change in Net Assets - Business -Type Activities $ 1,371,243 The Notes to the Financial Statements are an integral part of this statement. 22 CITY OF ALBERTVILLE Wright County, Minnesota STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2005 Variance with Budgeted Amounts Final Budget - Actual Positive Original Final Amounts (Negative) REVENUES: Taxes $ 1,461,041 $ 1,461,041 $ 1,370,573 $ (90,468) Licenses and Permits 546,750 546,750 683,448 136,698 Intergovernmental Revenue 64,000 64,000 77,706 13,706 Charges for Services 220,900 220,900 236,136 15,236 Fines and Forfeitures 100 100 3,414 3,314 Miscellaneous 75,000 75,000 408,765 333,765 Total Revenues 2,367,791 2,367,791 2,780,042 412,251 EXPENDITURES: Current: General Government 748,893 748,893 1,070,698 (321,805) Public Safety 765,117 765,117 768,887 (3,770) Public Works 418,081 418,081 386,964 31,117 Culture and Recreation 130,500 130,500 115,614 14,886 Economic Development 20,700 20,700 3,219 17,481 Capital Outlay: General Government 110,000 110,000 13,045 96,955 Public Safety 90,000 90,000 19,007 70,993 Public Works 40,000 40,000 38,769 1,231 Culture and Recreation 44,500 44,500 5,552 38,948 Total Expenditures 2,367,791 2,367,791 2,421,755 (53,964) Excess of Revenues Over Expenditures - OTHER FINANCING SOURCES (USES): Sale of Capital Assets - Transfers Out - Total Other Financincing Sources (Uses) - Excess of Revenues Under Expenditures and Other Financing Uses FUND BALANCES: Beginning of Year Ending of Year The Notes to the Financial Statements are an integral part of this statement. 358,287 358,287 ' 2,350 2,350 (473,000) (473,000) (470,650) (470,650) (112,363) $ (112,363) 2,222,944 $ 2,110,581 23 1 L, CI! n H I CITY OF ALBERTVILLE Wright County, Minnesota COMBINING STATEMENT OF NET ASSETS - PROPRIETARY FUNDS December 31, 2005 ASSETS: Current Assets: Cash and Investments (Including Cash Equivalents) Accounts Receivable Due from Other Governments Total Current Assets Noncurrent Assets: Capital Assets: Land Sewer Plant and Lines Water Main Storm Sewer Lines Machinery and Equipment Construction in Progress Total Capital Assets Less Accumulated Depreciation Net Capital Assets Total Assets 601 602 604 Sanitary Storm Sewer Water Water Total $ 1,480,736 $ 2,140,229 $ 615,996 $ 4,236,961 286,023 158,385 44,968 489,376 1,034 - 1,559 2,593 1,767,793 2,298,614 662,523 4,728,930 190,269 - - 190,269 7,742,312 - - 7,742,312 - 436,894 - 436,894 - - 71,251 71,251 193,560 42,710 - 236,270 3,832,739 383,593 144,305 4,360,637 11,958,880 863,197 215,556 13,037,633 (1,659,633) (79,658) (1,781) (1,741,072) 10,299,247 783,539 213,775 11,296,561 $ 12,067,040 $ 3,082,153 $ 876,298 $ 16,025,491 LIABILITIES AND NET ASSETS: Current Liabilities: Accounts and Contracts Payable $ 321,965 Accrued Salaries and Related Benefits 1,081 Accrued Interest Payable 41,795 Bonds Payable, Net of Unamortized Charges 400,426 Total Current Liabilities 765,267 $ 134,415 $ 4,200 $ 460,580 1,081 - 2,162 - - 41,795 - - 400,426 135,496 4,200 904,963 Noncurrent Liabilities: ' Bonds Payable, Net of Unamortized Charges 5,676,331 - - 5,676,331 Total Liabilities 6,441,598 135,496 4,200 6,581,294 Net Assets: Invested in Capital Assets, Net of Related Debt 4,222,490 783,539 213,775 5,219,804 Unrestricted Total Net Assets 1,402,952 5,625,442 2,163,118 2,946,657 658,323 872,098 4,224,393 9,444,197 Total Liabilities and Net Assets $ 12,067,040 $ 3,082,153 $ 876,298 $ 16,025,491 The Notes to the Financial Statements are an integral part of this statement. 24 CITY OF ALBERTVILLE Wright County, Minnesota STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS For the Year Ended December 31, 2005 OPERATING REVENUES: Charges for Services Penalties and Interest Trunk Charges Availability Charges Total Operating Revenues OPERATING EXPENSES: Wages, Salaries and Compensation Materials and Supplies Utilities Repairs and Maintenance Insurance Depreciation Equipment Professional Services Miscellaneous Total Operating Expenses Operating Income NONOPERATING REVENUES (EXPENSE): Bond Interest and Fiscal Charges Meter Sales Meter Purchases Special Assessments Investment Income Miscellaneous Total Nonoperating Revenues (Expense) Net Income before Transfers and Capital Contributions Capital Contributions Transfers In Change in Net Assets 601 602 604 Sanitary Storm (1------- Si1_a___ ♦1 T_i_._ T_a_1_ $ 699,424 $ 171,901 $ 53,241 $ 924,566 - 21,279 46,781 68,060 - 49,693 33,508 83,201 - 79,879 - 79,879 699,424 322,752 133,530 1,155,706 63,428 62,921 - 126,349 59,870 9,804 - 69,674 43,864 - - 43,864 29,574 69,275 749 99,598 900 750 - 1,650 173,721 15,932 1,781 191,434 667 1,465 - 2,132 40,685 1,221 12,297 54,203 1,094 3,482 3,000 7,576 413,803 164,850 17,827 596,480 285,621 157,902 115,703 559,226 (142,055) - - (142,055) - 33,345 - 33,345 - (30,068) - (30,068) 12,160 14,297 - 26,457 19,075 27,953 7,936 54,964 - 7,845 (83,333) (75,488) (110,820) 53,372 (75,397) (132,845) I 174,801 211,274 40,306 426,381 ' 154,820 - - 154,820 242,330 - - 242,330 571,951 211,274 40,306 823,531 NET ASSETS: Beginning of Year 5,053,491 2,735,383 831,792 8,620,666 End of Year $ 5,625,442 $ 2,946,657 $ 872,098 $ 9,444,197 The Notes to the Financial Statements are an integral part of this statement. 25 C ' CITY OF ALBERTVILLE Wright County, Minnesota STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS ' For the Year Ended December 31, 2005 6011 602 604 ' Sanitary Storm Sewer Water Water Totals CASH FLOWS - OPERATING ACTIVITIES: from Customers and Users $ 554,709 $ 333,118 $ 99,959 $ 987,786 'Receipts Payments to Suppliers 140,329 (202,467) (12,920) (75,058) Payments to Employees (63,695) (63,188) - (126,883) Net Cash Flows - Operating Activities 631,343 67,463 87,039 785,845 ' CASH FLOWS - NONCAPITAL FINANCING ACTIVITIES: Transfer from Other Funds 242,330 - - 242,330 ' CASH FLOWS - CAPITAL AND RELATED FINANCING ACTIVITIES: Net Bond Proceeds Bond Principal Payments 3,910,040 (242,500) - - 3,910,040 (242,500) Bond Interest and Fiscal Agent Fees (100,260) (100,260) Purchases of Capital Assets (3,576,906) (67,726) - (3,644,632) Purchases of Water Meters = (30,068) - (30,068) ' Sales of Water Meters 33,345 33,345 Special Assessments 12,160 14,297 - 26,457 Other Miscellaneous Receipts - 7,845 - 7,845 Net Cash Flows - Capital and Related Financing Activities 2,534 (42,307) (39,773) CASH FLOWS - NONOPERATING ACTIVITIES: ' Interest and Dividends 19,075 27,953 7,936 54,964 Net Change in Cash and Cash Equivalents 895,282 53,109 94,975 1,043,366 ' Cash and Cash Equivalents, January 1 585,454 2,087,120 521,021 3,193,595 Cash and Cash Equivalents, December 31 $ 1,480,736 $ 2,140,229 $ 615,996 $ 4,236,961 ' RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS - OPERATING ACTIVITIES: Operating Income $ 285,621 $ 157,902 $ 115,703 $ 559,226 Adjustments to Reconcile Operating Income to ' Net Cash Flows - Operating Activities: Depreciation Expense 173,721 15,932 1,781 191,434 Accounts Receivable (166,812) (15,810) (33,571) (216,193) ' Due from Other Governments 22,097 26,176 - 48,273 Accounts Payable 316,983 127,129 3,126 447,238 Due to Other Governments - (243,599) - (243,599) Accrued Salaries and Related Benefits Total Adjustments (267) 345,722 (267) (90,439) - (28,664) (534) 226,619 Net Cash Flows - Operating Activities $ 631,343 $ 67,463 $ 87,039 $ 785,845 NONCASH INVESTING, CAPITAL AND ' FINANCING ACTIVITIES: Contributions of Capital Assets from Government Capital Funds $ 154,820 $ - $ - $ 154,820 Bad Debt Expense - - (83,333) (83,333) The Notes to the Financial Statements are an integral part of this statement. 26 L ASSETS: Cash and Investments LIABILITIES: Accounts Payable CITY OF ALBERTVILLE ' Wright County, Minnesota STATEMENT OF FIDUCIARY NET ASSETS ' December 31, 2005 ' Agency Fund g y Albertville Friendly City Landscaping ' Days Escrows Total $ 10,000 $ I12,840 $ 122,840 , $ 10,000 $ 112,840 $ 122,840 The Notes to the Financial Statements are an integral part of this statement. 27 CITY OF ALBERTVILLE ' Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity ' The City of Albertville is a statutory city governed by an elected mayor and four council ' members. The accompanying financial statements present the government entities for which the government is considered to be financially accountable. The financial statements present the City and its component units. The City includes all funds, 1 account groups, organizations, institutions, agencies, departments and offices that are not legally separate from such. Component units are legally separate organizations for which the elected officials of the City are financially accountable and are included within the basic financial statements of the City because of the significance of their operational or financial relationships with the City. The City is considered financially accountable for a component unit if it appoints a voting t majority of the organization's governing body and it is able to impose its will on the organization by significantly influencing the programs, projects, activities or level of services performed or ' provided by the organization, or there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on, the City. As a result of applying the component unit definition criteria above, certain organizations have 1 been defined in accordance with Governmental Accounting Standards Board (GASB) Statement No. 14 and are presented in this report as follows: Joint Ventures and Jointly Governed Organizations — The relationship of the City with the entity is disclosed. For the category above, the specific entity is identified as follows: , 1. Joint Ventures and Jointly Governed Organizations Joint Powers Board Water Fund In 1977, the City of Albertville entered into an agreement with the Cities of St. Michael, , Hanover and Frankfort Township to construct a water system under a grantbond arrangement with the Economic Development Administration (EDA). Water Revenue Bonds were issued in the name of the City of Albertville and purchased by the EDA. The Joint Powers Board remits the annual bond and interest payment to the City of Albertville which, in turn, remits the payment to the EDA. J 29 1 E CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity (Continued) 1. Joint Ventures and Jointly Governed Organizations (Continued) Joint Powers Board Water Fund (Continued) The Joint Powers Agreement states in the event the Joint Powers Board Water Fund does not generate sufficient revenue to pay operating costs and principal and interest on bonds, the participants agree to contribute from their General Fund an amount sufficient to pay for such deficiency. At the time of the original Agreement, each City and Town was to contribute 25% of the required amount. In 1996, Frankfort Township was annexed into the Cities of St. Michael, Albertville and Otsego and no longer exists as a township. Therefore, the City of ' Albertville is now required to contribute one-third of any potential deficiencies of the Joint Powers Board. ' A summary of the financial information of the Joint Powers Board Water Fund for the year ended December 31, 2005 is: Total Assets $ 25,718,111 Total Liabilities $ 13,939,337 Total Net Assets 11,778,774 Total Liabilities and Net Assets $ 25,718,111 ' Operating Revenue $ 1,859,084 Operating Expense 1,106,233 Other Income and Expense 1,038,851 Change in Net Assets $ 1,791,702 ' Financial statements for the Joint Powers Board Water Fund may be obtained at the Albertville City Hall. St. Michael — Albertville Ice Arena (STMA Arena) ' In 1996 and 1997, the City of Albertville entered into a Joint Powers Agreement with the City of St. Michael and Independent School District No. 885, St. Michael -Albertville, for construction and maintenance of a qualified ice arena. In addition, the City received notice in 1996 of being selected as a Mighty Ducks grant recipient to help fund the cost of the arena. The arena was constructed with the Mighty Ducks grant funds, donations and contributions by the Cities of St. Michael and Albertville and Independent School District No. 885. 30 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity (Continued) 1. Joint Ventures and Jointly Governed Organizations (Continued) St. Michael — Albertville Ice Arena (STMA Arena) (Continued) The Joint Powers Agreement states the City of Albertville is to execute a revenue note in the amount of $ 133,333, which will be paid back with funds available from the operation of the ice arena. The total amount of the revenue note is to be $ 400,000, of which each participant is one-third responsible. If funds are deficient, the City must pay one-third of the amount necessary to make up the shortage. In addition, the City must allocate an amount sufficient to pay one-third of any projected shortfall in annual revenues available for the operation and maintenance of the ice arena. During 1998, the City contributed the required $ 133,333 toward the ice arena. In addition, in 1998 the City's Storm Water Enterprise Fund provided the ice arena with a short-term loan in the amount of $ 83,333. In 2005, 2004 and 2003, the City did not make any contributions nor receive any payments on the loan. The City did, however, cancel the short-term loan, due from other governments, in the amount of $ 83,333 as a bad debt expense. A summary of the financial information of the STMA Arena for the year ended June 30, 2004 is: 0 11 ' Total Assets $ 828,081 Total Liabilities $ 681,688 ' Total Net Assets 146,393 Total Liabilities and Equity $ 828,081 Total Revenues $ 198,747 Operating Expenses 213,242 ' Other Income (Expense) 190 Change in Net Assets $ (14,305) i Financial statements for the STMA Arena may be obtained at the Albertville City Hall. I 31 1 L Fi 1 H CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES B. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the nonfiduciary activities of the City. The fiduciary funds are only reported in the Statement of Fiduciary Net Assets at the fund financial statement level. 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 is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities. 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. The Agency Funds are presented in the fiduciary fund financial statements. Since, by definition, these assets are being held for the benefit of a third party (other local governments, private parties, etc.) and cannot be used to address activities or obligations of the City, these Funds are not incorporated into the government -wide statements. 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 and fiduciary 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. 1 32 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement Focus, Basis of Accounting and Financial Statement Presentation ' (Continued) 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 government 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, franchise taxes, licenses 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 government. Description of Funds: Major Governmental Funds: General Fund — This Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Sewer Access Capital Projects Fund — This Fund accounts for the resources accumulated from sewer availability charges collected by the City. Closed Capital Projects Fund — This Fund accounts for costs associated with replacement of the City's utility and road systems. It also covers minor costs for project funds closed and completed. Prairie Run Capital Projects Fund — This Fund accounts for the resources and payments made for construction of public improvements at the Prairie Run Development. City Hall Capital Projects Fund — This Fund accounts for the resources and payments made for construction of the City Hall. Ice Arena Locker Rooms — This Fund accounts for the resources and payments made for I construction of the ice arena locker rooms. 33 1 I 1� 1 L Fi CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued) Description of Funds: (Continued) Major Proprietary Funds: Sanitary Sewer Fund — This Fund accounts for the operations of the City's sanitary sewer utility. Water Fund — This Fund accounts for the operations of the City's water utility. Storm Water Fund — This Fund accounts for the activities of the City's storm drainage operations. Fiduciary Fund: Agency Funds — These Funds account for landscaping escrow deposits and funds for the City's "Friendly Days" held by the City in a strictly custodial capacity. Private -sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the GASB. Governments also have the option of following subsequent private -sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private -sector guidance. As a general rule, the effect of interfund activity has been eliminated from the government - wide financial statements. Exceptions to this general rule are charges between the government's sanitary sewer function and various other functions of the government. 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 Sanitary Sewer, Water and Storm Water Enterprise Funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 1 34 CITY OF ALBERTVILLE , Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued) When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. D. Assets, Liabilities and Net Assets or Equity ' 1. Deposits and Investments The government's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. ' Minnesota Statutes require all deposits made by cities with financial institutions are collateralized in an amount equal to 110% of deposits in excess of Federal Deposit Insurance I Corporation (FDIC) insurance. Minnesota Statutes authorizes the City to invest in obligations of the U.S. Treasury, agencies ' and instrumentalities, shares of investment companies whose only investments are in the aforementioned securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, future contracts, repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days and in the Minnesota Municipal Investment Pool. The City's investment policy has addressed concentration risk as to diversification and is required to limit potential losses to no more than the income generated by the portfolio. The City's policy also addresses interest rate risk by not allowing the City to invest in securities maturing more than five years from the date of purchase. Also, no more than 50% of the dollar value of the City's investments will mature more than two years from the date of purchase. The City will also not purchase investments that cannot be held to maturity. The policy also covers that the City will handle its investment transactions with several legal, competing, reputable investment security dealers. The City's policy has not addressed exposure to credit risk and custodial credit risk. Investments for the government are reported at fair value. The Minnesota Municipal Investment Pool is an external investment pool not registered with the Securities Exchange Commission (SEC) that follows the same regulatory rules of the SEC under Rule 2.a.7. The fair value of the position in the pool is the same as the value of the pool shares. 35 1 H I� 0 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Assets or Equity (Continued) 2. Restricted Assets Certain proceeds of the Public Facilities Authority's revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets in the Balance Sheet because they are maintained in separate bank accounts and their use is limited by the Public Facilities Authority Loan Agreement. 3. Property Tax Receivables All property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of the property. The City levies its property tax for the subsequent year during the month of December. December 28 is the last day the City can certify a tax levy to the County Auditor for collection the following year. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. The property tax is recorded as revenue when it becomes measurable and available. Wright County is the collecting agency for the levy and remits the collections to the City three times a year. The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment is due on October 15. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable. The County Auditor prepares the tax list for all taxable property in the City, applying the applicable tax rate to the tax capacity of individual properties, to arrive at the actual tax for each property. The County Auditor also collects all special assessments, except for certain prepayments paid directly to the City. The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year. 4. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, 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 estimated useful life greater than one year and with an initial individual cost as shown on the following page. 1 36 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS ' December 31, 2005 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Assets or Equity (Continued) 4. Capital Assets (Continued) Land $ 10,000 Land Improvements 25,000 Infrastructure 100,000 Buildings 25,000 Building Improvements 25,000 Vehicles 5,000 Other Equipment 5,000 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. Property, plant and equipment of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Years Land Improvements 5-30 Infrastructure 15-50 ' Buildings 15-40 Vehicles 3-15 Other Equipment 3-20 1 5. Vacation, Sick and Compensatory Benefits The City compensates employees who resign or retire with due notice for unused vacation and compensatory time. Employees may carry over vacation time from one vacation year to another vacation year as established by the employee's anniversary date. Compensatory time is accumulated at 1.5 times for overtime hours worked. A maximum of 40 hours of compensatory time may be accumulated. Full-time employees are entitled to sick leave at the rate of one day per month to a maximum of 45 days, or 360 hours. Hours accumulated in excess of the maximum are applied to the City's sick leave incentive program. An employee earns 1/4 day paid vacation or 1/4 days' pay in lieu of excess sick leave at the employee's option. This option is only active and available when the beginning sick leave balance for each month is 45 days. The cash in lieu option is paid in December of each year. 37 1 r F11 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Assets or Equity (Continued) 5. Vacation, Sick and Compensatory Benefits (Continued) Full-time employees are entitled to sick leave at the rate of one day per month to a maximum of 45 days, or 360 hours. Hours accumulated in excess of the maximum are applied to the City's sick leave incentive program. An employee earns 1/4 day paid vacation or 1/4 days' pay in lieu of excess sick leave at the employee's option. This option is only active and available when the beginning sick leave balance for each month is 45 days. The cash in lieu option is paid in December of each year. Vacation, compensatory and sick pay are considered expenditures in the year due in the governmental fund types, while in the proprietary fund types, vacation and sick pay are charged to expense when earned. All estimated vacation and compensatory time is recorded when incurred in the government -wide and proprietary fund statements. 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 Statement of Net Assets. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, 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. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. 8. Net Assets Net assets represent the difference between assets and liabilities in the government -wide financial statements. Net Assets invested in capital assets, net of related debt consists of capital assets, net of accumulation depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. Net assets are reported as restricted in the government -wide financial statement when there are limitations on their use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Assets or Equity (Continued) , 9. Use of Estimates The preparation of basic financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Fund Balance Deficits The following funds had deficit fund balances at December 31, 2005: Major Funds: Closed Capital Projects $ (76,006) Prairie Run Capital Projects Fund (1,485,351) Ice Arena Locker Rooms Capital Projects Fund (590,768) Nonmajor Funds: Debt Service Funds: City Hall Bonds (1,649) 1996A G.O. TIF Bonds (79,946) 2003A G.O. Improvement Bonds (155,096) Capital Projects Funds: TIF No. 8 - Vetsch Custom Cabinets (421) TIF No. 10 - Mold -Tech (11,001) TIF No. 11 - Land of Lakes Tile (19,774) NW Commercial Park (104,406) County Road 37 Traffic Light (102,952) I-94 (230,672) Wright County Transportation (27,549) , CSAH 37 Trails (221,646) School Pedestrian Bike Trail (340,975) Wright -Hennepin Substation (1,624) ' 52nd Street Industrial Park (2,500) Hockey Rink (133,523) u 39 1 I CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 2 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Fund Balance Deficits (Continued) These deficits will be eliminated by future levies, collections of special assessments, operating transfers and developer reimbursements. B. Excess of Expenditures over Appropriations Expenditures exceeded appropriations during the year ended December 31, 2005 by the following amounts: Appropriations Expenditures Excess General Fund $ 2,367,791 $ 2,421,755 $ 53,964 C. Budgetary Information 1. In August of each year, City staff submits to the City Council, a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them for the upcoming year. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution after obtaining taxpayer comments. 4. Budgets for the General and Special Revenue Funds are adopted on a basis consistent with U.S. generally accepted accounting principles. 5. Expenditures may not legally exceed budgeted appropriations at the department level. No fund's budget can be increased without City Council approval. The City Council may authorize transfer of budgeted amounts between departments within any fund. Management may amend budgets within a department level, so long as the total department budget is not changed. 6. Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds. Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions. Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted. 7. Budgeted amounts are as originally adopted or as amended by the City Council. Individual amendments were not material in relation to the original amounts budgeted. Budgeted expenditure appropriations lapse at year-end. 1 40 I CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 3 — DEPOSITS AND INVESTMENTS A. Deposits Custodial Credit Risk — Deposits: Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned to it. As of December 31, 2005, the City's bank balance was not exposed to custodial credit risk because it was insured and fully collateralized with securities held by the pledging financial institution's trust department or agent and in the government's name. As of December 31, 2005, the City had deposits as follows: Checking $ 843,145 Savings 9,111,562 Certificates of Deposit 826,741 Total Deposits $ 10,781,448 B. Investments n estments As of December 31, 2005, the City had the following investments: Fair Weighted Average Value Maturity (Years) Ratings Commercial Paper $ 199,000 0.082 Pi Government Securities 843,201 4.726 AAA Municipal Bonds 510,707 11.654 AAA and AA3 Brokered Certificates of Deposit 1,600,990 0.713 N/A Money Market 176,372 N/A N/A Restricted Investments 977,366 N/A N/A Total Investments 4,307,636 $ Concentration of Credit Risk: More than 5% of the City's investments are in: Dollars Percent of Total Investment Invested Investment ' Federal Home Loan Bank Note $ 258,044 5.99% Federal Home Loan Bank Note 292,968 6.80% Coon Rapids, Minnesota Tax Increment B 245,935 5.71% 41 1 L I L C CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 3 — DEPOSITS AND INVESTMENTS B. Investments (Continued) Custodial Credit Risk — Investments: For an investment, this is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. As of December 31, 2005, the City's investment balance was not exposed to custodial credit risk. Interest Rate Risk: In accordance with its investment policy, the City manages its exposures to declines in fair values by limiting the weighted average maturity of 50% of its portfolio to less than two years. Summary of cash, deposits and investments as of December 31, 2005: Petty Cash $ 250 Deposits 10,781,448 Investments 4,307,636 Total $ 15,089,334 ' Cash, deposits and investments are presented in the December 31, 2005 basic financial statements as follows: C 7 H Statement of Net Assets: Cash and Investments Cash in Trust Restricted Cash in Trust Statement of Fiduciary Net Assets: Agency Funds Total Deposits and Investments $ 13,989,128 899,403 77,963 122,840 $ 15,089,334 1 42 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 4 — ACCOUNTS RECEIVABLE Accounts receivable as of year-end for the government's individual major funds and nonmajor funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: Governmental Activities: Accounts Receivable Less Allowance for Uncollectibles Net Accounts Receivable - Governmental Activities Business -Type Activities: Accounts Receivable - Business -Type Activities Closed General Capital Fund Projects $ 140,343 $ 669,358 - (240,912) $ 140,343 $ 428,446 Nonmajor Governmental Funds $ 5,251 $ 5,251 Total $ 814,952 (240,912) $ 574,040 Sanitary Storm Sewer Water Water Fund Fund Fund Total $ 286,023 $ 158,385 $ 44,968 $ 489,376 43 ' CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 5 — CAPITAL ASSETS ' Capital asset activity for the year ended December 31, 2005 was as follows: Restated, ' Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital Assets not being Depreciated: Land $ 3,556,020 $ 119,295 $ - $ 3,675,315 Construction in Progress 4,255,978 1,855,925 273,280 5,838,623 ' Total Capital Assets not being Depreciated 7,811,998 1,975,220 273,280 9,513,938 ' Capital Assets being Depreciated: Buildings 2,563,750 59,189 - 2,622,939 t Infrastructure Improvements Other 19,316,608 - - 19,316,608 than Buildings 450,000 68,391 - 518,391 ' Vehicles Machinery and Equipment 883,714 109,088 - 10,500 249,760 - 992,802 260,260 Total Capital Assets being Depreciated 23,224,572 486,428 - 23,711,000 Less Accumulated Depreciation for: Buildings 137,382 62,324 - 199,706 Infrastructure 5,909,470 741,571 - 6,651,041 Improvements Other than Buildings 30,000 34,559 - 64,559 Vehicles 442,967 71,042 - 514,009 ' Machinery and Equipment 5,250 17,401 22,651 Total Accumulated ' Depreciation 6,525,069 926,897 - 7,451,966 Total Capital Assets being ' Depreciated, Net 16,699,503 (440,469) - 16,259,034 Governmental Activities Capital Assets, Net $ 24,511,501 $ 1,534,751 $ 273,280 $ 25,772,972 Beginning balance was restated to reflect the addition of land values. ' 44 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 5 — CAPITAL ASSETS Business -Type Activities: Capital Assets not being Depreciated: Land Construction in Progress Total Capital Assets not being Depreciated Capital Assets being Depreciated: Sewer Plant and Lines Water Main Storm Sewer Machinery and Equipment Total Capital Assets being Depreciated Less Accumulated Depreciation for: Sewer Plant and Lines Water Mains Storm Sewer Machinery and Equipment Total Accumulated Depreciation Total Capital Assets being Depreciated, Net Business -Type Activities Capital Assets, Net Beginning Balance Increases Decreases Ending Balance $ 190,269 $ - $ - $ 190,269 1,177,394 3,535,072 351,829 4,360,637 1,367,663 3,535,072 351,829 4,550,906 7,418,792 323,520 - 7,742,312 436,894 - - 436,894 - 71,251 - 71,251 236,270 - - 236,270 8,091,956 394,771 - 8,486,727 1,364,198 160,504 - 1,524,702 47,876 10,923 - 58,799 - 1,781 - 1,781 137,564 18,226 - 155,790 1,549,638 191,434 - 1,741,072 6,542,318 203,337 - 6,745,655 $ 7,909,981 $ 3,738,409 $ 351,829 $ 11,296,561 45 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 5 — CAPITAL ASSETS Depreciation expense was charged to functions/programs of the government as follows: Governmental Activities: General Government $ 544 Public Safety 42,369 Public Works 842,085 Park and Recreation 41,899 Total Depreciation Expense - Governmental Activities $ 926,897 Business -Type Activities: Storm Sewer Water Sewer $ 1,781 15,932 173,721 Total Depreciation Expense - Business -Type Activities $ 191,434 NOTE 6 — INTERFUND TRANSFERS The composition of interfund transfers as of December 31, 2005 is as follows: Transfers In: Closed Nonmajor Capital Governmental Sanitary Projects Funds Sewer Total Transfer Out: General Fund $ 400,000 $ 73,000 $ - $ 473,000 Sewer Access - - 242,330 242,330 Closed Capital Projects - 35,112 - 35,112 Nonmajor Governmental Funds 1,902,547 11,715 - 1,914,262 Total $ 2,302,547 $ 119,827 $ 242,330 $ 2,664,704 The purpose of the above transfers are to provide funding for capital improvement projects and capital outlay, provide funding for operating purposes and other miscellaneous items. .e ' CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 7 — LONG-TERM DEBT A. Components of Long -Term Liabilities Issue Interest Original Final Principal Due Within Date Rate Issue Maturity Outstanding One Year Governmental Activities: ' Revenue Bonds: Public Facility Authority Lease Revenue Bonds, Series 1999 07/20/99 5.00-5.60% $ 860,000 02/01/19 $ 720,000 $ 35,000 ' Public Project Lease Revenue Bonds, Series 2004 09/09/04 3.75-4.90% 2,100,000 02/01/25 2,100,000 30,000 Public Project Lease Revenue Bonds, Series 2005B 12/22/05 3,30-4.70% 3,700,000 12/01/25 3,700,000 125,000 ' Total Revenue Bonds 6,520,000 190,000 G.O. Special Assessment Bonds: ' G.O. Improvement Refunding Bonds, Series 1993A 08/01/93 3.40-5.75% 675,000 02/01/06 20,000 20,000 G.O. Improvement Bonds, Series 1999A 07/29/99 4.10-5.20% 1,760,000 02/01/15 440,000 40,000 ' G.O. Improvement Bonds, Series 2003A 08/15/03 2.00-4.15% 3,235,000 02/01/19 2,825,000 450,000 Total G.O. Special Assessment Bonds 3,285,000 510,000 ' G.O. Tax Increment Bond, Series 1996A 11/22/96 4.25-5.40% 400,000 02/01/08 80,000 25,000 Unamortized Charges (283,715) (21,816) , Total Governmental Bonds 9,601,285 703,184 Compensated Absences 26,762 - , Total Long -Term Liabilities, Governmental Activities 9,628,047 703,184 Business -Type Activities: ' Revenue Debt: Public Facility Authority, G.O. Sewer Revenue Note 10/19/93 3.32% 1,454,514 08/20/14 771,718 74,926 G.O. Lease Revenue , Bonds, Series 2000A 11/20/00 4.50-5.25% 2,550,000 02/01/16 1,395,000 190,000 G.O. Sewer Revenue Bonds, Series 2005A 12/22/05 3.15-4.25% 4,000,000 12/01/25 4,000,000 140,000 ' Unamortized Charges (89,961) (4,500) Total Business -Type Activities 6,076,757 400,426 ' Total all Long -Term Liabilities $ 15,704,804 $ 1,103,610 Long-term bonded indebtedness listed above were issued to finance acquisition and construction ' of capital facilities or to refinance (refund) previous bond issues. 47 , C H 11 U CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 7 - LONG-TERM DEBT B. Changes in Long -Term Liabilities Long-term liability activity for the year ended December 31, 2005, was as follows: Governmental Activities: Revenue Bonds G.O. Special Assessment Bonds G.O. Tax Increment Bond Unamortized Charges Compensated Absences Total Governmental Activities Business -Type Activities: ' G.O. Sewer Revenue Note Lease Revenue Bonds Unamortized Charges ' Total Business -Type Activities Total 7 F Beginning Ending Due Within Balance Additions Reductions Balance One Year $ 2,855,000 $ 3,700,000 $ 35,000 $ 6,520,000 $ 190,000 3,810,000 - 525,000 3,285,000 510,000 105,000 - 25,000 80,000 25,000 - (300,284) (16,569) (283,715) (21,816) 22,173 30,058 25,469 26,762 - 6,792,173 3,429,774 593,900 9,628,047 703,184 2,409,217 - 242,499 2,166,718 264,926 - 4,000,000 - 4,000,000 140,000 - (89,961) - (89,961) (4,500) 2,409,217 3,910,039 242,499 6,076,757 400,426 $ 9,201,390 $ 7,339,813 $ 836,399 $ 15,704,804 $ 1,103,610 C. Amortization Requirements The annual requirements to amortize all bonded debt outstanding as of December 31, 2005 are: Governmental Activities Year Ending Revenue Bonds G.O. Special Assessment Bonds G.O. Tax Increment Bond December 31, Principal Interest Principal Interest Principal Interest Total 2006 $ 190,000 $ 282,859 $ 510,000 $ 103,578 $ 25,000 $ 3,645 $ 1,115,082 2007 245,000 274,796 495,000 90,915 25,000 2,295 1,133,006 2008 250,000 265,399 510,000 76,247 30,000 810 1,132,456 2009 265,000 255,469 520,000 60,048 - - 1,100,517 2010 270,000 244,985 125,000 49,462 - - 689,447 2011-2015 1,515,000 1,049,250 695,000 161,821 - - 3,421,071 2016-2020 1,820,000 687,534 430,000 36,653 - - 2,974,187 2021-2025 1,965,000 270,352 - - - - 2,235,352 Total $ 6,520,000 $ 3,330,644 $ 3,285,000 $ 578,724 $ 80,000 $ 6,750 $ 13,801,118 1 48 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 7 — LONG-TERM DEBT C. Amortization Requirements (Continued) Year Ended Business -Type Activities December 31, Principal Interest Total 2006 $ 404,926 $ 242,246 $ 647,172 2007 427,434 226,167 653,601 2008 455,027 208,809 663,836 2009 287,706 194,630 482,336 2010 300,474 184,006 484,480 2011-2015 1,711,151 732,343 2,443,494 2016-2020 1,280,000 405,594 1,685,594 2021-2025 1,300,000 167,365 1,467,365 Total $ 6,166,718 $ 2,361,160 $ 8,527,878 NOTE 8 — FUND BALANCES A. Designated Fund Balance Designated fund balance is comprised of the following components: Capital Projects Nonmajor Sewer Debt General Access Service Unreserved: Designated for Working Capital Designated for Capital Expenditures Designated for Debt Service Total Nonmajor Capital Projects Total $ 1,000,000 $ - $ - $ - $ 1,000,000 ' - 1,525,000 - 2,328,440 3,853,440 - - 83,941 - 83,941 $ 1,000,000 $ 1,525,000 $ 83,941 $ 2,328,440 $ 4,937.381 I 49 1 11 ' CITY OF ALBERTVILLE Wright County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 9 — RISK MANAGEMENT ' The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust with other cities in the state, which is a public entity risk pool currently operating ' as a common risk management and insurance program. The City pays an annual premium to the League for its insurance coverage. The League of Minnesota Cities Insurance Trust is self sustaining through commercial companies for excess claims. The City is covered through the pool for any claims incurred but unreported, but retains risk for the deductible portion of its insurance ' policies. The amount of these deductibles is considered immaterial to the financial statements. There were no significant reductions in insurance from the previous year or settlements in excess ' of insurance coverage for any of the past three fiscal years. The City's workers' compensation insurance policy is retrospectively rated. With this type of policy, final premiums are determined after loss experience is known. The amount of premium adjustment for 2005 is estimated to be immaterial based on workers' compensation rates and salaries for the year. ' At December 31, 2005, there are no other claims liabilities reported in the Fund based on the requirements of GASB Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. ' NOTE 10 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE Public Employees' Retirement Association A. Plan Description All full-time and certain part-time employees of the City are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Polices and Fire Fund (PEPFF), which are cost -sharing, multiple -employer retirement plan. These Plans ' are established and administered in accordance with Minnesota Statutes Chapters 353 and 356. PERF members belong to either the Coordinated Plan or Basic Plan. Coordinated Plan members are covered by social security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. ' PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by state statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age and years of credit at termination of service. 1 50 7 CITY OF ALBERTVILLE ' Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS ' December 31, 2005 NOTE 10 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE Public Employees' Retirement Association (Continued) A. Plan Description (Continued) ' Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The retiring member receives the higher of a step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first 10 years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and 1.7% for each remaining year. Under Method 2, the ' annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0% for each year of service. For all PEPFF and PERF members hired prior to July 1, 1989, whose , annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF and 65 for Basic and Coordinated Plan members hired prior to July 1, 1989. Normal retirement age is the age for unreduced social ' security benefits capped at 66 for Coordinated Plan members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single -life ' annuity is a lifetime annuity that ceases upon the death of the retiree -no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will ' be payable over joint lives. Members may also leave their contributions in the Fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. ' The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active Plan participants. Vested, terminated employees who are entitled to benefits but are not yet receiving them, are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required ' supplementary information for PERF. That report may be obtained on the web at www.mnpera.org, by writing to PERA at 60 Empire Drive, Suite 200, St. Paul, Minnesota ' 55103-2088 or by calling (651) 296-7460 or (800) 652-9026. 51 1 7 7 J 7 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 10 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE Public Employees' Retirement Association (Continued) B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These Statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members were required to contribute 9.1 % and 5.1 %, respectively, of their annual covered salary in 2005. Contribution rates in the Coordinated Plan will increase in 2006 to 5.5%. PEPFF members were required to contribute 6.2% of their annual covered salary in 2005. That rate will increase to 7.0% in 2006. Public Employees Correctional Fund (PECF) members are required to contribute 5.83% of their annual covered salary. The City is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan PERF members, 5.53% for Coordinated Plan PERF members, 9.3% for PEPFF members and 8.75% for PECF members. Employer contribution rates for the Coordinated Plan and PEPFF will increase to 6.0% and 10.5%, respectively, effective January 1, 2006. The City's contributions to the PERF for the years ending December 31, 2005, 2004 and 2003 were $ 27,219, $ 24,493 and $ 20,923, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. NOTE 11 — COMMITMENTS ' The City has entered into several public improvement projects contracts. The remaining commitments under these contracts at December 31, 2005 is $ 2,921,980. NOTE 12 — CONDUIT DEBT OBLIGATIONS Conduit debt obligations are certain limited -obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party. The City has issued revenue bonds to provide funding to private -sector entities for projects deemed to be in the public interest. Although these bonds bear the name of the City, the City has no ' obligations for such debt beyond the resources provided by related leases or loans. Accordingly, the bonds are not reported as liabilities in the financial statements of the City. H 7 1 52 CITY OF ALBERTVILLE Wright County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2005 NOTE 12 — CONDUIT DEBT OBLIGATIONS As of December 31, 2005, the following issues were outstanding: Date Original Principal Name of Issue Amount Due 12/31/05 Cottages of Albertville: Multi Family Housing Revenue Bonds, Series 1999A Subordinated Multi -Family Housing Revenue Bonds, Series 1999C NOTE 13 — PRIOR PERIOD ADJUSTMENT 12/23/99 $ 3,230,000 $ 3,200,000 09/30/99 425,000 425,000 Net assets for governmental activities were restated to reflect City owned land valued at $ 3,556,020. Fund balance for governmental funds was restated to reflect the consolidation of governmental fund Wastewater Treatment Phase III with the Sewer Enterprise Fund in the amount of $ 221,438. 53 CITY OF ALBERTVILLE Wright County, Minnesota ' COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2005 ' Special Revenue Debt Service 203 300 322 324 1993A G.O. Revolving Closed Bond 1992A G.O. Improvement City ' Loan Issues Improvement Refunding Hall Bonds ASSETS: Cash and Investments (Including Cash Equivalents) $ 118,952 $ 83,850 $ 14,075 $ 96,623 $ Cash in Trust - - - - - Restricted Cash in Trust - - - - - Taxes Receivable - Delinquent - 64 81 - 109 Special Assessments Receivable - Deferred - 5,106 - - - Special Assessments - Delinquent - - 214 - - ' Accounts Receivable - - - - Due from Other Governments - 91 - 569 - Notes Receivable 56,578 - - - Total Assets $ 175,530 $ 89,111 $ 14,370 $ 97,192 $ 109 LIABILITIES AND FUND BALANCES: Liabilities: ' Cash Overdraft $ - $ - $ - $ - $ 1,649 Accounts and ContractsPayable - - - Deferred Revenue 56,578 5,170 295 - 109 Total Liabilities 56,578 5,170 295 1,758 , Fund Balances: Reserved - - - 97,192 - Unreserved: ' Designated - 83,941 - - - Undesignated 118,952 - 14,075 - (1,649) Total Fund Balances 118,952 83,941 14,075 97,192 (1,649) ' Total Liabilities and Fund Balances $ 175,530 $ 89,111 $ 14,370 $ 97,192 $ 109 55 ' Debt Service Capital Projects 353 r 354 j 1 357 358 359 j 102 201 1999A G.O. 2003A G.O. 2005 Lease 2005 City ' 1996A G.O. 1999 Lease Improvement Improvement Revenue Hall Revenue Capital Park TIF Bonds Revenue Bonds Bonds Bonds Bonds Bonds Outlay Reserve Fund ' $ _ $ 22,945 $ 287,598 $ _ $ 607,282 $ 9,001 $ 888,280 $ 1,271,120 13,438 77,963 - - - - 150 1,417 1,071 1,431 2,666 - - - 33,750 - 119,895 385,105 - 60 1,002 158 626 818 - - - ' $ 33,960 $ 116,765 $ 408,722 $ 387,162 $ 610,766 $ 9,001 $ 888,280 $ 1,271,120 ' $ 80,006 $ $ - $ 155,721 $ - $ - $ - $ - - - - - - - 66,942 ' 33,900 1,417 120,966 386,537 2,666 = - ` 113,906 1,417 120,966 542,258 2,666 66,942 - 115,348 287,756 - 608,100 9,001 - - - - - - 821,338 1,271,120 (79,946) - - (155,096) - - - - ' (79,946) 115,348 287,756 (155,096) 608,100 9,001 821,338 1,271,120 $ 33,960 $ 116,765 $ 408,722 $ 387,162 $ 610,766 $ 9,001 $ 888,280 $ 1,271,120 ' 56 CITY OF ALBERTVILLE Wright County, Minnesota COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS December 31, 2005 ' Capital Projects 407 j 408 409 410 411 TIF No. 7 TIF No. 8 TIF No. 9 TIF No. I I Senior Vetsch Custom Barthel Bus TIF No. 10 Land of ' Housing Cabinets Garage Mold -Tech Lakes Tile ASSETS: Cash and Investments (Including Cash Equivalents) $ 15,838 $ - $ 2,563 Cash in Trust - - - - - Restricted Cash in Trust - - - - - Taxes Receivable - Delinquent - - - - - Special Assessments Receivable - Deferred - Special Assessments - Delinquent - - - - - Accounts Receivable - - - - - Due from Other Governments - - - - Notes Receivable - - - Total Assets $ 15,838 $ $ 2,563 $ $ LIABILITIES AND FUND BALANCES: Liabilities: ' Cash Overdraft $ - $ 421 $ - $ 11,001 $ 19,774 Accounts and Contracts Payable - - - - - Deferred Revenue - - - - - Total Liabilities - 421 - 11,001 19,774 ' Fund Balances: Reserved 15,838 - 2,563 - - ' Unreserved: Designated - - - - - Undesignated - (421) - (11,001) (19,774) Total Fund Balances 15,838 (421) 2,563 (11,001) (19,774) ' Total Liabilities and Fund Balances $ 15,838 $ $ 2,563 $ $ 57 ' Capital Projects ' 463 467 468 469 470 476 481 NW School Commercial County Road 37 Wright County CSAH 37 Pedestrian Wright -Hennepin ' Park Traffic Light I-94 Transportation Trails Bike Trail Substation $ 5,251 $ 5,251 $ $ $ $ $ $ ' $ 109,657 $ 102,952 $ 230,189 $ 27,549 $ 132,654 $ 314,882 $ 1,624 - - 483 - 88,992 26,093 - 109,657 340,975 1,624 102,952 230,672 27,549 221,646 (104,406) (102,952) (230,672) (27,549) (221,646) (340,975) (1,624) ' (104,406) (102,952) (230,672) (27,549) (221,646) (340,975) (1,624) $ 5,251 $ $ $ $ $ $ 1 ' 58 CITY OF ALBERTVILLE Wright County, Minnesota COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS ' December 31, 2005 Capital Projects ' 492 496 497 Total Nomnajor 52st Street Hockey 70th Street/ Governmental Industrial Park Rink Maclver Funds ASSETS: Cash and Investments (Including Cash Equivalents) $ $ _ $ 235,982 $ 3,654,109 Cash in Trust _ 13,438 Restricted Cash in Trust - - - 77,963 Taxes Receivable - Delinquent - - - 6,989 Special Assessments Receivable - Deferred - - 192,166 736,022 Special Assessments - Delinquent 214 Accounts Receivable - - - 5,251 Due from Other Governments - - - 3,324 Notes Receivable - - - 56,578 Total Assets $ $ $ 428,148 $ 4,553,888 LIABILITIES AND FUND BALANCES: Liabilities: Cash Overdraft $ 2,500 $ 36,264 $ - $ 1,226,843 Accounts and Contracts Payable - 97,259 - 279,769 Deferred Revenue - - 192,166 799,804 Total Liabilities 2,500 133,523 192,166 2,306,416 Fund Balances: Reserved - - - 1,135,798 Unreserved: Designated - - 235,982 2,412,381 Undesignated (2,500) (133,523) - (1,300,707) Total Fund Balances (2,500) (133,523) 235,982 2,247,472 Total Liabilities and Fund Balances $ $ $ 428,148 $ 4,553,888 59 CITY OF ALBERTVILLE ' Wright County, Minnesota COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS , For the Year Ended December 31, 2005 REVENUES: Taxes Special Assessments Intergovernmental Charges for Services Miscellaneous Total Revenues EXPENDITURES: Current: Culture and Recreation Economic Development Capital Outlay: Public Works Culture and Recreation Debt Service: Principal Interest and Fiscal Charges Total Expenditures Excess of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Transfers In Transfers Out Total Other Financing Sources (Uses) Excess of Revenues Over (Under) Expenditures and Other Financing Sources (Uses) FUND BALANCES: January 1, as Previously Stated Prior Period Adjustment January 1, Restated December 31 Special Revenue Debt Service 203 ::] 1 322 324 341 353 ' 1993A G.O. Revolving Closed Bond 1992A G.O. Improvement City 1996A G.O. Loan Issues Improvement Refunding Hall Bonds TIF Bonds ' $ - $ 198 $ $ - $ - $ 5,537 - 3,000 - 10,652 - 20,328 80 '18,261 1,107 193 1,227 - - 18,261 4,305 193 11,879 25,945 - - 20,000 - 25,000 - 2,132 5,369 - - - 22,132 - 30,369 18,261 4,305 193 (10,253) (4,424) ' , 18,261 4,305 193 (10,253) - (4,424) 100,691 79,636 13,882 107,445 (1,649) (75,522) ' 100,691 79,636 107,445 (1,649) (75,522) 13,882 $ 118,952 $ 83,941 $ 14,075 $ 97,192 $ (1,649) $ (79,946) 60 Debt Service Capital Projects 354 j 102 20I 1999A G.O. 2003A G.O. 2004 Lease 2005 City T1F No. 7 1999 Lease Improvement Improvement Revenue Hall Revenue Capital Park Senior Revenue Bonds Bonds Bonds Bonds Bonds Outlay Reserve Fund Housing $ 59,617 $ 40,364 $ 69,601 $ 155,304 $ - $ $ $ 39,474 - 23,677 56,269 - - 863 593 1,019 2,303 ' 96,185 1,994 3,736 7,279 9,001 11,492 2,497 633 62,474 68,370 126,889 164,886 9,001 11,492 98,682 40,107 - - - - - - 1,037 - 35,428 - - - - - 151,596 - - - - - - 104,072 35,000 95,000 410,000 - - 40,344 24,466 90,578 83,818 _ _ _ 75,344 119,466 500,578 83,818 - 151,596 105,109 35,428 (12,870) (51,096) (373,689) 81,068 9,001 (140,104) (6,427) 4,679 73,000 = = (33,378) - 73,000 (33,378) (12,870) (51,096) (373,689) 81,068 9,001 (67,104) (6,427) (28,699) ' 128,218 338,852 218,593 527,032 - 888,442 1,277,547 44,537 44,537 128,218 338,852 218,593 527,032 - 888,442 1,277,547 $ 115,348 $ 287,756 $ (155,096) $ 608,100 $ 9,001 $ 821,338 $ 1,271,120 $ 15,838 i 1 1 1 61 CITY OF ALBERTVILLE Wright County, Minnesota COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2005 REVENUES: Taxes Special Assessments Intergovernmental Charges for Services Miscellaneous Total Revenues EXPENDITURES: Current: Culture and Recreation Economic Development Capital Outlay: Public Works Culture and Recreation Debt Service: Principal Interest and Fiscal Charges Total Expenditures Excess of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Transfers In Transfers Out Total Other Financing Sources (Uses) Excess of Revenues Over (Under) Expenditures and Other Financing Sources (Uses) FUND BALANCES: January 1, as Previously Stated Prior Period Adjustment January 1, Restated December 31 Capital Projects 408 i409 410 411 433 442 TIF No. 8 TIF No. 9 TIF No. I 1 TIF No. 7 TIF No. 9 Vetsch Custom Barthel Bus TIF No. 10 Land of Cottages of Barthel Cabinets Garage Mold -Tech Lakes Tile Albertville Bus Garage , $ 8,936 $ 13,251 $ 10,342 $ 27,427 $ ' - 124 - - 8,936 13,375 10,342 27,427 - 8,936 13,251 10,342 27,427 8,936 13,251 10,342 27,427 - 124 - - - - - - 33,378 6,478 , - (6,478) - - - - - (6,478) - - 33,378 6,478 - (6,354) - - 33,378 6,478 (421) 8,917 (11,001) (19,774) (33,378) (6,478) ' (421) 8,917 (11,001) (19,774) (33,378) (6,478) $ (421) $ 2,563 $ (11,001) $ (19,774) $ $ 62 ' Capital Projects 465 466 467 468 469 470 475 NW Commercial CSAH 19 Public Works CR 37 Wright County CSAH 37 Towne Lakes Park Widening Facility Traffic Light I-94 Transportation Trails Commercial $ $ $ $ 81,043 - - - - - - 21 _ 74,598 1,617 27,799 - - - - 155,641 1,617 27,799 - - 210 79,282 149,303 6,068 80,876 205,771 - - 79,282 149,303 6,068 80,876 205,771 - 76,359 (147,686) 21,731 (80,876) (205,771) 210 (1,836,946) (37,160) - - - - (210) - (1,836,946) (37,160) - - (210) (1,760,587) (184,846) 21,731 (80,876) - (205,771) - (104,406) 1,760,587 184,846 (124,683) (149,796) (27,549) (15,875) - - 184,846 (104,406) 1,760,587 (124,683) (149,796) (27,549) (15,875) $ (104,406) $ $ $ (102,952) $ (230,672) $ (27,549) $ (221,646) $ ' 63 CITY OF ALBERTVILLE Wright County, Minnesota COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2005 REVENUES: Taxes Special Assessments Intergovernmental Charges for Services Miscellaneous Total Revenues EXPENDITURES: Current: Culture and Recreation Economic Development Capital Outlay: Public Works Culture and Recreation Debt Service: Principal Interest and Fiscal Charges Total Expenditures Excess of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Transfers In Transfers Out Total Other Financing Sources (Uses) Excess of Revenues Over (Under) Expenditures and Other Financing Sources (Uses) FUND BALANCES: January 1,as Previously Stated Prior Period Adjustment January 1, Restated December 31 Capital Projects 476 481 484 491 492 School Weight- Wastewater Pedestrian Hennepin Phil Treatment Facility 52nd Street Bike Trail Substation Morris Phase III Industrial Park ' $ - $ $ $ - $ - - - 90 - - 192,353 - - - - 192,353 - 90 - 98,671 - - - - - - - 2,500 98,671 - 2,500 93,682 90 - (2,500) ' - - - (90) - - - (90) - - 93,682 - - - (2,500 (434,657) (1,624) - (221,438) - - - 221,438 - (434,657) (1,624) - - $ (340,975) $ (1,624) $ $ $ (2,500) 64 ' Capital Projects 493 494 495 496 497 CSAH 19 CSAH 19 Wright Total and 57th and County Hockey 70th Street/ Other Intersection 50th Street Shop Property Rink Maclver Governmental - $ 430,051 - - - 91,508 286,477 4,85 144,474 240,959 - - 353,911 235,982 1,316,256 - - - - 99,708 - - - _ = 95,384 2,919 2,373 1,679 682,367 - - - 133,523 - 237,595 - - - - 585,000 _ 246,707 2,919 2,373 1,679 133,523 - 1,946,761 (2,919) (2,373) (1,679) (133,523) 235,982 (630,505) 2,919 2,373 1,679 - 119,827 (1,914,262) 2,919 2,373 1,679 - (1,794,435) - - - (133,523) 235,982 (2,424,940) - - 4,450,974 - 221,438 - - - - 4,672,412 $ $ $ $ (133,523) $ 235,982 $ 2,247,472 65 OEM KERN .DEWENTER•VIERE REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS February 17, 2006 Honorable Mayor and City Council City of Albertville Albertville, Minnesota fl I u We have audited the financial statements of the governmental activities, business -type activities and each major fund of the City of Albertville, Minnesota, as of and for the year ended December 31, 2005, and have issued our report thereon dated February 17, 2006. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit, we considered the City's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the City's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. The reportable condition is described below. The City does not have adequate segregation of accounting duties due to a limited number of office employees. Management has determined that this weakness is not practical to correct. .6 am KERN •DEWENTER-VIE RE A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements, caused by error or fraud, in amounts that would be material in relation to the financial statements being audited, may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we do not believe the reportable condition described above is a material weakness. COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. We also noted certain additional matters that we reported to management of the City in a separate letter dated February 17, 2006. This report is intended solely for the information and use of the City Council, City Administration and state and federal awarding agencies and pass -through entities and is not intended to be, and should not be, used by anyone other than these specified parties. Kz,�,& & L-7t--d - KERN, DEWENTER, VIERS, LTD. St. Cloud, Minnesota F� 67 KERN-DEWENTER•VIERE REPORT ON LEGAL COMPLIANCE February 17, 2006 Honorable Mayor and City Council City of Albertville Albertville, Minnesota We have audited the financial statements of the governmental activities, business -type activities and each major fund of the City of Albertville, Minnesota, as of and for the year ended December 31, 2005, which collectively comprise the City's basic financial statements and have issued our report thereon dated February 17, 2006. We conducted our audit in accordance with U.S. generally accepted auditing standards and the provisions of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated by the State Auditor pursuant to Minnesota Statutes Sec. 6.65. Accordingly, the audit included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The Minnesota Legal Compliance Audit Guide for Local Government covers seven main 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 study included all of the listed categories. The results of our tests indicate that for the items tested, the City of Albertville, Minnesota, complied with the material terms and conditions of applicable legal provisions, except as described in the Schedule of Findings on Legal Compliance. This report is intended solely for the information and use of the City Council, City Administration and the Office of the State Auditor, and is not intended to be, and should not be, used by anyone other than these specified parties. KERN, DEWENTER, VIERE, LTD. St. Cloud, Minnesota H l� 1 CITY OF ALBERTVILLE Wright County, Minnesota SCHEDULE OF FINDINGS ON LEGAL COMPLIANCE Year Ended December 31, 2005 CURRENT YEAR LEGAL COMPLIANCE FINDING: According to Minnesota Statute 471.425, Subd. 4a, requires contracts of a municipality to have the prime contractor pay any subcontractor within 10 days of the prime contractor's receipt of payment. The contract also must require that the prime contractor pay interest at the rate of 1.5% per month or any part of a month to the subcontractor for any undisputed amount not paid to the subcontractor within the 10 days. For the contract entered into for the Wastewater Treatment Plant Phase II Expansion, the City did not include this verbiage in the contract. We recommend the required verbiage be added in order to be in compliance with state statutes. CURRENT AND PRIOR YEAR LEGAL COMPLIANCE FINDINGS: During our audit, we noted there was an expenditure to purchase employee gift certificates. Expenditures by a city should meet a public purpose test. The Minnesota Attorney General's Office has the opinion that payments for employee appreciation do not qualify as a public purpose expenditure. We recommend the City refrain from paying for items that do not meet a public purpose. I n n 1 69