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HomeMy WebLinkAbout2014-05-08 - Council Agenda PacketAgenda Corcoran City Council May 8, 2014 - 7:00 PM 1. Call to Order/ Roll Call 2. Pledge of Allegiance 3. Agenda Approval 4. Open Forum 5. Presentations a. 2013 Audit* 6. Consent Agenda a. Draft Minutes of April 27, 2014 Council Meeting* b. Draft Minutes 2014 Local Board of Appeal and Equalization* c. Awarding Calcium Chloride Contract - Resolution 2014 -23* d. Accepting Donation from Corcoran Athletic Assoc. - Resolution 2014 -24* 7. Claims as Presented * a. Escrow Claims (Fund #500) b. All Other Financial Claims 8. Staff Reports / Memos /Commissions -None 9. Planning Business -None 10. Unfinished Business a. Maple Hill Community Center* 11. New Business a. 2014 Leadership - Planning -Team Building Retreat Executive Summary* b. Mission, Vision, Values Statement, Strategic Goals* c. April 2014 General Fund Balance* d. Public Works Facility Finance Plan* 12. Unscheduled Items 13. Review of Upcoming Council Meeting Agenda 14. Council Calendar Planning Commission 05/01/14 06/05/14 07/03/14 08/07/14 09/04/14 Cancelled Lynch Cossette Thomas Guenthner Parks and Trails Commission 05/20/14 06/17114 07/15/14 08/19/14 09/16/14 Lynch Cossette Thomas Guenthner Asleson 15. Adjournment *Includes Materials - Materials relating to these agenda items can be found in the House Agenda Packet by Door. CITY OF CORCORAN CORCORAN, MINNESOTA MANAGEMENT LETTER FOR THE YEAR ENDED DECEMBER 31, 2013 I� 1 CITY OF CORCORAN CORCORAN, MINNESOTA MANAGEMENT LETTER FOR THE YEAR ENDED DECEMBER 31, 2013 e - ' ABDO I I EI c r *, _ NIL ff1 S LLP Ort.iiied Public Acmtraurit.5 & Consultants April 25, 2014 Management, Honorable Mayor and City Council City of Corcoran, Minnesota We have audited the financial statements of the governmental activities, business -type activities, each major fund and the aggregate remaining fund information of the City of Corcoran, Minnesota (the City), for the year ended December 31, 2013. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated October 29, 2013. Professional standards also require that we provide to you the following information related to our audit. Our Responsibility under Auditing Standards Generally Accepted in the United States of America As stated in our engagement letter, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your responsibilities. Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. As part of our audit, we considered the internal control over financial reporting of the City. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control over financial reporting. We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures specifically to identify such matters. Significant Audit Findings In planning and performing our audit of the financial statements, we considered the City's internal control to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We identified a certain deficiency in internal control, described on the following page as item 2013 -002 that we consider to be a significant deficiency. 5201 Eden Avenue, Suite 250 Edina, MN 55436 952.835.9090 1 Fax 952.835.3261 -1- 2013 -002 Preparation of financial statements Condition: As in prior years, we were requested to draft the audited financial statements and related footnote disclosures as part of our regular audit services. Auditing standards require auditors to communicate this situation to the City Council as an internal control deficiency. Ultimately, it is management's responsibility to provide for the preparation of your statements and footnotes, and the responsibility of the auditor to determine the fairness of presentation of those statements. It is our responsibility to inform you that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by your management. Essentially, the auditors cannot be part of your internal control process. Criteria: Internal controls should be in place to provide reasonable assurance over financial reporting. Cause: From a practical standpoint we do both for you at the same time in connection with our audit. This is not unusual for us to do with an organization of your size. Effect: The effectiveness of the internal control system relies on enforcement by management. The effect of deficiencies in internal controls can result in undetected errors in financial reporting. Recommendation: It is your responsibility to make the ultimate decision to accept this degree of risk associated with this condition because of cost or other considerations. As in prior years, we have instructed management to review a draft of the auditor prepared financials in detail for their accuracy; we have answered any questions they might have, and have encouraged research of any accounting guidance in connection with the adequacy and appropriateness of classification of disclosure in your statements. We are satisfied that the appropriate steps have been taken to provide you with the completed financial statements. While the City is reviewing the financial statements we recommend that a disclosure checklist be utilized to ensure all required disclosures are presented and the City should agree its financial software to the numbers reported in the financial statements. Management response: For now, the City's management accepts the degree of risk associated with this condition and thoroughly reviews a draft of the financial statements. Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of compliance with certain provisions of Minnesota statutes. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. While our audit provides a reasonable basis for our opinion, it does not provide a legal determination on the City's compliance with those requirements. The results of our tests disclosed an instance of noncompliance that is required to be reported under Minnesota statutes which are described below: 2013 -001 Time period for payment Condition: Auditing for legal compliance requires a review of the City's deposits and investments. Our study indicated an instance of non - compliance that we believe is required to be remedied. Criteria: Minnesota statute section 471.425 requires that the City pay bills within 35 days from receipt. If the invoice is not paid within the 35 days, interest at 1.5 percent per month is to be added to amount due. Cause: During our testing we noted three invoices that were paid after the 35 day period. Effect.• The City is in violation of this statute. Recommendation: We recommend that the accounts payable process consider the payment terms required by statute. Implementing this recommendation will not result in any additional cost to the City. Management response: Consideration of payment terms required by statute is part of the accounts payable process. To insure + Process, Pec� ople payments are made within statute requirements or first available claim approval, incoming invoices are date stamped. (_r(1llig I3f ,N o mth, -2- Nurilhers Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing. Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. The requirements of GASB statement No. 61 were adopted for the year ended December 31, 2013. The application of existing policies was not changed during the year. We noted no transaction entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumption about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the financial statements were depreciation on capital assets and allocation of payroll including compensated absences and other postemployment benefits. • Management's estimate of depreciation is based on estimated useful lives of the assets. Depreciation is calculated using the straight -line method. • Allocations of gross wages and payroll benefits are approved by City Council within the City's budget and are derived from each employee's estimated time to be spent servicing the respective functions of the City. These allocations are also used in allocating accrued compensated absences payable. • Management's estimate of its OPEB liability is based on several factors including, but not limited to, anticipated retirement age for active employees, life expectancy, turnover, and healthcare cost trend rate. We evaluated the key factors and assumptions used to develop depreciation in determining that it is reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit or the financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, a financial accounting, reporting or auditing matter, whether or not resolved to our satisfaction that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated April 25, 2014. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that may be expressed People on those statements, our professional standards require the consulting accountant to check with us to determine that ., I OC�SS.. + Process, the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. A In -3- Nu[ilI ers Other Matters With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Financial Position and Results of Operations Our principal observations and recommendations are summarized below. These recommendations resulted from our observations made in connection with our audit of the City's financial statements for the year ended December 31, 2013. General Fund The General fund is used to account for resources traditionally associated with government, which are not required legally or by sound principal management to be accounted for in another fund. The General fund balance increased $289,910 from 2012. The fund balance of $1,232,663 is 37.1 percent of the 2014 budgeted expenditures. We recommend the fund balance be maintained at a level sufficient to fund operations until the major revenue sources are received in June. We feel a reserve of approximately 50 percent of planned expenditures and transfers out are adequate to meet working capital and small emergency needs. At the current level, the fund balance is below what is generally recommended as a minimum. The City has a fund balance policy that sets a goal to maintain an unrestricted balance of not less than 35 percent of planned expenditures in reserve. The purposes and benefits of a fund balance are as follows: • Expenditures are incurred somewhat evenly throughout the year. However, property tax and state aid revenues are not received until the second half of the year. An adequate fund balance will provide the cash flow required to finance the governmental fund expenditures. • The City is vulnerable to legislative actions at the State and Federal level. The State continually adjusts the local government aid formulas. An adequate fund balance will provide a temporary buffer against aid adjustments. • Expenditures not anticipated at the time the annual budget was adopted may need immediate City Council action. These would include capital outlay, replacement, lawsuits and other items. An adequate fund balance will provide the financing needed for such expenditures. • A strong fund balance will assist the City in maintaining, improving or obtaining its bond rating. The result will be better interest rates in future bond sales. -4- People + Process I3r ��r mri to, �urrlfar���� A table summarizing the General fund balance in relation to budget follows: $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $ 500,000 Total Unrestricted General of Total Fund Balance Fund Balance Budget Year December 31 December 31 Year 2009 $ 667,693 $ 379,445 2010 2010 698,923 415,229 2011 2011 749,070 471,772 2012 2012 942,753 668,338 2013 2013 1,232,663 961,389 2014 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $ 500,000 Fund Balance as a Percent of Next Year's Budget $3,175,544 $3,326,938 $2,980,185 $3,005,739 $3,152,256 37.1% 23.3% 23.8% 29.70/( 22.4% 28.9% 0 13.8% 15.0% 21,0% 12.7 /o 2009 2010 2011 2012 2013 2014 Total Fund Balance (Unrestricted Fund Balance (Budget We have compiled a peer group average derived from information we have requested from the Office of the State Auditor and then compiled data for Cities of the 4th class which have populations of 2,500- 10,000. In 2011 and 2012, the average fund balances as a percentage of expenditures was 69 percent and 76 percent, respectively. Based on comparisons to the average peer groups, the City's General fund balance is below average. People -5- \urrlh� Percent Percent General of Total of Unrestricted Fund Fund Balance Fund Balance Budget to Budget to Budget $ 2,980,185 22.4 % 12.7 % 3,005,739 23.3 13.8 3,152,256 23.8 15.0 3,175,544 29.7 21.0 3,326,938 37.1 28.9 Fund Balance as a Percent of Next Year's Budget $3,175,544 $3,326,938 $2,980,185 $3,005,739 $3,152,256 37.1% 23.3% 23.8% 29.70/( 22.4% 28.9% 0 13.8% 15.0% 21,0% 12.7 /o 2009 2010 2011 2012 2013 2014 Total Fund Balance (Unrestricted Fund Balance (Budget We have compiled a peer group average derived from information we have requested from the Office of the State Auditor and then compiled data for Cities of the 4th class which have populations of 2,500- 10,000. In 2011 and 2012, the average fund balances as a percentage of expenditures was 69 percent and 76 percent, respectively. Based on comparisons to the average peer groups, the City's General fund balance is below average. People -5- \urrlh� A summary of 2013 General fund revenue and expenditures is as follows: Revenues Expenditures Net change in fund balances Fund balances, January 1 Fund balances, December 31 Some variances of both revenues and expenditures are summarized below: Final Budgeted Actual Variance with Amounts Amounts Final Budget $ 3,219,052 $ 3,465,857 $ 246,805 3,175,544 3,175,947 (403) 43,508 289,910 246,402 942,753 942,753 - $ 986,261 $ 1,232,663 $ 246,402 • Revenues provided a positive budget variance of $246,805. The largest positive variances were in intergovernmental and licenses and permits, which were $119,304 and $91,274 over budget, respectively. • Expenditures provided a total negative budget variance of $403. The most significant variances were in general government and public works. General governmental expenditures were over budget by $92,987 and public works expenditures were under budget by $89,882. People ��f'�(lCl {�t9,• -6- A more detailed comparison of General fund revenues and transfers for the last three years is as follows: Percent of Revenues 2011 2012 2013 Total Taxes $ 2,411,562 $ 2,555,838 $ 2,627,327 75.8 % Licenses and permits 101,850 74,291 159,524 4.6 Intergovernmental 257,393 250,233 373,000 10.8 Charges for services 182,448 170,619 199,184 5.7 Fines and forfeitures 108,006 80,338 58,194 1.7 Interest on investments 4,068 1,965 1,026 - Miscellaneous 36,278 61,762 47,602 1.4 Transfers in 5,000 - - - Total revenues and transfers $ 3,106,605 $ 3,195,046 $ 3,465,857 100.0 % The revenues and transfers summarized above are graphically presented as follows: $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Revenues and Transfers Per Capita $ 480 29 68 36 11 9 $ 633 2011 2012 2013 tTaxes (Licenses and permits —*--Intergovernmental —0—Charges for services -I -Other People ��f'�(lCl {�t9,• 11re A more detailed comparison of expenditures and transfers for the last three years is as follows: The above chart compares the amount the City spends per capita, in comparison to a peer group. We have compiled peer group average fund balance information from approximately 120 fourth class cities (populations 2,500 - 10,000). The peer group average is derived from 2012 information we have requested from the Office of the State Auditor. The expenditures and transfers summarized above are graphically presented as follows: $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Expenditures and Transfers 2011 2012 2013 --*--General government —0—Public safety (Public works -E— Transfers out and other —I--Total People I3f��tmclta,�� -8- NWlfi bvrs Peer Percent of Per Group Per Programs 2011 2012 2013 Total Capita Capita General government $ 606,941 $ 603,825 $ 749,029 23.6 % $ 137 $ 125 Public safety 1,264,796 1,221,870 1,285,746 40.4 235 218 Public works 1,087,532 1,093,801 1,031,550 32.5 189 106 Culture and recreation 41,680 45,314 73,133 2.3 13 54 Total current 3,000,949 2,964,810 3,139,458 98.8 574 503 Capital outlay 55,509 36,553 36,489 1.2 7 34 Total expenditures $ 3,056,458 $ 3,001,363 $ 3,175,947 100.0 % $ 581 $ 537 The above chart compares the amount the City spends per capita, in comparison to a peer group. We have compiled peer group average fund balance information from approximately 120 fourth class cities (populations 2,500 - 10,000). The peer group average is derived from 2012 information we have requested from the Office of the State Auditor. The expenditures and transfers summarized above are graphically presented as follows: $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Expenditures and Transfers 2011 2012 2013 --*--General government —0—Public safety (Public works -E— Transfers out and other —I--Total People I3f��tmclta,�� -8- NWlfi bvrs Special Revenue Funds Special revenue funds include funds used to account for revenue derived from specific revenue sources that are restricted or committed to expenditure for specified purposes. The fund balances of each special revenue fund are as follows: Total Debt Service Funds $ 35,891 $ 32,795 $ 3,096 Debt Service funds are a type of governmental fund to account for the accumulation of resources for the payment of interest and principal on debt. Debt Service funds may have one or a combination of the following revenue sources pledged to retire debt as follows: • Property taxes - Primarily for general City benefit projects such as parks and municipal buildings. Property taxes may also be used to fund special assessment bonds which are not fully assessed. • Tax increments - Pledged exclusively for tax increment /economic development districts. • Special assessments - Charges to benefited properties for various improvements. In addition to the above pledged assets, other funding sources may be received by Debt Service funds as follows: • Residual project proceeds from the related capital projects fund • Investment earnings • State or Federal grants • Transfers from other funds The following is a recap of the various Debt Service fund assets and related bond principal outstanding: Fund Balances December 31, 2012 December 31, Increase Fund 2013 2012 (Decrease) Nonmajor Debt Description Balances Reserve Donation $ 15,098 $ 11,404 $ 3,694 Police Donation 1,603 1,050 553 Firearms Safety 9 3,377 (3,368) DWI Forfeiture 12,428 12,449 (21) Drug Forfeiture 1,170 1,168 2 Truck Safety 5,583 3,347 2,236 Total Debt Service Funds $ 35,891 $ 32,795 $ 3,096 Debt Service funds are a type of governmental fund to account for the accumulation of resources for the payment of interest and principal on debt. Debt Service funds may have one or a combination of the following revenue sources pledged to retire debt as follows: • Property taxes - Primarily for general City benefit projects such as parks and municipal buildings. Property taxes may also be used to fund special assessment bonds which are not fully assessed. • Tax increments - Pledged exclusively for tax increment /economic development districts. • Special assessments - Charges to benefited properties for various improvements. In addition to the above pledged assets, other funding sources may be received by Debt Service funds as follows: • Residual project proceeds from the related capital projects fund • Investment earnings • State or Federal grants • Transfers from other funds The following is a recap of the various Debt Service fund assets and related bond principal outstanding: Total remaining interest payments $ 1,744,896 It is important for the City to monitor its cash flows over the life of the debt to ensure sufficient resources for payment of principal and interest. The above are funded with annual tax levies. -9- People + Process l_)rting 13f ,N o mu1 t , Nulilhers December 31, 2012 Final Cash Total Outstanding Maturity Debt Description Balances Assets Debt Date 309 G.O. Equipment Certificates 2006/2008/2010/2012 $ 61,614 $ 61,614 $ 1,108,000 2013/2022 311 2012 Public Works Bond 68,330 68,330 4,000,000 2038 407 Facility Expansion 8,074 8,074 59,000 2015 Total $ 138,018 $ 138,018 $ 5,167,000 Total remaining interest payments $ 1,744,896 It is important for the City to monitor its cash flows over the life of the debt to ensure sufficient resources for payment of principal and interest. The above are funded with annual tax levies. -9- People + Process l_)rting 13f ,N o mu1 t , Nulilhers $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 Debt Service Scheduled Principal and Interest for the Next 10 Years t �� 1 I [ �� 1 I F.' � ►.I I I G � ►.I 17 � i.I I I F : �• L I I L'id 17 ►.I I i� 1 i ►. i i.I I Y. i ►� ►.I 17 ►.T C � ■Principal ■Interest Capital Projects Funds The capital projects funds account for the acquisition of capital assets or construction of major capital projects. The funds in this group include: Nonmaj or Park Capital Fund Balances 342,809 21,235 Capital Equip -Cert December 31, 62,069 Increase Fund 2013 2012 (Decrease) Major 71,548 71,428 120 Tax Increment Financing $ 1,764,180 $ 1,603,223 $ 160,957 Infrastructure Planning (177,930) (177,633) (297) Public Works Facility 230,898 3,564,187 (3,333,289) Subtotal 1,817,148 4,989,777 (3,172,629) Nonmaj or Park Capital 364,044 342,809 21,235 Capital Equip -Cert 7,280 62,069 (54,789) Shannon Lane (93,344) (96,782) 3,438 Asphalt Maintenance 71,548 71,428 120 Police Capital 10,292 15,266 (4,974) County Road 19 Improvement (101,389) 134,097 (235,486) Subtotal 258,431 528,887 (270,456) Total $ 2,075,579 $ 5,518,664 $ (3,443,085) Occasionally, fund balance deficits will occur. This could happen for a variety of reasons including cost overruns, funding shortfalls or incurring project costs in advance of revenue resources. It is important that the City have a plan in place whenever there is a deficit fund balance. The City should evaluate each deficit and ensure its current position is consistent with the financing plans in place. Annual review will ensure that deficits are addressed promptly. People I3f��tmclta,�� -10- 4urllbvr s Enterprise Funds The Water and Sewer enterprise funds were created in 2013 and are accounted for in separate enterprise funds. The funds had minimal activity in 2013 with approximately $50,000 of cash outflows for payments for legal, planning and engineering fees. The funds also received approximately $2,000,000 in capital contributions related to the Water and Sewer utility projects completed in governmental activities and contributed to the funds. In future years, when development increases and users start connecting to the infrastructure the City will complete the utility billing processes. Developer Agency Accounts In total, the City is maintaining $138,142 in cash in its developer funds. In addition to this balance the City is owed an additional $75,546 by accounts that are in deficit. The deficit balances are identified as follows: Accounts receivable Hedgestone final plat $ 22,583 Laurent - Hedgstone 16,863 Lennar Eng 28,042 Lennar Eng 4,703 Lennar Eng 3,105 Unallocated 250 Total $ 75,546 Of the deficit balance noted above, $39,446 relates to long outstanding receivables while the rest is current developer receivables. We recommend the City either research and identify the difference in the long outstanding listed items or transfer other City funds to close out the deficit. It cannot be determined based on a review of the last seven years of detail where this amount originated. The deficits are further discussed as follows. Other Items Developer escrow account deficit balances Condition: It was noted again during audit fieldwork that some developer escrow accounts had deficit account balances. In total $75,546 was owed by six different accounts. Of the deficit balance noted above, $39,446 relates to long outstanding receivables while the rest is current developer receivables. It is also worth noting that any service charge for deficit balances was not factored into the amount owed. Criteria: The City needs to have funds in amounts sufficient to cover the planning, legal, engineering and any other City cost that a developer incurs. Cause: It appears that reconciliations have been completed for current accounts, but collection efforts were not sufficient to eliminate the deficit balance in 2013. Effect: The effect of allowing deficit balances means that shortfall needs to be funded with other resources. In the current situation other positive developer accounts are funding the deficits. Recommendation: Management has implemented informal policies to review escrow balances on a weekly basis with balances reported to the City Administrator and all consultants. This reporting ensures all interested parties are aware of balances on a timely and regular basis, deposits are received in advance of any activity, and that work stops prior to any additional accounts becoming negative. We recommend the City adopt a formal policy identifying procedures related to escrow accounts including service charges for any account that does become negative. The City should transfer funds to eliminate any uncollectable accounts. -11- People + Process A lli ; Nulilhers Ratio Analysis The following captures a few ratios from the City's financial statements that give some additional information for trend and peer group analysis. The peer group average is derived from information we have requested from the Office of the State Auditor for Cities of the 4th class which have populations between 2,500 and 10,000. In comparison to the peer group, it is important to remember the uniqueness of the City and it is really only comparable in size to the other Cities. The majority of these ratios facilitate the use of economic resources focus and accrual basis of accounting at the government -wide level. A combination of solvency (ability to pay its long -term obligations) and funding (comparison of financial amounts and economic indicators to measure changes in financial capacity over time) ratios are shown below. Ratio Calculation Source 2010 2011 2012 2013 Debt to assets Total liabilities /total assets Government -wide 22% 19% 42% 49% 34% 33% 33% N/A Debt per capita Bonded debt/population Government -wide $ 303 $ 264 $ 1,023 $ 945 $ 2,774 $ 2,826 $ 2,626 N/A Taxes per capita Tax revenues /population Government -wide $ 500 $ 550 $ 566 $ 595 $ 458 $ 500 $ 480 N/A Current expenditures per capita Governmental fund current Governmental funds $ 530 $ 561 $ 562 $ 577 expenditures /population $ 624 $ 640 $ 649 N/A Capital expenditures per capita Governmental fund capital Governmental funds $ 185 $ 91 $ 502 $ 672 expenditures /population $ 265 $ 229 $ 298 N/A Capital assets % left to Net capital assets/ Government -wide 73% 70% 74% 74 % depreciate - Governmental gross capital assets 68% 64% 65% N/A Capital assets % left to Net capital assets/ Government -wide n/a n/a n/a 98% depreciate - Business -type gross capital assets 68% 65% 63% N/A Represents the City of Corcoran Represents Peer Group Average Debt -to- Assets Leverage Ratio (Solvency Ratio) The debt -to- assets leverage ratio is a comparison of a City's total liabilities to its total assets or the percentage of total assets that are provided by creditors. It indicates the degree to which the City's assets are financed through borrowings and other long -term obligations (i.e. a ratio of .50 would indicate half of the City's assets are financed through outstanding debt). Bonded Debt per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total bonded debt by the population of the City and represents the amount of bonded debt obligation for each citizen of the City at the end of the year. The higher the amount, the more resources are needed in the future to retire these obligations through taxes, assessments or user fees. Taxes per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total tax revenues by the population of the City and represents the amount of taxes for each citizen of the City for the year. The higher this amount is, the more reliant the City is on taxes to fund its operations. Current Expenditures per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total current governmental expenditures by the population of the City and represents the amount of governmental expenditure for each citizen of the City during the year. Since this is People generally based on ongoing expenditures, we would expect consistent annual per capita results. -J- ��f'�(lCl {�t9,• -12- Capital Expenditures per Capita (Funding Ratio) This dollar amount is arrived at by dividing the total governmental capital outlay expenditures by the population of the City and represents the amount of capital expenditure for each citizen of the City during the year. Since projects are not always recurring, the per capita amount will fluctuate from year to year. Capital Assets Percentage (Common -size Ratio) This percentage represents the percent of governmental or business -type capital assets that are left to be depreciated. The lower this percentage, the older the City's capital assets are and may need major repairs or replacements in the near future. A higher percentage may indicate newer assets being constructed or purchased and may coincide with higher debt ratios or bonded debt per capita Financial Management Plan Analysis Comparison of Actual Results to the City's Multi -Year Financial Management Plan Report (Unaudited) December 31, 2013 Total $ 4,019,414 $ 2,765,897 $ 1,253,517 During 2012 the City created and approved a multi -year financial management plan report adopted by the City Council on September 13, 2012. At the request of management we have compared actual results to estimated results from the plan. Assumptions and results will always change, as noted by the variances above. We recommend the People City analyze the reasons for the variances and factor into the updating of the plan. Updating the plan on an annual + Process, basis and using during the budget process will benefit the City in making financial decisions for the future. (,tlIng -13- Nu[ill ers Fund Balances/Net Position City Multi -Year Financial Management Actual Plan Report Variance Governmental Funds - Fund Balances General Fund $ 1,232,663 $ 764,245 $ 468,418 Tax Increment Financing 1,764,180 1,327,265 436,915 Debt Service Funds 138,018 52,953 85,065 Special Revenue Funds 35,891 59,314 (23,423) Capital Project Funds 311,399 485,855 (174,456) Total governmental 3,482,151 2,689,632 792,519 Proprietary Funds - Net Position Water and Sewer Funds 1,886,123 (15,996) 1,902,119 Total $ 5,368,274 $ 2,673,636 $ 2,694,638 Cash Balances City Multi -Year Financial Management Actual Plan Report Variance Governmental Funds General Fund $ 906,016 $ 519,683 $ 386,333 Tax Increment Financing 1,823,614 1,357,868 465,746 Debt Service Funds 138,018 52,953 85,065 Special Revenue Funds 38,845 59,278 (20,433) Capital Project Funds 1,164,694 792,111 372,583 Total governmental 4,071,187 2,781,893 1,289,294 Proprietary Funds Water and Sewer Funds (51,773) (15,996) (35,777) Total $ 4,019,414 $ 2,765,897 $ 1,253,517 During 2012 the City created and approved a multi -year financial management plan report adopted by the City Council on September 13, 2012. At the request of management we have compared actual results to estimated results from the plan. Assumptions and results will always change, as noted by the variances above. We recommend the People City analyze the reasons for the variances and factor into the updating of the plan. Updating the plan on an annual + Process, basis and using during the budget process will benefit the City in making financial decisions for the future. (,tlIng -13- Nu[ill ers Future Accounting Standard Changes The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact on future City financial statements.1 GASB Statement No. 67 - The Financial Reporting for Pension Plans- an Amendment to GASB Statement No. 25 Summary The objective of this Statement is to improve financial reporting by state and local governmental pension plans. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision - useful information, supporting assessments of accountability and interperiod equity, and creating additional transparency. This Statement replaces the requirements of Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, and No. 50, Pension Disclosures, as they relate to pension plans that are administered through trusts or equivalent arrangements (hereafter jointly referred to as trusts) that meet certain criteria. The requirements of Statements No. 25 and No. 50 remain applicable to pension plans that are not administered through trusts covered by the scope of this Statement and to defined contribution plans that provide postemployment benefits other than pensions. This Statement is effective for financial statements for fiscal years beginning after June 15, 2013. Earlier application is encouraged. How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will improve financial reporting primarily through enhanced note disclosures and schedules of required supplementary information that will be presented by the pension plans that are within its scope. The new information will enhance the decision - usefulness of the financial reports of these pension plans, their value for assessing accountability, and their transparency by providing information about measures of net pension liabilities and explanations of how and why those liabilities changed from year to year. The net pension liability information, including ratios, will offer an up -to -date indication of the extent to which the total pension liability is covered by the fiduciary net position of the pension plan. The comparability of the reported information for similar types of pension plans will be improved by the changes related to the attribution method used to determine the total pension liability. The contribution schedule will provide measures to evaluate decisions related to the assessment of contribution rates in comparison to actuarially determined rates, when such rates are determined. In that circumstance, it also will provide information about whether employers and nonemployer contributing entities, if applicable, are keeping pace with actuarially determined contribution measures. In addition, new information about rates of return on pension plan investments will inform financial report users about the effects of market conditions on the pension plan's assets over time and provide information for users to assess the relative success of the pension plan's investment strategy and the relative contribution that investment earnings provide to the pension plan's ability to pay benefits to plan members when they come due. People + Process [_,Mli 13f ,N o mu1 t , -14- Nu[i1I ers Future Accounting Standard Changes - Continued GASB Statement No. 68 - The Accounting and Financial Reporting of Pensions- an Amendment of GASB Statement No. 27 The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for pensions. It also improves information provided by state and local governmental employers about financial support for pensions that is provided by other entities. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision - useful information, supporting assessments of accountability and interperiod equity, and creating additional transparency. This Statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate to pensions that are provided through pension plans administered as trusts or equivalent arrangements (hereafter jointly referred to as trusts) that meet certain criteria. The requirements of Statements 27 and 50 remain applicable for pensions that are not covered by the scope of this Statement. This Statement is effective for fiscal years beginning after June 15, 2014. Earlier application is encouraged How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will improve the decision - usefulness of information in employer and governmental nonemployer contributing entity financial reports and will enhance its value for assessing accountability and interperiod equity by requiring recognition of the entire net pension liability and a more comprehensive measure of pension expense. Decision - usefulness and accountability also will be enhanced through new note disclosures and required supplementary information. GASB Statement No. 69 - Government Combinations and Disposals of Government Operations Summary This Statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. As used in this Statement, the term government combinations include a variety of transactions referred to as mergers, acquisitions, and transfers of operations. The distinction between a government merger and a government acquisition is based upon whether an exchange of significant consideration is present within the combination transaction. Government mergers include combinations of legally separate entities without the exchange of significant consideration. This Statement requires the use of carrying values to measure the assets and liabilities in a government merger. Conversely, government acquisitions are transactions in which a government acquires another entity, or its operations, in exchange for significant consideration. This Statement requires measurements of assets acquired and liabilities assumed generally to be based upon their acquisition values. This Statement also provides guidance for transfers of operations that do not constitute entire legally separate entities and in which no significant consideration is exchanged. This Statement defines the term operations for purposes of determining the applicability of this Statement and requires the use of carrying values to measure the assets and liabilities in a transfer of operations. A disposal of a government's operations results in the removal of specific activities of a government. This Statement provides accounting and financial reporting guidance for disposals of government operations that have been transferred or sold. This Statement requires disclosures to be made about government combinations and disposals of government operations to enable financial statement users to evaluate the nature and financial effects of those transactions. The requirements of this Statement are effective for government combinations and disposals of government operations occurring in financial reporting periods beginning after December 15, 2013, and should be applied on a prospective basis. Earlier application is encouraged. How the Changes in This Statement Will Improve Financial Reporting Until now, governments have accounted for mergers, acquisitions, and transfers of operations by analogizing to accounting and financial reporting guidance intended for the business environment, generally APB Opinion No. 16, Business Combinations. This Statement provides specific accounting and financial reporting guidance for combinations in the governmental environment. This Statement also improves the decision usefulness of financial reporting by requiring that disclosures be made by governments about combination arrangements in which they engage and for disposals of People government operations. + Process, G_'M lig 11f'N(llu t, -15- ,Ulilf ers Future Accounting Standard Changes - Continued GASB Statement No. 70 - Accounting and Financial Reporting for Nonexchange Financial Guarantees Summary Some governments extend financial guarantees for the obligations of another government, a not- for - profit organization, a private entity, or individual without directly receiving equal or approximately equal value in exchange (a nonexchange transaction). As a part of this nonexchange financial guarantee, a government commits to indemnify the holder of the obligation if the entity or individual that issued the obligation does not fulfill its payment requirements. Also, some governments issue obligations that are guaranteed by other entities in a nonexchange transaction. The objective of this Statement is to improve accounting and financial reporting by state and local governments that extend and receive nonexchange financial guarantees. This Statement requires a government that extends a nonexchange financial guarantee to recognize a liability when qualitative factors and historical data, if any, indicate that it is more likely than not that the government will be required to make a payment on the guarantee. The amount of the liability to be recognized should be the discounted present value of the best estimate of the future outflows expected to be incurred as a result of the guarantee. When there is no best estimate but a range of the estimated future outflows can be established, the amount of the liability to be recognized should be the discounted present value of the minimum amount within the range. This Statement requires a government that has issued an obligation guaranteed in a nonexchange transaction to report the obligation until legally released as an obligor. This Statement also requires a government that is required to repay a guarantor for making a payment on a guaranteed obligation or legally assuming the guaranteed obligation to continue to recognize a liability until legally released as an obligor. When a government is released as an obligor, the government should recognize revenue as a result of being relieved of the obligation. This Statement also provides additional guidance for intra- entity nonexchange financial guarantees involving blended component units. This Statement specifies the information required to be disclosed by governments that extend nonexchange financial guarantees. In addition, this Statement requires new information to be disclosed by governments that receive nonexchange financial guarantees. The provisions of this Statement are effective for reporting periods beginning after June 15, 2013. Earlier application is encouraged. Except for disclosures related to cumulative amounts paid or received in relation to a nonexchange financial guarantee, the provisions of this Statement are required to be applied retroactively. Disclosures related to cumulative amounts paid or received in relation to a nonexchange financial guarantee may be applied prospectively. How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will enhance comparability of financial statements among governments by requiring consistent reporting by those governments that extend nonexchange financial guarantees and by those governments that receive nonexchange financial guarantees. This Statement also will enhance the information disclosed about a government's obligations and risk exposure from extending nonexchange financial guarantees. This Statement also will augment the ability of financial statement users to assess the probability that governments will repay obligation holders by requiring disclosures about obligations that are issued with this type of financial guarantee. GASB Statement No. 71 - Pension Transition for Contributions Made Subsequent to the Measure Date - an Amendment of GASB Statement No. 68 Summary The objective of this Statement is to address an issue regarding application of the transition provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The issue relates to amounts associated with contributions, if any, made by a state or local government employer or nonemployer contributing entity to a defined benefit pension plan after the measurement date of the government's beginning net pension liability. -16- People + Process A lli ; 13f ,N o mu1 t , Nulilhers Future Accounting Standard Changes - Continued Statement No. 68 requires a state or local government employer (or nonemployer contributing entity in a special funding situation) to recognize a net pension liability measured as of a date (the measurement date) no earlier than the end of its prior fiscal year. If a state or local government employer or nonemployer contributing entity makes a contribution to a defined benefit pension plan between the measurement date of the reported net pension liability and the end of the government's reporting period, Statement No. 68 requires that the government recognize its contribution as a deferred outflow of resources. In addition, Statement No. 68 requires recognition of deferred outflows of resources and deferred inflows of resources for changes in the net pension liability of a state or local government employer or nonemployer contributing entity that arise from other types of events. At transition to Statement No. 68, if it is not practical for an employer or nonemployer contributing entity to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions, paragraph 137 of Statement No. 68 required that beginning balances for deferred outflows of resources and deferred inflows of resources not be reported. Consequently, if it is not practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions, contributions made after the measurement date of the beginning net pension liability could not have been reported as deferred outflows of resources at transition. This could have resulted in a significant understatement of an employer or nonemployer contributing entity's beginning net position and expense in the initial period of implementation. This Statement amends paragraph 137 of Statement No. 68 to require that, at transition, a government recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning net pension liability. Statement No. 68, as amended, continues to require that beginning balances for other deferred outflows of resources and deferred inflows of resources related to pensions be reported at transition only if it is practical to determine all such amounts. The provisions of this Statement are required to be applied simultaneously with the provisions of Statement No. 68. How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will eliminate the source of a potential significant understatement of restated beginning net position and expense in the first year of implementation of Statement No. 68 in the accrual -basis financial statements of employers and nonemployer contributing entities. This benefit will be achieved without the imposition of significant additional costs. ' Note. From GASB Pronouncements Summaries. Copyright 2014 by the Financial Accounting Foundation, 401 Merritt 7, Norwalk, CT 06856, USA, and is reproduced with permission. This communication is intended solely for the information and use of the City Council, management, others within the City and the Minnesota Office of the State Auditor and is not intended to be and should not be used by anyone other than these specified parties. The comments and recommendation in this report are purely constructive in nature, and should be read in this context. Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data. If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your convenience. We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to us by your staff. 0 Ir ABDO, EICK & MEYERS, LLP Minneapolis, Minnesota April 25, 2014 -17- People + Process A lli ; 13f ,N o mu1 t , Nulilhers CITY OF CORCORAN CORCORAN, MINNESOTA ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2013 THIS PAGE IS LEFT BLANK INTENTIONALLY CITY OF CORCORAN, MINNESOTA ANNUAL FINANCIAL REPORT TABLE OF CONTENTS FOR THE YEAR ENDED DECEMBER 31, 2013 INTRODUCTORY SECTION Elected and Appointed Officials Page FINANCIAL SECTION Independent Auditor's Report 9 Management's Discussion and Analysis 13 Basic Financial Statements Government -wide Financial Statements Statement of Net Position 25 Statement of Activities 26 Fund Financial Statements Governmental Funds 68 Balance Sheet 30 Reconciliation of the Balance Sheet to the Statement of Net Position 33 Statement of Revenues, Expenditures and Changes in Fund Balances 34 Reconciliation of the Statement of Revenues, Expenditures, and Changes in 73 Fund Balances to the Statement of Activities 36 General Fund 74 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 37 Proprietary Funds Statement of Net Position 38 Statement of Revenues, Expenditures and Changes in Net Position 39 Statement of Cash Flows 40 Fiduciary Funds Statement of Fiduciary Net Position 41 Notes to the Financial Statements 43 Required Supplementary Information Schedule of Funding Progress for the Postemployment Benefit Plan 64 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 66 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 67 Nonmajor Special Revenue Funds Combining Balance Sheet 68 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 70 Nonmajor Debt Service Funds Combining Balance Sheet 72 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 73 Nonmajor Capital Project Funds Combining Balance Sheet 74 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 76 General Fund Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 78 Fiduciary Funds Combining Schedule of Net Position 82 Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds 84 OTHER REQUIRED REPORTS Independent Auditor's Report on Minnesota Legal Compliance 87 Schedule of Findings and Responses 89 BE THIS PAGE IS LEFT BLANK INTENTIONALLY -2- INTRODUCTORY SECTION CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2013 -3- THIS PAGE IS LEFT BLANK INTENTIONALLY -4- Name Ken Guenthner Rich Asleson Tom Cossette Diane Lynch Ron Thomas Brad Martens Jeanie Heinecke CITY OF CORCORAN, MINNESOTA ELECTED AND APPOINTED OFFICIALS FOR THE YEAR ENDED DECEMBER 31, 2013 ELECTED Term Expires 12/31/14 12/31/14 12/31/14 12/31/16 12/31/16 APPOINTED Irbil Title Mayor Council Member Council Member Council Member Council Member City Administrator City Clerk THIS PAGE IS LEFT BLANK INTENTIONALLY IM FINANCIAL SECTION CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2013 11re THIS PAGE IS LEFT BLANK INTENTIONALLY -8- e - ' ABDO I I EI c r *, _ NIL ff1 S LLP Ortilicd Pulkc !1cmtrauras & Consultants INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Corcoran, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Corcoran, Minnesota (the City), as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2013, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. 5201 Eden Avenue, Suite 250 Edina, MN 55436 952.835.9090 1 Fax 952.835.3261 -9- THIS PAGE IS LEFT BLANK INTENTIONALLY -10- Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis starting on page 13 and the Schedule of Funding Progress for the Postemployment Benefit Plan on page 64 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements as a whole. The introductory section and combining and individual fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. 4V�" ABDO, EICK & MEYERS, LLP Minneapolis, Minnesota NEED DATE -11- People + Process A I ng 13f ,N o mu1 t , Nulilhers THIS PAGE IS LEFT BLANK INTENTIONALLY -12- Management's Discussion and Analysis As management of the City of Corcoran, Minnesota (the City), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2013. Financial Highlights • The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $8,543,761 (net position). Of this amount, $903,151 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors. • The City's total net position increased by $231,672. Governmental activities decreased by $1,654,451 and business -type activities increased $1,886,123 primarily as a result of a contribution of water and sewer assets contributed from governmental to business -type activities upon completion of the Water /Sewer Utility project. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $3,482,151 a decrease of $3,141,192 in comparison with the prior year. The decrease resulted from capital expenditures for the public works facility and sewer and water utility project. • At the end of the current fiscal year, unassigned fund balance for the General fund was $961,389 or 30.3 percent of total General fund expenditures. • The City's total long -term debt decreased $344,454 during the current fiscal year as a result of the scheduled principal and interest payments. -13- Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of combining and individual fund financial statements and schedules that further explains and supports the information in the financial statements. Figure 1 shows how the required parts of this annual report are arranged and relate to one another. In addition to these required elements, we have included a section with combining and individual fund financial statements and schedules that provide details about nonmajor governmental funds, which are added together and presented in single columns in the basic financial statements Figure 1 Required Components of the City's Annual Financial Report ............................................. ............................... Management's Basic Required Discussion and Financial Supplementary Analysis Statements Information Government- Fund Notes to the wide Financial Financial Financial Statements Statements Statements Summary Detail -14- Figure 2 summarizes the major features of the City's financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management's discussion and analysis explains the structure and contents of each of the statements. Figure 2 Major features of the Government -wide and Fund Financial Statements Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private- sector business. The statement of net position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. 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 that are principally supported by taxes and intergovernmental revenue (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 include general government, public safety, public works, culture and recreation, and interest on long -term debt. The business -type activities of the City include water and sewer utilities. -15- Fund Financial Statements Government -wide Governmental Funds Proprietary Funds Fiduciary Funds Statements Scope Entire City government The activities of the City that are Activities the City Instances in which the (except fiduciary funds) not proprietary or fiduciary, such operates similar to City administers and the City's as police, fire and parks private businesses, such resources on behalf of component units as the water and sewer someone else, such as system developers Required • Statement of Net • Balance Sheet • Statement of Net • Statement of financial Position • Statement of Revenues, Position fiduciary net statements . Statement of Expenditures, and Changes in • Statement of position Activities Fund Balances Revenues, Expenses and Changes in Net Position • Statement of Cash Flows Accounting Accrual accounting and Modified accrual accounting and Accrual accounting and Accrual accounting and Basis and economic resources current financial resources focus economic resources economic resources measurement focus focus focus focus Type of All assets and liabilities, Only assets expected to be used All assets and liabilities, All assets and liabilities, asset /liability both financial and up and liabilities that come due both financial and both short-term and information capital, and short-term during the year or soon thereafter; capital, and short-term long -term; fund do not and long -term no capital assets included and long -term currently contain capital assets, although they can Type of All deferred Only deferred outflows of All deferred All deferred deferred outflows /inflows of resources expected to be used up outflows /inflows of outflows /inflows of outflows /inflo resources, regardless of and deferred inflows of resources resources, regardless of resources, regardless of ws of when cash is received or that come due during the year or when cash is received or when cash is received or resources paid. soon thereafter; no capital assets paid. paid information included. Type of in All revenues and Revenues for which cash is All revenues and All additions and flow /out flow expenses during year, received during or soon after the expenses during the year, deductions during the information regardless of when cash end of the year; expenditures regardless of when cash year, regardless of when is received or paid when goods or services have been is received or paid cash is received or paid received and payment is due during the year or soon thereafter Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private- sector business. The statement of net position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. 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 that are principally supported by taxes and intergovernmental revenue (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 include general government, public safety, public works, culture and recreation, and interest on long -term debt. The business -type activities of the City include water and sewer utilities. -15- The government -wide financial statements include not only the City itself (known as the primary government), but also a legally separate Economic Development Authority for which the City is financially accountable. The Economic Development Authority, although legally separate, functions for all practical purposes as a department of the City, and therefore has been included as part of the primary government. The government -wide financial statements start on page 25 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, 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 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 inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -term impact by the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 19 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General fund, Tax Increment Financing fund, Infrastructure Planning fund, and Public Works Facility fund all of which are considered to be major funds. Data from the other 15 governmental funds are combined into a single, aggregated presentation identified as other nonmajor governmental funds. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements or schedules elsewhere in this report. The City adopts an annual appropriated budget for its General fund. A budgetary comparison statement has been provided for the General fund to demonstrate compliance with this budget. The basic governmental fund financial statements start on page 30 of this report. Proprietary funds. The City maintains one type of proprietary funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses enterprise funds to account for its Water and Sewer funds. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary funds financial statements provide separate information for each of the enterprise funds which are considered to be major funds of the City. The basic proprietary funds financial statements start on page 38 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on page 41 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements start on page 43 of this report. Other information. The combining statements referred to earlier in connection with nonmajor governmental funds are presented following the notes to the financial statements. Combining and individual fund statements and schedules start on page 66 of this report. -16- Government -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities by $8,543,761 at the close of the most recent fiscal year. The largest portion of the City's net position (41.4 percent) 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 uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City'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. Assets Current and other assets Capital assets Total assets Liabilities Noncurrent liabilities outstanding Other liabilities Total liabilities Net position Net investment in capital assets Restricted Unrestricted Total net position City of Corcoran's Summary of Net Position Governmental Activities Business -type Activities Increase Increase 2013 2012 (Decrease) 2013 2012 (Decrease) $ 4,538,300 $ 7,106,060 $ (2,567,760) $ (51,773) $ - $ (51,773) 8,474,495 7,314,485 1,160,010 1,954,442 - 1,954,442 13,012,795 14,420,545 (1,407,750) 1,902,669 - 1,902,669 5,522,615 5,864,382 (341,767) - - - 832,542 244,074 588,468 16,546 - 16,546 6,355,157 6,108,456 246,701 16,546 - 16,546 3,538,393 5,368,601 (1,830,208) 1,954,442 - 1,954,442 2,147,775 2,043,182 104,593 - - - 971,470 900,306 71,164 (68,319) - (68,319) $ 6,657,638 $ 8,312,089 $ (1,654,451) $ 1,8861123 $ - $ 1,886,123 An additional portion of the City's net position (25.1 percent) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($903,151) may be used to meet the City's ongoing obligations to citizens and creditors. -17- Governmental and Business -type activities. Governmental activities decreased the City's net position by $1,654,451 and business- type activities increased the City's net position by $1,886,123. Significant changes from prior year are noted below: City of Corcoran's Changes in Net Position Property taxes represent 70.2 percent of total revenues in 2013 in governmental activities. Significant changes in revenues included: • Operating grants and contributions increased $106,145, primarily related to a FEMA grant received in 2013. • Capital grants and contributions decreased $194,137 from prior year. In 2012, Met Council had reimbursed the City for property for a lift station. • Property taxes increased in 2013 as a result of an increase in the General fund levy as well as first year of levying for the 2012B G.O. Capital Improvement bonds. Significant changes in expenses included: • In 2012, general government expenses of approximately $200,000 were capitalized for the purchase of land for the public works facility. • Public works expenditures decreased as a result of significant capital expenditures in 2013. -18- Governmental Activities Business -type Activities Increase Increase 2013 2012 (Decrease) 2013 2012 (Decrease) Revenues Program revenues Charges for services $ 453,349 $ 366,143 $ 87,206 $ - $ - $ - Operating grants and contributions 366,708 260,563 106,145 - - - Capital grants and contributions 68,075 262,212 (194,137) - - - General revenues Property taxes 2,924,902 2,774,552 150,350 - - - Other taxes 327,270 316,107 11,163 - - - Grants and contributions not restricted to specific programs 11,028 10,543 485 - - - Unrestricted investment earnings 8,897 21,281 (12,384) (26) - (26) Gain on sale of capital assets 3,768 49,163 (45,395) - - - Total revenues 4,163,997 4,060,564 103,433 (26) - (26) Expenses General government 799,786 499,048 300,738 - - - Public safety 1,399,599 1,332,415 67,184 - - - Public works 1,385,771 1,789,513 (403,742) - - - Culture and recreation 101,282 94,133 7,149 - - - Interest on long -term debt 144,349 141,692 2,657 - - - Water - - - 57,174 - 57,174 Sewer - - - 44,338 - 44,338 Total expenses 3,830,787 3,856,801 (26,014) 101,512 - 101,512 Change in net position before transfers 333,210 203,763 129,447 (101,538) - (101,538) Transfer of capital assets (1,987,661) - (1,987,661) 1,987,661 - 1,987,661 Change in net position (1,654,451) 203,763 (1,858,214) 1,886,123 - 1,886,123 Net position, January 1 8,312,089 8,108,326 203,763 - - - Net position, December 31 $ 6,657,638 $ 8,312,089 $ (1,654,451) $ 1,886,123 $ - $ 1,886,123 Property taxes represent 70.2 percent of total revenues in 2013 in governmental activities. Significant changes in revenues included: • Operating grants and contributions increased $106,145, primarily related to a FEMA grant received in 2013. • Capital grants and contributions decreased $194,137 from prior year. In 2012, Met Council had reimbursed the City for property for a lift station. • Property taxes increased in 2013 as a result of an increase in the General fund levy as well as first year of levying for the 2012B G.O. Capital Improvement bonds. Significant changes in expenses included: • In 2012, general government expenses of approximately $200,000 were capitalized for the purchase of land for the public works facility. • Public works expenditures decreased as a result of significant capital expenditures in 2013. -18- The following graph depicts various governmental activities and shows the revenue and expenses directly related to those activities. Expenses and Program Revenue - Governmental Activities $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 General government Public safety Public works Culture and recreation Interest on long -term debt ■ Expenses ■ Program Revenues Revenues by Source - Governmental Activities Capital grant contributioi 1.63% Operating gn and contribute 8.81% Charges for services 10.90% Grants and Property taxes 70 ?AO/. capital assets 0.09% mvestments earnings 0.21% -19- Business -type activities. Business -type activities increased the City's net position by $1,886,123. The primary reason for the increase in net position was due to a capital asset contribution from governmental activities of $1,987,661. This is the first year of operations for both funds. Financial Analysis of the City's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. Governmental funds. The focus of the City'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's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $3,482,151, a decrease of $3,141,192 in comparison with the prior year. Approximately 16.9 percent of this total amount ($588,726) constitutes unassigned fund balance, which is available for spending at the City's discretion. The remainder of fund balance ($2,893,425) is not available for new spending because it is either 1) nonspendable ($271,274), 2) restricted ($2,428,114), 3) committed ($7,195), or 4) assigned ($186,842). For further classification refer to Note 3E on page 57 of this report. Fund Balance December 31, Increase Major Funds 2013 2012 (Decrease) General $ 1,232,663 $ 942,753 $ 289,910 The General fund balance increased $289,910 during the year. The primary reason for the increase is related to positive budget variances of $119,304 and $91,274 in intergovernmental and license and permit revenues, respectively. The fund balance is strong in relation to following years budget. Tax In crem en t Fin an cing $ 1,764,180 $ 1,603,223 $ 160,957 The Tax Increment Financing fund balance increased $160,957 during the year due to collection of tax increment and expenses related to the Water and Sewer utility project and planning related to the expected downtown improvements. Infrastructure Planning $ (177,930) $ (177,633) $ (297) The Infrastructure Planning fund balance showed minimal change in 2013. The fund deficit is planned to be eliminated with future collections of fees or transfers from other funds. Public Works Facility $ 230,898 $ 3,564,187 $ (3,333,289) The Public Works Facility fund was created in 2012 to account for the construction of the public works facility. The fund recorded capital expenditures of $3,337,906 during construction of the new facility which is expected to be completed in early 2014. General Fund Budgetary Highlights The City's General fund was not amended during the year. Revenues exceeded budget by $246,805, primarily due positive budget variances in intergovernmental revenue and licenses and permits of $119,304 and $91,274, respectively. Expenditures had a negative budget variance of $403, primarily due to offsetting budget variances, including a positive budget variance of $89,882 in public works and a negative budget variance in general government of $92,987. -20- Capital Asset and Debt Administration Capital assets. The City's investment in capital assets for its governmental type activities as of December 31, 2013, amounts to $8,474,495 (net of accumulated depreciation). This investment in capital assets includes land, structures, improvements, machinery and equipment, park facilities, roads, and highways. The total increase in the City's investment in capital assets for the current fiscal year was 16 percent. Major capital events during the current fiscal year included the following: • Completion of Water and Sewer Utility project • Construction of Public Works Facility — in progress at year end • Purchase of new squad car City of Corcoran's Capital Assets (net of depreciation) Major capital asset events during the current fiscal year included the following: Construction in progres 33.0% Equi 10 Capital Assets Land 1 11 50/ Buildings 9.3% Additional information on the City's capital assets can be found in Note 3B starting on page 53 of this report. -21- Governmental Activities Business -type Activities Increase Increase 2013 2012 (Decrease) 2013 2012 (Decrease) Land $ 1,410,197 $ 1,410,197 $ - $ - $ - $ - Construction in progress 3,439,005 2,055,683 1,383,322 - - - Buildings 967,095 1,005,239 (38,144) - - - Equipment 1,051,694 1,271,576 (219,882) - - - Infrastructure 1,606,504 1,571,790 34,714 1,954,442 - 1,954,442 Total $ 8,474,495 $ 7,314,485 $ 1,160,010 $ 1,954,442 $ - $ 1,954,442 Major capital asset events during the current fiscal year included the following: Construction in progres 33.0% Equi 10 Capital Assets Land 1 11 50/ Buildings 9.3% Additional information on the City's capital assets can be found in Note 3B starting on page 53 of this report. -21- Long -term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $5,167,000. Of this amount, is general obligation improvement bonds, $5,108,000 is general obligation bonds, and $59,000 is lease revenue bonds for municipal facilities. The following table highlights the total debt of the City. General obligation bonds Lease revenue bonds Notes payable Compensated absences payable Other postemployment benefits payable Total City of Corcoran's Outstanding Debt Governmental Activities Increase 2013 2012 (Decrease) $ 5,108,000 $ 5,279,000 $ (171,000) 59,000 96,000 (37,000) - 136,454 (136,454) 218,004 239,685 (21,681) 137,611 113,243 24,368 $ 5,522,615 $ 5,864,382 $ (341,767) The City's total debt decreased $341,767 during the current fiscal year. The decrease was due to scheduled principal and interest payments, as well as the payoff of the note payable. Minnesota statutes limit the amount of net general obligation debt a City may issue to 3 percent of the market value of taxable property within the City. Net debt is debt payable solely from ad valorem taxes. The current debt limitation for the City is $16,957,026. The City has $5,108,000 of debt subject to this limit. Additional information on the City's long -term debt can be found in Note 3D starting on page 55 of this report. Economic Factors and Next Year's Budgets and Rates The City's property tax rate increased from 39.617 percent to 46.111 percent in 2013 while the City's property tax levy increased $153,618 or 5.500 percent Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City Administrator, City of Corcoran 8200 County Road 116, Corcoran, MN 55340. -22- GOVERNMENT -WIDE FINANCIAL STATEMENTS CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2013 -23- THIS PAGE IS LEFT BLANK INTENTIONALLY -24- CITY OF CORCORAN, MINNESOTA STATEMENT OF NET POSITION DECEMBER 31, 2013 ASSETS Cash and temporary investments Receivables Accounts Interest Delinquent taxes Special assessments Due from other governments Capital assets Nondepreciable Depreciable, net of accumulated depreciation TOTAL ASSETS LIABILITIES Accounts payable Due to other governments Accrued salaries payable Accrued interest payable Noncurrent liabilities Due within one year Due in more than one year TOTAL LIABILITIES NET POSITION Net investment in capital assets Restricted for Tax increment financing Debt service Park dedication fees Police expenditures Capital outlay Unrestricted TOTAL NET POSITION Governmental Business -type Activities Activities Total $ 4,071,187 $ (51,773) $ 4,019,414 39,489 - 39,489 46 - 46 70,613 - 70,613 202,435 - 202,435 154,530 - 154,530 4,849,202 - 4,849,202 3,625,293 1,954,442 5,579,735 13,012,795 1,902,669 14,915,464 631,742 16,546 648,288 110,911 - 110,911 40,448 - 40,448 49,441 - 49,441 340,240 - 340,240 5,182,375 - 5,182,375 6,355,157 16,546 6,371,703 3,538,393 1,954,442 5,492,835 1,764,180 - 1,764,180 88,577 - 88,577 274,140 - 274,140 13,598 - 13,598 7,280 - 7,280 971,470 (68,319) 903,151 $ 6,657,638 $ 1,886,123 $ 8,543,761 The notes to the financial statements are an integral part of this statement. -25- CITY OF CORCORAN, MINNESOTA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2013 Business -type activities Water 57,174 - - - Sewer Program Revenues Total business -type activities 101,512 - - - Total $ 3,932,299 $ 453,349 $ 366,708 $ 68,075 Operating Capital Taxes Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities Grants and contributions not restricted to specific programs Unrestricted investment earnings General government $ 799,786 $ 86,061 $ 21,888 $ - Public safety 1,399,599 234,518 87,530 - Public works 1,385,771 131,135 254,555 13,876 Culture and recreation 101,282 1,635 2,735 54,199 Interest on long term debt 144,349 - - - Total governmental activities 3,830,787 453,349 366,708 68,075 Business -type activities Water 57,174 - - - Sewer 44,338 - - - Total business -type activities 101,512 - - - Total $ 3,932,299 $ 453,349 $ 366,708 $ 68,075 General revenues Taxes Property taxes, levied for general purposes Property taxes, levied for debt service Tax increments Franchise fees Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Transfer of capital assets Total general revenues and transfers Change in net position Net position, January 1 Net position, December 31 The notes to the financial statements are an integral part of this statement. -26- Net Revenues (Expenses) and Changes in Net Position Governmental Business -type Activities Activities Total $ (691,837) (1,077,551) (986,205) (42,713) (144,349) (2,942,655) $ (691,837) (1,077,551) (986,205) (42,713) (144,349) (2,942,655) (57,174) (57,174) (44,338) (44,338) (101,512) (101,512) (2,942,655) (101,512) (3,044,167) 2,594,621 - 2,594,621 330,281 - 330,281 287,781 - 287,781 39,489 - 39,489 11,028 - 11,028 8,897 (26) 8,871 3,768 - 3,768 (1,987,661) 1,987,661 - 1,288,204 1,987,635 3,275,839 (1,654,451) 1,886,123 231,672 8,312,089 - 8,312,089 $ 6,657,638 $ 1,886,123 $ 8,543,761 -27- THIS PAGE IS LEFT BLANK INTENTIONALLY -28- FUND FINANCIAL STATEMENTS CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2013 -29- CITY OF CORCORAN, MINNESOTA BALANCESHEET GOVERNMENTAL FUNDS DECEMBER 31, 2013 ASSETS Cash and temporary investments Receivables Interest Delinquent taxes Accounts Special assessments Due from other governments Due from other funds TOTAL ASSETS LIABILITIES Accounts payable Due to other governments Accrued salaries payable Due to other funds TOTAL LIABILITIES TOTAL DEFERRED INFLOWS OF RESOURCES Unavailable revenues - taxes Unavailable revenues - special assessments TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Nonspendable Restricted Committed Assigned Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 100 401 402 Tax Increment Infrastructure General Financing Planning $ 906,016 $ 1,823,614 $ - 46 - - 70,613 - - 39,489 - - 173,411 - - 152,493 - - 271,274 - - $ 1,613,342 $ 1,823,614 $ - $ 86,768 $ 59,434 $ - 9,439 - - 40,448 - - - 177,930 136,655 59,434 177,930 70,613 - - 173,411 - - 244,024 - - 271,274 - - - 1,764,180 - 961,389 - (177,930) 1,232,663 1,764,180 (177,930) $ 1,613,342 $ 1,823,614 $ - The notes to the financial statements are an integral part of this statement. -30- 411 Public Works Facility $ 715,904 Other Total Governmental Governmental Funds Funds $ 625,653 $ 4,071,187 - - 46 - - 70,613 - 39,489 29,024 202,435 - 2,037 154,530 - - 271,274 $ 715,904 $ 656,714 $ 4,809,574 $ 485,006 $ 534 $ 631,742 - 101,472 110,911 - 40,448 - 93,344 271,274 485,006 195,350 1,054,375 - 70,613 29,024 202,435 29,024 273,048 - - 271,274 230,898 433,036 2,428,114 - 7,195 7,195 186,842 186,842 - (194,733) 588,726 230,898 432,340 3,482,151 $ 715,904 $ 656,714 $ 4,809,574 -31- THIS PAGE IS LEFT BLANK INTENTIONALLY -32- CITY OF CORCORAN, MINNESOTA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS DECEMBER 31, 2013 Total fund balances - governmental $ 3,482,151 Amounts reported for governmental activities in the statement of net position are different because Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. Cost of capital assets 11,410,788 Less: accumulated depreciation (2,936,293) Long -term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the fund statements. Long -term liabilities at year -end consist of Bond payable (5,108,000) Leases payable (59,000) Compensated absences payable (218,004) Other postemployment benefits payable (137,611) Some receivables are not available soon enough to pay for current period expenditures, and, therefore, are unavailable in the funds. Delinquent taxes receivable 70,613 Special assessments receivable 202,435 Governmental funds do not report a liability for accrued interest until due and payable. (49,441) Total net position - governmental activities $ 6,657,638 The notes to the financial statements are an integral part of this statement. -33- CITY OF CORCORAN, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2013 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest on investments Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Public safety Public works Culture and recreation Capital outlay General government Public safety Public works Culture and recreation Debt service Principal Interest and other charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Sale of capital assets TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 100 401 402 Tax Increment Infrastructure General Financing Planning $ 2,627,327 $ 287,781 $ - 159,524 - - 373,000 34 - 199,184 - - 58,194 - - 1,026 2,750 (297) 47,602 - - 3,465,857 290,565 (297) 749,029 - - 1,285,746 - - 1,031,550 - - 73,133 - - 3,890 129,608 - 32,599 - - 3,175,947 129,608 - 289,910 160,957 (297) 289,910 160,957 (297) 942,753 1,603,223 (177,633) $ 1,232,663 $ 1,764,180 $ (177,930) The notes to the financial statements are an integral part of this statement. -34- 411 Public Works Facility Other Total Governmental Governmental Funds Funds - $ 330,281 $ 3,245,389 - - 159,524 - - 373,034 - 29,430 228,614 - - 58,194 - 3,599 3,599 4,617 801 8,897 - 19,560 67,162 4,617 383,671 4,144,413 - - 749,029 18,973 1,304,719 - 1,031,550 73,133 - 17,991 17,991 - 53,327 53,327 3,337,906 99,052 3,570,456 - 1,191 33,790 - 344,454 344,454 - 113,497 113,497 3,337,906 648,485 7,291,946 (3,333,289) (264,814) (3,147,533) 4,360 4,360 (4,360) (4,360) 6,341 6,341 6,341 6,341 (3,333,289) (258,473) (3,141,192) 3,564,187 690,813 6,623,343 $ 230,898 $ 432,340 $ 3,482,151 -35- CITY OF CORCORAN, 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, 2013 Total net change in fund balances - governmental funds $ (3,141,192) Amounts reported for governmental activities in the statement of activities are different because Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. Capital outlays 3,571,528 Depreciation expense (421,284) Assets constructed in the governmental funds for enterprise funds are eliminated in the government -wide statements. (1,987,661) Governmental funds report a gain (loss) on sale of capital assets to the extent of cash exchanged, whereas the disposition of the assets book value is included in the total gain (loss) in the statement of activities. Disposals (63,995) Depreciation on disposals 61,422 The issuance of long -term debt provides current financial resources to governmental funds, while the repayment of the principal of long -term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts amortized in the statement of activities. Principal repayments 344,454 Interest 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 financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. (30,852) Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting, they cannot be recognized until they are available to liquidate liabilities of the current period. Property taxes 6,783 Special assessments 9,033 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences 21,681 Other postemployment benefits costs (24,368) Change in net position - governmental activities $ (1,654,451) The notes to the financial statements are an integral part of this statement. -36- CITY OF CORCORAN, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2013 REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Interest on investments Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Public safety Public works Culture and recreation Capital outlay Public works Culture and recreation TOTAL EXPENDITURES NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget $ 2,628,428 $ 2,628,428 $ 2,627,327 $ (1,101) 68,250 68,250 159,524 91,274 253,696 253,696 373,000 119,304 159,230 159,230 199,184 39,954 90,000 90,000 58,194 (31,806) 3,000 3,000 1,026 (1,974) 16,448 16,448 47,602 31,154 3,219,052 3,219,052 3,465,857 246,805 656,042 656,042 749,029 (92,987) 1,291,917 1,291,917 1,285,746 6,171 1,121,432 1,121,432 1,031,550 89,882 65,830 65,830 73,133 (7,303) 4,500 4,500 3,890 610 35,823 35,823 32,599 3,224 3,175,544 3,175,544 3,175,947 (403) 43,508 43,508 289,910 246,402 942,753 942,753 942,753 - $ 986,261 $ 986,261 $ 1,232,663 $ 246,402 The notes to the financial statements are an integral part of this statement. -37- CITY OF CORCORAN, MINNESOTA STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2013 ASSETS CURRENT ASSETS Cash and temporary investments NONCURRENT ASSETS Capital assets Infrastructure Less accumulated depreciation TOTAL CAPITAL ASSETS (NET OF ACCUMULATED DEPRECIATION) TOTAL ASSETS LIABILITIES Accounts payable NET POSITION Net investment in capital assets Unrestricted NET POSITION Business -type Activities - Enterprise Funds Water Sewer Totals $ (33,346) $ (18,427) $ (51,773) 934,201 1,053,460 1,987,661 (15,613) (17,606) (33,219) 918,588 1,035,854 1,954,442 885,242 1,017,427 1,902,669 8,232 8,314 16,546 918,588 1,035,854 1,954,442 (41,578) (26,741) (68,319) $ 877,010 $ 1,009,113 $ 1,886,123 The notes to the financial statements are an integral part of this statement. -38- CITY OF CORCORAN, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR YEAR ENDED DECEMBER 31, 2013 Business -type Activities - Enterprise Funds OPERATING EXPENSES Personal services Repairs and maintenance Depreciation TOTAL OPERATING EXPENSES OPERATING LOSS NONOPERATING REVENUES Interest on investments INCOME BEFORE CONTRIBUTIONS CAPITAL CONTRIBUTIONS FROM OTHER FUNDS CHANGE IN NET POSITION NET POSITION, JANUARY 1 NET POSITION, DECEMBER 31 $ - $ 100 $ 100 41,561 26,632 68,193 15,613 17,606 33,219 57,174 44,338 101,512 (57,174) (44,338) (101,512) (17) (9) (26) (57,191) (44,347) (101,538) 934,201 1,053,460 1,987,661 877,010 1,009,113 1,886,123 $ 877,010 $ 1,009,113 $ 1,886,123 The notes to the financial statements are an integral part of this statement. -39- CITY OF CORCORAN, MINNESOTA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2013 Business -type Activities - Enterprise Funds CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers Payments to employees NET CASH USED BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest paid on investments NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, JANUARY 1 CASH AND CASH EQUIVALENTS, DECEMBER 31 RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES Operating loss Adjustments to reconcile operating loss to net cash used by operating activities Depreciation Increase in liabilities Accounts payable NET CASH USED BY OPERATING ACTIVITIES NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets contributed by other funds The notes to the financial statements are an integral part of this statement. -40- $ (33,329) $ (18,318) $ (51,647) - (100) (100) (33,329) (18,418) (51,747) (17) (9) (26) (33,346) (18,427) (51,773) $ (33,346) $ (18,427) $ (51,773) $ (57,174) $ (44,338) $ (101,512) 15,613 17,606 33,219 8,232 8,314 16,546 $ (33,329) $ (18,418) $ (51,747) $ 934,201 $ 1,053,460 $ 1,987,661 CITY OF CORCORAN, MINNESOTA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS DECEMBER 31, 2013 ASSETS Cash and temporary investments Accounts receivable TOTAL ASSETS LIABILITIES Accounts payable Deposits payable TOTAL LIABILITIES Agency 500 501 Lions and Escrow Jaycees Total $ 132,142 $ 6,000 $ 138,142 75,546 - 75,546 S 207,688 $ 6,000 $ 213,688 $ 47,070 $ 6,000 $ 53,070 160,618 - 160,618 $ 207,688 $ 6,000 $ 213,688 The notes to the financial statements are an integral part of this statement. -41- THIS PAGE IS LEFT BLANK INTENTIONALLY -42- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting entity The City of Corcoran, Minnesota (the City), operates under a Home Rule Charter form of government. The charter provides for citizen input for initiative, referendum and recall. Under this plan, the government of the City is directed by a City Council composed of an elected Mayor and four elected City Council members. The City Council exercises legislative authority and determines all matters of policy. The City Council appoints personnel responsible for the proper administration of all affairs relating to the City. The City has considered all potential units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the primary government to impose its will on that organization or (2) the potential for the organization to provide the specific benefits to, or impose specific financial burdens on the primary government. Blended component units, although legally separate entities, are in substance, part of the City's operations and so data from these units are combined with data of the primary government. The City has the following component unit: Blended component unit The Economic Development Authority (the EDA) of the City was created pursuant to Minnesota statutes 469.090 through 469.108 to carry out economic and industrial development and redevelopment consistent with policies established by the City Council. The EDA may not exercise any of the powers enumerated by the authorizing statutes without prior approval of the Board of Commissioners. The activity of the EDA are blended and reported as a Debt Service fund due to the financial benefit/burden relationship. The only prior activity of the EDA was to issue the 2004 Public Project revenue bonds (reported in the Facility Expansion fund) and the EDA has a December 31 year end. Separate financial statements are not issued for this component unit. B. Government -wide and fund financial statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non - fiduciary activities of the City and its component unit. The effect of interfund activity has been removed from these statements. 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. Amounts reported as 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, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. -43- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED C. Measurement focus, basis of accounting and financial statement presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary 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. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, 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 City. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are measurable and become available. Non - exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the year for which the tax is levied. Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non - exchange transactions must also be available before it can be recognized. Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are also recorded as unearned revenue. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. -44- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City reports the following major governmental funds: The General fund is the City's primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund. The Tax Increment Financing fund accounts for the City's tax increment financing activities. The Infrastructure Planning fund accounts for costs related to the City's future infrastructure needs. The Public Works Facility fund accounts for costs related to the City's construction of the public works facility. The City reports the following major proprietary funds: The Water fund (601) account for costs associated with the City's water system and ensures that user charges are sufficient to pay for those costs. The Sewer fund (602) account for the costs associated with the City's sewer system and ensures that user charges are sufficient to pay for those costs. Additionally, the City reports the following fund types: Fiduciary funds account for assets held by the government in a trustee capacity or as an agent of behalf of others. The agency fund is custodial in nature and does not present results of operations or have a measurement focus. Agency funds are accounted for using the modified accrual basis of accounting. This fund is used to account for assets that the City holds for others in an agency capacity. As a general rule the effect of interfund activity has been eliminated from government -wide financial statements. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. -45- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED D. Assets, liabilities, deferred inflows of resources and net position /fund balance Deposits and investments The City'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. Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of the funds. The City may also invest idle funds as authorized by Minnesota statutes, as follows: 1. Direct obligations or obligations guaranteed by the United States or its agencies. 2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a final maturity of thirteen months or less. 3. General obligations of a state or local government with taxing powers rated "A" or better; revenue obligations rated "AA" or better. 4. General obligations of the Minnesota Housing Finance Agency rated "A" or better. 5. Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System. 6. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less. 7. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions qualified as a "depository" by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker - dealers. 8. Guaranteed Investment Contracts (GIC's) issued or guaranteed by a United States commercial bank, a domestic branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt obligations were rated in one of the top two rating categories by a nationally recognized rating agency. Investments for the City are reported at fair value. The broker money market investment pool operates in accordance with appropriate State laws and regulations. The reported value of the pool is the same as the fair value of the pool share. The City's investment policy limits the term of investments to be less than five years. All other policy provisions are limited to Minnesota statutes. -46- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Property taxes The City Council annually adopts a tax levy in December and certifies it to the County for collection in the following year. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January 1 and are payable by the property owners in two installments. The taxes are collected by the County Treasurer and tax settlements are made to the City during January, July and December each year. Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred inflow of resources for taxes not received within 60 days after year end in the governmental financial statements. Accounts receivable Accounts receivable include amounts billed for services provided before year end. Amounts outstanding at year end are considered fully collectible. Special assessments Special assessments represent the financing for public improvements paid for by benefiting property owners. These assessments are recorded as receivable upon certification to the County. Special assessments are recognized as revenue when they are received in cash or within 60 days after year end. All governmental special assessments receivable are offset by a deferred inflow of resources in the fund financial statements. Interfund receivables and payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to /from other funds" (i.e., the current portion of interfund loans) or "advances to /from other funds" (i.e., the non - current portion of interfund loans). All other outstanding balances between funds are reported as "due to /from other funds ". Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account in the General fund or a restricted, committed or assigned account in applicable governmental funds to indicate the constraint on these resources. -47- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Capital assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are, reported in the governmental activities column in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $2,500 (amount not rounded) and an estimated useful life in excess of three years. The City reports infrastructure assets on a network and subsystem basis. Accordingly, the amounts spent for the construction or acquisition on infrastructure assets are capitalized and reported in the government -wide financial statements. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the City chose to include all such items regardless of their acquisition date or amount. The City was able to estimate the historical cost for the initial reporting of these assets through backtrending (i.e., estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price -level index to deflate the cost to the acquisition year). As the City constructs or acquires additional capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. In the case of donations the City values these capital assets at the estimated fair value of the item at the date of its donation. Property, plant and equipment of the City are depreciated using the straight -line method over the following estimated useful lives: Useful Lives Assets in Years Buildings and improvements 7-40 Infrastructure 15-50 Equipment and machinery 5-60 Vehicles 3-50 Roads and highways 20-40 Land improvements 5-30 Compensated absences It is the City's policy to permit employees to accumulate a limited amount of earned but unused vacation, which is paid to the employee upon separation. A portion of unused sick leave may also be paid upon separation from City service. In governmental fund types the cost of these benefits are recognized when payments are made to the employees. The General fund is typically used to liquidate governmental compensated absences payable. Postemployment benefits other than pensions Under Minnesota statute 471.61, subdivision 2b., public employers must allow retirees and their dependents to continue coverage indefinitely in an employer- sponsored health care plan, under the following conditions: 1) Retirees must be receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in group plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees may obtain dependent coverage immediately before retirement. All premiums are funded on a pay -as- you -go basis. The liability was actuarially determined, in accordance with GASB Statement 45, at January 1, 2013. -48- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Long -term obligations In the government -wide financial statements long -term debt and other long -term obligations are reported as liabilities in the statement of net position. The recognition of bond premiums and discounts are amortized over the life of the bonds using the effective interest method. Bond issuance costs are reported as an expense in the period incurred. In the fund financial statements, governmental fund types recognized 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. Deferred inflows of resources In addition to liabilities, the statement of financial position and fund financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies as needing to be reported in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: taxes and special assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Fund balance In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These classifications are defined as follows: Nonspendable - Amounts that cannot be spent because they are not in spendable form, such as due from other funds. Restricted - Amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of the City Council, which is the City's highest level of decision - making authority. Committed amounts cannot be used for any other purpose unless the City Council modifies or rescinds the commitment by resolution. Assigned - Amounts constrained for specific purposes that are internally imposed. In governmental funds other than the General fund, assigned fund balance represents all remaining amounts that are not classified as nonspendable and are neither restricted nor committed. In the General fund, assigned amounts represent intended uses established by the City Council itself or by an official to which the governing body delegates the authority. The City Council has adopted a fund balance policy which delegates the authority to assign amounts for specific purposes to the City Administrator. Unassigned - The residual classification for the General fund and also negative residual amounts in other funds. The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available. Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The City has formally adopted a fund balance policy for the General fund. The City's policy is to maintain a minimum unrestricted fund balance of 35 percent of budgeted operating expenditures for cash -flow timing needs. -49- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Net position In the government -wide financial statements, net position represents the difference between assets and liabilities. Net position is displayed in three components: a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets. b. Restricted net position- Consist of net position balances restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. c. Unrestricted net position- All other net position balances that do not meet the definition of "restricted" or "net investment in capital assets" Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary information Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the General fund. All annual appropriations lapse at fiscal year -end. The City does not use encumbrance accounting. In July of each year, all departments of the City submit requests for appropriations to the City Administrator so that a budget may be prepared. Before September 15, the proposed budget is presented to the City Council for review. The City Council holds public hearings and a final budget is prepared and adopted in December. The appropriated budget is prepared by fund, function and department. The City's department heads, with the approval of the City Council, may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the City Council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. The budget was not amended during the year. B. Deficit fund equity The following funds had fund equity deficits at December 31, 2013: Fund Amount Major Infrastructure Planning $ 177,930 Nonmaj or Shannon Lane 93,344 County Road 19 Improvement 101,389 The deficit in the Infrastructure Planning fund will be eliminated with future collections of fees and transfers from other funds. The deficit in the Shannon Lane fund will be eliminated with future special assessment collections and transfers. The County Road 19 Improvement deficit will be eliminated with a future transfer. -50- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY - CONTINUED C. Excess of expenditures over appropriations For the year ended December 31, 2013 expenditures exceeded appropriations in the following fund: Fund General Excess of Expenditures Over Budget Actual Appropriations $ 3,175,544 $ 3,175,947 $ 403 The expenditures over budget were funded by revenue in excess of expenditures. Note 3: DETAILED NOTES ON ALL FUNDS A. Deposits and investments Deposits Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City's deposits and investments may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes and as authorized by the City Council, the City maintains deposits at those depository banks, all of which are members of the Federal Reserve System. Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds. Authorized collateral in lieu of a corporate surety bond includes: • United States government Treasury bills, Treasury notes, Treasury bonds; • Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; • General obligation securities of any state or local government with taxing powers which is rated "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; • General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; • Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc., or Standard & Poor's Corporation; and • Time deposits that are fully insured by any federal agency. Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The selection should be approved by the City. At year end, the City's carrying amount of deposits was $2,115,325 and the bank balance was $2,701,090. Of the bank balance, $493,270 was covered by federal depository insurance, and the remainder was covered by collateral held by the City's agent in the City's name. -51- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Investments As of December 31, 2013, the City had the following investments that are insured or registered, or securities held by the City or its agent in the City's name. Types of Investments Pooled investments Money Market Mutual funds (1) Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. (2) Interest rate risk is disclosed using the segmented time distribution method. N/A Indicated not applicable or unavailable. The investments of the City are subject to the following risks: • Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota statutes limit the City's investments to the list on page 46 of the notes. • Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City's investment policy does not address custodial credit risk but typically limits its exposure by purchasing insured or registered investments. • Concentration of Credit Risk. The concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The City places no limit on the amount that may be invested in any one issuer. • Interest Rate Risk. The interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with its investment policy, the City manages its exposure to declines in fair values by limiting the maturity of its investment portfolio to less than five years. Cash and investments summary A reconciliation of cash and temporary investments as shown on the Statement of Net Position for the City follows: Carrying amount of deposits $ 2,115,325 Investments 2,042,231 Total $ 4,157,556 Cash and temporary investments Statement of Net Position $ 4,019,414 Statement of Fiduciary Net Position 138,142 Total $ 4,157,556 -52- Fair Value Credit Segmented and Quality/ Time Carrying Ratings (1) Distribution (2) Amount N/A Less than 6 months $ 2,042,231 (1) Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. (2) Interest rate risk is disclosed using the segmented time distribution method. N/A Indicated not applicable or unavailable. The investments of the City are subject to the following risks: • Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota statutes limit the City's investments to the list on page 46 of the notes. • Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City's investment policy does not address custodial credit risk but typically limits its exposure by purchasing insured or registered investments. • Concentration of Credit Risk. The concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The City places no limit on the amount that may be invested in any one issuer. • Interest Rate Risk. The interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with its investment policy, the City manages its exposure to declines in fair values by limiting the maturity of its investment portfolio to less than five years. Cash and investments summary A reconciliation of cash and temporary investments as shown on the Statement of Net Position for the City follows: Carrying amount of deposits $ 2,115,325 Investments 2,042,231 Total $ 4,157,556 Cash and temporary investments Statement of Net Position $ 4,019,414 Statement of Fiduciary Net Position 138,142 Total $ 4,157,556 -52- CITY OF CORCORAN, MINNESOTA (2,577,941) (421,284) NOTES TO THE FINANCIAL STATEMENTS (2,936,293) Total capital assets, DECEMBER 31, 2013 being depreciated, net Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED (212,369) (10,943) 3,625,293 B. Capital assets Capital asset activity for the year ended December 31, 2013 was as follows: $ 3,158,614 $ (1,998,604) $ 8,474,495 Beginning Beginning Ending Ending Balance Increases Decreases Balance Governmental activities Business -type activities Capital assets not being depreciated Capital assets, being depreciated Land $ 1,410,197 $ - $ - $ 1,410,197 Construction in progress 2,055,683 3,370,983 (1,987,661) 3,439,005 Infrastructure - Total capital assets, - (33,219) Business -type activities not being depreciated 3,465,880 3,370,983 (1,987,661) 4,849,202 $ 1,954,442 $ - $ 1,954,442 Capital assets, being depreciated Buildings 1,667,515 29,839 - 1,697,354 Equipment 2,927,980 80,024 (73,875) 2,934,129 Infrastructure 1,831,051 99,052 - 1,930,103 Total capital assets being depreciated 6,426,546 208,915 (73,875) 6,561,586 Less accumulated depreciation Buildings (662,276) (67,983) - (730,259) Equipment (1,656,404) (288,963) 62,932 (1,882,435) Infrastructure (259,261) (64,338) - (323,599) Total accumulated depreciation (2,577,941) (421,284) 62,932 (2,936,293) Total capital assets, being depreciated, net 3,848,605 (212,369) (10,943) 3,625,293 Governmental activities capital assets, net $ 7,314,485 $ 3,158,614 $ (1,998,604) $ 8,474,495 Beginning Ending Balance Increases Decreases Balance Business -type activities Capital assets, being depreciated Infrastructure $ - $ 1,987,661 $ - $ 1,987,661 Less accumulated depreciation Infrastructure - (33,219) - (33,219) Business -type activities capital assets, net $ - $ 1,954,442 $ - $ 1,954,442 -53- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Depreciation expense was charged to functions /programs of the City as follows: Governmental activities General government $ 59,214 Public safety 92,506 Public works 255,865 Culture and recreation 13,699 Total depreciation expense - governmental activities $ 421,284 Business -type activities Water $ 15,613 Sewer 17,606 Total depreciation expense - governmental activities $ 33,219 Construction commitments The City has an active construction project as of December 31, 2013. At year end, the City's commitment with contractors is as follows: Proj ect Public works facility C. Interfund balances The composition of internal balances as of December 31, 2013 is as follows: Spent Remaining to date commitment $ 4,157,744 $ 921,663 Receivable Fund Payable Fund Purpose Amount General Infrastructure Planning Cash flow purposes $ 177,930 General Shannon Lane Finance capital purchases 93,344 Total $ 271,274 -54- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED D. Long -term debt General obligation bonds (G.O. bonds) The City issued G.O. bonds in governmental activities for equipment purchases and the construction of the new public works facility. Both will be repaid with tax levy. Each year the tax levy equals 105 percent of the amount required for debt service. The excess of 5 percent is to cover any delinquencies in tax payments. G.O. bonds are direct obligations and pledge the full faith and credit of the City. Bonds currently outstanding are as follows: Total General Obligation Bonds $ 5,108,000 Annual debt service requirements to maturity for general obligation bonds are as follows: Year Ending December 31, 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 Total ISSIS Principal Governmental Activities Interest Total $ 175,000 Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End G.O. Capital Improvement 104,040 263,040 998,000 450,151 1,448,151 Bonds Series 2012B $ 4,000,000 2.00-3.00 % 11/01/12 02/01/38 $ 4,000,000 G.O. Equipment 93,750 1,303,750 Certificate of 2008A 622,000 3.50-4.05 04/08/08 12/01/17 362,000 G.O. Equipment Certificate of 2010A 470,000 2.35 -3.95 04/01/10 02/01/20 376,000 G.O. Equipment Certificate of 2012A 410,000 0.65 - 1.75 11/01/12 11/01/22 370,000 Total General Obligation Bonds $ 5,108,000 Annual debt service requirements to maturity for general obligation bonds are as follows: Year Ending December 31, 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 Total ISSIS Principal Governmental Activities Interest Total $ 175,000 $ 129,936 $ 304,936 219,000 124,658 343,658 224,000 118,796 342,796 268,000 111,972 379,972 159,000 104,040 263,040 998,000 450,151 1,448,151 850,000 358,135 1,208,135 1,005,000 250,840 1,255,840 1,210,000 93,750 1,303,750 $ 5,108,000 $ 1,742,278 $ 6,850,278 CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Lease revenue bonds The EDA has issued lease revenue bonds for financing building projects in accordance with Minnesota statutes 469.001 through 469.048. The agreements are supported by capital leases between the EDA and the City. The City is responsible for all operating expenses, insurance, etc. Lease revenue bonds currently outstanding are as follows: Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End Public project Lease revenue bonds $ 325,000 3.25-4.40 % 08/26/04 02/01/15 $ 59,000 Annual debt service requirements to maturity for lease revenue bonds are as follows: Year Ending December 31, 2014 2015 Total Governmental Activities Principal Interest Total $ 39,000 $ 2,178 $ 41,178 20,000 440 20,440 $ 59,000 $ 2,618 $ 61,618 Changes in lone -term liabilities Long -term liability activity for the year ended December 31, 2013, was as follows: -56- Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental activities G.O. bonds payable $ 5,279,000 $ - $ (171,000) $ 5,108,000 $ 175,000 Lease revenue bonds payable 96,000 - (37,000) 59,000 39,000 Notes payable 136,454 - (136,454) - - Compensated absences payable 239,685 126,240 (147,921) 218,004 126,240 Other postemployment benefits payable 113,243 35,254 (10,886) 137,611 - Total $ 5,864,382 $ 161,494 $ (503,261) $ 5,522,615 $ 340,240 -56- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED E. Components of fund balance At December 31, 2013, portions of the City's fund balance are not available for appropriation due to not being in spendable form (Nonspendable), legal restrictions (Restricted), City Council action (Committed), policy and/or intent (Assigned). The following is a summary of the components of fund balance: Nonmaj or Tax Increment Public Works Governmental General Financing Facility Funds Total Nonspendable Due from other funds $ 271,274 $ $ $ $ 271,274 Restricted for Tax increment financing $ - $ 1,764,180 $ - $ - $ 1,764,180 Debt service - - - 138,018 138,018 Capital outlay - - 230,898 7,280 238,178 Park dedication fees - - - 274,140 274,140 Police expenditures - - - 13,598 13,598 Total restricted $ - $ 1,764,180 $ 230,898 $ 433,036 $ 2,428,114 Committed to Police expenditures $ - $ - $ - $ 1,612 $ 1,612 Truck safety - - - 5,583 5,583 Total committed $ $ $ $ 7,195 $ 7,195 Assigned to Capital outlay $ - $ - $ - $ 81,840 $ 81,840 Police expenditures - - - 15,098 15,098 Park operations - - - 9,165 9,165 Other park expenditures - - - 80,739 80,739 Total assigned $ - $ - $ - $ 186,842 $ 186,842 561re CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE 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 General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost sharing, multiple - employer retirement plans. These plans are established and administered in accordance with Minnesota statutes, chapters 353 and 356. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers and peace officers who qualify for membership by Minnesota 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 Minnesota statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of 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 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0 percent for each year of service. For all PEPFF members and GERF 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 members and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement. A single -life annuity is a lifetime annuity that ceases upon death of the retiree - -no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees, who are entitled to benefits but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for GERF and PEPFF. That report may be obtained on the Internet at www.mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103 -2088 or by calling (651) 296 -7460 or (800) 652 -9026. 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 Minnesota statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute 9.10 percent and 6.25 percent, respectively, of their annual covered salary in 2013. PEPFF members are required to contribute 9.60 percent of their annual covered salary in 2013. In 2013, the City was required to contribute the following percentages of annual covered payroll: 11.78 percent for Basic Plan GERF members, 7.25 percent for Coordinated Plan GERF members, and 14.40 percent for PEPFF members. The City's contributions to the GERF for the years ending December 31, 2013, 2012, and 2011 were $43,967, $40,604, and $41,435, respectively. The City's contributions to the PEPFF for the years ending December 31, 2013, 2012, and 2011 were $78,921, $76,323, and $72,538, respectively. The City's contributions were equal to the contractually required contributions for each year as set by Minnesota statute. -58- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 5: POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS A. Plan description The City's defined benefit healthcare plan ( "the Retiree Health Plan ") provides healthcare insurance for eligible retirees and their spouses. The Retiree Health Plan is affiliated with the healthcare plan administered through LOGIS, an agent multiple - employer postemployment healthcare plan. LOGIS is a consortium of Minnesota local government units controlled by its members. LOGIS' Board of Directors is composed of one representative from each agency. LOGIS issues a publicly available financial report that includes financial statements and required supplementary information for the health plan. That report may be obtained by writing to LOGIS, 5750 Duluth Street, Golden Valley, MN 55422, or by calling (763) 543 -2600. B. Funding policy The contribution requirements of plan members and the City are established and may be amended by LOGIS' Board of Directors. The required contributions are based on projected pay -as- you -go financing requirements. The City contributed $10,886 to the plan for the year ended December 31, 2013. As of January 1, 2013, the City has one retiree receiving health benefits from the plan. C. Annual other postemployment benefit cost The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC) of the City, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation: Annual required contribution $ 34,505 Interest on net OPEB obligation 5,262 Adjustment to annual required contribution (4,513) Annual OPEB cost (expense) 35,254 Contributions made (10,886) Increase in net OPEB obligation 24,368 Net OPEB obligation - beginning of year 113,243 Net OPEB obligation - end of year $ 137,611 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the fiscal years ended 2013, 2012, and 2011 follows: -59- Trend Information Fiscal Percentage Year Annual Annual OPEB Net OPEB Ending OPEB Cost Contributed Obligation 12/31/2013 $ 35,254 30.9 % $ 137,611 12/31/2012 33,924 26.9 113,243 12/31/2011 34,873 28.8 88,459 -59- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 5: POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS - CONTINUED D. Funded status and funding progress As of January 1, 2013, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $311,079, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $1,044,470, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 29.8 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. E. Methods and assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. In the January 1, 2013 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 4.50 percent investment rate of return, which is a blended rate of the expected long -term investment returns on plan assets and on the employer's own investments. The initial healthcare trend rate was 9.00 percent, reduced by decrements to an ultimate rate of 5.00 percent after 12 years. The unfunded actuarial accrued liability (UAAL) is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at December 31, 2013, was 30 years. -60- CITY OF CORCORAN, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2013 Note 6: OTHER INFORMATION A. Risk management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance. The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust ( LMCIT) which is a risk sharing pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self - sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City's coverage in any of the past three fiscal years. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. B. Legal debt margin The City's statutory debt limit is computed as 3 percent of the taxable market value of property within the City. Long- term debt issued and financed partially or entirely by special assessments is excluded from the debt limit computation. The 2013 taxable value of property located in the City is $565,234,200 which calculated to a debt limit of $16,957,026. The City has $5,108,000 of debt subject to this limit. C. Commitment and contingencies Tax increment districts The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. -61- THIS PAGE IS LEFT BLANK INTENTIONALLY -62- REQUIRED SUPPLEMENTARY INFORMATION CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2013 -63- CITY OF CORCORAN, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2013 Schedule of funding progress for the postemployment benefit plan Unfunded -64- Actuarial UAAL as a Actuarial Actuarial Actuarial Accrued Percentage Valuation Value of Accrued Liability Funded Covered of Covered Date Assets Liability (UAAL) Ratio Payroll Payroll 01/01/13 $ - $ 311,079 $ 311,079 - % $ 1,044,470 29.8 % 01/01/12 - 281,360 281,360 - 1,006,718 27.9 O1 /01 /11 - 290,701 290,701 - 1,010,962 28.8 -64- COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2013 -65- ASSETS Cash and temporary investments Special assessments receivable Due from other governments TOTAL ASSETS LIABILITIES Accounts payable Due to other governments Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenues - special assessments FUND BALANCES Restricted Committed Assigned Unassigned TOTAL FUND BALANCE CITY OF CORCORAN, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2013 Special Debt Capital Revenue Service Projects Total $ 38,845 $ 138,018 $ 448,790 $ 625,653 - - 29,024 29,024 - - 2,037 2,037 $ 38,845 $ 138,018 $ 479,851 $ 656,714 $ 534 $ - $ - $ 534 2,420 - 99,052 101,472 - - 93,344 93,344 2,954 - 192,396 195,350 - - 29,024 29,024 13,598 138,018 281,420 433,036 7,195 - - 7,195 15,098 - 171,744 186,842 - - (194,733) (194,733) 35,891 138,018 258,431 432,340 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 38,845 $ 138,018 $ 479,851 $ 656,714 -66- CITY OF CORCORAN, MINNESOTA NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2013 Special Debt Capital REVENUES Taxes Charges for services Special assessments Interest on investments Miscellaneous TOTAL REVENUES EXPENDITURES Current Public safety Capital outlay General government Public safety Public works Culture and recreation Debt service Principal Interest and other charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Sale of capital assets TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Revenue Service Projects Total $ - $ 330,281 $ - $ 330,281 7,830 - 21,600 29,430 - - 3,599 3,599 62 103 636 801 15,236 - 4,324 19,560 23,128 330,384 30,159 383,671 13,982 - 4,991 18,973 - - 17,991 17,991 6,050 - 47,277 53,327 - - 99,052 99,052 - - 1,191 1,191 - 208,000 136,454 344,454 - 113,497 - 113,497 20,032 321,497 306,956 648,485 3,096 8,887 (276,797) (264,814) 4,360 - - 4,360 (4,360) - - (4,360) 6,341 6,341 - 6,341 6,341 3,096 8,887 (270,456) (258,473) 32,795 129,131 528,887 690,813 $ 35,891 $ 138,018 $ 258,431 $ 432,340 -67- CITY OF CORCORAN, MINNESOTA NONMAJOR SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2013 -68- 201 202 204 205 Reserve Police Firearms DWI Donation Donation Safety Forfeiture ASSETS Cash and temporary investments $ 18,039 $ 1,603 $ 22 $ 12,428 LIABILITIES Accounts payable $ 521 $ - $ 13 $ - Due to other governments 2,420 - - - TOTAL LIABILITIES 2,941 - 13 - FUND BALANCES Restricted - - - 12,428 Committed - 1,603 9 - Assigned 15,098 - - - TOTAL FUND BALANCES 15,098 1,603 9 12,428 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 18,039 $ 1,603 $ 22 $ 12,428 -68- 206 207 Drug Truck Forfeiture Safety Total $ 1,170 $ 5,583 $ 38,845 534 - - 2,420 - - 2,954 1,170 - 13,598 - 5,583 7,195 - - 15,098 1,170 5,583 35,891 $ 1,170 $ 5,583 $ 38,845 -69- CITY OF CORCORAN, MINNESOTA NONMAJOR SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2013 201 202 204 205 Reserve Police Firearms DWI REVENUES Charges for services Interest on investments Miscellaneous TOTAL REVENUES EXPENDITURES Current Public safety Capital outlay Public safety TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Donation Donation Safety Forfeiture $ 7,830 $ - $ - $ - 27 3 - 21 5,640 596 3,827 997 13,497 599 3,827 1,018 8,013 6,050 14,063 (566) 4,260 46 2,835 1,039 46 2,835 1,039 553 992 (21) - (4,360) 4,260 - (4,360) - 3,694 553 (3,368) (21) 11,404 1,050 3,377 12,449 $ 15,098 $ 1,603 $ 9 $ 12,428 -70- 206 207 Drug Truck Forfeiture Safety Total $ - $ - $ 7,830 2 9 62 - 4,176 15,236 2 4,185 23,128 - 2,049 13,982 - - 6,050 - 2,049 20,032 2 2,136 3,096 - 100 4,360 - - (4,360) - 100 - 2 2,236 3,096 1,168 3,347 32,795 $ 1,170 $ 5,583 $ 35,891 dm CITY OF CORCORAN, MINNESOTA NONMAJOR DEBT SERVICE FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2013 -72- 309 311 407 G.O. Equipment 2012 Public Facility Certificates Works Bond Expansion Total ASSETS Cash and temporary investments $ 61,614 $ 68,330 $ 8,074 $ 138,018 FUND BALANCES Restricted $ 61,614 $ 68,330 $ 8,074 $ 138,018 -72- CITY OF CORCORAN, MINNESOTA NONMAJOR DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2013 REVENUES Taxes Interest on investments TOTAL REVENUES EXPENDITURES Debt service Principal Interest and other charges TOTAL EXPENDITURES NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 309 311 407 G.O. Equipment 2012 Public Facility Certificates Works Bond Expansion Total $ 219,162 $ 68,250 $ 42,869 $ 330,281 46 80 (23) 103 219,208 68,330 42,846 330,384 171,000 - 37,000 208,000 35,503 74,166 3,828 113,497 206,503 74,166 40,828 321,497 12,705 (5,836) 2,018 8,887 48,909 74,166 6,056 129,131 $ 61,614 $ 68,330 $ 8,074 $ 138,018 -73- CITY OF CORCORAN, MINNESOTA NONMAJOR CAPITAL PROJECT FUNDS COMBINING BALANCE SHEET DECEMBER 31, 2013 415 416 417 305 Park Capital Shannon Asphalt Capital Equip -Cert Lane Maintenance ASSETS Cash and temporary investments $ 364,044 $ 5,243 $ - $ 71,548 Special assessments receivable - - 29,024 - Due from other governments - 2,037 - - TOTAL ASSETS $ 364,044 $ 7,280 $ 29,024 $ 71,548 LIABILITIES Due to other government Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenues - special assessments FUND BALANCES Restricted Assigned Unassigned TOTAL FUND BALANCE TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES - - 93,344 - - 93,344 29,024 274,140 7,280 - - 89,904 - - 71,548 - - (93,344) - 364,044 7,280 (93,344) 71,548 $ 364,044 S 7,280 $ 29,024 $ 71,548 -74- 308 310 Police County Road Capital 19 Improvement Total $ 10,292 $ (2,337) $ 448,790 - - 29,024 - - 2,037 $ 10,292 $ (2,337) $ 479,851 $ - $ 99,052 $ 99,052 - - 93,344 - 99,052 192,396 - - 29,024 - - 281,420 10,292 - 171,744 - (101,389) (194,733) 10,292 (101,389) 258,431 $ 10,292 $ (2,337) $ 479,851 -75- CITY OF CORCORAN, MINNESOTA NONMAJOR CAPITAL PROJECT FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED DECEMBER 31, 2013 415 416 417 Park Capital Shannon Capital Equip -Cert Lane REVENUES Charges for services $ 21,600 $ - $ - Special assessments - - 3,599 Interest on investments 576 64 (161) Miscellaneous 250 4,074 - TOTAL REVENUES 22,426 4,138 3,438 EXPENDITURES Current Public safety Capital outlay General government Public safety Public works Culture and recreation Debt service Principal TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES Sale of capital assets NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 305 Asphalt 120 - 17,991 - - - 47,277 - - 1,191 - - - 1,191 65,268 - - 21,235 (61,130) 3,438 120 - 6,341 - - 21,235 (54,789) 3,438 120 342,809 62,069 (96,782) 71,428 $ 364,044 $ 7,280 $ (93,344) $ 71,548 -76- 308 310 Police County Road Capital 19 Improvement 17 20 4,991 99,052 $ 21,600 3,599 636 4,324 30,159 4,991 17,991 47,277 99,052 1,191 - 136,454 136,454 4,991 235,506 306,956 (4,974) (235,486) (276,797) 6,341 (4,974) (235,486) (270,456) 15,266 134,097 528,887 $ 10,292 $ (101,389) $ 258,431 dre CITY OF CORCORAN, MINNESOTA GENERAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - CONTINUED ON THE FOLLOWING PAGES FOR THE YEAR ENDED DECEMBER 31, 2013 (With comparative actual amounts for the year ended December 31, 2012) Charges for services General government 22,700 2013 56,338 33,638 2012 Public safety Budgeted Amounts Actual Variance with Actual 10,456 Original Final Amounts Final Budget Amounts REVENUES Recycling 70,000 70,000 62,607 (7,393) Taxes Total 159,230 159,230 199,184 39,954 General property taxes $ 2,593,428 $ 2,593,428 $ 2,587,838 $ (5,590) $ 2,517,642 Cable franchise fees 35,000 35,000 39,489 4,489 38,196 Total 2,628,428 2,628,428 2,627,327 (1,101) 2,555,838 Licenses and permits Contributions and donations 1,100 Business 18,250 18,250 18,300 50 18,270 Nonbusiness 50,000 50,000 141,224 91,224 56,021 Total 68,250 68,250 159,524 91,274 74,291 Intergovernmental 47,602 31,154 61,762 TOTAL REVENUES 3,219,052 Federal 3,465,857 246,805 3,195,046 FEMA - - 114,696 114,696 - State Property tax credits 11,028 11,028 11,028 - 10,543 PERA aid 1,845 1,845 1,845 - 1,845 Police state aid 50,500 50,500 47,190 (3,310) 48,629 State aid for streets 130,000 130,000 125,051 (4,949) 126,236 Other 35,823 35,823 32,599 (3,224) 36,221 County Recycling 14,500 14,500 14,808 308 14,820 Other 10,000 10,000 25,783 15,783 11,939 Total 253,696 253,696 373,000 119,304 250,233 Charges for services General government 22,700 22,700 56,338 33,638 21,823 Public safety 8,000 8,000 13,036 5,036 10,456 Streets and highways 58,530 58,530 67,203 8,673 77,100 Recycling 70,000 70,000 62,607 (7,393) 61,240 Total 159,230 159,230 199,184 39,954 170,619 Fines and forfeitures 90,000 90,000 58,194 (31,806) 80,338 Interest on investments 3,000 3,000 1,026 (1,974) 1,965 Miscellaneous Contributions and donations 1,100 1,100 3,785 2,685 8,489 Refunds and reimbursements - - 9,363 9,363 - Other 15,348 15,348 34,454 19,106 53,273 Total 16,448 16,448 47,602 31,154 61,762 TOTAL REVENUES 3,219,052 3,219,052 3,465,857 246,805 3,195,046 -78- CITY OF CORCORAN, MINNESOTA GENERAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2013 (With comparative actual amounts for the year ended December 31, 2012) Administrator Personal services 121,808 2013 151,662 (29,854) 2012 Supplies Budgeted Amounts 3,200 Actual Variance with Actual Other services and charges Original Final Amounts Final Budget Amounts EXPENDITURES Total 126,748 126,748 155,078 (28,330) Current Elections General government Supplies 5,000 5,000 1,397 3,603 City Council Auditor /treasurer Personal services $ 7,105 $ 7,105 $ 7,105 $ - $ 7,105 Supplies 100 100 - 100 - Other services and charges 55 55 41 14 32 Total 7,260 7,260 7,146 114 7,137 Newspaper /newsletter Total 49,784 49,784 51,163 (1,379) Other services and charges 4,700 4,700 5,182 (482) 4,762 Administrator Personal services 121,808 121,808 151,662 (29,854) 119,646 Supplies 3,200 3,200 2,189 1,011 2,305 Other services and charges 1,740 1,740 1,227 513 165 Total 126,748 126,748 155,078 (28,330) 122,116 Clerk Personal services 164,493 164,493 170,482 (5,989) 181,320 Supplies 4,000 4,000 2,292 1,708 1,234 Other services and charges 1,561 1,561 1,134 427 1,251 Total 170,054 170,054 173,908 (3,854) 183,805 Elections Supplies 5,000 5,000 1,397 3,603 6,263 Auditor /treasurer Other services and charges 21,700 21,700 22,992 (1,292) 22,161 Assessor Supplies 500 500 960 (460) 929 Other services and chargcs 49,284 49,284 50,203 (919) 49,284 Total 49,784 49,784 51,163 (1,379) 50,213 Legal services Other services and charges 30,000 30,000 30,865 (865) 22,353 Planning administration Supplies - - 458 (458) - Other services and charges 32,000 32,000 42,221 (10,221) 41,785 Total 32,000 32,000 42,679 (10,679) 41,785 -79- CITY OF CORCORAN, MINNESOTA GENERAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2013 (With comparative actual amounts for the year ended December 31, 2012) -80- 2013 2012 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current - continued General government - continued Information technology Supplies $ 12,000 $ 12,000 $ 10,975 $ 1,025 $ 7,580 Other services and charges 13,000 13,000 13,481 (481) - Total 25,000 25,000 24,456 544 7,580 Code enforcement Personal services 60,258 60,258 56,452 3,806 8,595 Supplies 1,500 1,500 708 792 1,054 Other services and charges 100 100 100 - 626 Total 61,858 61,858 57,260 4,598 10,275 City center Supplies 18,000 18,000 23,544 (5,544) 18,527 Other services and charges 34,938 34,938 39,944 (5,006) 42,516 Total 52,938 52,938 63,488 (10,550) 61,043 Other general government Supplies - - 6,573 (6,573) 31 Other services and charges 69,000 69,000 106,842 (37,842) 64,301 Total 69,000 69,000 113,415 (44,415) 64,332 Total general government 656,042 656,042 749,029 (92,987) 603,825 Public safety Police Personal services 858,457 858,457 858,539 (82) 820,331 Supplies 67,500 67,500 71,368 (3,868) 80,129 Other services and charges 98,460 98,460 91,526 6,934 68,179 Total 1,024,417 1,024,417 1,021,433 2,984 968,639 Fire Other services and chargcs 250,000 250,000 236,478 13,522 242,083 Building inspection Other services and charges 17,500 17,500 27,835 (10,335) 11,148 Total public safety 1,291,917 1,291,917 1,285,746 6,171 1,221,870 -80- CITY OF CORCORAN, MINNESOTA GENERAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2013 (With comparative actual amounts for the year ended December 31, 2012) 2013 2012 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current - continued Public works Streets and highways Personal services $ 412,156 $ 412,156 $ 389,313 $ 22,843 $ 389,906 Supplies 471,000 471,000 445,355 25,645 473,157 Other services and charges 96,276 96,276 50,712 45,564 87,868 Total 979,432 979,432 885,380 94,052 950,931 Snow and ice removal Supplies 29,000 29,000 39,361 (10,361) 23,935 Engineering Other services and charges 43,000 43,000 38,592 4,408 53,365 Recycling Supplies 1,000 1,000 797 203 827 Other services and charges 69,000 69,000 67,420 1,580 64,743 Total 70,000 70,000 68,217 1,783 65,570 Total public works 1,121,432 1,121,432 1,031,550 89,882 1,093,801 Culture and recreation Parks Personal services 29,437 29,437 25,740 3,697 19,037 Supplies 24,100 24,100 39,464 (15,364) 22,906 Other services and charges 12,293 12,293 7,929 4,364 3,371 Total culture and recreation 65,830 65,830 73,133 (7,303) 45,314 Total current expenditures 3,135,221 3,135,221 3,139,458 (4,237) 2,964,810 Capital outlay Public works 4,500 4,500 3,890 610 332 Culture and recreation 35,823 35,823 32,599 3,224 36,221 Total capital outlay 40,323 40,323 36,489 3,834 36,553 TOTAL EXPENDITURES 3,175,544 3,175,544 3,175,947 (403) 3,001,363 NET CHANGE IN FUND BALANCES 43,508 43,508 289,910 246,402 193,683 FUND BALANCES, JANUARY 1 942,753 942,753 942,753 - 749,070 FUND BALANCES, DECEMBER 31 $ 986,261 $ 986,261 $ 1,232,663 $ 246,402 S 942,753 -81- CITY OF CORCORAN, MINNESOTA FIDUCIARY FUNDS COMBINING SCHEDULE OF NET POSITION DECEMBER 31, 2013 Agency 500 501 Lions and Escrow Jaycees Total ASSETS Cash and temporary investments $ 132,142 $ 6,000 $ 138,142 Accounts receivable Hedgestone final plat 22,583 - 22,583 Laurent - Hedgstone 16,863 - 16,863 Lennar Eng 28,042 - 28,042 Lennar Eng 4,703 - 4,703 Lennar Eng 3,105 - 3,105 Unallocated 250 - 250 Total accounts receivable 75,546 - 75,546 TOTAL ASSETS $ 207,688 $ 6,000 $ 213,688 -82- CITY OF CORCORAN, MINNESOTA FIDUCIARY FUNDS COMBINING SCHEDULE OF NET POSITION - CONTINUED DECEMBER 31, 2013 -83- Agency 500 501 Lions and Escrow Jaycees Total LIABILITIES Accounts payable $ 47,070 $ 6,000 $ 53,070 Deposits payable Armbruster 09 -011 500 - 500 Lymangood 250 - 250 Lennar Family Builders 1,707 - 1,707 Brent Heinz 2,879 - 2,879 Tim Kreps 140 - 140 Linda Kohnen 252 - 252 Great River Energy 609 - 609 Funfar CUP 691 - 691 Construction Science Site Plan 409 - 409 Sprint 1,026 - 1,026 Lano Equipment 521 - 521 Corcoran Mini Storage 1,133 - 1,133 Karachenets New Home Agreement 860 - 860 Triden Preliminary Plat 3,790 - 3,790 Meadow Creek Estates 3,269 - 3,269 Lennar Design 70,000 - 70,000 Lennar - Ravinia 13,380 - 13,380 Rockfor ISD Site Plan 1,634 - 1,634 Peachtree Planning 857 - 857 Ess Site Plan 1,260 - 1,260 Rosslyn Holdings 4,050 - 4,050 MTP West Acres 298 - 298 Centerpoint Energy 6,504 - 6,504 Ess Development 2,202 - 2,202 Global Signal Acquisitions 1,266 - 1,266 Heinz 210 - 210 Hope Ministries 940 - 940 Park Place Storage 250 - 250 Park Place Storage - 10 -006 626 - 626 Pheasant Acres 1,328 - 1,328 Rush Creek Meadows final plat 1,293 - 1,293 Ryan 138 - 138 SBA Network 428 - 428 Schmidt Hidden Valley 502 - 502 Shoulak 600 - 600 Sunram 869 - 869 United Properties 32,697 - 32,697 Valley Paving 1,250 - 1,250 Total deposits payable 160,618 - 160,618 TOTAL LIABILITIES $ 207,688 $ 6,000 $ 213,688 -83- CITY OF CORCORAN, MINNESOTA SUMMARY FINANCIAL REPORT REVENUES AND EXPENDITURES FOR GENERAL OPERATIONS GOVERNMENTALFUNDS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 The purpose of this report is to provide a summary of financial information concerning the City of Corcoran to interested citizens. The complete financial statements maybe examined at City Hall, 8200 County Road 116, Corcoran, MN 55340 Questions about this report should be directed to Brad Martens, City Administrator at (763) 420 -2288. -84- Percent Total Increase 2013 2012 (Decrease) REVENUES Taxes $ 3,245,389 $ 3,108,410 4.41 % Licenses and permits 159,524 74,291 114.73 Intergovernmental 373,034 473,258 (21.18) Charges for services 228,614 177,544 28.76 Fines and forfeitures 58,194 80,338 (27.56) Special assessments 3,599 3,611 (0.33) Interest on investments 8,897 21,281 (58.19) Miscellaneous 67,162 93,984 (28.54) TOTAL REVENUES $ 4,144,413 $ 4,032,717 2.77 % Per Capita $ 758 $ 748 1.27 % EXPENDITURES Current General government $ 749,029 $ 603,825 24.05 % Public safety 1,304,719 1,284,373 1.58 Public works 1,031,550 1,093,801 (5.69) Culture and recreation 73,133 45,314 61.39 Capital outlay General government 17,991 39,039 (53.92) Public safety 53,327 74,050 (27.99) Public works 3,570,456 2,547,832 40.14 Culture and recreation 33,790 44,907 (24.76) Debt service Principal 344,454 319,000 7.98 Interest and other charges 113,497 42,582 166.54 Bond issuance costs - 90,960 (100.00) TOTAL EXPENDITURES $ 7,291,946 $ 6,185,683 17.88 % Per Capita $ 1,333 $ 1,148 16.16 % Total Long -term Indebtedness $ 5,167,000 $ 5,511,454 (6.25) % Per Capita 945 1,023 General Fund Balance - December 31 $ 1,232,663 $ 942,753 30.75 % Per Capita 225 175 The purpose of this report is to provide a summary of financial information concerning the City of Corcoran to interested citizens. The complete financial statements maybe examined at City Hall, 8200 County Road 116, Corcoran, MN 55340 Questions about this report should be directed to Brad Martens, City Administrator at (763) 420 -2288. -84- OTHER REQUIRED REPORTS CITY OF CORCORAN CORCORAN, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2013 -85- THIS PAGE IS LEFT BLANK INTENTIONALLY -86- e - ' ABDO c I EI I _ NIL ff LLP Grtilietl Public !1cmtrauras & Consultants INDEPENDENT AUDITOR'S REPORT ON MINNESOTA LEGAL COMPLIANCE Honorable Mayor and City Council City of Corcoran, Minnesota We have audited the financial statements of the governmental activities, business -type activities, each major fund, and the aggregate remaining fund information of the City of Corcoran, Minnesota (the City), as of and for the year ended December 31, 2013, which collectively comprise the City's basic financial statements, and have issued our report thereon dated NEED DATE. The Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State Auditor pursuant to Minnesota Statute §6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our audit considered all of the listed categories. In connection with our audit, nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Political Subdivisions, except for the item as described in finding 2013 -001 in the accompanying schedule of findings and responses. Our audit was not directed primarily toward procedures, other matters may have come to our attention regarding the City's noncompliance with the above referenced provisions. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City's noncompliance with the above referenced provisions. The City's response to the finding identified above is described in the accompanying Schedule of Findings and Responses. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. This report is intended solely for the information and use those charged with governance and management of the City and the State Auditor and is not intended to be and should not be used by anyone other than these specified parties. UL& &� 4 ABDO, EICK & MEYERS, LLP Minneapolis, Minnesota NEED DATE 5201 Eden Avenue, Suite 250 Edina, MN 55436 952.835.9090 1 Fax 952.835.3261 -87- THIS PAGE IS LEFT BLANK INTENTIONALLY -88- CITY OF CORCORAN, MINNESOTA SCHEDULE OF FINDINGS AND RESPONSES FOR THE YEAR ENDED DECEMBER 31, 2013 Finding Description 2013 -001 Time period for payment Condition: Auditing for legal compliance requires a review of the City's deposits and investments. Our study indicated an instance of non - compliance that we believe is required to be remedied. Criteria: Minnesota statute section 471.425 requires that the City pay bills within 35 days from receipt. If the invoice is not paid within the 35 days, interest at 1.5 percent per month is to be added to amount due. Cause: During our testing we noted three invoices that were paid after the 35 day period. Effect.• The City is in violation of this statute. Recommendation: We recommend that the accounts payable process consider the payment terms required by statute. Implementing this recommendation will not result in any additional cost to the City. Management response: Consideration of payment terms required by statute is part of the accounts payable process. To insure payments are made within statute requirements or first available claim approval, incoming invoices are date stamped. -89- City of Corcoran City Council Meeting Minutes April 24, 2014 — 7:00 PM 6a. The Corcoran City Council met on April 24, 2014, at City Hall in Corcoran, Minnesota. Present were, Mayor Guenthner, Councilor Asleson, Councilor Cossette, and Councilor Lynch. Also present were City Administrator Martens, City Attorney Carson, City Planner Lindahl, City Engineer Torve, Lieutenant Hamilton and City Clerk Heinecke. Councilor Thomas was excused. Mayor Guenthner called the meeting to order at 7:00 pm 1. Call to Order / Roll Call 2. Pledge of Allegiance 3. Agenda Approval Motion: made by Cossette, seconded by Asleson to approve the agenda as presented. Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) Reconvene Local Board of Appeal and Equalization Mayor Guenthner recessed the council meeting at 7:03 to reconvene the Local Board of Appeal and Equalization Meeting. I%L Mayor Guenthner reconvened the regular council meeting at 7:07 pm 4. Open Forum -None 5. Presentations -None 6. Consent Agenda a. Draft Minutes of April 10, 2014 Council Meeting b. Draft Minutes of April 10, 2014 Council Work Session c. PERA Contribution /PT Officer - Resolution 2014 -22 d. Metropolitan Council 2040 Forecast Letter Motion: made by Asleson, seconded by Lynch to approve the consent agenda as presented. Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) 7. Claims as Presented a. Escrow Claims (Fund #500) Motion: made by Asleson, seconded by Lynch to approve escrow claims as presented. Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) All Other Financial Claims Motion: made by Cossette, seconded by Asleson to approve all other financial claims as presented. Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) 8. Staff Reports / Memos /Commissions a. Planning Project Report received, no action required. b. Code Compliance Report received, no action required. c. Financial Performance Report received, no action required. 9. Planning Business / Landform Page 1 of 3 City of Corcoran City Council Meeting Minutes April 24, 2014 — 7:00 PM 6a. a. Lennar /Vacation /Final PUD Development Plan /Final Plat report by City Planner Lindahl. Mayor Guenthner recessed the regular meeting at 7:23 pm to open a public hearing Mayor Guenthner opened a public hearing on the Vacation of Gleason Road • Jared Goerlitz, Peterson, Fram & Bergman spoke on behalf of the property owners at 19450 Gleason Rd. The property owners are concerned about driveway access to a public road and the proposed "Parkway" crossing their existing easement. • Greg Hoglund, 19220 Hackamore Rd., is concerned about drainage and tree loss. • Michael Haeger, 19204 Gleason Rd., is concerned about driveway access to a public road. Motion: made by Lynch, seconded by Asleson to close the public hearing. Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) Council discussed, including City Attorney Carson, City Planner Lindahl and City Attorney Torve in the discussion. Joe Jablonski of Lennar spoke to the council about Lennar's position. Motion: made by Cossette, seconded by Lynch to approve Resolution 2014 -19 "Approving Vacation of Gleason Road within the Proposed "Ravinia" Subdivision ", with the addition of a condition for an agreement for construction and maintenance of private driveway between the property owner, Lennar and future HOA on the Gleason right of way. Voting Aye: Guenthner, Asleson, Cossette, and Lynch 1%6.01 (Motion carried 4:0) Motion: made by Asleson, seconded by Lynch to approve Resolution 2014 -20 "APPROVING FINAL PUD DEVELOPMENT PLAN FOR "RAVINIA" FOR PROPERTY AT GLEASON ROAD AND COUNTY ROAD 101 (PID 36- 119 -23 -13 -0007, 36- 119 -23 -13 -0005, 36- 119 -23 -14 -0005, 36- 119 -23- 14 -0003, 36- 119 -23 -14 -0006, 36- 119 -23 -43 -0001, 36- 119 -23 -41 -0002, 36- 119 -23 -41 -0003, 36 -119- 23 -24 -0001, 36- 119 -23 -24 -0003, 36- 119 -23 -21 -0001) (CITY FILE 14 -003) Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) Motion: made by Cossette, seconded by Asleson to approve Resolution 2014 -21 "APPROVING FINAL PLAT AND DEVELOPMENT CONTRACT FOR "RAVINIA" FOR PROPERTY AT GLEASON ROAD AND COUNTY ROAD 101 (PID 36- 119 -23 -13 -0007, 36- 119 -23 -13 -0005, 36- 119- 23 -14- 0005, 36- 119 -23 -14 -0003, 36- 119 -23 -14 -0006, 36- 119 -23 -43 -0001, 36- 119 -23 -41 -0002, 36- 119 -23- 41 -0003, 36- 119 -23 -24 -0001, 36- 119 -23 -24 -0003, 36- 119 -23 -21 -0001) (CITY FILE 14 -003) updated to state 38 lots. Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) 10. Unfinished Business -None 11. New Business a. Capital Improvement Plan Substitution report received. Motion: made by Lynch, seconded by Asleson to approve request for substitution as presented in the staff memo. Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) b. County Road 101 Turn Lanes report by City Engineer Torve. Motion: made by Cossette, seconded by Asleson authorizing staff to solicit bids for turn lanes at County Road 101 and Gleason Rd. Page 2 of 3 City of Corcoran City Council Meeting Minutes April 24, 2014 — 7:00 PM 6a. Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) 12. Unscheduled Items -None Motion: made by Lynch, seconded by Asleson to adjourn. Voting Aye: Guenthner, Asleson, Cossette, and Lynch (Motion carried 4:0) Meeting adjourned at 9:18 pm Jeanie Heinecke — City Clerk 19 IV Page 3 of 3 Corcoran City Council Local Board of Appeal and Equalization Minutes April 10, 2014 - 7:00 PM i • The Corcoran City Council met on April 10, 2014, at City Hall in Corcoran, Minnesota to hold the Local Board of Appeal and Equalization meeting. Present were, Mayor Guenthner, Councilor Asleson, Councilor Cossette, Councilor Lynch, and Councilor Thomas. Also present were City Administrator Martens, City Assessor's Rolf Erickson, Lisa Mott, Lee Leichentritt, and Hennepin County Representative Nancy Wojcik. Mayor Guenthner called the meeting to order at 7:02 pm Mayor Guenthner explained the meeting process to attendees Verbal report by Assessor Erickson on 2013 real estate market in Corcoran. Agenda Approval Motion: made by Cossette, seconded by Asleson to approve the agenda as presented. Voting Aye: Guenthner, Asleson, Cossette, Lynch, and Thomas (Motion carried 5:0) 1% 04/11/2013 Approved Local Board of Review Minutes AFNN%l Motion: made by Thomas, seconded by Cossette to approve the Minutes as presented. Voting Aye: Guenthner, Asleson, Cossette, Lynch, and Thomas (Motion carried 5:0) The following property owners spoke to the council: Ilse Siebenschuh /Abraham Gadalla Rick Zbikowski Bill Rosso Harold Schmidt Bill Halverstadt Donna Holtan Halverstadt Kim Kelzenberzi— 19125 81st PI N 9101 Shannon Ln 10125 Ebert Rd 20125 Co Rd 30' 6420 Old Settlers Rd 24- 119 -23 -14 -0031 13- 119 -23 -14 -0004 03- 119 -23 -34 -0003 11- 119 -23 -43 -0001 35- 119 -23 -31 -0002 6420 Old Settlers Rd 35- 119 -23 -31 -0002 6290 Bluestem Rd 34- 119 -23 -34 -0004 20125 Co Rd 117 02- 119 -23 -12 -0005 Mayor Guenthner recessed the Local Board of Appeal and Equalization meeting at 7:30 pm. Mayor Guenthner reconvened the Local Board of Appeal and Equalization meeting at 8:50 pm. Council heard and acted on the following:.., Siebenschuh/Gadalla 19125 81st PI N 24- 119 -23 -14 -0031 214,000 No Chang Motion: made by Asleson, seconded by Thomas to sustain the estimated market value of the property located at 19125 81St PI N from $214,000 to $214,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0)==%,_ Rick Zbikowski 9101 Shannon Ln 13- 119 -23 -14 -0004 277,000 270,000 Motion: made by Thomas, seconded by Lynch to approve the reduction of the estimated market value of the property located at 9101 Shannon Ln from $277,000 to $270,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) Harold Schmidt 20125 Co Rd 30 11- 119 -23 -43 -0001 1,328,000 No Change Motion: made by Cossette, seconded by Asleson to sustain the estimated market value of the property located at 20125 Co Rd 30 from $1,328,000 to $1,328,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) Bill /Donna Halverstadt 6420 Old Settlers Rd 35- 119 -23 -31 -0002 643,000 No Change Corcoran City Council Local Board of Appeal and Equalization Minutes April 10, 2014 - 7:00 PM 6b. Motion: made by Thomas, seconded by Lynch to sustain the estimated market value of the property located at 6420 Old Settlers Rd from $643,000 to $643,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) Kim Kelzenberg 6290 Bluestem Rd 34- 119 -23 -34 -0004 882,000 No Change Motion: made by Cossette, seconded by Thomas to sustain the estimated market value of the property located at 6290 Bluestem Rd from $882,000 to $882,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) Mike & Pat Palmer 20419 Rush Meadow 02- 119 -23 -21 -0003 263,000 248,000 Motion: made by Thomas, seconded by Lynch to approve the reduction of the ated Market value of the property located at 20419 Rush Meadow from $263,000 to $248,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) William & Tracey Rosso 10125 Ebert Rd 03- 119 -23 -34 -0003 371,000 No Change Motion: made by Thomas, seconded by Lynch to sustain the estimated market value of the property located at 10125 Ebert Rd from $371,000 to $371,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) Suzanne Winter 22112 Chaparral Cir 04- 119 -23 -33 -0017 1233,000 68,000 Motion: made by Asleson, seconded by Thomas to approve the reduction of the estimated market value of the property located at 22112 Chaparral Cir from $233,000 to $68,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) Colleen Riley 22990 Oakdale Dr 05- 119 -23 -23 -0003 340,000 334,000 Motion: made by Cossette, seconded by Lynch to approve the reduction of the estimated market value of the property located at 22990 Oakdale Dr from $340,000 to $334,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) Matthias & Ann Faue 6415 Willow Dr 33- 119 -23 -42 -0002 266,000 249,000 Motion: made by Thomas, seconded by Lynch to approve the reduction of the estimated market value of the property located at 6415 Willow Dr from $266,000 to $249,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) 'go Lawrence & Jill Franklin 6320 Co Rd 116 36- 119 -23 -33 -0007 671,000 636,000 Motion: made by Cossette, seconded by Thomas to approve the reduction of the estimated market value of the property located at 6320 Co Rd 116 from $671,000 to $636,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) Gregory & Jackie Hoglund 19220 Hackamore Rd 36- 119 -23 -44 -0009 744,000 694,000 Motion: made by Asleson, seconded by Cossette to approve the reduction of the estimated market value of property located at 19220 Hackamore Rd from $744,000 to $694,000. Voting Aye: Guenthner, Asleson, Cossette, Lynch and Thomas. (Motion carried 5:0) Motion: made by Thomas, seconded by Asleson to accept no further appeals beyond the continuing consideration of the Ferdinandt property at 20125 Co Rd 117. Voting Aye: Guenthner, Asleson, Cossette, Lynch, and Thomas (Motion carried 5:0) Mayor Guenthner recessed the Local Board of Appeal and Equalization meeting at 9:26 pm on April 10, 2014. Corcoran City Council Local Board of Appeal and Equalization Minutes April 10, 2014 - 7:00 PM :. Mayor Guenthner reconvened the Local Board of Appeal and Equalization meeting at 7:04 pm on Thursday April 24, 2014. Councilor Thomas was excused. Kevin & Carrie Ferdinandt 20125 Co Rd 117 02- 119 -23 -12 -0005 1 327,000 311,000 Motion: made by Cossette, seconded by Lynch to approve the reduction of the estimated market value of the property located at 20125 Co Rd 117 from $327,000 to $311,000. Voting Aye: Guenthner, Asleson, Cossette, and Lynch. (Motion carried 4:0) Motion: made by Lynch, seconded by Asleson to adjourn the Local Board of Appeal and Equalization at 7:06 pm Voting Aye: Guenthner, Asleson, Cossette, and Lynch. (Motion carried 4:0) Jeanie Heinecke — City Clerk n City of Corcoran County of Hennepin State of Minnesota RESOLUTION NO. 2014 -23 Motion By: Seconded By: A RESOLUTION AWARDING CALCIUM CHLORIDE CONTRACT May 8, 2014 6c. WHEREAS, pursuant to quotes and bids sought for 2014/2015 Calcium Chloride street maintenance materials for various streets within the City, bids and quotes were received, opened, and tabulated according to law; and WHEREAS, the following quote was received: CONTRACTOR 201 12015 Envirotech Services $.95 per gallon 1 $.99 per gallon BE IT RESOLVED that Envirotech Services has been identified as the lowest responsible bidder; THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF CORCORAN, MN: 1. That the Mayor and Clerk are hereby authorized and directed to enter into contract with above identified responsible bidder in the name of the City of Corcoran for the 2014/2015 street maintenance materials. VOTING AYE ❑ Guenthner, Ken ❑ Asleson, Rich ❑ Cossette, Tom ❑ Lynch, Diane ❑ Thomas, Ron VOTING NAY ❑ Guenthner, Ken ❑ Asleson, Rich ❑ Cossette, Tom ❑ Lynch, Diane ❑ Thomas, Ron Whereupon, said Resolution is hereby declared adopted on this 8th day of May 2014. ATTEST: Jeanie Heinecke — City Clerk Kenneth Guenthner - Mayor Page 1 of 1 City Seal City of Corcoran May 8, 2014 County of Hennepin State of'Minnesota RESOLUTION NO. 2014 -24 Motion By: Seconded By: RESOLUTION ACCEPTING CORCORAN ATHLETIC ASSOCIATION DONATION WHEREAS, the City of Corcoran supports the efforts of the Corcoran Athletic Association; and WHEREAS, The Corcoran Athletic Association made a financial donation to the City of Corcoran to support Park maintenance in the amount of $500.00 and WHEREAS, The Corcoran Athletic Association made a financial donation to the City of Corcoran to support Corcoran newsletter in the amount of $100.00 and WHEREAS, The City Council finds that it is appropriate to accept the donation offered for the benefit of the general fund. NOW THEREFORE BE IT RESOLVED, the City Council of the City of Corcoran acknowledges the generosity of the Corcoran Athletic Association and graciously accepts the donations as listed above. VOTING AYE ❑ Guenthner, Ken ❑ Asleson, Rich ❑ Cossette, Tom ❑ Lynch, Diane ❑ Thomas, Ron VOTING NAY ❑ Guenthner, Ken ❑ Asleson, Rich ❑ Cossette, Tom ❑ Lynch, Diane ❑ Thomas, Ron Whereupon, said Resolution is hereby declared adopted on this 8th day of May 2014. Kenneth Guenthner - Mayor ATTEST: City Seal Jeanie Heinecke — City Clerk FINANCIAL CLAIMS CHECK RANGE 21856 - 21889 Agenda Item 7a -b Council Meeting Date: May 8, 2014 Prepared By: jheinecke Agenda Item: 7a. FUND #500 Escrow Claims Amount Paid to Amount Project name Carson, Clelland & Schreder 3,080.01 Lennar 13 -025 - Carson, Clelland & Schreder 326.67 Maple Hill CC - Hennepin County Taxpayer 92.00 Maple Hill CC 8,842.63 Wenck Associates Inc 4,804.50 Lennar Turn Lanes 1,487.10 Wenck Associates Inc 14,402.60 Lennar Design 2,129.15 Wenck Associates Inc 96.80 Kreps Grading 1,509.15 Wenck Associates Inc 6,274.40 Lennar Planning 12,403.50 Total 29,076.98 7185 Total Total Funds #500 $ 29,076.98 (See attached Check Detail Register) Agenda Item; 7b. ALL OTHER FINANCIAL CLAIMS $ 118,084.04 (See attached Check Detail Register) Total of Auto Deductions $ 26,445.38 TOTAL EXPENDITURES FOR APPROVAL $ 173,606.40 Auto Deductions / Electronic Fund Transfer 1 Other Disbursements Date Paid to Amount Net Payroll PR08 Payroll Taxes - Paychex Fee - 4/22/14 PERA 8,842.63 4/22114 Citi Street - 457 Deferred Comp 1,487.10 4122114 Citi Street - Health Care Savings 2,129.15 4122114 US Bank - H S A 1,509.15 4130114 Blue Cross Blue Shield 12,403.50 5/1/14 Mn Dept Rev -Fuel Tax 7185 Total 26,445.38 Total amount not reflected in Cash Balance Report $ 520,316.90 HACity Hall Information\CITY GOVERNMENT1Counci#, Commissions & CommitteeslCouncil Inform ationlCouncil Claims12014 Claims.xls CITY OF CORCORAN CASH BALANCE REPORT May 1, 2014 Cash ,. �" •v3 ,, % .,, : 71,453.56 10,278.55 (14,714.02) (2,333.60) 74,165.63 1,629,979,12 (62.48) (14;059.50) 3,450,114,82', 332,289,36 63,211.34 (34.28) 49,701.36 6,000.09 0.00 0.00 564.12 GENERAL FUND G 100- 10100 225,121.68 (215,435.45) RESERVES DONATION FUND T-201-10100 13,713.10 12,332,74 POLICE DONATION FUND G202-10100 1,603.27 1,601.15 FIREARMS SAFETY G 204 -10100 (4,07159) (1,029.99) DWI FORFEITURE FUND G 205 -10100 12,143.38 13,379.10 DRUG FORFEITURE FUND G 206 - 10100 1,170.16 '1,168,62 TRUCK SAFETY !�C`rl"AI ,- &AA tkl'arf ICI A.II'�� U-2 0-7 --1010 0 6,583.51 5 ,575.12 ,� i L. j I-Al I-J POLICE CAPITAL FUND DIS- EQUIPMENT CERTS CO. RD. 19 IMPROVEMENT 2012B PUBLIC WORKS BOND DIS TAX INCREMENT FINANCING INFRASTRUCTURE PLANNING _G402-10100 FACILITY EXPANSION DIS PUBLIC WORKS FACILITY PARK CAPITAL FUND - DEDICATION CAPITAL - EQUIPMENT CERTS SHANNON LANE ESCROW HOLDING FUND CIVIC ORGANIZATIONS WATER SEWER INVESTMENT CONTROL v ju;,- IU„uu G 308 -10100 G 309 -10100 G 310 -10100 G 311 -10100 G 401 -10100 G 407 -10100 G 411 -10100 G 415 -10100 G 416 -10100 G 417 -10100 G 500 -10100 G 501 -10100 G 601 -10100 G 602 -10100 G 999 -10100 r 1, y2 0.00 (4,203.75) 10,037.01 18,885.91 1,811,951.79 (0.13) (12,224.41) 145,009.97 357,880.37 5,242.85 0.11 (7,403.26) 6,000.09 (53,403.72) (27,844.56) 208.96 71,453.56 10,278.55 (14,714.02) (2,333.60) 74,165.63 1,629,979,12 (62.48) (14;059.50) 3,450,114,82', 332,289,36 63,211.34 (34.28) 49,701.36 6,000.09 0.00 0.00 564.12 Total Cash 2,.877,946.66 5,474,145.36 Farmers Savings Acct PARK CAPITAL FUND - MEMORIAL G 415 -10102 9,165.22 10,674.51 Change in Market Value GENERAL FUND G 100 -10105 0.00 0.00 Grand Total Cash 2,587,1'11.88 5,484,819.87 Due to Other Funds INFRASTRUCTURE PLANNING SHANNON LANE G 40220700 G 417 -20700 (177,929.76) (93,344.09) (177,632.76) (96,782.09) Total Due to Other Funds (271,273.85) {274,414.85) CORCORAN, MN 05/01/14 1:27 PM Page 1 *Check Detail Register© May 2014 Check Amt Invoice Comment 10100 Farmers State Bank Paid Chk# 021856 5/8/2014 6'k l3' E 100 -41941 -400 Repairs & Maint Cont (GENERAL $235.00 227894 APPLIANCE REPAIR Total ALTEMP MECHANICAL INC $235.00 Paid Chk# 021857 5/8/2014 SURNS RYAN E201-42100-210 Operating Supplies (GENERAL) $905.02 042114 GO BAGS E204-42100-210 Operating Supplies (GENERAL) $2,555.70 043014 FAS FIELD DAY Total BURNS RYAN $3,460.72 E 100-41941-210 Operating Supplies (GENERAL) Paid Chk# D21858 5/8/2014 CARSON, CLELLAND 8. SCHREDER City Hall Scraper Mat E 100-43100-417 E 100 -41600 -300 Professional Srvs (GENERAL) $1,668.34 043014 CIVIL -LEGAL E 100 -42100 -304 Legal Fees $1,465.20 043014 CRIMINAL -LEGAL E 205 -42100 -304 Legal Fees $285.00 043014 FORFEITURE -LEGAL G 500 -20321 Lennar- Ravinia $3,080.01 043014 LENNAR 13 -025 G 500 -20338 Maple Hill Community Center $326.67 043014 MAPLE HILL ESTATES Total CARSON, CLELLAND & SCHREDER $6,825.22 470401232 PW Uniforms Paid Chk# D21 ,e, ' <.,.0 ,.n,,f "'4_7'0_'­_"' �,-,.,, , ,... _ ,_. .,..- .........,,. _, �r- m _ -..� _...-,..- -., 859 5/8/2014 CINTAS - E 100-43100-210 Operating Supplies (GENERAL) $0.00 1841 PW RUGS -9100 E 100-42100-223 Building Repair Supplies $32.94 470397937 PD RUGS E 100-41941-210 Operating Supplies (GENERAL) $46.74 470397938 City Hall Scraper Mat E 100-43100-417 Uniforms $86.98 470397939 PW Uniforms E 100 -42100 -223 Building Repair Supplies $32.94 470401229 PD RUGS E 100 -41941 -210 Operating Supplies (GENERAL) $46.74 470401230 City Hall Scraper Mat E 100 - 43100 -210 Operating Supplies (GENERAL) $75.70 470401231 PW Towels E 100 - 43100 -417 Uniforms $86.98 470401232 PW Uniforms $33.93 Total CINTAS -470 $409,02 Paid k' 021860 5/8/2014 COMCAST- 90294333fi E 100 -43100 -321 Telephone $109.05 29303314 LAND LINE E 100-42100-321 Telephone $109.05 29303314 LAND LINE E 100-41941-321 Telephone $109.05 29303314 LAND LINE Total COMCAST- 902943336 $327.15 Paid Chk# 021861 5 {812014 CORCORAN LOCKER E 204 - 42100 -210 Operating Supplies (GENERAL) $120.00 1841 FAS HOT DOGS Total CORCORAN LOCKER $120.00 .,:, Paid Chk# 021862 _5'1 ,m..,�_,r..�..,u,.�,L.., ", �,.�A —LE ,i,C, --. - PA,N"Y-, ,,,,.,— 5/8/2014 f]1SPLAY SALES COMPANY R. _ ,_.,... ,- .�,�..- �,1.�- .,.�,.,,..... W .. .............. . - --n . , - r., -, . M�. ,: - E 100- 45200 -210 Operating Supplies (GENERAL) $367.00 95374 FLAGS E 100-41941-210 Operating Supplies (GENERAL) $233.00 95374 FLAGS Total DISPLAY SALES COMPANY $600.00 Paid Chk# 021863 5/8/2014 ECM PUBLISHERS INC "` `' °' " ° °.,,.- ,_„,._,. _. ....... ........ E 100- 43100 -228 Dust Control $33.93 93057 DUST CONTROL BIDS Total ECM PUBLISHERS INC $33.93 CORCORAN, MN 05/01114 1:27 PM Page 2 `Check Detail Register© May 2014 ����,��, Cheek Amt Invoice Comment Paid Chk# 021864 5/8/2014 EMERSON, STEVE MCMA CONFERENCE LODGING E 100- 41300 -208 Training and Instruction E201-42100-210 Operating Supplies (GENERAL) $41,00 043014 SERVICE AWARDS _ $50.00 Total EMERSON, STEVE $41,00 Total MARTENS BRAD Paid Chk# 021865 5!812014 HENN CO TAXPAYER SERVICES Paid Chk# 021872 .,._, 518w 12014 MENARDS MAPLE GROVE G 500 -20338 Maple Hill Community Center $92.00 2014 -10111 RECORD RESOLUTIONS 2014 -10 & 2014 -11 Total HENN CO TAXPAYER SERVICES $92.00 E 204 - 42100 -210 Operating Suppiies (GENERAL) Paid Chk# 021866 5!812014 HOLIDAY STATION STORES FAS FIELD DAY SUPPLIES E100-42100-220 RepairlMaint Supply (GENERAL) $25.00 3401051402 PRE PAID CAR WASH Total HOLIDAY STATION STORES $25.00 E 100 -41300 -208 Training and Instruction .,.., Paid Chk# 021867 1481 APRIL 2014 rotai METROPOLITAN AREA MGRS ASSOC _ $20.00 E 100-42100-208 Training and Instruction $120.00 051914 AWARD X3 ” " "" ° " " "' °'° Total 1 -94 WEST CHAMBER $120.00 $_3.39 94764 Paid Chk# 021868 5!812014 1 S COMPANIES INC $3,39 E 100- 43100 -220 RepairlMaint Supply (GENERAL) $39.04 1360810 SUPPLIES Total ISC COMPANIES INC $39.04 E 308- 42 1 0 0 -207 Computer Supplies $2,480,12 14328 ANNUAL HOSTING FEE E 308- 42100 -210 Operating Supplies (GENERAL) $7,812.00 14328 ANNUAL MAINTENANCE /LICENSE FEE E 100 -41951 -207 Computer Supplies $939.88 14328 RENEWAL LICENSE al LAW ENFORCEMENT TECH GROUP LLC $11,232.00 �....., �.,.: .. .._ .. Paid Chk# 021870 5/8/2014 LMCIT E 100-41900-360 Insurance (GENERAL) $64,517.00 49417 ANNUAL MUNICIPALITY INS COVERAGE Total LMCIT $64,517.00 Paid Chk# 021871 5/8/2014 MARTENS BRAD E 100 -41300 -208 Training and Instruction $494.36 20140430 MCMA CONFERENCE LODGING E 100- 41300 -208 Training and Instruction $225.00 20140430 MCMA CONFERENCE E 100 -41300 -210 Operating Supplies (GENERAL) _ $50.00 20140430 CELL PHONE 031314 Total MARTENS BRAD $769.36 Paid Chk# 021872 .,._, 518w 12014 MENARDS MAPLE GROVE .,.,. „.,, „., ..:.... E 100 -41941 -210 Operating Supplies (GENERAL) $39.45 36449 SUPPLIES E 204 - 42100 -210 Operating Suppiies (GENERAL) $261.92 37000 FAS FIELD DAY SUPPLIES Total MENARDS MAPLE GROVE $301.37 Paid Chk# 021873 5/8/2014 METROPOLITAN AREA MGRS ASSOC E 100 -41300 -208 Training and Instruction $20.00 1481 APRIL 2014 rotai METROPOLITAN AREA MGRS ASSOC _ $20.00 'Pa'[ d Chk# 023874 5/8/2014 NAPA AUTO PARTS - CORCORAN ” " "" ° " " "' °'° E 100 - 42100 -220 RepairlMaint Supply (GENERAL) $_3.39 94764 WINDSHIELD Total NAPA AUTO PARTS - CORCORAN $3,39 CORCORAN, MN 05/01/14 1:27 PM Page 3 *Check Detail Register© May 2014 Check Amt Invoice Comment ' itikii��' i+ ������1�a�������� ;l�i?���?"'`ti+i ���„iir<�z�1�1'e�� ��4�i��;<1'.�a.'�s��ik�z[4.w�, - ��,1e�'ii��l�;��i��t� �,�, "ti't >,,j •�-W -\.,�( �?, k Paid Chk# 021875 5!8!2014 NORTH SECOND STREET STEEL E 100 -43100 -220 Repair /Maint Supply (GENERAL) $290.30 285945 SUPPLIES Total NORTH SECOND STREET STEEL $290.30 ,E��,,........�,,,, nm,....�mr,, nAM.._.,_ ................ .. ..�a W�,_.,. 'hk# 021876 5/8/2014 NQRTFiERN TOOL 8 EQUIPMENT E 100- 43100 -210 Operating Supplies (GENERAL) $299,99 30370842 SUPPLIES Total NORTHERN TOOL & EQUIPMENT $299,99 Paid Chk# 021877 5!812014 NORTHLAND TRUST SERVICES E309-47000-610 Interest $7,330.50 2008A -0601 BOND INTEREST 2008A Total NORTHLAND TRUSTS ERVI CES $7,330.50 Paid" Chk# 021878,., „51812014 OEB ., -- w, ---,--, ---- ----_.M..... _,-" _. ..—. . --.- -- ..--- -,11 ,,,«� - ., -. -c- . E 411-43100-560 Furniture and Fixtures $1,675.00 24244 OFFICE EQUIPMENT Total OEB $1,675.00 hk# 021879 5/8/2014 RANDYS SANITATiQN E 100-43100-210 Operating Supplies (GENERAL) $149.46 110131404 PUBLIC WORKS GARBAGE E 100 -45200 -380 Utility & Services (GENERAL) $182.08 110381404 PARKS GARBAGE E 100 -41941 -380 Utility & Services (GENERAL) $194,11 12803511404 CITY HALL GARBAGE E 100- 43232 -300 Professional Srvs (GENERAL) $5,673,15 12803511404 MONTHLY RECYCLING E207-42100-210 Total RANDYS SANITATION $6,198.80 Total THE DOBO S Paid Chk# 021880- 5/8/2014 ROLF ERICKSON ENTERPRISES 1NC E 100-41550-210 Operating Supplies (GENERAL) $29.30 042814 FORMS AND SUPPLIES E 100 -41550 -300 Professional Srvs (GENERAL) $4,413.19 042814 MONTHLY ASSESSING FEE Total ROLF ERICKSON ENTERPRISES INC $4,442.49 'Paid-6hk# 021 ..v........n,m 881 5/8/2014 SCHARBER 8 5ON5 ..... ,. -�_ wm.r .._..,.....w......,,... „N -,, ._ -. E 100- 45200 -210 Operating Supplies (GENERAL) $513.39 P41891 PARTS Total SCHARBER & SONS $513.39 Pard Chk# 021882 ­,5I812014 , SPRINT,,, �� -. 4 �, m.mMr,n. „� ,. „� ��...w ,_ w. �,z,_ �,�u �.. a .... E 100- 43100 -321 Telephone $216.46 391283315149 CELL SERVICE E 100 -42100 -321 Telephone $248.12 391283315149 CELL SERVICE Total SPRINT $464.58 Paid Chk# 021883 5/8/2014 STREICNER S POLICE EQUIPMENT E 100-42100-417 Uniforms $207.50 11085680 PATCHES Total STREICHERS POLICE EQUIPMENT $207.50 k# 021884 518/2014 TEGRETE m_- E 100-41941-400 Repairs & Maint Cont (GENERAL $374.62 48958 MONTHLY CITY HALL CLEANING Total TEGRETE $374.62 Paid Chk# 021885 ....�� 5/8/2014 THE DOBO S � a �.n ��., �.�.er.,,� - - -- E207-42100-210 Operating Supplies (GENERAL) $137.50 9402 -A SALES TAX Total THE DOBO S $137.50 CORCORAN, MN 05/01/14 1:27 PM Page 4 *Check Detail Register© May 2014 ,,�z, �, � �� ,�, Check Amt Invoice Comment �1� ;�,4���.��a'�ia�������.1��.,. ��•''�.va�.�.���a1+ s. :�� �� °�'��.`#�'il^:i"�1,�., '.� ���„i� ��+'' :a���".�i�,YS�n'Wk };;t -i. Paid Chk# 021886 5/8/2014 TRANSPORT GRAPHICS . s������� E 100 -42100 -200 Office Supplies (GENERAL) $150.00 EM113144 UPDATE LOBBY ENTRANCE Total TRANSPORT GRAPHICS $150.00 ".,, �, ,.,,,,.,,,,,., �.r, �m�.,,, �� ,.��,,,�,,•�.�.,v,�,,,.�r.� ,.,,,, �,,.. �,,,.. �n�K, ��,�,�.�, ", "..�T....�.„�,a,.� - .""„ �., �,.-.,., �,. �,. „,. �.--. �, w��, Paid Chk# 021887 5!812014 US BANKCORP EQUIPMENT FINANCE m.,” n, .,. r,_...,.. Mm- .�,n,....,n,,.,.�..�,.m, ".�. -. �...:..�..,..e- _,,...W.. E 100 -42100 -200 Office Supplies (GENERAL) $115.61 MAY 2014 COPIER otal U5 BANKCORP EQUIPMENT FINANCE $115.61 Paid Chk# 02,M� �.., u ' A rW 1888 5!8!2014 VERI'ZON E 100- 42100 -321 Telephone $50.44 9723471855 CELL SERVICE Total VERIZON WIRELESS $50.44 Paid Chm �w " ". t4 .,, ' k# 021889 518!2014 W�NCK ASSOCIATES, �,,,,, m•...,,,, INC. ..•, _. .,,.,. G 500 -20336 Lenriar CSAH 101 Turn Lanes $4,804.50 11401453 LENNAR 14 -003 G 500 -20320 Lennar Design $14,402,60 11401464 LENNAR 14 -003 E 601- 49400 -303 Engineering Fees $3,841,50 11401464 WATERMAIN CSAH 101 E 100 -43170 -300 Professional Srvs (GENERAL) $2,316.60 11401465 MNDOT STATE AID E 100 -43170 -300 Professional Srvs (GENERAL) $594.00 11401465 STORMWATERfWCA E 100 - 43170 -300 Professional Srvs (GENERAL) $217.80 11401465 MEETINGS G 500 -20305 TIM KREPS $96.80 11401465 KREPS GRADING E 100 -43170 -300 Professional Srvs (GENERAL) $197.70 11401465 NE SEWER DISTRICT E 100 -43170 -300 Professional Srvs (GENERAL) $270.48 11401465 GENERAL G 500 -20335 Lennar Eng Plan Review /Modific $6,274.40 11401470 LENNAR 14 -003 E 401 -41900 -300 Professional Srvs (GENERAL) $1,907.20 11401550 SEWER & WATER PLANNING Total WENCK ASSOCIATES, INC. $34,923.58 Paid Chk# 021890 5/8/2014 XCEL ENERGY " E 100- 43100 -380 UNify & Services (GENERAL) Total XCEL ENERGY $815.52 409467231 UTILITIES -9100 $815.52 10100 Farmers State Bank $147,161.02 CORCORAN, MN 05/01/14 1:27 PM Page 5 'Check Detail Register© May 2014 Check Amt +++nnn Invoice Commenw�ty�, Fund Summary 10100 Farmers State Bank 100 GENERAL FUND $88,731.58 201 RESERVES DONATION FUND $946.02 204 FIREARMS SAFETY $2,937,62 205 DWI FORFEITURE FUND $285.00 207 TRUCK SAFETY $137.50 308 POLICE CAPITAL FUND $10,292,12 309 DIS- EQUIPMENT CERTS $7,330.50 401 TAX INCREMENT FINANCING $1,907.20 411 PUBLIC WORKS FACILITY $1,675.00 500 ESCROW HOLDING FUND $29,076,98 601 WATER $3,841.50 $147,161.02 City of Corcoran Consultant Summary May 8, 2014 Name Invoice Date Check # Amount Due Carson, Clelland & Schreder 04/30/94 21858 6,825.22 Rolf Erickson Enterprises 04/28/14 21880 4,442.49 Wenck Associates Inc 04/29/14 21889 34,923.58 Total 46,191.29 HACity Hall lnformation\ClTY GOVERNMENTICouncil, Commissions & CommitteeslCouncil InformationlCouncil Claims12014 Claims.xls CARSON, CLELLAND & SCHREDER Attorneys at Law 6300 SHINGLE CREEK PARKWAY STE 305 MINNEAPOLIS, MN 55430 -2190 (763)-561 -2800 April 30, 2014 CITY OF CORCORAN 8200 CO RD 116 CORCORAN, MN 55340 Professional Services Amount ..Civil 4/112014 Correspondence with city regarding status of resolution, review ownership documents, 70.00 update file, Research council authority issue, correspondence with attorney Carson, noted files. 280,00 4/2/2014 Conference with attorney Carson regarding motion to rescind authority, procedure, case law. 35.00 Review data request (Lymangood) received from Jeanie and review data practices law and 140.00 correspondence to Jeanie and Brad. Review issues relating to motion for rescission of previous motion, conference with attorney 70,00 John Thames (my office). 4/3/2014 Miscellaneous - conference with Brad regarding school board issues as related to rescission 46.67 of previous motion. 4/7/2014 Miscellaneous - conference with Shawn regarding workers compensation issues, 46.67 4/10/2014 Prepare for meeting, review of agenda and items of concern. 140.00 Meeting 280.00 4/18/2014 Research Parks and Trails Commission ordinances, file, correspondence with attorney Jeff 93.33 Carson, edit ordinances. 4/24/2014 Prepare for meeting and review of agenda. 140.00 Meeting 326.67 SUBTOTAL: [ 1,668.34] .Lennar 3/31/2014 Prepare for meeting of April 1, 2014, review correspondence from Kendra and review 186.67 appraisals. 4/1/2014 Prepare and attended staff meeting and review of recapture and development agreement. 490.00 4/3/2014 Southeast sewer and water project easement documents, review offer documents received 186.67 from Dale CEariage. 4/4/2014 Review revised development agreement and comments to staff, 280.00 4/8/2014 Review development documents per request from Kendra, 186.67 4/10/2014 Work on documents, review with Kendra. 186.67 4/11/2014 Work on recapture agreement; conference with Kendra. 140,00 CITY OF CORCORAN Page 2 A— mount 4/14/2014 Review documents for staff meeting on April 16, 2014, amend and comment. 4/15/2014 Conference with Kendra, miscellaneous issues. 350,00 4/16/2014 Prepare for staff meeting and review of development and repayment agreement/recapture agreement and revise. 350.03 4/17/2014 Work on recapture agreement and send to all, 4/23/2014 Review documents for city council, including development agreement and recapture 213.00 agreement, review issues relating access for Haeger and Tabor; conference with Kendra. 4/24/2014 Prepare for public hearings; review issues 233.33 relating to street vacation. 210,00 SUBTOTAL: ( 3,080.01] .Maple Hill Estates and Mobile Hope 3/31/2014 Maple HiN Estates - review Maple Hill Estates draft contracts received from Brad. 4/2/2014 Maple Hill Estates and Mobile hope - review draft agreements and comment to Brad 140.00 186.67 SUBTOTAL; ] 326,67] Criminal 3/31/2014 Correspondence with defense attorneys, defendants, witnesses, review discovery, motion documents, 95.00 correspondence with court, noted files. Preparation for April 1, 2014 cases. 15.83 4/1/2014 Attend arraignmentslpretrial hearings. 71.25 4/2/2014 Handle arraignment/pretriailin custody calendars at Brookdale court, 95.00 4/4/2014 Review voicemails regarding criminal cases. 15.83 4/8/2014 Telephone call with defense attorney. Preparation of April 9, 2014 cases. 31.67 4/9/2014 Attend arraignment/pretrial hearings, 31.67 4/10/2014 Review voicemail and emails regarding criminal cases, review and respond to 63.33 correspondence and telephone calls with defense attorneys. 95.00 4/14/2014 Prepare for April 15, 2014 cases. 4/15/2014 Correspondence with defense attorneys, defendants, witnesses, review discovery, noted 15.83 31.67 files. Attend arraignment/pretrial hearings. 47.50 4/16/2014 Handle arraign ment/pretrial /in custody calendar at Brookdale court. 4/17/2014 Review cases in MNCIS. 47.50 4/22/2014 Attend arraignment/pretrial /probation violations and court trial hearings. 31.67 47.5 0 Attend Brookdale work group meeting, Review files in preparation for April 23, 2014 arraignment/pretrial calendar at Brookdale 23.75 31.67 court, correspondence with defense attorneys, review discovery, jury trial preparation. 4/23/2014 Finish disposition letter for April 1, 2014 cases, follow up instructions to assistants regarding restitution. 15.83 CITY OF CORCORAN Page Total amount of this bill Previous balance $6,825.22 $4,784.58 A -mount 4/23/2014 Prepare disposition letter regarding April 9, 2014 cases. Handle arraignment/pretrial /in custody calendar at Broakdale court, 15.83 95,00 Telephone call with officer; review correspondence from police department; instructions to legal assistant. 63.33 4/24/2014 Begin disposition letter regarding April 15, 2014 cases. Begin disposition letter regarding April 22, 2014 cases. 15.83 4/25/2014 Finish April 22, 2014 disposition, fallow instructions to assistants, review cases in MNCIS. Open criminal files, preparation of criminal complaints; 23.75 preparation of cases for court calendars, including court and jury trials; contact and notice to witnesses for trial testimony, 148.75 prepare outgoing discovery requests, complete incoming discovery requests for monthly period. Open criminal files, preparation of criminal complaints; preparation of cases for court calendars, including court and jury trials; contact and notice to witnesses 78 75 for trial testimony, prepare outgoing discovery requests, complete incoming discovery requests for monthly period. Open criminal files, preparation of criminal complaints; preparation of cases for court calendars, including court and jury trials; contact 8.75 and notice to witnesses for trial testimony, prepare outgoing discovery requests, complete incoming discovery requests for monthly period. SUBTOTAL; [ 1,273.32] Vehicle Forfeiture: 4/8/2014 Review status of forfeiture cases, email police department, telephone call with defense attorneys. 95,00 4/10/2014 Begin going through and updating status of forfeiture cases, review cases in MNCIS, email 142.50 with lien holder, email police department. 4/15/2014 Prepare forfeiture paper work. 47.50 SUBTOTAL: [ 285.00] For professional services rendered $6,633.34 Client Expense Charges Criminal Expenses: Westlaw charges for March Monthly support fee 177,45 14.43 SUBTOTAL: [ 191.88] Total Client Expense Charges $191.88 Total amount of this bill Previous balance $6,825.22 $4,784.58 CITY OF CORCORAN Balance due Page 4 Amount $11,609.80 I hereby declare under the penalties of perjury that the foregoing statement for legal services is just and correct and that no part thereof has been paid. ---' Jeff A. Carson, City Attorney STATEMENT 28- Apr -14 ROLF ERICKSON ENTERPRISES, INC. SOUTWEST ASSESSING P O BOX 47841 PLYMOUTH, MN 55447 CITY OF CORCORAN 8200 Co. Rd. 116 CORCORAN, MN 55340 APRIL 2014 ASSESSING FEE COUNTY DATA FEE COPIES OF BOARD OF REVIEW REPORTS $4,399.00 $14.19 $29.30 TOTAL $4,442.49 x.;, - We n c Engineers * Scientists Business Professionals April 29, 2014 Mr. Brad Martens City Administrator City of Corcoran 8200 County Road 116 Corcoran, MN 55340 Dear Brad: APR 3 Q 2014 Wenck Associates, Inc. 1800 Pioneer Creek Center P.O. Box 249 Maple Plain, MN 55359 -0249 (800)472 -2232 (763) 479 -4200 Fax {763) 479-4242 wenckmp @wenck.com www. wenck.com Enclosed are our invoices for March 2014. Unbilled time totaled 14 hours last month and includes meeting time over an hour, travel time, and mileage costs. Major items for general engineering include MNDOT state aid and continuing work on MS4 (stormwater) permit implementation. The summary table on the next page separates city expenses from escrow amounts, More details about each line item can be found on individual invoices. If you have any questions as you review this letter or our invoices, please contact me at 763- 479 -4209, ktorve @wenck.com, or at City Mall. Sincerely, WENCK ASSOCIATES INC. Kent Torve, P.E. Principal T:12294- GorcorarVnvcices and Budget Tracker etct20141March 2014Warch 2014 invoice corer Iettecdocx City of Corcoran March 2014 Invoices City of Corcoran March 2014 Invoices Invoice # I Wenck Phase # I Project name project # Amount Page 2 of 3 Total 400 Initial Construction Plan Engineering $1,984.00 500 Appraisal, Property Access, Legal & Negotiation Efforts $2,340.50 SUBTOTAL $3,841.50 CITY PROJECTS TOTAL $23,844.68 L12294- CorcoranllnvoiceS and Budget Tracker etc120141March 201415Aarch 2fli4 invoice corer leucr.docx Wenck Engineers . Scientists Business Professionals a 500 -01 General $270.48 500 -02 Council Meetings and Engineering $1,400.70 400 Administrative $217.80 600 -01 Stormwater /WCA General Tasks $594.00 700 -01 MnDOT State Aid $2,316.60 800 -09 Kreps Grading Permit $96.80 $14,402.60 800 -16 NE Sewer District $197.70 SUBTOTAL $3,693.38 114p155C3; 2294 10 SeW�r` ar�d Vl/bter Pla1?t?rng, 10 Project Closeout $1,68650 11 Easements and Utilities $75.50 14 MCES Forcemain Construction $145.20 SUBTOTAL $1.907.20 400 Initial Construction Plan Engineering $1,984.00 500 Appraisal, Property Access, Legal & Negotiation Efforts $2,340.50 SUBTOTAL $3,841.50 CITY PROJECTS TOTAL $23,844.68 L12294- CorcoranllnvoiceS and Budget Tracker etc120141March 201415Aarch 2fli4 invoice corer leucr.docx Wenck Engineers . Scientists Business Professionals a 100 Wetland Delineation and Application $188.30 200 Route Surveying and Draft Easements $1,400.70 400 Initial Construction Plan Engineering $5,444.80 500 Appraisal, Property Access, Legal, and Negotiation Efforts $3,872.80 600 Geotechnical Investigation $3,496.00 SUBTOTAL $14,402.60 400 Initial Construction Plan Engineering $1,984.00 500 Appraisal, Property Access, Legal & Negotiation Efforts $2,340.50 SUBTOTAL $3,841.50 CITY PROJECTS TOTAL $23,844.68 L12294- CorcoranllnvoiceS and Budget Tracker etc120141March 201415Aarch 2fli4 invoice corer leucr.docx Wenck Engineers . Scientists Business Professionals a City of Corcoran March 2014 Invoices Page 3 of 3 Invoice # Wenck Phase # I Project name (Escrow Number) I Total nroiect # 1140147 - NA Lennar Development (500 $6,274.40 11401463 2294 -20 100,200 CSAH 101 and Gleason Road Turn Lanes (13 -025, 500 -1=;� $4,804.50 ESCROW PROJEcTsSUBTOTAL $11,078.90 MARCH 2014 TOTAL $34,923.58- WCCICIC T:12294- Corcoranlfnvoices and budget Tracker etc12014SMarch 2614NMarch2014 invoice cove letter.docs Engineers • Scientists Business Professionals City of Corcoran MA ttD i) Yl7 -Te9C mod, 8200 County Road 116 Corcoran, MN 55340 Project 2294 -01 Corcoran General Engineering Services Professional Services Through March 31, 2014 — — Phase 500 -01 General — — — Professional Personnel Hours Rate Amount Nelson, Susan 4.50 60.00 270.00 Totals 4.50 270.00 Total Labor 270,00 Reimbursable Expenses Postage and Shipping .48 Total Reimbursables .48 .48 Phase Total $270.48 -------------------------------------------------- Phase 500 -02 Council Meetings and Engineering Administrative Professional Personnel Hours Rate Amount Torve, Kent 1.80 121,00 217.80 Totals 1.80 217.80 Total Labor 217,80 Phase Total $217.80 -------------------------------------------------- Phase 600 -01 Stormwater /WCA General Tasks Professional Personnel Hours Rate Amount Nelson, Susan 9.90 60.00 594.00 Totals 9.90 591,00 Total Labor 594.00 Phase Total $594.00 Phase 700 -01 MnDOT State Aid — Professional Personnel Hours Rate Amount Claridge, Dale 1.00 151.00 151.00 Terhaar, Edward 13.50 150.00 2,025.00 Vander Top, Vincent 1.00 121.00 121.00 Totals 15.50 2,297.00 Total Labor 2,297.00 INVOICES ARE DUE UPON PRESENTATION. Invoice balances not paid within 30 days of invoice are subject to 1 -1/2% 18% annum interest /finance charge. Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 Project 2294 -01 Corcoran General Engineering Services Invoice 11401465 Reimbursable Expenses Mileage - Reimbursable 19.60 Total Reimbursables 19.60 19.60 Phase Total $2,316.60 Phase 800 -09 Kreps Grading Permit Professional Personnel Hours Rate Amount Torve, Kent .80 121.00 96.80 Totals .80 96.80 Total[ Labor 96.80 Phase Total $96.80 Phase 800 -16 NE Sewer District Professional Personnel Hours Rate Amount Libby, Heather .50 105.00 52.50 Tore, Kent 1.20 121.00 145.20 Totals 1.70 197.70 Total Labor 197.70 Phase Total $197.70 Total Invoice Amount $3,693.38 INVOICES ARE DUE UPON PRESENTATION. Invoice balances not paid within 30 days of invoice are subject to 1 -1/2% 1811/o annum Page 2 interest/finance charge. Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 Invoice March 31, 2014 Invoice No: 11401550 Brad Martens City of Corcoran 8200 County Road 116 Corcoran, MN 55340 Project 2294 -10 Sewer and Water Planning Wenck Wenck Associates, Inc, IM Pioneer Creek center P.O. Box 249 ftlt Plain, MN 55399 -OM (M) 479.4200 Fox (763) 479 -4242 e -mak accauntinp�vditk.can Professional Services Through March 31, 2014 Phase 10 PROJECT CLOSEOUT — Professional Personnel Hours Rate Amount Claridge, Dale 3/4/2014 1.00 151.00 151.00 MG watermain connection - final costs, coordination Claridge, Dale 3/5/2014 1.50 151,00 226.50 MG watermain connection - final costs, coordination, payment request Claridge, Dale 3/6/2014 1.50 151.00 226.50 MG watermain connection - final costs, coordination, payment request, communication, call to Maple Grove Claridge, Dale 3/7/2014 4.00 151.00 604,00 MG watermain connection - final costs, coordination, payment request, communication, documentation, prepare invoice and memo Claridge, Dale 3/12/2014 1.00 151.00 151.00 Maple Grove service water agreement, documentation and filing, etc. Claridge, Dale 3/14/2014 .50 151.00 75.50 Maple Grove payment request, communication Louwag.ie, Shawn 3/12/2014 2.80 90.00 252.00 Televising Report Review Totals 12.30 1,686-50 Total Labor 1,686.50 Phase Total $1,686.50 -------------------------------------------------- Phase 11 EASEMENTS AND UTILITIES Professional Personnel Hours Rate Amount Claridge, Dale 3/7/2014 .50 151.00 75.50 Followup on attorney fees for forcemain easements Totals .50 75.50 Total Labor 75.50 Phase Total $75.50 -------------------------------------------------- -- -. Phase 14 MCES Forcemain Construction Professional Personnel Hours Rate Amount Torve, Kent 3/19/2014 1.20 121,00 145,20 INVOICES ARE DUE UPON PRESENTATION. Invoice balances not paid within 30 days of invoice are subject to 1 -1/2% 1811/a annum interest/finance charge. Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 Project 2294 -10 Sewer and Water Planning Invoice 11401550 MCES Lift Station agreement amendment to Council Totals 1.20 145.20 Total Labor 145.20 Phase Total $145.20 Total Invoice Amount $1,907.20 INVOICES ARE DUE UPON PRESENTATION. Invoice balances not paid within 30 days of invoice are subject to 1 -1/2% 18 0/o annum Page 2 interest/finance charge. Please reference the invoice number when sending payment, Federal Tax ID #41- 1520095 Professional Services Throu h March 31 2014 Professional Personnel Outside Services Haugo Geotechnical Services, LLC 1,242.00 Outside Services Total 1,242.00 1,242.00 Total Invoice Amount $6,274.40 INVOICES ARE DUE UPON PRESENTATION, Invoice balances not paid within 30 days of invoice are subject to I -1/2% 18% annum interesVfinance charge. Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 Hours Rate Amount Madejczyk, Jeffrey 1.50 114.00 171.00 Mattson, Kevin 9.50 96.00 912.00 Terhaar, Edward 1.00 150.00 150.00 Torve, Kent 31.40 121.00 31799.40 Totals 43.40 5,032.40 Total Labor 5,032.40 Outside Services Haugo Geotechnical Services, LLC 1,242.00 Outside Services Total 1,242.00 1,242.00 Total Invoice Amount $6,274.40 INVOICES ARE DUE UPON PRESENTATION, Invoice balances not paid within 30 days of invoice are subject to I -1/2% 18% annum interesVfinance charge. Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 invoice ..,° Wenck= March 31, 2014 -% Invoice No: 11401464 Wmd amrlales, Inc, 1DO pioneer Creak Comiar P.O. Bm 249 Maple Plain, MN 55358 -0249 (763) 4794200 Brad Martens Fax (763) 4794242 trtail; areounGrv}@wdtdc,ean City of Corcoran 8200 County Road 116 Corcoran, MN 55340 Project 2294 -18 Southeast District Sewer and Water Project Professional Services Throu h March 31 2014 Phase 100 Wetland Delineation and Application Professional Personnel Hours Rate Amount Boll, Wesley 1.40 98.00 137.20 Summers, Matthew .70 73.00 51.10 Totals 2.10 188.30 Total Labor 188.30 Phase Total $188.30 Phase 200 Route Surveying and Draft Easements - - - - w. - - - - - Professional Personnel Hours Rate Amount Landecker, David 1.30 150.00 195.00 Quisberg, Jason 2.00 137.00 274.00 Torve, Kent 7.70 121.00 931.70 Totals 11.00 1,400.70 Total Labor 1,400.70 Phase Total $1,400.70 Phase 400 Initial Construction Plan Engineering --....,...------....,..,.--------- Professional Personnel Hours Rate Amount Libby, Heather 7.00 105.00 735.00 Mattson, Kevin 16.50 96.00 1,584.00 Quisberg, Jason 15.50 137.00 2,123.50 Schroeher, Mark 2.50 96.00 240.00 Torve, Kent 6.30 121.00 762.30 Totals 47.80 5,444.80 Total Labor 5,444.80 Phase Total $5,444.80 Phase 500 - --.., ------- ..,..,. - -. Appraisal, Property Access, Legal and Negotiation Efforts INVOICES ARE DUE UPON PRESENTATION. Invoice balances not paid within 30 days of invoice are subject to 1 -1/2% 18 0/0 annum interest /finance charge, Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 Project 2294 -18 Southeast District Sewer and Water Proje Invoice 11401464 Professional Personnel Claridge, Dale Torve, Kent Totals Total Labor 3,872.80 Phase Total $3,872.80 r. Phase 600 Geotechnical Investigation Outside Services Haugo Geotechnical Services, LLC 3,496.00 Outside Services Total 3,496.00 3,496.00 Phase Total $3,496.00 Total Invoice Amount $14,402.60 Hours Rate 21.00 151.00 5.80 121.00 26.80 Amount 3,171.00 701.80 3,872.80 INVOICES ARE DUE UPON PRESENTATION. Invoice balances not paid' within 30 days of invoice are subject to 1 -1/2% 18% annum Page 2 interest/finance charge. Please reference the invoice number when sending payment, Federal Tax ID #41- 1520095 Invoice March 31, 2014 Invoice No: 11401463 Brad Martens City of Corcoran 8200 County Road 116 Corcoran, MN 55340 Project 2294 -20 CSAH 101 and Gleason Road Turn Lanes Professional Services Through March 31, 2014 Phase 100 Preliminary Survey, Wetlands, Utilities and Easements Professional Personnel Wenck Wenck Associates, Inc. 1600 Pioneer Creek Center P.D. Bas 249 Maple Plain, MN 55359.0249 (753) 479.4200 Fax (M) 479 -4242 e- ffaif: accaLmbrg5wwck.L0n Total Labor 672.00 Phase Total $672.00 — Design -- — — — — — — — — — — — -- Phase 2Professional Personnel Hours Rate Amount Boll, Wesley .80 98.00 78.40 Mattson, Kevin 2.50 96.00 240.00 Summers, Matthew .70 73.00 51.10 Torve, Kent 2.50 121.00 302.50 Totals 6.50 4,132.50 672.00 Total Labor 672.00 Phase Total $672.00 — Design -- — — — — — — — — — — — -- Phase 2Professional Personnel INVOICES ARE DUE UPON PRE5FNTATION. Invoice balances not paid within 30 days of invoice are subject to 1 -1/20% 18% annum interest/finance charge. Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 Hours Rate Amount Claridge, Dale 9.00 151.00 1,359.00 Mattson, Kevin 8.00 96.00 768.00 Schroeher, Mark 19.00 96.00 1,824.00 Torve, Kent 1.50 121.00 181.50 Totals 37.50 4,132.50 Total Labor 4,132.50 Phase Total $4,132.50 Total Invoice Amount $4,804.50 INVOICES ARE DUE UPON PRE5FNTATION. Invoice balances not paid within 30 days of invoice are subject to 1 -1/20% 18% annum interest/finance charge. Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 Invoice March 31, 2014 Invoice No: 11401462 Brad Martens City of Corcoran 8200 County Road 116 Corcoran, MN 55340 Project 2294 -21 Watermain CSAH 101 Professional Services Through March 31, 2014 Phase 400 Initial Construction Plan Engineering Professional Personnel _ -. Wenck Mork Associates, Ix� 1806 Pioneer Creek Center P.01 BOX 244 Maple Plain, MN 55354 -0249 (%3} 47942W fax (763) 479 -4242 e -mail: atoountiixi rj ckmn Total Labor 1:,501.00 Phase Total $1,501.00 Phase 500 Appraisal, Property Access, Legal & Negotiation Efforts — — — — Professional Personnel Claridge, Dale Totals Total Labor Hours Rate Amount 15.50 151.00 2,340.50 15.50 2,340.50 Phase Total Total Invoice Amount 2,340.50 $2,340.50 $3,841.50 INVOICES ARE DUE UPON PRESENTATION. Invoice balances not paid within 30 days of invoice are subject to 1 -1/2% 18% annum interest /finance charge. Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 Hours Rate Amount Claridge, Dale 1.00 151.00 151.00 Mattson, Kevin 6.50 96.00 624.00 Torve, Kent 6.00 121.00 726.00 Totals 13.50 1,501.00 Total Labor 1:,501.00 Phase Total $1,501.00 Phase 500 Appraisal, Property Access, Legal & Negotiation Efforts — — — — Professional Personnel Claridge, Dale Totals Total Labor Hours Rate Amount 15.50 151.00 2,340.50 15.50 2,340.50 Phase Total Total Invoice Amount 2,340.50 $2,340.50 $3,841.50 INVOICES ARE DUE UPON PRESENTATION. Invoice balances not paid within 30 days of invoice are subject to 1 -1/2% 18% annum interest /finance charge. Please reference the invoice number when sending payment. Federal Tax ID #41- 1520095 STAFF REPORT Document No. 10a. Council Meeting: May 8, 2014 Prepared By: Brad Martens Topic: Maple Hill Community Center Action Required: Approval Summary: At the April 10, 2014 City Council meeting staff presented draft agreements for the construction and management of the proposed community center to be constructed in Maple Hill Estates. The financial arrangement presented was for the City to pay for the total cost of construction and then be reimbursed from a $225,000 Community Development Block Grant (CDBG) and funds to be raised by Mobile Hope, $30,000 of which was guarantee by Barry Hay of Maple Hill Estates. Mobile Hope agreed to fund costs above the CDBG however the City would ultimately bear that risk if fundraising fell short. At that April 10th meeting staff was directed to make changes to the agreements requiring that all financial risk associated with the project be guaranteed by Maple Hill Estates. This new position was presented to both Mobile Hope and Barry Hay who informed staff that the arrangement is not possible. Mr. Hay is unable to provide a larger guarantee than the one he has offered and Mobile Hope does not have the capacity to guarantee the obligation although they are committed and confident that the fundraising will take place. Since no additional guarantee exists for the project the City Council must now choose to go back to the previous funding scenario in which the City takes on the financial risk beyond the CDBG and personal guarantee or the project will not be constructed. It is staff opinion that there is virtually no risk related to the CDBG funds as a very low bar is set to meet the requirements of the grant. The financial risk is a gap estimated at $73,200 which Mobile Hope must fundraise. According to Mobile Hope an amount of $20,000 has already been raised. Staff believes that Mobile Hope will be able to meet the fundraising goal and reimburse the City of all funds to complete the construction of the facility. Page 2 Financial /Budget: It is estimated that the total costs to construct the Maple Hill Community Center will be approximately $346,000. • Pre - design work already completed: $18,078.76 • Design work, building permit, related soft costs: $20,200 • Construction: $308,000 • Total: $346,278.76 The project will be financed as follows: • CDBG funds: $225,000 • Personal Guarantee: $30,000 • City investment (2012 — 2013): $18,078.76 • Sub - total: $273,078.76 • Estimated Mobile Hope Responsibility (Gap): $73,200 • Total: $346,278.76 Options: 1. Approve a motion to support the construction of the community center by covering costs related to the construction until paid back through fund raising efforts. 2. Approve a motion committing to the April 10, 2014 staff direction requiring financial guarantees. Recommendation: Approve a motion to support the construction of the community center by covering costs related to the construction until paid back through fund raising efforts. Council Action: Approve a motion to support the construction of the community center by covering costs related to the construction until paid back through fund raising efforts. Attachments: N/A From: Jeanie Heinecke To: Jeanie Heinecke Subject: FW: Message for City Council Date: Wednesday, May 07, 2014 8:39:48 AM Attachments: Letters from REAMS.pdf From: Samantha Heitke [ mailto :heitkes(a)rockford.kl2.mn.us] Sent: Tuesday, May 06, 2014 4:09 PM To: general Subject: Message for City Council Hello, Would you please forward on this email and the attachment on to the city council? The attachment is a collection of letters from teachers at Rockford Elementary regarding an item on the agenda for Thursday's meeting. There are no words to express how helpful it is for our school to have the connection with district families who live in Maple Hill Estates through Mobile Hope. In only the two short years that we have been partnering together to help students at risk, the impact has been huge. Their pursuit of a permanent community center structure to house the programming that is making such a difference is something that we cannot help but support. I personally am the coordinator of the Wednesday after - school sessions of Homework Help. I can tell you first hand that sometimes we have almost 30 kids in the current location - which is a donated trailer - and due to the crowding, it is very difficult to make efficient tutoring happen. I can also say that there are kids who do not come because of our cramped and dated space. The kids are so excited about the community center building. They have seen the blueprints and asked 1,001 questions about it. Seeing it come to life with all the buzz that comes from new construction may be the best thing in their most recent memories. Many have quite a tough time at home and I cannot imagine adding to their difficulties that there will no longer be a permanent "Hope House." (That's what we call the trailer.) I hope that, as you see what these teachers have said, you realize that all of us feel the same way. Please make the decision on this issue in a way that shows you understand importance of investing in children and families. Thank you, Samantha Heitke EXCEL Gifted and Talented Program Coordinator Rockford Elementary Arts Magnet School 7650 County Road 50, MN 55373 763 - 477 -5837 ext:1618 heitkes(@rockford.k12.rnn.us www. rockford. k 12. mn. us PLEASE CHECKOUT THE FOLLOWING VIDEO CLICK TO VIEW - Rockford Area Schools District #883 - ADVANTAGE (Feel free to cut, paste and share this link) EIV 4 '+% �QT1i� YOU ! Q.,/ L Yb � -j " P vm --V cCL A, Qr -e-Q(2,C I Ov)'ke l � � �bd Cp'a-Ce ✓1 �"J� C «u 5.� ck _v\A nee L �CesS �a� k Or J6��- -W4nV, 'Ative�+ 4' e y s koLac( t cu '5�, AWom. c he �z. curt 1%e� hcd^nc) +' OL p1c«e 40 ° to(0.sc. �-'3 be+ter A-\,.cLo\ SA.ytn oxs'Ac \�-'e,ni0.zl ccv,cl }O C1r c uV P \a.y Soccer, fie_ e aw 0 —+ 4A there a# \Past every oti u mot"(k 1u AO sc)"'O ' �ur , lk- c6cso provAes c� \ace � cb 1Aow.e -i� yotAr �w•,P s �W cro E(ed. Keep NoPL "For me to live is Christ" Phillippians 1:21a May 7, 2014 Brad Martens City Adiministator City of Corcoran 8200 County Road 116 Corcoran MN 55430 Dear Mr. Martens, David McCarty Pastor, Outreach and Mission This letter is intended to communicate the enthusiastic support Lord of Life Lutheran Church has for the proposed Community Center at Maple Hill Estates. Lord of Life members have been providing volunteer services at Maple Hill Estates for many years, and we are eagerly looking forward to expanding our participation with Homework Help and other areas within that community. The Community Center will be a wonderful additition and a tremendous facility from which to provide these much needed services. In addition to many hours of volunteer services our congregation has also committed to providing $10,000 of support toward the construction of the Community Center, and will make those funds available when the City of Corcoran has provided the needed approvals and construction begin. Thank you for your assistance, support and guidance with this project. Please let me know if i can help in anyway or if you have any questions related to Lord of Life's support for this project. Sincerely, Rev. David H. McCarty DaveM@LordOfLife.org Phone: 763.420.5015, x147 / Cell: 763.607.4953 / Fax: 763.420.7286 7401 County Road 101, Maple Grove, MN 55311 -4313 LordOfl-ife.org I I I H F--1 I C/2 0 CD I<i k CD +,e I ct I CD 1 s � I I O I —, O C� CD ct CD I K i CD i m P, m I O I CD I I i T I I O I �. I 1` 1 -4- ct I k F--J i i rn o I ct CD ct i CD I i �' ct I I O I I m CID I ct H I , ICI ct I '� CD i CD CD +, I CD rn I I I J? I I I I I I I_,� H H I co ' d m I O CD CD I I t� O — CD tt I I_ i O C� I CD I I( '�+ ct I F-6 F �. cF� I7 I �. rte' I CD CD co r I I I l o i O F� It g' ice' i I ,t m I i C-3 ct O F._,. 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