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HomeMy Public PortalAbout06.06.2023 City Council Meeting Packet Posted 6/2/2023 Page 1 of 1 AGENDA FOR THE REGULAR MEETING OF THE MEDINA CITY COUNCIL Tuesday, June 6, 2023 7:00 P.M. Medina City Hall 2052 County Road 24 I. CALL TO ORDER II. PLEDGE OF ALLEGIANCE III. ADDITIONS TO THE AGENDA IV. APPROVAL OF MINUTES A. Minutes of the May 16, 2023, Work Session Meeting B. Minutes of the May 16, 2023, Regular City Council Meeting C. Minutes of the May 17, 2023, Special City Council Meeting V. CONSENT AGENDA A. Approve Updated 2023 Meeting Calendar and Updated Personnel Policy 5.70 Holiday to include Juneteenth B. Resolution Accepting Resignation of Community Service Officer Jacob Milinkovich and Approve Recruitment of Vacant Community Service Officer Position C. Approve Appointment of Tanner Weise to Police Officer D. Approve Appointment of Brenna Groth to Office Assistant in the Police Department E. Approve Fireworks Display Contract Agreement with PC Pyrotechnics Inc. F. Approve Quote from EPA Audio Visual for City Council Chambers Upgrades G. Approve Quote from Robert Braun Painting LLC. for City Council Chambers Painting H. Approve Quote from Alternative Business Furniture for the Election Storage Room I. Resolution Accepting Donation from Dick Avery Memorial J. Resolution Accepting Donations for the 2023 Bike Rodeo K. Resolution to Publish Ordinance 709 by Title and Summary L. Approve Water Treatment Plant Filters 1 and 2 Rehabilitation Project Change Order Number 1 M. Approve Letter of Support for Fee Waivers for Melrose Commons VI. COMMENTS A. From Citizens on Items Not on the Agenda B. Park Commission C. Planning Commission VII. PRESENTATION A. Resolution Recognizing Dave Hall for 20 Years of Service B. Audit Presentation VIII. NEW BUSINESS A. Hackamore Road Improvement Project 1. Resolution Accepting Bids and Awarding the Contract 2. Joint Powers Agreement IX. CITY ADMINISTRATOR REPORT X. MAYOR & CITY COUNCIL REPORTS XI. APPROVAL TO PAY BILLS XII. CLOSED SESSION: Police Union Contract Pursuant to Minn. Stat. 13D.03 XIII. ADJOURN Meeting Rules of Conduct to Address the City Council: • Fill out & turn in comment card • Give name and address • Indicate if representing a group • Limit remarks to 3-5 minutes MEMORANDUM TO: Medina Mayor and City Council FROM: Scott Johnson, City Administrator DATE OF REPORT: June 1, 2023 DATE OF MEETING: June 6, 2023 SUBJECT: City Council Meeting Report V. CONSENT AGENDA A. Approve Updated 2023 Meeting Calendar and Personnel Policy 5.7 Holiday – The calendar and personnel policy are updated to include the addition of Juneteenth as a State Holiday. The date was added to State Law by the Legislature during the recently completed 2023 session. Staff recommends approval. See attached meeting calendar and personnel policy. B. Approve Resolution Accepting Resignation of Community Service Officer Jacob Milinkovich and Approve Recruitment of Vacant Community Service Officer Position – CSO Jacob Milinkovich has resigned from his position and his last day was June 2, 2023. Staff recommends approval of his resignation. Staff is also requesting the authorization to begin the recruitment process for two CSOs (to fill the current vacancy and then fill the upcoming vacancy with Tanner Wiese’s appointment to Police Officer in August). See attached resolution. C. Approve Appointment of Tanner Wiese to Police Officer – Staff recommends the appointment of Tanner Wiese to the position of Police Officer contingent upon completion of skills training, passage of the P.O.S.T. test, and passage of the psychological and physical evaluations. See attached memo. D. Approve Appointment of Brenna Groth to Office Assistant in the Police Department – On April 4, 2023, the City Council authorized staff to begin the recruitment process to fill the Police Department Office Assistant position. Staff recommends the appointment of Brenna Groth to the Police Department Office Assistant position. See attached memo. 2 E. Approve Fireworks Display Contract Agreement with PC Pyrotechnics Inc. – Attached is the fireworks agreement for Celebration Day on September 16, 2023. Staff recommends approval. See attached agreement. F. Approve Quote from EPA Audio Visual for City Council Chambers Upgrades – The quote is for several audio-visual upgrades to the Council Chambers including movable microphones with mute buttons and a new audio equalizer to reduce audio feedback. Staff is also working with EPA and Mike Brocco on adding two large monitor displays for presentations in lieu of individual monitors. We expect a quote from Medina Electric in the near future to install the electrical outlets, fiber, and two large monitors. The project will be paid for with funds from the revolving capital fund. Staff recommends approval. See attached quote. G. Approve Quote from Robert Braun Painting LLC for City Council Chambers Painting – The quote is for drywall repairs and painting of the City Council Chambers, the election storage room, and a few other small areas around City Hall. The drywall work and painting are needed in the Council Chambers in conjunction with the audio-visual upgrades. The project will be paid for with funds from the revolving capital fund. Staff recommends approval. See attached quote. H. Approve Quote from Alternative Business Furniture for the Election Storage Room – The conference room adjacent to the Council Chambers is being converted to an election storage room. The project will be paid for with funds from the revolving capital fund. Staff recommends approval. See attached quote. I. Approve Resolution Accepting Donation from Dick Avery Memorial – Staff recommends approval of the resolution accepting the donation from the Dick Avery Memorial. See attached resolution. J. Approve Resolution Accepting Donations for the 2023 Bike Rodeo – Staff recommends approval of the resolution accepting the donations for the Bike Rodeo. See attached resolution. 3 K. Approve Resolution to Publish Ordinance 709 by Title and Summary – Ordinance 709, An Ordinance Amending the Official Zoning Map Cates Industrial Park, was adopted at the May 16, 2023 City Council meeting. Staff recommends approval. See attached resolution. L. Approve Water Treatment Plant Filters 1 and 2 Rehabilitation Project Change Order Number 1 – Staff recommends approval of the project change order. The change order results in a net decrease in the contract amount by $81,486.00. See attached memo and change order. M. Approve Letter of Support for Fee Waivers for Melrose Commons – Staff recommends approval of the support letter. The Medina City Council discussed at the May 2, 2023 Work Session their support of the provision of City fee waivers in the amount of up to $115,000 for the establishment of affordable housing units within the Melrose Commons project, a 50-unit affordable housing project proposed by CommonBond Communities. The project is proposed north of Highway 12, east of Baker Park Road. See attached letter. VII. PRESENTATION A. Resolution Recognizing Dave Hall for 20 Years of Service – Dave Hall has contributed greatly to Medina during his 20 years of service to the City. Mayor Martin will read the resolution and honor Dave for his 20 years of service. Recommended Motion: Motion to approve resolution recognizing Dave Hall for 20 Years of Service. See attached resolution. B. 2022 Audit Presentation – Justin Nilson from Abdo will be present at the meeting to present and address any questions regarding the 2022 audit. Recommended Motion: Accept the 2022 Audit from Abdo. See attached 2022 Audit Information. VIII. NEW BUSINESS A. Hackamore Road Improvement Project – The Hackamore Road Improvement Project was initiated back in early 2020 with the intention of addressing increased traffic volume, 4 deteriorating pavement conditions, and pedestrian connectivity along this corridor. Corcoran and Medina staff members have been working diligently on this project. Staff is now requesting approval of the Joint Powers Agreement (JPA) between the cities of Corcoran and Medina. Staff is also requesting the City Council accept the lowest responsible bid and award the contract for the project to Valley Paving, Inc. for the Hackamore Road Improvement Project in the amount of $5,445,445.00. Recommended Actions: 1. Consider a motion to approve the Joint Powers Agreement between the cities of Corcoran and Medina. 2. Adopt the resolution accepting the lowest responsible bid and awarding the contract to Valley Paving, Inc. for the Hackamore Road Improvement Project in the amount of $5,445,445.00. See attached memo, JPA, and resolution. X. APPROVAL TO PAY BILLS Recommended Motion: Motion to approve the bills, EFT 006846E-006866E for $76,044.55, order check numbers 054348-054417 for $673,675.08, payroll EFT 0512738-0512768 for $64,478.17, payroll manual check 20456-20457 for $6,662.81. INFORMATION PACKET: • Planning Department Update • Police Department Update • Public Works Department Update • Claims List MEDINA CITY COUNCIL WORK SESSION MEETING MINUTES 1 OF MAY 16, 2023 2 3 The City Council of Medina, Minnesota met in work session on May 16, 2023, at 6:30 p.m. at 4 the Medina City Hall, 2052 County Road 24, Medina, MN. 5 6 I. Call to Order 7 8 Members present: Martin, Cavanaugh, DesLauriers, Reid 9 Members absent: Albers 10 Also present: City Administrator Scott Johnson, Public Works Director Steve Scherer, 11 Planning Director Dusty Finke, Public Safety Director Jason Nelson, City Clerk Caitlyn Walker, 12 and Finance Director Erin Barnhart 13 14 II. Hackamore Road Improvement Project Update 15 16 Planning Director Finke provided an update on the Hackamore Road Improvement Project. 17 Finke shared the low bid was under the engineer’s cost estimate by approximately $900,000. He 18 explained Corcoran is finalizing agreements with developers prior to finalizing the Joint Powers 19 Agreement (JPA). Staff intends to present the JPA and the contract for the project at the June 6 20 City Council meeting. Finke also explained that Medina will be the lead agency on the project 21 and contract. 22 23 III. City Council Wage Increase 24 25 The City Council initially discussed the City Council wage increase at the April 4 work session 26 meeting according to City Administrator Johnson. At that meeting, the City Council requested 27 additional information. Johnson presented the updated information. The City Council agreed that 28 updating the salaries would help cover expenses the members incur and it could potentially 29 attract more people to run for office in the future. Moved by DesLauriers, seconded by Martin, to 30 direct staff to bring forward an amendment to Ordinance No. 412, Section 200.19 to change the 31 salaries of Mayor from $4,250 to $6,000 and Council Members from $3,000 to $4,000 at a future 32 City Council meeting. Motion passed unanimously. 33 34 IV. Adjournment 35 DesLauriers made a motion to adjourn the meeting at 6:55 p.m. on May 16, 2023. Martin 36 seconded the motion. Motion passed unanimously. 37 38 _________________________ 39 Kathleen Martin, Mayor 40 Attest: 41 42 ____________________________ 43 Caitlyn Walker, City Clerk 44 45 Medina City Council Meeting Minutes May 16, 2023 1 DRAFT 1 2 MEDINA CITY COUNCIL MEETING MINUTES OF MAY 16, 2023 3 4 The City Council of Medina, Minnesota met in regular session on May 16, 2023 at 7:00 5 p.m. in the City Hall Chambers. Mayor Martin presided. 6 7 I. ROLL CALL 8 9 Members present: Cavanaugh, DesLauriers, Martin, and Reid. 10 11 Members absent: Albers. 12 13 Also present: City Administrator Scott Johnson, City Clerk Caitlyn Walker, Attorney 14 Dave Anderson, Finance Director Erin Barnhart, City Engineer Jim Stremel, City 15 Planning Director Dusty Finke, Public Works Director Steve Scherer, and Chief of Police 16 Jason Nelson. 17 18 II. PLEDGE OF ALLEGIANCE (7:00 p.m.) 19 20 III. ADDITIONS TO THE AGENDA (7:00 p.m.) 21 The agenda was approved as presented. 22 23 IV. APPROVAL OF MINUTES (7:00 p.m.) 24 25 A. Approval of the May 2, 2023 Work Session City Council Meeting Minutes 26 Moved by Martin, seconded by DesLauriers, to approve the May 2, 2023 work session 27 City Council meeting minutes as presented. Motion passed unanimously. 28 29 B. Approval of the May 2, 2023 Regular City Council Meeting Minutes 30 Martin noted the proposed revisions to be incorporated that were distributed to the 31 Council prior to the meeting. 32 33 Moved by Martin, seconded by DesLauriers, to approve the May 2, 2023 regular City 34 Council meeting minutes as amended. Motion passed unanimously. 35 36 V. CONSENT AGENDA (7:01 p.m.) 37 38 A. Approve 2023-2024 Liquor License Renewals 39 B. Approve Resolution Accepting Resignation of Police Officer Andrew Scharf 40 and Approve Recruitment of the Vacant Police Officer Position 41 C. Approve Easement Agreement with Nancy Jean and Roger S. Miller for 42 Hackamore Road Project 43 D. Approve Easement Agreement with Marilyn Larson for Hackamore Road 44 Project 45 E. Approve an Ordinance Amending the Official Zoning Map to Rezone Lots 1 46 and 2, Block 1, Cates Industrial Park 47 F. Approve Resolution Granting Preliminary Plat Approval for Cates Industrial 48 Park 49 G. Approve Resolution Granting Site Plan Review Approval for Cates 50 Industrial Park 51 Medina City Council Meeting Minutes May 16, 2023 2 Moved by Cavanaugh, seconded by DesLauriers, to approve the consent agenda. 1 Motion passed unanimously. 2 3 VI. COMMENTS (7:01 p.m.) 4 5 A. Comments from Citizens on Items not on the Agenda 6 There were none. 7 8 B. Park Commission 9 Scherer stated that the park tour will be held the following night. 10 11 C. Planning Commission 12 Finke stated that while the May Commission meeting was canceled there will be four 13 hearings at the June meeting. 14 15 VII. NEW BUSINESS 16 17 A. Amendment to Hamel Community Building Maintenance and Operations 18 Agreement (7:02 p.m.) 19 Johnson provided an update on the Hamel Community Building and asked Barnhart to 20 provide further information on the contractor who oversees the facility. 21 22 Barnhart noted that the contractor had requested to become a part-time employee and 23 staff also considered contracting for services. She stated that it would be more 24 expensive for the City for the person to become a part-time employee and therefore it is 25 recommended to make an amendment to the agreement. She stated that through this 26 agreement, the City pays the Lions, and the Lions distribute those funds, along with 27 additional funds from their coffers to pay the person. 28 29 DesLauriers stated that if this increase is made it would appear that the facility would run 30 at a deficit and the fees would also need to be increased. 31 32 Barnhart agreed that the fees need to be adjusted each year. She noted that there is a 33 fine line as to how much could be charged because the facility lacks a lot of amenities. 34 She commented that they can bring the fee schedule back for review but also wants to 35 ensure that the fee would not deter renters. 36 37 DesLauriers disagreed that there are not a lot of amenities as the users could utilize the 38 park amenities. 39 40 Barnhart noted that the other park amenities are first come, first serve basis, and are not 41 rented with the building. 42 43 Cavanaugh noted that the only option is a full day rental and perhaps there would be an 44 option for half day rentals. 45 46 Barnhart replied that becomes complicated because cleaning is required between 47 events, but they could investigate that option again. 48 49 Cavanaugh commented that perhaps prime days have a premium rental. 50 51 Medina City Council Meeting Minutes May 16, 2023 3 Moved by Cavanaugh, seconded by DesLauriers, to approve the amendment to the 1 Hamel Community Building Maintenance and Operations Agreement. Motion passed 2 unanimously. 3 4 B. Great River Greening Grant Opportunity – Medina Lake Preserve (7:08 p.m.) 5 Scherer stated that the Park Commission is always looking for grants to assist with the 6 parks and this opportunity has been on the horizon for several years. He stated that 7 now that there is access, Great River Greening is also excited about this opportunity. 8 He stated that the City would have the available match within the budget for the 9 preserve, as the City had already planned to do some cleanup. He stated that this letter 10 of support will be added to the grant application and if the funds are awarded, they would 11 bring back the proposal and scope of work. 12 13 Martin commented that this is exciting. 14 15 Moved by Martin, seconded by DesLauriers, to direct staff to draft a letter of 16 recommendation to Great River Greening in support of their proposed forest restoration 17 five-year work plan for Medina Lake Preserve. Motion passed unanimously. 18 19 VIII. CITY ADMINISTRATOR REPORT (7:12 p.m.) 20 Johnson had nothing further to report. 21 22 IX. MAYOR & CITY COUNCIL REPORTS (7:12 p.m.) 23 No reports. 24 25 X. APPROVAL TO PAY THE BILLS (7:12 p.m.) 26 Moved by Martin, seconded by DesLauriers, to approve the bills, EFT 006819E-27 006845E for $118,046.38, order check numbers 054280-054347 for $422,567.72, and 28 payroll EFT 0512702-0512737 for $68,256.21. Motion passed unanimously. 29 30 XI. ADJOURN 31 Moved by DesLauriers, seconded by Martin, to adjourn the meeting at 7:12 p.m. Motion 32 passed unanimously. 33 34 35 __________________________________ 36 Kathleen Martin, Mayor 37 Attest: 38 39 ____________________________________ 40 Caitlyn Walker, City Clerk 41 Medina City Council Special Meeting Minutes 1 May 17, 2023 DRAFT 1 MEDINA CITY COUNCIL MEETING MINUTES OF MAY 17, 2023 2 3 The City Council of Medina, Minnesota met in special session on May 17, 2023, at 8:00 4 a.m. at the Hamel Community Building, 3200 Mill Street, Hamel, MN. 5 6 I. Call to Order 7 8 Members present: Martin, Cavanaugh (A quorum was not present) 9 10 Members absent: Albers, DesLauriers, Reid 11 12 Also present: City Administrator Scott Johnson, City Clerk/Assistant to City 13 Administrator Caitlyn Walker, Public Works Director Steve Scherer, Planning Director 14 Dusty Finke, Chief Jason Nelson, and Finance Director Erin Barnhart. 15 16 II. Restaurant Meeting 17 18 City Council and staff met with restaurant owners from OAK Eatery and Medina 19 Entertainment Center. They discussed the opportunities and challenges restaurant owners 20 have faced over the past several years. They also discussed the need for additional 21 parking and infrastructure in Hamel in order to attract more restaurant users to the City. 22 23 24 III. Adjournment 25 26 The meeting was adjourned at 9:15 a.m. 27 28 29 _________________________ 30 Kathy Martin, Mayor 31 Attest: 32 33 34 ____________________________ 35 Caitlyn Walker, City Clerk 36 1 TO: Medina City Council FROM: Caitlyn Walker, City Clerk/Assistant to City Administrator DATE OF REPORT: May 23, 2023 DATE OF MEETING: June 6, 2023 SUBJECT: Addition of Juneteenth Holiday Background The legislature passed a bill to establish Juneteenth as a state-recognized holiday. The law was set to be effective August 1, 2023. On May 23, 2023, the state and local government omnibus bill was passed with a provision that changed the effective date so that the holiday must be observed this year. Public business cannot not be conducted on June 19 in observance of the holiday. The meeting calendar and the holiday personnel policy need to be updated to reflect this change. Recommendation Approve the updated 2023 meeting calendar and approve the updated Personnel Policy 5.70 Holiday. MEMORANDUM Agenda Item #5A S M T W T F S S M T W T F S 1 2 3 4 5 6 7 2 3 4 5 6 7 8 8 9 10 11 12 13 14 9 10 11 12 13 14 15 15 16 17 18 19 20 21 16 17 18 19 20 21 22 22 23 24 25 26 27 28 23 24 25 26 27 28 29 29 30 31 30 31 S M T W T F S S M T W T F S 1 2 3 4 1 2 3 4 5 5 6 7 8 9 10 11 6 7 8 9 10 11 12 12 13 14 15 16 17 18 13 14 15 16 17 18 19 19 20 21 22 23 24 25 20 21 22 23 24 25 26 26 27 28 27 28 29 30 31 S M T W T F S S M T W T F S 1 2 3 4 1 2 5 6 7 8 9 10 11 3 4 5 6 7 8 9 12 13 14 15 16 17 18 10 11 12 13 14 15 16 19 20 21 22 23 24 25 17 18 19 20 21 22 23 26 27 28 29 30 31 24 25 26 27 28 29 30 S M T W T F S S M T W T F S 1 1 2 3 4 5 6 7 2 3 4 5 6 7 8 8 9 10 11 12 13 14 9 10 11 12 13 14 15 15 16 17 18 19 20 21 CITY COUNCIL - 7:00 pm 16 17 18 19 20 21 22 22 23 24 25 26 27 28 1st Tuesdays* 23 24 25 26 27 28 29 29 30 31 WORK SESSION - 6:00 pm CITY COUNCIL - 7:00 pm S M T W T F S S M T W T F S 3rd Tuesdays* 30 1 2 3 4 5 6 1 2 3 4 7 8 9 10 11 12 13 5 6 7 8 9 10 11 PLANNING COMMISSION - 7:00 pm 14 15 16 17 18 19 20 12 13 14 15 16 17 18 2nd Tuesdays* 21 22 23 24 25 26 27 19 20 21 22 23 24 25 28 29 30 31 26 27 28 29 30 1 2 PARK COMMISSION - 7:00 pm 3rd Wednesdays* S M T W T F S S M T W T F S HOLIDAYS 1 2 3 3 4 5 6 7 8 9 4 5 6 7 8 9 10 10 11 12 13 14 15 16 ELECTION DAYS 11 12 13 14 15 16 17 17 18 19 20 21 22 23 18 19 20 21 22 23 24 24 25 26 27 28 29 30 CITY EVENTS 25 26 27 28 29 30 1 31 *unless otherwise noted January 3rd: 5:30 PM City Council Goal Setting Session April 5th: 6:30 PM Board of Appeal and Equalization Meeting April 18th: 6 PM - Continuation of Board of Appeal Meeting April 29th: 8 AM to Noon Clean-up Day May 17th: Annual Park Commission Park Tour May 20th: Annual Bicycle Safety Rodeo for Kids July 5th: Council meeting moved to Wednesday (Independence Day on Tuesday) August 1st: Night to Unite Neighborhood Celebrations August 2nd: Council meeting moved to Wednesday (Night to Unite on Tuesday) September 5th: 6 PM Budget Open House September 16th: Medina Celebration Day November 7th: School District Elections November 8th: Council meeting moved to Wednesday (Election on Tuesday) JUNE NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JULY AUGUST SEPTEMBER OCTOBER 2023 MEETING CALENDAR Personnel Policy 5.70 Holidays 71 5.70 Holidays Purpose: The City desires to allow time off for employees to observe certain recognized holidays. Policy: 1. The following calendar days and such other days as the Council may fix, are recognized holidays: Holiday Date New Year’s Day January 1 Martin Luther King’s Day Third Monday in January Presidents’ Day Third Monday in February Memorial Day Last Monday in May Juneteenth June 19 Independence Day July 4 Labor Day First Monday in September Veterans’ Day November 11 Thanksgiving Day Fourth Thursday in November Day After Thanksgiving Friday following Fourth Thursday in November Christmas Day December 25 Two Floating Holidays See details below Employees wanting to observe holidays other than those officially recognized by the City may request either vacation leave, compensatory time, floating holiday, or unpaid leave for such time off. 2. All full-time employees are entitled to time off with 8 hours of holiday pay on holidays recognized by the City. Benefited part-time employees shall receive 6 (six) hours of holiday pay. Regular part-time employees shall receive 4 (four) hours of holiday pay. Temporary part-time employees shall have holidays off without pay. 3. All City of Medina offices and buildings shall be closed for business on each recognized holiday, but employees may be required to work on recognized holidays when the nature of their duties or other conditions require them to do so. Employees required to work on a holiday shall receive pay at the rate of one and one-half times their normal rate of pay. 4. Recognized holidays that fall on Saturday will be observed that preceding Friday. Holidays that fall on a Sunday will be observed the following Monday. Each holiday commences at Formatted: Underline Formatted: Underline, Font color: Red Formatted: Underline Personnel Policy 5.70 Holidays 72 the beginning of the first shift on the day of which the holiday occurs and continues for twenty-four (24) hours thereafter. The City Administrator may at his/her discretion close City offices to the public on December 24th (Christmas Eve) or December 26th with public notice if enough employees request off. Employees will be given the choice to come into work on that day or take the day off using accumulated leave (floating holiday, vacation, or compensatory time off). 5. Floating Holiday: Each full-time City employee is granted two floating holidays and each benefited part-time and regular part-time City employee is granted one floating holiday that may be used for personal time off from work duties. The individual floating holidays must be used within the calendar year, in an increment of eight (8) hours only. The floating holiday may not be carried over to the next year. The floating holiday leave request must be submitted to the employee’s department head for approval prior to the start of the requested leave, and is generally desired to be requested five days or more in advance of the start of the requested leave. Upon termination of employment, any remaining individual floating holidays shall be paid in full at the employee’s regular hourly rate. However, if the employee is discharged for misconduct or quits without giving proper notice, the unused floating holiday shall be forfeited. Approved By: Medina City Council Date: December 20, 2005; Amended April 17, 2012 and Amended September 5, 2017, Amended June 6, 2023 Formatted: Underline, Font color: Red Resolution No. 2023- June 6, 2023 Member ____ introduced the following resolution and moved its adoption: CITY OF MEDINA RESOLUTION NO. 2023- RESOLUTION ACCEPTING RESIGNATION OF COMMUNITY SERVICE OFFICER JACOB MILINKOVICH WHEREAS, Jacob Milinkovich began employment with the City of Medina as a Community Service Officer in the Police Department on November 8, 2022; and WHEREAS, on May 19, 2023, Milinkovich submitted a letter of resignation from his position addressed to the Public Safety Director; and WHEREAS, Milinkovich’s resignation from his position is effective June 2, 2023. NOW, THEREFORE, BE IT RESOLVED by the city council of the city of Medina that Jacob Milinkovich’s letter of resignation is hereby accepted. Dated: June 6, 2023. ______________________________ Kathleen Martin, Mayor ATTEST: _______________________________ Caitlyn Walker, City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member ______ and upon vote being taken thereon, the following voted in favor thereof: And the following voted against same: Whereupon said resolution was declared duly passed and adopted. Agenda Item #5B 1 TO: Medina City Council FROM: Caitlyn Walker, City Clerk/Assistant to City Administrator DATE OF REPORT: June 1, 2023 DATE OF MEETING: June 6, 2023 SUBJECT: Police Officer Appointment Background In 2022, the City Council authorized the addition of a police officer position in 2023. The position was posted at the end of 2022. Interviews were conducted but the final candidate pulled out from the process. The position was reposted this spring. Based on the final scoring of applicants, committee interviews, background/reference checks, we are recommending the appointment of Tanner Wiese to the position of Police Officer contingent upon completion of skills training, passage of the P.O.S.T. test, and passage of the psychological and physical evaluations. Wiese currently serves as a Medina Community Service Officer and is expected to transition to a Police Officer in August 2023. After the appointment of Wiese as a Police Officer, we have one remaining vacant Police Officer position. Staff continues to recruit for the vacant position. Recommendation We recommend the appointment of Tanner Wiese to the position of Police Officer, contingent upon completion of skills training, passage of the P.O.S.T. test, and passage of the psychological and physical evaluations, with an hourly wage (non-exempt) of $32.00/hr., vacation to begin accruing at 10 days per year, and other benefits to be at the same rate as other union employees, in accordance with the City Personnel Policies, and a one-year probationary period. MEMORANDUM Agenda Item #5C 1 TO: Medina City Council FROM: Caitlyn Walker, City Clerk/Assistant to City Administrator DATE OF REPORT: June 1, 2023 DATE OF MEETING: June 6, 2023 SUBJECT: Police Department Office Assistant Background On April 4, 2023, the City Council authorized staff to begin the recruitment process to fill the Police Department Office Assistant position. Based on the final scoring of applicants, committee interviews, background/reference checks, we are recommending the appointment of Brenna Groth to the position of Office Assistant. Groth has verbally accepted the position with a starting date of June 26, 2023, contingent on City Council approval. Appointee Background Groth has two years of experience as a Police Records Clerk with the Robbinsdale Police Department. She volunteered in the Plymouth Police Explorer program for several years and has served as a Parks Patrol Officer and Reserve Officer for the Plymouth Police Department. She also has several years of experience working in mall security. The City of Medina has confidence in her abilities, communication, character, and problem- solving skills. Selection Process • The City Council directed staff to recruit for the full-time position on April 4, 2023. • Advertisements for the position were published through the League of Minnesota Cities, social media, and the City Website. • Applications were received, reviewed, and scored by City Clerk/Assistant to the City Administrator Caitlyn Walker. • Interviews were conducted by Jason Nelson, Anne Klaers, and Caitlyn Walker on May 4, 2023. • The Medina Police Department completed a background check on May 30, 2023, which she passed. • Groth’s start date will be June 26, 2023, with an hourly wage (non-exempt) of $25/hr., benefits to be at the same rate as other employees, in accordance with the City Personnel Policies. Following a six-month probationary period, Groth’s performance will be reviewed, with a positive review, Groth will become a non- probationary employee. Groth has been notified that our recommendation is contingent upon City Council approval. MEMORANDUM Agenda Item #5D 2 Recommendation We recommend the appointment of Brenna Groth to the position of Office Assistant effective June 26, 2023, with an hourly wage (non-exempt) of $25/hr., vacation to begin accruing at 10 days per year, and other benefits to be at the same rate as other full-time employees, in accordance with the City Personnel Policies. PC Pyrotechnics Inc. Sponsor: Date: __________ CONTRACT This Contract entered into this _____ day of _____________________ 20 _____ , engages the services of PC Pyrotechnics Inc., (hereinafter referred to as “PC PYROTECHNICS”) to produce and perform a fireworks display under the following terms: 1.PC PYROTECHNICS reserves the right to make substitutions as reasonably necessary. All substitutions will be of equal or greater quality, quantity, and value. 2.PC PYROTECHNICS shall provide qualified pyrotechnicians who will deliver, set-up, execute and take down the fireworks display. The pyrotechnicians shall conduct an after-display search of the grounds in an effort to locate and dispose of any unexploded or defective fireworks. The extent of such search shall be reasonably dictated by such elements as prevailing weather conditions, location of display sight, time of completion of display, etc. 3.PC PYROTECHNICS shall provide Liability Insurance (including spectator and property coverage) in the amount $2,000,000 naming the Sponsor as an additional insured. 4.The cost of the display will be $ _________________________________ . At the time of signing of this Contract, Sponsor will pay a nonrefundable deposit amount of 50% The remaining balance will be paid by Sponsor prior to the display being fired. 5.The date of the display will be ______________________ , at _______ PM. In case of inclement weather, the display will be rescheduled for _____________________ at ________ PM. In the event inclement weather forces the cancellation of the display, Sponsor will pay 10% of the contract total, to cover expenses of redisplaying the display. If the display is not rescheduled, Sponsor will pay 20% of the contract total - for transportation, labor, and restocking charges. The decision to proceed with the display based upon Inclement weather shall be made by the Sponsor. PC PYROTECHNICS shall have complete authority to cancel the display if, in the reasonable opinion of PC PYROTECHNICS , the health, safety, and well being of the pyrotechnicians and/or spectators or property would be jeopardized by proceeding with the display. 6.Sponsor shall procure and furnish a suitable location for the fireworks display in accordance with NFPA 1123, and shall secure all police, fire, local and state permits, and shall arrange for all security bonds as required by law for the location of the display. Sponsor shall furnish all necessary police, fire and other appropriate protection necessary for proper crowd control, automobile parking, and supervision in clearing of debris after the display. 5/6/2023 City of Medina 2052 County Road 24 Medina, MN 55340 6th May 23 7,500.00 8pm9/16/2023 Agenda Item #5E 7. Sponsor explicitly acknowledges that an early morning search of the grounds/ location the morning after the display is of utmost importance. If any unexploded or defective fireworks are found, that were missed during the inspection the preceding evening, the sponsor shall immediately notify PC PYROTECHNICS , and the local fire department. 8. PC PYROTECHNICS agrees to take all steps reasonably necessary to safeguard Sponsor's property and the property of the spectators. Should any losses occur, the Sponsor must notify PC PYROTECHNICS of the nature of the loss and the date on which the loss occurred. Said notice shall be in writing and shall provide as much detail as reasonably possible in relation to the nature and extent of the loss. 9. PC PYROTECHNICS shall perform all services required hereunder, except when prevented by strike, lockout, act of God, accident, or other circumstances beyond PC PYROTECHNICS 'S control. 10. This Contract shall be construed by the laws of the state of Minnesota. In the event that any court of competent jurisdiction deems any provision of this agreement unenforceable, the remaining provisions hereof shall remain in full force and effect. 11. The Sponsor shall pay to PC PYROTECHNICS all costs and expenses, including reasonable attorneys fees, incurred by PC PYROTECHNICS in enforcing the terms of this Contract. 12. Sponsor agrees to indemnify and hold harmless PC PYROTECHNICS for any and all costs and liabilities, which PC PYROTECHNICS may incur as a result, or arising out of products not supplied by PC PYROTECHNICS or the actions of individuals other than the pyrotechnicians and other employees of PC PYROTECHNICS . 13. This Contract constitutes the entire agreement between the parties hereto and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, either oral or executed in writing by the parties to be bound thereby. The waiver of any provisions of this Contract shall not constitute a waiver of any other provision of this contract. 14. The party signing this document for the Sponsor warrants and represents that she/he is solely authorized to enter into this agreement on behalf of the Sponsor. ADDITIONAL PROVISIONS: PC Pyrotechnics Inc. 4016 Aspen Circle South Rockford MN 55373 (763) 458-9885 CUSTOMER: Address: By By Date Signed Date Signed Phone # Agenda Item #5F SUBJECT: City of Medina, Council Chambers rev3 City of Medina - Scott - Council Chambers - 051623 rev3 Based on the information given and site visit, we have prepared this proposal to install the audio visual system at The City of Medina. This proposal includes the scope of work, system costs, standard warranty, scheduling, and implementation. EPA Audio Visual, Inc. is a premier communication technology integration firm. We specialize in design and design/build A/V solutions as well as A/V technology upgrade solutions for integrated multimedia presentation systems, audio systems, distributed media, video conferencing, and portable systems. Scope of Work Council Chambers: During the proposed installation EPA Audio Visual, Inc. will be upgrading the presentation system. Audio: • The existing audio DSP will be replaced with a new DSP that will be programmed and aligned to route, balance and equalize audio within the space. • The upgraded DSP will also incorporate AEC which is currently not in the system. • The two (2) existing front speakers will be reused. • The existing rack -mounted, 2 -channel amplifier will be reused. • Local speech reinforcement is a part of this system. • An audio record output will be programmed to feed the conferencing PC. Equipment Rack: • A 12 -RU, freestanding rack will be located in the corner cabinet. Notes: • Construction and electrical requirements necessary to complete this project are not included in the proposal. A general and electrical contractor may have to be contracted by the owner. • Customer will need to provide a duplex receptacle at the display locations. • Customer will need to provide cable pathway for specified locations. • EPA is not responsible for the functionality of existing equipment or faulty infrastructure incorporated into the newly installed system. Copyright 2023, EPA Audio Visual, Inc. All Rights Reserved 2 System Implementation EPA provides a turnkey audio visual system, including equipment, materials, testing, training and warranty. Installation includes engineering, labor, and hardware for display, audio, video, control systems, equipment rack, equipment mounting, plates, panels, connectors and cables. The following items are dependent on project requirements: Application Engineering: • Meet with the client's representatives to answer questions during proposal and project reviews. • Develop and review equipment lists and scope of work to ensure functionality of proposed system. • Advise conduit and electrical requirements when applicable. • Review architectural, electrical, and millwork drawings. • Recommend or review acoustical changes or requirements. • Provide speaker placement for proper coverage. Project Management: • Meetings with client's technical/contract representatives to answer questions and/or resolve issues. • Coordinate installation process, system implementation, monitoring, and submittal review with client and their contractors. • Stage equipment and materials at our location. • Submit owner's manuals and equipment documentation upon request. • Supervise end user training on systems. Installation Labor: • Terminate and label AV system cable that is part of our project. • Mount/rack AV equipment as specified in the scope of work. • Adjusting and balancing audio gain settings, equalization, and DSP configuration. • Assure that the system meets design criteria and functions per the scope of work. • Site clean-up, disposal of packaging, etc. This does not include existing equipment recycling. • Pricing is based upon standard business hours of 8:00 a.m. until 4:30 p.m. CST Monday through Friday. Second and third shifts may require additional labor unless a prior agreement has been made. Exclusions: • All conduit, high voltage wiring, breakers, relays, boxes, receptacles, etc. • Building, site construction, or demolition. • Concrete cutting, core drilling etc. • Sheet rock replacement or repair necessary for implementation of AV system. • Ceiling tile or grid work removal or replacement. • All millwork (moldings, trim, etc.). • Permits (unless specified in contract). • Painting or refinishing necessary for implementation of AV system. System Costs The system costs include the provision of equipment, hardware, cable, connectors, etc., as well as all engineering, project management, and field installation labor necessary to provide a complete operational system as described above. Copyright 2023, EPA Audio Visual, Inc. All Rights Reserved 3 Audio Equipment: Qty Brand 1 Biamp 1 Biamp 1 JBL 2 JBL 1 Denon 1 Shure 9 Shure 10 Shure 10 Shure Model and Description TesiraFORTE Al, DSP: 12 in x 8 out TesiraFORTE CI, DSP: 12(AEC) in x 8 out SA 1120Z, Drivecore Audio Amplifier Control 23-1, Ultra -Compact Indoor/Outdoor Speaker (Black) DN-700R, Network SD/USB Recorder SLX4/SM58, Wireless Handheld Microphone Package MX418/C, 18" Gooseneck Microphone w/ Shock & Flange Mount MX400DP, Microphone Desktop Base MX410/C, 10" Miniature Gooseneck Microphone With Bi-Color Status Light Equipment Rack: Qty Brand 1 Middle Atlantic 1 JuiceGoose 1 Middle Atlantic 2 Middle Atlantic 4 Middle Atlantic 2 Middle Atlantic 1 Middle Atlantic 1 $Each $Extended Model and Description DR12, 12 Space Desktop Rail Equipment Rack JB11-15A-EPA1, Rack Mount Power Strip UPS-S500R, Select Series UPS Backup Power, 1RU, 500A UFA-8-F1, 1RU 8"D RackShelf w/ 1RU Faceplate IEC-18, IEC Power Cord, 18" (Single) VT1, 1 Space Vented Blank Panel TW12, Velcro® Cable Strap (Qty: 12) Remove 2,402.00 Existing Existing Existing Existing Remove 224.00 296.00 Remove 2,402.00 Existing Existing Existing Existing Remove 2,240.00 2,960.00 $Each $Extended 75.00 75.00 145.00 145.00 475.00 475.00 49.00 98.00 13.00 52.00 16.00 32.00 20.00 20.00 Summary $Totals Equipment Total: Installation Materials: Installation Labor/Project Management: Custom Programming: Design/Engineering: Shipping: Project Total: 8,499.00 250.00 2,500.00 N/A 280.00 325.00 11,854.00 • Sales Tax not included, if applicable. • This proposal is valid for 30 days. Thereafter it is subject to change. Copyright 2023, EPA Audio Visual, Inc. All Rights Reserved 4 Payment Schedule All payments are due Net -30 days from date of delivery on equipment with an active account. All others will be required to pay fifty percent (50%) upon order and the balance at completion of the project. If there is a delay in scheduling due to room availability, electrical, construction, etc., equipment will be billed at that time. Should delays occur with specific products from our vendors preventing the completion of a project, delivery and partial billing of any received equipment and/or labor shall occur or could be subject to manufacturer price increase. Payment(s) can be made in the form of EFT's, Check or Credit Card. If a Credit Card is used, it must be presented at the time of order and will be subject to a 3% processing fee. Credit Cards may not be used after a project has been invoiced on Net terms. Remit and Order Address: (All payments must be mailed to address below) EPA Audio Visual, Inc. 7910 State Hwy 55 Rockford, MN 55373 EPAStaff@eoaaudio.com 1 763-477-4395 — Fax Standard Warranty • EPA warrants the audio visual system furnished to be free from defects in workmanship (i.e. cables, connections, structures) failure for a period of one (1) year from the date of acceptance or first beneficial use, whichever occurs first. Warranty service for such defects will be handled in a reasonable and timely manner from the time of notification to EPA by the owner or their agent. • Warranty applies only to equipment sold on contract through EPA Audio Visual, Inc. and does not include existing or owner -furnished equipment. • EPA will provide a 24 -hour support phone number. It will be determined at the time of the call if a service technician will be required to make a service call. If a service call is needed, a service technician will be sent to the owner's location within a reasonable amount of time. • Warranty period on equipment shall start on the day of installation of equipment. • Manufacturer's equipment warranties are of varying lengths (usually 90 days to 3 years). • EPA will warrant equipment for the term established by the manufacturer. • Warranty does not apply to any product that has been subject to misuse, neglect, accident, changes in external or internal settings, reconfiguration of the wiring, or operational error. • Owner changes to network, computers, peripherals, voice/video servers, or infrastructure requiring the reconfiguration of the audio visual equipment after system deployment is not covered under the standard warranty. Implementation Team Quentin McDermid, (763) 477-6931 will serve as your Account Manager and will provide primary coordination of systems and equipment recommendations and pricing for the project. Doug Neumann, (763) 477-6931 will serve as Project Engineer and will oversee the various disciplines within the EPA team. Other members of the EPA technical and administrative staff will be utilized as required for the project. Copyright 2023, EPA Audio Visual, Inc. All Rights Reserved 5 Summary We are confident that our participation in your project will contribute to its success. We appreciate the opportunity to submit this proposal package and look forward to your authorization to proceed. Sincerely, 0(-4-1.--A4,111 GRAA-‘-4:-Q Quentin McDermid Regional Sales Manager EPA Audio Visual, Inc. Customer or Authorized Representative: Your signature below acknowledges you have read and agree to the stated proposed information and authorize EPA Audio Visual, Inc. to proceed with the project. Signature Print Name Title Date Project Total: $11,854.00 • Sales Tax not included, if applicable. • This proposal is valid for 30 days. Thereafter it is subject to change. City of Medina - Scott - Council Chambers - 051623 rev3 Copyright Notice: EPA hereby authorizes duplication of this material to the extent necessary in connection with the implementation and use of the system. However, any other duplication of this material in any form or format including, but not limited to, use for purpose of re -bidding the work with a competitor of EPA cannot be made without the advanced written permission of EPA. • This proposal including its system design, function, and programming are solely owned by EPA. • Copyright pertains to equipment list, design, function, drawings, graphics, overlays, programming, layouts etc. related to this proposal. • Duplication includes photocopies, facsimiles, electronic transfer, etc. • If extra copies of the document or drawings are necessary, a written request can be made to EPA Audio Visual, Inc. Copyright 2023, EPA Audio Visual, Inc. All Rights Reserved 6 Agenda Item #5G PROPOSAL NO. Proposal PROPOSAL SUBMITTED TO: SHEET NO. DATE WORK TO BE PERFORMED AT: Al 3o 2,3 ADDRESS DATE OF PLANS \RCHITECT r We hereby propose to furnish the materials and perform the labor necessary for the completion of Pe *.A.,—/— , ► o rte - r T/ d- A o Gp s I) A e_ CI b , AfQ € i.L a, oa o GQ 5 -W-9-115 Li All material is guaranteed to be as specified, and the above work to be per4r519din accordance wi h the drawings/and specifications submitte, for aboveov completed in a substantial workmanlike manner for the sum of 0 7— & 5.„4") ¢— and Dollars ($ 1_0_ p ) with payments to be made as follows. Any alteration or deviation from above specifications involving extra costs will be executed only upon written order, and will become an extra charge Respectfully over and above the estimate. All agreements contingent upon strikes, submitted accidents, or delays beyond our control. Per 7 e7 days. Note — this proposal may be withdrawn by us if not accepted within ACCEPTANCE OF PROPOSAL The above prices. specifications, and conditions are satisfactory and are hereby accepted. You are authorized to do the work as specified. Payments will be made as outlined above. Signature — Date Signature J adams• D8118 3-12 6533 Flying Cloud Drive, Suite 800 Alternative Eden Prairie, MN 55344 Business (952) 937-7688 Furniture, Inc. Fax (952) 937-7691 Project:City of Medina - City Hall Storage Room Contact:Caitlyn Walker Salesperson:Mark Frommelt Designer:LuAnne Zilka System:Herman Miller AO2 / Aurora / Great Openings / ECA Date:5/26/2023, Revision Qty.Description Unit Price Total Price 42 Toggle 2.16 90.72 42 Wall Fastener, Machine Screw 0.33 13.86 3 84" Wall Track 42.40 127.20 2 30 x 48" Worksurface 140.58 281.16 4 48" Shelf 68.64 274.56 4 Diagonal Tray 31.60 126.40 1 12 x 48" Tackboard 81.64 81.64 1 48" Tool Bar 70.80 70.80 6 Velcro Strips, Black Undermount Power Strip cords, 2 each cord 2.50 15.00 2 Great Openings Mobile Box / Box / File Pedestal Key Alike 329.31 658.62 26-7/8"H x 27-7/8"D x 15-1/4"W - Model #: EL-A-2211-0004 - Pull Style: A Full Pull - Finish: Medium Tone Includes June 5, 2023 price increase 1 Great Openings Double Door Storage Cabinet with 2 Adjustable Shelves Key Alike 626.69 626.69 42"W x 18-1/4"D x 39-7/8" H - Model #: CG-A-06F4-0004 - Pull Style: A Full Pull - Finish: Medium Tone Includes June 5, 2023 price increase 3 ECA Power Strip 8 Power, 108" Cord, Circuit Breaker On/Off Switch 116.95 350.85 - Model #: PS8-B-108 - Finish: Black Mount under the worksurface 1 Aurora Quik-Lock Double Door Storage Cabinet Adjustable Shelves 1,194.64 1,194.64 42"W x 30"D x 76-1/4"H -Model #: 3076CL00, 30R00, 30RT00, 4211S00, 4230T00, 4276B00, 4276QDR00 -Pull Style: Standard, Quuick-Lok black handle -Finish: Copra, CP42, Textured Aurora Lead time 11-12 weeks Double Door Storage PROJECT PROPOSAL PRODUCT SPECIFICATIONS Designer:City of Medina 2023 1 of 3 Agenda Item #5H Laminate: Formica Pumice 858-58 Flipper Door , Tackboard Fabric: Guilford, Bailey 2299, Khaki 7012 , Railroad, CAT1 Edge: Rehau Innertone Cantilevers: MT Paint: MT Paper Management: BU Wall Track: AO-B/A Product Total: 3,912.14 Fabric: Guilford, Bailey 2299, Khaki 7012, CAT 1, Railroad Delivery: 90.00 Installation: 488.00 Caitlyn Walker, 763-473-8850 Design: 520.00 City Hall Great Openings Surcharge: 71.55 2052 Co Rd 24 Aurora Freight / Surcharge: 374.25 Medina, MN 55340 NOTE:PROJECT TOTAL:5,455.94 - Lead Time: 11-12 Weeks.Applicable Sales Taxes will be added at time of invoicing. -Quote Valid for 30 Days Pricing Subject to Unannounced Tariff Surcharges. Finishes: Contact / Location: ***PROJECT SPECIFICATIONS AND TERMS ARE LISTED ON THE FOLLOWING PAGE.*** Designer:City of Medina 2023 2 of 3 FINISHES: Fabric, Laminate & Paint: Standard selections included in pricing, unless noted otherwise. (Customer Choice from ABF selection). *Please note: Many commercial fabrics are subject to what is termed moisture regain . This is a process by which the fibers within a particular fabric absorb moisture from the surrounding environment resulting in temporary relaxing (or sagging) of a fabric's appearance. This sagging is not the result of misapplication, but rather the fabric's natural reaction to fluctuations in ambient humidity levels. PRODUCT: *Pricing valid for 30 days from proposal date. *Pricing subject to unforeseen manufacturer imposed tariffs, price changes, and fuel surcharges *Products quoted are based upon most current field dimensions available. ABF will attempt to verify field dimensions as construction progress and circumstances allow. Should it be necessary to place orders prior to the availability of verified field dimensions, customer may be responsible for associated costs. *All sales are final. Unwanted product ay not be returnable, or subject to re-stock charges. *Charges may be applicable should storage of purchased product be necessary beyond initially scheduled timeframes. LABOR & EQUIPMENT: *ABF will be responsible for supplying all necessary labor & equipment to perform the installation. *Labor is quoted as non-union labor. *Labor is quoted for regular working hours (Monday-Friday; 8:00 A.M. - 5:00 P.M.). *Customer will be responsible to have all miscellaneous items cleared out prior to installation. *Delays created by customer or other contractors may create additional labor charges. *Labor is quoted as a one phase project. (split dates will require additional charges). *Install and delivery quote is based on first floor delivery and install with clear access without steps. ELECTRICAL: *Customer will be responsible to have a qualified electrician to perform all electrical connections including hardwiring, panel-to-panel and receptacles. TERMS: Net 15 days unless other arrangements made with Seller. A 50% deposit may also apply. Buyer understands and agrees to pay a service charge of 1.33% per month (16% per annum) after 15 days of receipt of goods. Buyer further agrees to pay ALL costs of reasonable collections and attorneys fees. Buyer acknowledges Seller's retention and hereby grants to Seller a purchase money security interest in all merchandise purchased or described herein unless and until Seller receives payments as described above. Buyer agrees to execute a standard UCC Financing Statement to perfect any such security interest. In the event Buyer fails to execute UCC financing statement, this Sales Agreement shall suffice and may be filed by Seller to perfect the security interest. Signature: Title Date: TERMS & CONDITIONS Designer:City of Medina 2023 3 of 3 TO: Medina City Council FROM: Public Safety Director Jason Nelson DATE: June 1, 2023 RE: Donation – Memorial for Dick Avery On May 15, 2023, the police department received a check from the Dick Avery Memorial for $50.00 as a donation for the Medina Police Department. I would ask the Medina City Council to accept the donation for the Crime Prevention Fund and direct staff to respond with a thank you letter to Dick Avery Family. Agenda Item #5I Resolution No. 2023-XX June 6, 2023 Member introduced the following resolution and moved its adoption: CITY OF MEDINA RESOLUTION NO. 2023-XX RESOLUTION ACCEPTING DONATION FROM DICK AVERY MEMORIAL WHEREAS, the Dick Avery Memorial generously offered to donate a check in the amount of $50 to the City of Medina (the “City”); and WHEREAS, the Donation will be dedicated to the City’s Police Department Crime Prevention Fund; and WHEREAS, the City wishes to accept the Donation and express its gratitude to the Dick Avery Memorial for his generosity. NOW, THEREFORE, BE IT RESOLVED by the city council of the city of Medina, Minnesota that the City accepts the Donation and thanks the Dick Avery Memorial. Dated: June 6, 2023. ____________________________________ Kathleen Martin, Mayor ATTEST: ___________________________________ Caitlyn Walker, City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member upon vote being taken thereon, the following voted in favor thereof: And the following voted against same: Whereupon said resolution was declared duly passed and adopted. Resolution No. 2023-XX 1 June 6, 2023 Member introduced the following resolution and moved its adoption: CITY OF MEDINA RESOLUTION NO. 2023-XX RESOLUTION ACCEPTING DONATIONS FOR THE 2023 BIKE SAFETY RODEO WHEREAS, The donors listed on Exhibit A (the “Donors”) have generously offered to donate money listed on Exhibit A (the “Donation”) to the City of Medina (the “City”); and WHEREAS, the Donation will be dedicated to pay for the annual Bike Safety Rodeo activities; and WHEREAS, the City wishes to accept the Donation and express its gratitude to the Donors for their generosity. NOW, THEREFORE, BE IT RESOLVED by the city council of the city of Medina, Minnesota that the City accepts the Donation and thanks the Donors. Dated: June 6, 2023. ____________________________________ Kathleen Martin, Mayor ATTEST: ___________________________________ Caitlyn Walker, City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member upon vote being taken thereon, the following voted in favor thereof: And the following voted against same: Whereupon said resolution was declared duly passed and adopted. Agenda Item #5J Resolution No. 2023-XX 2 June 6, 2023 Exhibit A Donations BUSINESSES DONATION 21st Century Bank $200 Dojo Karate Bounce House/Prize Farmers State Bank of Hamel $200 Gear West Bicycle Repair Station and Personnel Hamel Fire Department Fire Truck and Personnel Hometowne Pizza Food Truck/Two Bicycles Kelly’s Towing $500 Koch’s Korner $200 Loretto Auto Body $225 Loretto Fire Department Fire Truck and Personnel Medina Entertainment Center Bowling Coupons Motley Auto Service $100 North Memorial Ambulance Ambulance and Personnel Rumble Boy Kickboxing Club $100 State Farm – Garrett Larson Booth and Personnel Resolution No. 2023-## DATE Member _________ introduced the following resolution and moved its adoption: CITY OF MEDINA RESOLUTION NO. 2023-## RESOLUTION AUTHORIZING PUBLICATION OF ORDINANCE NO. 709 BY TITLE AND SUMMARY WHEREAS, the city council of the City of Medina has adopted Ordinance No. 709, an ordinance amending the official zoning map to rezone Lots 1 and 2, Block 1 and Outlot A, Cates Industrial Park; and WHEREAS, Minnesota Statues § 412.191, subdivision 4 allows publications by title and summary in the case of lengthy ordinances or those containing charts or maps; and WHEREAS, the ordinance is two pages in length and contains a map; and WHEREAS, the city council believes that the following summary would clearly inform the public of the intent and effect of the ordinance. NOW, THEREFORE, BE IT RESOLVED by the city council of the City of Medina that the city clerk shall cause the following summary of Ordinance No. 709 to be published in the official newspaper in lieu of the ordinance in its entirety: Public Notice The city council of the City of Medina has adopted Ordinance No. 709, amending the official zoning map to rezone Lots 1 and 2, Block 1 and Outlot A, Cates Industrial Park. The ordinance rezones property east of Willow Dr, north of Chippewa Rd, (currently address 2575 Cates Ranch Dr) to the Business (B) zoning district. The full text of the ordinance is available from the city clerk at Medina city hall during regular business hours. BE IT FURTHER RESOLVED by the city council of the City of Medina that the city clerk keep a copy of the ordinance in her office at city hall for public inspection and that she post a full copy of the ordinance in a public place within the city. Agenda Item #5K Resolution No. 2023-## 2 DATE Dated: ______________________________ Kathleen Martin, Mayor ATTEST: _________________________________ Caitlyn Walker, City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member _______ upon vote being taken thereon, the following voted in favor thereof: And the following voted against same: Whereupon said resolution was declared duly passed and adopted. MEMORANDUM TO: Mayor and City Council FROM: Jim Stremel, City Engineer DATE: May 31, 2023 MEETING: June 6, 2023 City Council SUBJECT: Water Treatment Plant Filters 1 and 2 Rehabilitation Project – Approve Change Order No. 1 Background: The Water Treatment Plant (WTP) Filters 1 and 2 Rehabilitation Project included the furnishing of all labor and materials for the construction of the following: - Removal and disposal of existing filter media. - Furnishing and installing new filter media. - Inspection of interior steel surfaces of filter vessels. - Complete blasting and painting interior steel surfaces of filter vessels (Bid Alt. No. 1). - Removal and disposal of existing media retaining nozzles. - Furnishing and installing new media retaining nozzles. - Disinfection of filter vessels and appurtenances. - Providing system start-up and training. The spent filter media that was removed from the two filters needed to be tested for radium and properly disposed. Bid pricing for proper disposal options based on different radium concentrations was included in Bid Alternates 2 and 3. At the time of award, Bid Alternate 2 was included in the contract as the more conservative of the spent filter media disposal scenarios. The City Council awarded the construction contract for the Water Treatment Plant Filters 1 and 2 Rehabilitation Project to Shank Constructors, Inc. on Nov. 1, 2022. Change Order No. 1: Based on the radium test results, the radium concentrations in the spent filter media are low enough that the material can be reused in construction, and it does not need to be mixed or “diluted” with clean sand or hauled and disposed of at a landfill. Therefore, Bid Alternate No. 2 was not necessary and can be deleted from the contract, although the cost for the contract to haul the media to Medina Public Works will still need to be accounted for. These items are detailed in the attached Change Order No. 1. In addition to the media hauling mentioned above, Change Order No. 1 also includes the cost to apply caulk to the exposed threaded rod plate connections on the underside of the filter chamber instead of sandblasting and painting those surfaces and the cost for additional underdrain surface Agenda Item #5L 2 preparation and painting labor due to unanticipated obstructions in the work space. These items were discussed and agreed upon between the Contractor, City staff, and WSB during construction. The deletion of Bid Alternate No. 2 and the addition of these items results in a net decrease in the contract amount by $81,486.00 as detailed in the attached Change Order No. 1. Change Order No. 1 also adds 7 days to the substantial completion date for Filter 1, 61 days to the substantial completion date for Filter 2, and 63 days to the final completion date. These extensions are because of the additional caulking and additional surface preparation and painting around unanticipated obstructions in the work space mentioned above, and they were also discussed and agreed upon between the Contractor, City staff, and WSB during construction. The work was substantially complete and the filters returned to service on May 1, 2023. The Contractor completed their final cleaning on May 5, 2023. No punch list items have been identified to date, aside from project closeout documentation. Next Steps: Consider approving Change Order No. 1. Await Contractor’s closeout documentation for final payment. City Council Action Requested: Consider a motion to approve Change Order No. 1. CHANGE ORDER NO. 1 WATER TREATMENT PLANT FILTERS 1 AND 2 REHABILITATION CITY OF MEDINA, MN CLIENT PROJECT NO.: N/A WSB PROJECT NO.: 020695-000 May 24, 2023 OWNER: CONTRACTOR: City of Medina 600 Clydesdale Trail Medina, MN 55340 Shank Constructors, Inc. 3501 85th Avenue North Brooklyn Park, MN 55443 YOU ARE DIRECTED TO MAKE THE FOLLOWING CHANGES IN THE CONTRACT DOCUMENT DESCRIPTION: Add and delete work items and associated costs as detailed in the attached Change Order No. 1 Detail. Add 7 calendar days to the original substantial completion date of Filter 1, 61 calendar days to the original substantial completion date of Filter 2, and 63 calendar days to the original final completion date of both filters. IT IS UNDERSTOOD THAT THIS CHANGE ORDER INCLUDES ALL ADDITIONAL COSTS AND TIME EXTENSIONS WHICH ARE IN ANY WAY, SHAPE, OR FORM ASSOCIATED WITH THE WORK ELEMENTS DESCRIBED ABOVE. CHANGE IN CONTRACT PRICE: CHANGE IN CONTRACT TIME: ORIGINAL CONTRACT PRICE: PREVIOUS CHANGE ORDERS or SUPPLEMENTAL AGREEMENTS CONTRACT PRICE PRIOR TO THIS CHANGE ORDER: NET INCREASE/DECREASE OF THIS CHANGE ORDER: CONTRACT PRICE WITH ALL APPROVED CHANGE ORDERS: CLa/ft,. JONATHAN CHRISTENSEN, P.E. WSB ENGINEER $777,207.00 $0.00 $777,207.00 -$81,486.00 ORIGINAL SUBSTANTIAL COMPLETION FILTER 1 ORIGINAL SUBSTANTIAL COMPLETION FILTER 2 ORIGINAL FINAL COMPLETION (FILTERS 1 & 2) NET CHANGE FROM PREVIOUS CHANGE ORDERS: $695,721.00 NET INCREASE OF CHANGE ORDER: APPROVED SUBSTANTIAL COMPLETION FILTER 1 APPROVED SUBSTANTIAL COMP TION FILTER 2 APPROVED FINAL TERS 1 & 2) 2/24/2023 3/31/2023 4/28/2023 NONE 7 days for Subs. Filter 1 61 days for Subs. Filter 2 63 days for Final Filters 1 & 2 3/3/2023 5/31/2023 6/30/2023 CONTRACTOR SIGNATURE SHANK CONSTRUCTORS, INC. CONTRACTOR APPROVED BY: CITY OF MEDINA DATE CITY OF MEDINA DATE CHANGE ORDER NO. 1 DETAIL WATER TREATMENT PLANT FILTERS 1 AND 2 REHABILITATION CITY OF MEDINA, MN CLIENT PROJECT NO.: N/A WSB PROJECT NO.: 020695-000 May 24, 2023 ADDED ITEMS Item No. Description Qty Unit Price Extended Amount Apply caulk to the exposed threaded rod plate connections on 1 the underside of the filter chamber for Filters 1 and 2 in lieu of sandblasting and painting said surfaces. 2 Additional underdrain surface preparation and painting labor due to unanticipated obstructions in work space. 3 Haul filter media to Medina Public Works in lieu of Bid Alternate No. 2. 1 LUMP SUM $1,219.00 $1,219.00 1 LUMP SUM $7,280.00 $7,280.00 1 LUMP SUM $2,415.00 $2,415.00 TOTAL ADDED ITEMS CHANGE ORDER NO. 1 $10,914.00 DELETED ITEMS Item No. Description Qty Unit Price Extended Amount 4 Delete Bid Alternate No. 2. 660 CU YD $140.00 $92,400.00 TOTAL DELETED ITEMS CHANGE ORDER NO. 1 TOTAL ADJUSTMENT TO ORIGINAL CONTRACT AMOUNT $92,400.00 -$81,486.00 K:1020695.0001AdminlConstruction Admin\Change Ord&elllange Order 11020695 Medina WTP Filter Rehabilitation - Change Order No. 1C01 Detail June 6, 2023 Minnesota Housing 400 Wabasha Street North St. Paul, Minnesota 55102 Re: Melrose Commons, Medina D8514 / M19122 The Medina City Council supports the provision of City fee waivers in the amount of up to $115,000 for the establishment of affordable housing units within the Melrose Commons project. Said waivers are proposed to be made up of $43,000 in sewer connection fee waivers and $72,000 in park dedication fee waivers. Please also accept this letter as evidence of the city’s support for the Melrose Commons application for funding from Minnesota Housing. It is an important project that will help fill a large housing gap in western Hennepin County, with plans for 50 affordable housing units with a mix of 12 one-bedroom, 20 two-bedroom, 12 three-bedroom, and 6 four-bedroom units. Affordability levels will vary from 30% to 60% AMI and provide housing opportunities, especially for families. The city respectfully requests funding approval by Minnesota Housing for the project to address the affordable housing needs within our community. Sincerely, Kathleen Martin Mayor Agenda Item #5M Resolution No. 2023-XX June 6, 2023 Member ___________ introduced the following resolution and moved its adoption: CITY OF MEDINA RESOLUTION NO. 2023-XX RECOGNIZING DAVID HALL FOR TWENTY YEARS OF SERVICE TO THE CITY OF MEDINA WHEREAS, David Hall has been a valued full time City of Medina employee in the Police Department of the City since May 27, 2003; and WHEREAS, David served as a patrol officer for 20 years; and WHEREAS, David became a field training officer in 2004 and has trained four new patrol officers hired; and WHEREAS, David became our first full time investigator in October of 2007 serving three years in that position; and WHEREAS, David returned to school and graduated with his Master’s Degree in Law Enforcement Leadership from the University of St. Thomas; and WHEREAS, David worked as our representative in the West Metro Drug Taskforce from July of 2014 to July of 2017: and WHEREAS, David investigated a homicide case in 2016 where he tracked down a drug dealer who provided drugs to a resident of Medina who overdosed. The suspect was arrested and convicted; and WHEREAS, David received a unit Citation from the Hennepin County Sheriff for his work on the West Metro Drug Taskforce in 2016; and WHEREAS, David has served as the Union Steward for the Medina Patrol Officers for 10 years; and WHEREAS, David was instrumental in developing all the dyno forms for our current records management system; and WHEREAS, David brings professionalism, dependability and a great work ethic to the job on a daily basis; and WHEREAS, David has started work as the departments recruitment officer at college job fairs; and WHEREAS, David will be promoted to Sergeant on July 1, 2023; and Agenda Item #7A Resolution No. 2023-XX June 6, 2023 2 WHEREAS, the City of Medina expresses sincere gratitude for David’s continued service to the Medina community. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Medina acknowledges and thanks David Hall for twenty years of service to the community. Dated: June 6, 2023. ______________________________ Kathleen Martin, Mayor Attest: _______________________________ Caitlyn Walker, City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member _______ and upon vote being taken thereon, the following voted in favor thereof: And the following voted against same: Whereupon said resolution was declared duly passed and adopted. Agenda Item #7B r ., Executive Governance Summary City of Medina Medina, Minnesota For the year ended December 31, 2022 A- o 1,191triu1'tht potft f��r�:�o�a' Edina Office 5201 Eden Avenue, Ste 250 Edina, MN 55436 P 952.635 9090 Mankato Office 100 Warren Street, Ste 600 Mankato, MW 56001 iT 507.625.2727 Scottsdale Office 14500 N Northsigtit Blvd, Ste 233 Scottsdale, AZ 85260 P 480 864.5579 Ab-40 May 31, 2023 Management, Honorable Mayor and City Council City of Medina, Minnesota We have audited the financial statements of the governmental activities, the business -type activities, the aggregate discreetly presented component units, each major fund, and the aggregate remaining fund information of the City of Medina, Minnesota (the City), for the year ended December 31, 2022. 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 January 3, 2023. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing 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. We did not identify any deficiencies in internal control that we consider to be material weaknesses. 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 preceding paragraph 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. However, as discussed below, we identified a deficiency in internal control that we consider to be a significant deficiency described below as finding 2022-001 and we identified a deficiency in internal control that we consider to be a material weakness, as finding 2022-002. 2 2022-001 Preparation of Financial Statements Condition: Criteria: Cause: Effect: Recommendation: Management Response: The City has one staff person involved in the majority of duties in the financial statement reporting internal control cycle. This cycle includes the drafting, review and finalization of the City's annual financial report. The current structure doesn't provide adequate segregation of duties for all elements of internal control. The audit firm drafts the report and management reviews the work performed but the firm can't be considered part of internal control due to independence auditing standards. Internal control procedures need to separate actions between the duties around authorization, recording and reconciling. When one person has duties in each area there is not complete check and balance. Given the comparatively small size of the City and its staff, the City does not have a second person from which a complete check and balance system can be created. This is not unusual for an organization of your size. Since controls are not completely segregated there is increased risk that an error or fraud could occur and not be detected. It is the responsibility of the City to make the decision to accept this degree of risk associated with this condition because of cost or other considerations. We have requested management to review a draft of the auditor prepared annual financial report in detail for accuracy including agreeing the information in the finance software to the report. We have answered any questions they might have and have encouraged research of any accounting guidance in connection with amounts or disclosures. We are satisfied that the appropriate steps have been taken to provide you with the completed financial statements. The City's management accepts the degree of risk associated with this condition and thoroughly reviews a draft of the financial statements. AbdoSoiutior+s cool 3 2022-002 Material Audit Adjustment Condition: During analytical testing of revenues and expenditures, it was noted that a there were grant revenues recognized in the prior year that lacked project expenses and returned to the State. Criteria: Accounting principles require that revenues are recognized when they are matched with an expenditure. Cause: The revenues were returned. Because revenues were returned and are not governmental expenditures, an adjustment to the prior year was needed. Effect: The error indicates that the City's system of internal control did not identify a necessary adjustment. Recommendation: We recommend that all grants revenue recognition is monitored in relation to expenditures in future years. Management Response: In 2021, the City partnered with The Minnesota Board of Water and Soil Resources (BWSR) and received grant in the amount of $116,079 for the Wolsfeld Ravine Stabilization project. In 2022, the project was unable to move forward due to restrictions within the Scientific and Natural Area (SNA). City staff, along with the Minnehaha Creek Watershed District began looking for other viable projects to replace the Wolsfeld project and utilize funds. In February 2023, staff concluded that there were not any viable projects and the grant funding needed to be returned. Engineering costs totaling $2,964.50 did not qualify as project costs and the grant funding was returned in its entirety. In future, grant funding received at the beginning of a project will be accounted as unearned revenue and not recognized as revenue until the project is complete. AbdoSotutsons com 4 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Minnesota statutes. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. 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 City changed accounting policies during the year ended December 31, 2022. We noted no transactions entered into by the governmental unit 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 assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements are included below: • 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 and other postemployment benefits. • Management's estimate of its pension liability is based on several factors including, but not limited to, anticipated investment return rate, retirement age for active employees, life expectancy, salary increases and form of annuity payment upon retirement. • Management's estimate of its lease receivable is based on the present value of lease payments expected to be received during the lease term. We evaluated key factors and assumptions used to develop these accounting estimates 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. 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. We proposed one journal entry that we consider to be an audit entry or correction of management decisions. 5 Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated May 31, 2023. 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 City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the required supplementary information (RSI) (Management's Discussion and Analysis, the Schedules of Employer's Share of the Net Pension Liability and the Schedules of Employer's Contributions, which is information that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the supplementary information (combining and individual fund financial statements and schedules and schedules of federal awards), which accompany the financial statements but are not RSI. With respect to this supplementary information, 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. We were not engaged to report on the introductory section or statistical sections, which accompany the financial statements but is not RSI. We did not audit or perform other procedures on this other information, and we do not express an opinion or provide any assurance on it. 0 6 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: CI) GASB Statement No. 94 - Public -Private and Public -Public Partnerships and Availability Payment Arrangements Summary The primary objective of this Statement is to improve financial reporting by addressing issues related to public -private and public -public partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange -like transaction. Some PPPs meet the definition of a service concession arrangement (SCA), which the Board defines in this Statement as a PPP in which (1) the operator collects and is compensated by fees from third parties; (2) the transferor determines or has the ability to modify or approve which services the operator is required to provide, to whom the operator is required to provide the services, and the prices or rates that can be charged for the services; and (3) the transferor is entitled to significant residual interest in the service utility of the underlying PPP asset at the end of the arrangement. This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). As defined in this Statement, an APA is an arrangement in which a government compensates an operator for services that may include designing, constructing, financing, maintaining, or operating an underlying nonfinancial asset for a period of time in an exchange or exchange -like transaction. Effective Date and Transition The requirements of this Statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. Earlier application is encouraged. PPPs should be recognized and measured using the facts and circumstances that exist at the beginning of the period of implementation (or if applicable to earlier periods, the beginning of the earliest period restated). How the Changes in This Statement Will Improve Accounting and Financial Reporting The requirements of this Statement will improve financial reporting by establishing the definitions of PPPs and APAs and providing uniform guidance on accounting and financial reporting for transactions that meet those definitions. That uniform guidance will provide more relevant and reliable information for financial statement users and create greater consistency in practice. This Statement will enhance the decision usefulness of a government's financial statements by requiring governments to report assets and liabilities related to PPPs consistently and disclose important information about PPP transactions. The required disclosures will allow users to understand the scale and important aspects of a government's PPPs and evaluate a government's future obligations and assets resulting from PPPs. AbdoSolutions corn 7 Future Accounting Standard Changes (Continued) GASB Statement No. 96 - Subscription -Based Information Technology Arrangements Summary This Statement provides guidance on the accounting and financial reporting for subscription -based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right -to -use subscription asset - an intangible asset - and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended. Under this Statement, a government generally should recognize a right -to -use subscription asset - an intangible asset - and a corresponding subscription liability. A government should recognize the subscription liability at the commencement of the subscription term, - which is when the subscription asset is placed into service. The subscription liability should be initially measured at the present value of subscription payments expected to be made during the subscription term. Future subscription payments should be discounted using the interest rate the SBITA vendor charges the government, which may be implicit, or the government's incremental borrowing rate if the interest rate is not readily determinable. A government should recognize amortization of the discount on the subscription liability as an outflow of resources (for example, interest expense) in subsequent financial reporting periods. This Statement provides an exception for short-term SBITAs. Short-term SBITAs have a maximum possible term under the SBITA contract of 12 months (or less), including any options to extend, regardless of their probability of being exercised. Subscription payments for short-term SBITAs should be recognized as outflows of resources. This Statement requires a government to disclose descriptive information about its SBITAs other than short-term SBITAs, such as the amount of the subscription asset, accumulated amortization, other payments not included in the measurement of a subscription liability, principal and interest requirements for the subscription liability, and other essential information. Effective Date and Transition The requirements of this Statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. Earlier application is encouraged. Assets and liabilities resulting from SBITAs should be recognized and measured using the facts and circumstances that existed at the beginning of the fiscal year in which this Statement is implemented. Governments are permitted, but -are not required, to include in the measurement of the subscription asset capitalizable outlays associated with the initial implementation stage and the operation and additional implementation stage incurred prior to the implementation of this Statement. How the Changes in This Statement Will Improve Accounting and Financial Reporting The requirements of this Statement will improve financial reporting by establishing a definition for SBITAs and providing uniform guidance for accounting and financial reporting for transactions that meet that definition. That definition and uniform guidance will result in greater consistency in practice. Establishing the capitalization criteria for implementation costs also will reduce diversity and improve comparability in financial reporting by governments. This Statement also will enhance the relevance and reliability of a government's financial statements by requiring a government to report a subscription asset and subscription liability for a SBITA and to disclose essential information about the arrangement. The disclosures will allow users to understand the scale and important aspects of a government's SBITA activities and evaluate a government's obligations and assets resulting from SBITAs. 8 Future Accounting Standard Changes (Continued) GASB Statement No. 99 - Omnibus 2022 Summary The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The practice issues addressed by this Statement are as follows: • Classification and reporting of derivative instruments within the scope of Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, that do not meet the definition of either an investment derivative instrument or a hedging derivative instrument • Clarification of provisions in Statement No. 87, Leases, as amended, related to the determination of the lease term, classification of a lease as a short-term lease, recognition and measurement of a lease liability and a lease asset, and identification of lease incentives • Clarification of provisions in Statement No. 94, Public -Private and Public -Public Partnerships and Availability Payment Arrangements, related to (a) the determination of the public -private and public -public partnership (PPP) term and (b) recognition and measurement of installment payments and the transfer of the underlying PPP asset • Clarification of provisions in Statement No. 96, Subscription -Based Information Technology Arrangements, related to the subscription -based information technology arrangement (SBITA) term, classification of a SBITA as a short- term SBITA, and recognition and measurement of a subscription liability • Extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt • Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP) • Disclosures related to nonmonetary transactions • Pledges of future revenues when resources are not received by the pledging government • Clarification of provisions in Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as amended, related to the focus of the government -wide financial statements • Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position • Terminology used in Statement 53 to refer to resource flows statements. 9 Future Accounting Standard Changes (Continued) Effective Date and Transition The requirements of this Statement that are effective as follows: • The requirements related to extension of the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance. • The requirements related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. • The requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter. The Board considered the effective dates for the requirements of this Statement in light of the COVID-19 pandemic and in concert with Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. How the Changes in This Statement Will Improve Accounting and Financial Reporting The requirements of this Statement will enhance comparability in the application of accounting and financial reporting requirements and will improve the consistency of authoritative literature. Consistent authoritative literature enables governments and other stakeholders to more easily locate and apply the correct accounting and financial reporting provisions, which improves the consistency with which such provisions are applied. The comparability of financial statements also will improve as a result of this Statement. Better consistency and comparability improve the usefulness of information for users of state and local government financial statements. GASB Statement No. 100 - Accounting Changes and Error Corrections - an amendment of GASB Statement No. 62 Summary The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. This Statement defines accounting changes as changes in accounting principles, changes in accounting estimates, and changes to or within the financial reporting entity and describes the transactions or other events that constitute those changes. As part of those descriptions, for (1) certain changes in accounting principles and (2) certain changes in accounting estimates that result from a change in measurement methodology, a new principle or methodology should be justified on the basis that it is preferable to the principle or methodology used before the change. That preferability should be based on the qualitative characteristics of financial reporting - understandability, reliability, relevance, timeliness, consistency, and comparability. This Statement also addresses corrections of errors in previously issued financial statements. This Statement prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections. This Statement requires that (a) changes in accounting principles and error corrections be reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be reported by adjusting beginning balances of the current period, and (c) changes in accounting estimates be reported prospectively by recognizing the change in the current period. The requirements of this Statement for changes in accounting principles apply to the implementation of a new pronouncement in absence of specific transition provisions in the new pronouncement. This Statement also requires that the aggregate amount of adjustments to and restatements of beginning net position, fund balance, or fund net position, as applicable, be displayed by reporting unit in the financial statements. 10 Future Accounting Standard Changes (Continued) This Statement requires disclosure in notes to financial statements of descriptive information about accounting changes and error corrections, such as their nature. In addition, information about the quantitative effects on beginning balances of each accounting change and error correction should be disclosed by reporting unit in a tabular format to reconcile beginning balances as previously reported to beginning balances as restated. Furthermore, this Statement addresses how information that is affected by a change in accounting principle or error correction should be presented in required supplementary information (RSI) and supplementary information (SI). For periods that are earlier than those included in the basic financial statements, information presented in RSI or SI should be restated for error corrections, if practicable, but not for changes in accounting principles. Effective Date and Transition The requirements of this Statement are effective for accounting changes and error corrections made in fiscal years beginning after June 15, 2023, and all reporting periods thereafter. Earlier application is encouraged. How the Changes in This Statement Will Improve Accounting and Financial Reporting The requirements of this Statement will improve the clarity of the accounting and financial reporting requirements for accounting changes and error corrections, which will result in greater consistency in application in practice. In turn, more understandable, reliable, relevant, consistent, and comparable information will be provided to financial statement users for making decisions or assessing accountability. In addition, the display and note disclosure requirements will result in more consistent, decision useful, understandable, and comprehensive information for users about accounting changes and error corrections. GASB Statement No. 101 - Compensated Absences Summary The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. Leave is attributable to services already rendered when an employee has performed the services required to earn the leave. Leave that accumulates is carried forward from the reporting period in which it is earned to a future reporting period during which it may be used for time off or otherwise paid or settled. In estimating the leave that is more likely than not to be used or otherwise paid or settled, a government should consider relevant factors such as employment policies related to compensated absences and historical information about the use or payment of compensated absences. However, leave that is more likely than not to be settled through conversion to defined benefit postemployment benefits should not be included in a liability for compensated absences. This Statement requires that a liability for certain types of compensated absences - including parental leave, military leave, and jury duty leave - not be recognized until the leave commences. This Statement also requires that a liability for specific types of compensated absences not be recognized until the leave is used. This Statement also establishes guidance for measuring a liability for leave that has not been used, generally using an employee's pay rate as of the date of the financial statements. A liability for leave that has been used but not yet paid or settled should be measured at the amount of the cash payment or noncash settlement to be made. Certain salary -related payments that are directly and incrementally associated with payments for leave also should be included in the measurement of the liabilities. 11 Future Accounting Standard Changes (Continued) With respect to financial statements prepared using the current financial resources measurement focus, this Statement requires that expenditures be recognized for the amount that normally would be liquidated with expendable available financial resources. Effective Date and Transition The requirements of this Statement are effective for fiscal years beginning after December 15, 2023, and all reporting periods thereafter. Earlier application is encouraged. How the Changes in This Statement Will Improve Accounting and Financial Reporting The unified recognition and measurement model in this Statement will result in a liability for compensated absences that more appropriately reflects when a government incurs an obligation. In addition, the model can be applied consistently to any type of compensated absence and will eliminate potential comparability issues between governments that offer different types of leave. The model also will result in a more robust estimate of the amount of compensated absences that a government will pay or settle, which will enhance the relevance and reliability of information about the liability for compensated absences (1) Note. From GASB Pronouncements Summaries. Copyright 2022 by the Financial Accounting Foundation, 401 Merritt 7, Norwalk, CT 06856, USA, and is reproduced with permission. * * * * * Restriction on Use 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 continued opportunity to be of service, and for the courtesy and cooperation extended to us by your staff. Abdo Minneapolis, Minnesota May 31, 2023 12 Annual Financial Report City of Medina Medina, Minnesota For the year ended December 31, 2022 Ilk War fighting the path/01 tiara Edina Office 5201 Eden Avenue, Ste 250 Ulna, MN 55436 P 952.835 9090 Mankato Office 100 Warren Street, Ste 600 Mankato, MN 56001 507.625 2727 Scottsdale Office 14500 N No!thsight Blvd, Ste 233 Scottsdale, AZ 85260 480 864.5579 THIS PAGE IS LEFT BLANK INTENTIONALLY 2 City of Medina, Minnesota Annual Financial Report Table of Contents For the Year Ended December 31, 2022 Introductory Section Elected and Appointed Officials 9 Page No. Financial Section Independent Auditor's Report Management's Discussion and Analysis 13 17 Basic Financial Statements Government -wide Financial Statements Statement of Net Position 29 Statement of Activities 30 Fund Financial Statements Governmental Funds Balance Sheet 34 Reconciliation of the Balance Sheet to the Statement of Net Position 35 Statement of Revenues, Expenditures and Changes in Fund Balances 36 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 87 General Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 39 Proprietary Funds Statement of Net Position 40 Statement of Revenues, Expenses and Changes in Net Position 43 Statement of Cash Flows 44 Notes to the Financial Statements 47 Required Supplementary Information Schedule of Employer's Share of Public Employees Retirement Association Net Pension Liability - General Employees Retirement Fund Schedule of Employer's Public Employees Retirement Association Contributions - General Employees Retirement Fund Notes to the Required Supplementary Information - General Employees Retirement Fund Schedule of Employer's Share of Public Employees Retirement Association Net Pension Liability - Public Employees Police and Fire Fund Schedule of Employer's Public Employees Retirement Association Contributions - Public Employees Police and Fire Fund Notes to the Required Supplementary Information - Public Employees Police and Fire Fund 76 76 77 79 79 80 3 THIS PAGE IS LEFT BLANK INTENTIONALLY 4 City of Medina, Minnesota Annual Financial Report Table of Contents (Continued) For the Year Ended December 31, 2022 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 85 Nonmajor Special Revenue Funds Combining Balance Sheet 86 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 88 Nonmajor Capital Projects Funds Combining Balance Sheet 90 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 92 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 94 Debt Service Funds Combining Balance Sheet 98 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 99 Summary Financial Report Revenues and Expenditures for General Operations - Governmental Funds 100 Other Required Report Independent Auditor's Report on Minnesota Legal Compliance Page No. 103 5 THIS PAGE IS LEFT BLANK INTENTIONALLY 6 INTRODUCTORY SECTION CITY OF MEDINA MEDINA, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2022 7 THIS PAGE IS LEFT BLANK INTENTIONALLY 8 e City of Medina, Minnesota Elected and Appointed Officials For the Year Ended December 31, 2022 ELECTED Name Title Term Expires Kathleen Martin Mayor 12/31/24 Dino DesLauriers Council Member 12/31/26 Robin Reid Council Member 12/31/24 Joseph Cavanaugh Council Member 12/31/24 Todd Albers Council Member 12/31/26 APPOINTED Name Title Scott Johnson Erin Barnhart City Administrator Finance Director 9 THIS PAGE IS LEFT BLANK INTENTIONALLY 10 FINANCIAL SECTION CITY OF MEDINA MEDINA, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2022 11 THIS PAGE IS LEFT BLANK INTENTIONALLY 12 • Abt4o INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Medina, Minnesota Report on the Financial Statements Opinions We have audited the accompanying financial statements of governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Medina, Minnesota (the City), as of and for the year ended December 31, 2022, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. 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, 2022, 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. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City's and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. itrihti►i9 the path ftrrcvcrrrf 13 In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Change in Accounting Principle As described in Note 8 to the financial statements, the City adopted the provisions of Governmental Accounting Standard Board (GASB) Statement No. 87, Lease, for the year ended December 31, 2022. Adoption of the provisions of these statements results in significant change to the classifications of the components of the financial statements. Our opinion is not modified with respect to this matter. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis starting on page 17 and the schedule of Employer's Share of the Net Pension Liability, the schedule of Employer's Contributions, and the Notes to the Required Supplementary Information to 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. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The 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. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 14 Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 31, 2023 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Abdo Minneapolis, Minnesota May 31, 2023 AbdoSolutians corn 15 1 THIS PAGE IS LEFT BLANK INTENTIONALLY 16 Management's Discussion and Analysis As management of the City of Medina, 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, 2022. Financial Highlights • The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year as shown in the summary of net position on the following pages. The unrestricted net position may be used to meet the City's ongoing obligations to citizens and creditors. • The total net position of governmental activities increased as shown in the summary of net position. The increase can be attributed to an increase in capital grants and contributions to governmental activities. • At the end of the current fiscal year, the unassigned fund balance for the General fund as shown in the financial analysis of the city's funds section increased from prior year. • The City's total debt decreased during the current fiscal year. The main reason for the decrease was a result of scheduled debt service payments as shown on the outstanding debt table. 17 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 of 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 Discussion and Analysis Government - wide Financial Statements 77N Basic Financial Statements Fund Financial Statements Required Supplementary Information • • • • Notes to the Financial Statements Summary INOi pm Detail 18 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 Fund Financial Statements Government -wide Statements Governmental Funds Proprietary Funds Scope Required financial statements Entire City government (except fiduciary funds) • Statement of Net Position • Statement of Activities The activities of the City that are not proprietary or fiduciary, such as police, fire and parks • Balance Sheet • Statement of Revenues, Expenditures, and Changes in Fund Balances Activities of the City that operates similar to private businesses, such as the water and sewer systems • Statements of Net Position • Statements of Revenues, Expenses and Changes in Fund Net Position • Statements of Cash Flows Accounting basis and measurement focus Accrual accounting and economic resources focus Modified accrual accounting and current financial resources focus Accrual accounting and economic resources focus Type of asset/liability information Type of deferred outflows/inflows of resources information All assets and liabilities, both financial and capital, as well as short-term and long-term All deferred outflows/inflows of resources, regardless of when cash is received or paid Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included Only deferred outflows of resources expected to be used up and deferred inflows of resources that come due during the year or soon thereafter; no capital assets included All assets and liabilities, both financial and capital, as well as short-term and long-term All deferred outflows/inflows of resources, regardless of when cash is received or paid Type of inflow/outflow information All revenues and expenses during the year, regardless of when cash is received or paid Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter All revenues and expenses during the year, regardless of when cash is received or paid 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 deferred outflows of resources and liabilities and deferred inflows of resources, with the difference 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 cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). 19 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, streets and highways, sanitation and recycling, culture and recreation, economic development, miscellaneous and interest on long-term debt. The business -type activities of the City include water, sanitary sewer, and storm water. The government -wide financial statements start on page 29 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 two categories: governmental funds and proprietary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term 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 numerous individual governmental funds, seven of which are Debt Service 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, Debt Service fund, Sewer Capital Improvements and the Road Improvement fund, all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements 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 34 of this report. Proprietary Funds. The City maintains one type of proprietary fund. 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, sanitary sewer and storm sewer. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for each of the three enterprise funds, all of which are considered to be major funds of the City. The basic proprietary fund financial statements start on page 40 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 47 of this report. Supplementary 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 84 of this report. 20 In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's progress in funding its obligation to provide pension and other post - employment benefits to its employees. Required supplementary information can be found starting on page 76 of this report. Government -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $52,379,782 at the close of the most recent fiscal year. By far, the largest portion of the City's net position 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. City of Medina's Summary of Net Position Governmental Activities Business -type Activities Increase Increase 2022 2021 (Decrease) 2022 2021 (Decrease) Assets Current and other assets $ 20,938,521 $ 20,582,493 $ 356,028 $ 7,743,340 $ 6,986,478 $ 756,862 Capital assets 28,690,775 26,328,594 2,362,181 16,463,163 13,029,998 _ 3,433,165 Total Assets 49,629,296 46,911,087 2,718,209 24,206,503 20,016,476 4,190,027 Deferred Outflows of Resources 2,896,058 1,562,161 1,333,897 88,926 103,995 (15,069) Liabilities Noncurrent liabilities Other liabilities Total Liabilities Deferred Inflows of Resources 12,396,126 9,570,978 2,825,148 3,483,525 3,674,416 _ (190,891) 15,879,651 13,245,394 2,634,257 911,315 2,144,605 (1,233,290) 571,910 144,515 716,425 4,421 630,562 (58,652) 50,774 93,741 681,336 35,089 142,602 (138,181) Net Position Net investment in capital assets 21,391,586 18,302,925 3,088,661 16,258,163 12,618,209 3,639,954 Restricted 3,243,000 2,687,721 555,279 Unrestricted 11,099,802 12,092,603 (992,801) 7,316,420 6,678,324 638,096 Total Net Position $ 35,734,388 $ 33,083,249 $ _2,651,139 $ 23„574,583 $ 19,296,533 $ 4,278,050 Net Position as a Percent of Total Net investment in capital assets Restricted Unrestricted 59.9 % 9.1 31.5 100.5 % 55.3 % 8.1 36.6 100.0 % 69.0 % 31.0 100.0 % 65.4 % 34.6 100.0 % An additional portion of the City's net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City as a whole, as well as for its separate governmental and business -type activities. The same situation held true for the prior fiscal year. 21 Governmental Activities. Governmental activities increased the City's net position. Key elements of this increase are as follows: City of Medina's Changes in Net Position Governmental Activities Business -type Activities Increase Increase 2022 2021 (Decrease) 2022 2021 (Decrease) Revenues Program Revenues Charges for services $ 1,211,592 $ 1,129,190 $ 82,402 $ 2,841,029 $ 2,728,492 $ 112,537 Operating grants and contributions 1,597,471 445,255 1,152,216 1,269 372 897 Capital grants and contributions 2,709,534 3,044,987 (335,453) 3,681,173 133,546 3,547,627 General Revenues Property taxes 4,956,117 4,609,430 346,687 Tax increments 574,939 548,846 26,093 Franchise taxes 55,757 58,899 (3,142) Grants and contributions not restricted to specific programs 52,705 19,677 33,028 Unrestricted investment earnings (587,758) (156,489) (431,269) (243,384) (61,430) (181,954) Gain on sale of capital assets 29,440 5,294 24,146 - - - Total Revenues 10,599,797 9,705,089 894,708 6,280,087 2,800,980 3,479,107 Expenses General government 1,410,377 1,097,576 312,801 Public safety 3,484,440 2,671,418 813,022 Streets and highways 2,010,554 1,684,738 325,816 Culture and recreation 567,375 470,299 97,076 Economic development 241,966 241,534 432 Interest on long-term debt 109,849 47,199 62,650 Water - - 920,390 972,501 (52,111) Sewer 865,531 732,609 132,922 Storm water 224,134 203,773 20,361 Total Expenses 7,824,561 6,212,764 1,611,797 2,010,055 1,908,883 101,172 Change in Net Position Before Transfers 2,775,236 3,492,325 (717,089) 4,270,032 892,097 3,377,935 Transfers - Capital Assets (240,263) (3,311) (236,952) 240,263 3,311 236,952 Transfers 116,166 110,098 6,068 (116,166) (110,098) (6,068) Change in Net Position 2,651,139 3,599,112 (947,973) 4,394,129 785,310 3,608,819 Net Position, January 1 as Restated 33,083,249 29,484,137 3,599,112 19,180,454 18,511,223 669,231 Net Position, December 31 $ 35,734,388 $ 33,083,249 $ 2,651,139 $ 23 574,583 $ 19,296,533 $ 4,278,050 22 The following graph depicts various governmental activities and shows the revenue and expenses directly related to those activities. Expenses and Program Revenue - Governmental Activities $3,000,000 $2,700,000 82,400,000 $2,100,000 $1,800,000 $1,500,000 $1,200,000 $900,000 $600,000 $300,000 $- enk A Go Gen Taxes 52.7% INN Saketi �a�s aka c) en% e`pt (%'‘ ,o��o \saga\44 a�a�ecie `Goe�e 9 �o� - e�� Slee GvwJ<e �oono� ��e�es\oc` Expenses Revenues Revenue by Source - Governmental Activities Grants and Contributions Not Restricted to Specific Programs 0.5% Capital Grants and Contributions 25.6% Unrestricted Investment Eamings -5.5% Gain on Sale of Capital Assets 0.3% Charges for Services 11.3% Operating Grants and Contributions 15.1% 23 Business -type Activities. Business -type activities increased the City's net position as shown in the changes in net position table. The increase from prior year is mainly due charges for services in excess of expenditures during the current year. The following graph depicts various business -type activities and shows the revenue and expenses directly related to those activities. Expenses and Program - Revenue Business -type Activities Graph $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Water Sewer Expenses Revenues Revenue by Source - Business -type Activities Unrestricted Investment Eamings -3.9% I Grants and Contributions 58.6% Storm Water Charges for Services 45.3% 24 Financial Analysis of the Government'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, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. Major Funds Fund Balance December 31, Increase 2022 2021 _(Decrease) General $ 3,718,511 $ 3,917,931 $ (199,420) The fund balance of the General fund decreased due to public safety expenditures Debt Service $ 2,137,643 $ 2,240,306 $ (102,663) The Debt Service fund balance idecreased as part of scheduled debt service payments Sewer Capital Improvements $ 3,207,659 $ 3,282,853 $ (75,194) The Sewer Capital Improvement fund balance decreased mainly due to the decline in value of the investments. Road Improvements $ (66,252) $ 340,228 $ (406,480) The Road Improvement fund balance decreased mainly due to road improvement capital outlay expenditures. Proprietary Funds. The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. Water Utility The increase primarily Sewer Utility The increase primarily Storm Water Utility The increase primarily is attributed to developer is attributed to developer is attributed to developer Capital Asset and Debt Administration Ending Net Position 2022 contributions made contributions made contributions made $ 15,091,035 during the year. $ 6,422,648 during the year. $ 2,060,900 during the year. Ending Net Position 2021 $ 12,527,713 $ 4,948,275 $ 1,704,466 Increase/ (Decrease) $ 2,563,322 $ 1,474,373 $ 356,434 Capital Assets. The City's investment in capital assets for its governmental and business type activities as of December 31, 2022, shown in the Capital Asset table below (net of accumulated depreciation/amortization). This investment in capital assets includes land, structures, improvements, machinery and equipment, park facilities, and roads. Major capital asset events during the current fiscal year included the following: • Chippewa Watermain Extension • Arrowhead / OSI Turn Lane Expansion • Chippewa Park Land Purchase • Hackamore Road • Deer Hill Final Course • Police Vehicles, Bobcat and Meter Reading Software 25 Additional information on the City's capital assets can be found in Note 3B starting on page 59 of this report. City of Medina's Capital Assets (Net of Depreciation/Amortization) Land Infrastructure Buildings Improvements Machinery and Equipment Construction in Progress Governmental Activities 2022 2021 Business -type Activities Increase (Decrease) 2022 2021 Increase (Decrease) $ 1,742,849 $ 813,779 $ 929,070 $ 138,393 $ 138,393 $ 13,431,530 12,797,994 633,536 9,959,930 6,608,299 3,351,631 6,767,286 7,012,791 (245,505) 4,219,558 4,410,644 (191,086) 4,135,375 3,079,405 1,055,970 966,037 1,039,205 (73,168) 1,029,176 1,176,598 (147,422) 764,209 815,639 (51,430) 1,584,559 1,448,027 136,532 415,036 17,818 397,218 Total $ 28,690,775 $ 26,328,594 $ 2,362,181 $ 16,463,163 $ 13,029,998 $ 3,433,165 Long-term Debt. At the end of the current fiscal year, the City had total bonded debt outstanding as noted below. City of Medina's Outstanding Debt Governmental Activities Increase 2022 2021 (Decrease) Business -type Activities Increase 2022 2021 (Decrease) General Obligation Improvement Bonds $ 7,040,000 $ 7,735,000 $ (695,000) $ $ $ G.O. Tax Increment Bonds General Obligation Revenue Bonds - - 205,000 405,000 (200,000) Unamortized Premium on Bonds 259,189 290,669 (31,480) 6,789 (6,789) Total $ 7,299,189 $ 8,025,669 $ (726,480) $ 205,000 $ 411,789 $ (206,789) Additional information on the City's Tong -term debt can be found in Note 3E starting on page 62 of this report. Economic Factors and Next Year's Budgets and Rates • The unemployment rate for Hennepin County is currently 2.5 percent (Mar 2023). This compares to the State of Minnesota's average unemployment rate of 2.8 percent and the national average rate of 3.4 percent. • Property valuations increased 19.3 percent within the City from 2022 to 2023. The City's total property tax levy will increase in 2023 by 20.5 percent. The General fund levy increase amounts to 22.7% and the debt service levies increasing a total of 9.3%. The City's tax capacity rate will increase from 22.429% to 22.598% for 2023. A 1% water rate increase was approved for the three individual water systems for 2023. Sanitary sewer also had a 1% increase and storm water utility rates increased 3%. All of these factors were considered in preparing the City's budget for the 2023 fiscal year. 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 Finance Director, City of Medina, 2052 County Road 24, Medina, MN 55340-9790. 26 GOVERNMENT -WIDE FINANCIAL STATEMENTS CITY OF MEDINA MEDINA, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2022 27 THIS PAGE IS LEFT BLANK INTENTIONALLY 28 City of Medina, Minnesota Statement of Net Position December 31, 2022 Assets Cash and temporary investments Receivables Accounts Taxes Special assessments Leases Due from other governments Prepaid items Capital assets Nondepreciable Depreciable, net of accumulated depreciation Total Assets Deferred Outflows of Resources Deferred pension resources Liabilities Accounts payable Due to other governments Salaries payable Accrued interest payable Deposits payable Unearned revenue Noncurrent liabilities Due within one year Long-term debt Due in more than one year Long-term debt Net pension liability Total Liabilities Deferred Inflows of Resources Deferred pension resources Deferred lease resources Total Deferred Inflows of Resources Net Position Net investment in capital assets Restricted for Debt service Capital improvements Park improvements Police expenditures Unrestricted Total Net Position The notes to the financial statements are an integral part of this statement. 29 Governmental Activities $ 17,717,603 198,663 73,839 1,065,355 846,358 950,815 85,888 3,327,408 25,363,367 49,629,296 2,896,058 353,306 199,685 74,756 24,204 2,619,113 212,461 867,801 6,803,005 4,725,320 15,879,651 93,619 817,696 911,315 21,391,586 2,502,832 134,470 378,248 227,450 11,099,802 $ 35,734,388 Business -type Activities $ 7,479,664 163,445 51,513 10,887 37,831 553,429 15,909,734 24,206,503 88,926 11,785 120,098 11,137 1,495 227,717 54,268 289,925 716,425 4,421 4,421 16,258,163 7,316,420 $ 23,574,583 Total $ 25,197,267 362,108 73,839 1,116,868 846,358 961,702 123,719 3,880,837 41,273,101 73,835,799 2,984,984 365,091 319,783 85,893 25,699 2,619,113 212,461 1,095,518 6,857,273 5,015,245 16,596,076 98,040 817,696 915,736 37,649,749 2,502,832 134,470 378,248 227,450 18,416,222 $ 59.308,971 City of Medina, Minnesota Statement of Activities For the Year Ended December 31, 2022 Program Revenues Functions/Programs Governmental Activities General government Public safety Streets and highways Culture and recreation Economic development Interest on long-term debt Total Governmental Activities Business -type Activities Water Sewer Storm water Total Business -type Activities Total Charges for Expenses Services $ 1,410,377 3,484,440 2,010,554 567,375 241,966 109,849 Operating Grants Capital Grants and and Contributions Contributions $ 206,750 $ 914,227 11,952 78,653 10 298,036 1,209,955 89,480 2,544,786 164,748 7,824,561 1,211,592 1,597,471 2,709,534 920,390 1,591,731 865,531 954,393 224,134 294,905 2,010,055 2,841,029 $ 9,834,616 $ 4,052,621 531 1,719,004 504 1,588,894 234 373,275 1,269 3,681,173 1,598,740 $ 6,390,707 General Revenues Taxes Property taxes, levied for general purposes Property taxes, levied for debt service Tax increments Franchise taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings (loss) Gain on sale of capital assets Transfers - Capital Assets Transfers Total General Revenues and Transfers Change in Net Position Net Position - January 1, as Restated in Note 9 Net Position, December 31 The notes to the financial statements are an integral part of this statement. 30 Net (Expenses) Revenues and Changes in Net Position Governmental Business -type Activities Activities Total $ (1,203,627) $ - $ (1,203,627) (2,272,177) - (2,272,177) 1,756,139 1,756,139 (234,494) (234,494) (241,956) - (241,956) (109,849) (109,849) (305,964) (2,305,964) 2,390,876 2,390,876 1,678,260 1,678,260 444,280 444,280 4,513,416 4,513,416 (2,305,964) 4,513,416 2,207,452 4,546,695 4,546,695 409,422 409,422 574,939 - 574,939 55,757 55,757 52,705 52,705 (587,758) (243,384) (831,142) 29,440 29,440 (240,263) 240,263 116,166 (116,166) 4,957,103 (119,287) 4,837,816 2,651,139 4,394,129 7,045,268 33,083,249 19,180,454 52,263,703 $ 35734,388 $ 23,574,583 $ 59,308,971 The notes to the financial statements are an integral part of this statement. 31 THIS PAGE IS LEFT BLANK INTENTIONALLY 32 FUND FINANCIAL STATEMENTS CITY OF MEDINA MEDINA, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2022 33 City of Medina, Minnesota Balance Sheet Governmental Funds December 31, 2022 101 403 420 Other Total Debt Sewer Capital Road Governmental Governmental General Service Improvements Improvement Funds Funds Assets Cash and temporary investments $ 6,712,820 $ 2,132,112 $ 2,573,428 S 647,435 $ 5,651,808 $ 17,717,603 Receivables Accounts 7,252 190,761 650 198,663 Taxes 64,628 7,775 1,436 - 73,839 Special assessments 44,817 381,618 638,920 1,065,355 Leases 846,358 - - 846,358 Due from other governments 56,283 5,531 883,256 5,745 950,815 Due from other funds 638,636 - 638,636 Prepaid items 85,663 225 85,888 $ 7,817,821 $ 2,527,036 $ 3,212,064 S 2.361,808 $ 5,658,428 $ 21577.157 Total Assets Liabilities Accounts payable $ 259,153 S 3 4,405 $ 75,323 3 14,425 S 353,306 Due to other funds - 638,636 - 638,636 Due to other governments 197,447 - 2,238 199,685 Salaries payable 74,756 74,756 Deposits payable 2,619,113 - 2,619,113 Unearned revenue 21,700 - 190,761 212,461 Total Liabilities 3,172,169 4,405 904,720 16,663 4,097,957 Deferred Inflows of Resources Deferred lease resources 817,696 - - 817,696 Unavailable revenue - taxes 64,628 7,775 1,436 73,839 Unavailable revenue - assessments 44,817 381,618 638,920 1,065,355 Unavailable revenue - intergovernmental - - 882,984 882,984 Total Deferred Inflows of Resources 927,141 389,393 1,523,340 2,839,874 Fund Balances Nonspendable 85,663 - - 225 85,888 Restricted 2,137,643 740,168 2,877,811 Committed - 1,561,869 1,561,869 Assigned 638,699 3,207,659 3,339,503 7,185,861 Unassigned 2,994,149 - (66,252) - 2,927,897 Total Fund Balances 3,718,511 2,137,643 3,207,659 (66,252) 5,641,765 14,639,326 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 7 817.821 $ 2,527,036 $ 3,212,064 $ 2,361,808 $ 5,658,428 $ 21,577,157 The notes to the financial statements are an integral part of this statement. 34 City of Medina, Minnesota Reconciliation of the Balance Sheet to the Statement of Net Position Governmental Funds December 31, 2022 Amounts reported for governmental activities in the statement of net position are different because Total Fund Balances - Governmental Funds $ 14,639,326 Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. Cost of capital assets 43,454,408 Less accumulated depreciation (14,763,633) Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-term liabilities at year-end consist of Bonds payable (7,040,000) Plus premium on bonds (259,189) Compensated absences payable (371,617) Net pension liability (4,725,320) Some receivables are not available soon enough to pay for the current period's expenditures, and therefore are unavailable in the funds. Intergovernmental receivable 882,984 Taxes receivable 73,839 Special assessments receivable 1,065,355 Governmental funds do not report long-term amounts related to pensions and other postemployment benefits. Deferred outflows of pension resources 2,896,058 Deferred inflows of pension resources (93,619) Governmental funds do not report a liability for accrued interest until due and payable. (24,204) Total Net Position - Governmental Activities $ 35,734,388 The notes to the financial statements are an integral part of this statement. 35 City of Medina, Minnesota Statement of Revenues, Expenditures and Changes in Fund Balances Govemmental Funds For the Year Ended December 31, 2022 101 403 420 Other Total Debt Sewer Capital Road Governmental Governmental General Service Improvements Improvement Funds Funds Revenues Taxes $ 4,163,184 $ 409,422 $ - $ 89 $ 1,054,750 $ 5,627,445 Licenses and permits 541,455 - - 541,455 Intergovernmental 327,154 - 766,857 1,094,011 Charges for services 387,663 90,873 - 776,789 1,255,325 Fines and forfeitures 49,480 - - 19,379 68,859 Special assessments 104,445 88,616 - 193,061 Interest on investments (203,121) (59,712) (117,264) (15,281) (192,380) (587,758) Miscellaneous 221,118 - - - 180,927 402,045 Total Revenues 5,486,933 454,155 (26,391) 840,281 1,839,465 8,594,443 Expenditures Current General government 1,272,489 1,272,489 Public safety 3,088,450 - 8,362 3,096,812 Streets and highways 810,154 340 - 810,494 Culture and recreation 259,452 - 114,507 373,959 Capital outlay General government - 35,394 35,394 Public safety - - - 223,973 223,973 Streets and highways - 48,463 1,246,761 288,081 1,583,305 Culture and recreation - - 1,104,568 1,104,568 Economic development 229,604 229,604 Debt service Principal - 695,000 695,000 Interest and other charges 145,292 145,292 Total Expenditures 5,430,545 840,292 48,803 1,246,761 2,004,489 9,570,890 Excess (Deficiency) of Revenues Over (Under) Expenditures 56,388 (386,137) (75,194) (406,480) (165,024) (976,447) Other Financing Sources (Uses) Proceeds from sale of capital assets - 29,440 29,440 Transfers in 279,230 283,474 535,038 1,097,742 Transfers out (535,038) - (446,538) (981,576) Total Other Financing Sources (Uses) (255,808) 283,474 117,940 145,606 Net Change in Fund Balances (199,420) (102,663) (75,194) (406,480) (47,084) (830,841) Fund Balances, January 1 3,917,931 2,240,306 3,282,853 340,228 5,688,849 15,470,167 Fund Balances, December 31 $ 3,718,511 $ 2,137,643 $ 3,207,659 $ (66,252) $ 5,641,765 $ 14,639,326 The notes to the financial statements are an integral part of this statement. 36 City of Medina, 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, 2022 Amounts reported for governmental activities in the statement of activities are different because Total Net Change in Fund Balances - Governmental Funds $ (830,841) 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 outlay 2,775,626 Depreciation expense (1,494,071) The net effect of various miscellaneous transactionsinvolving capital assets is to increase (decrease) net position. Book value of disposed assets A gain or loss on the trade-in of capital assets, including the difference between carrying value and any related sales proceeds, is included in net position. However, only the sales proceeds are included in the change in the change in fund balance. Capital assets constructed in capital projects funds but intended for enterprise fund use are transferred in the government -wide financial statements. Donations of capital assets increase net position in the statement of activities, but do not appear in the governmental funds because they are not financial resources. The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of 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 are amortized in the statement of activities. Amortization of bond premium Principal repayments (55,846) (240,263) 1,376,735 31,480 695,000 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. 3,963 Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Property taxes (40,632) Special assessments 260,891 Intergovernmental 335,842 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences (3,576) Long-term pension activity is not reported in governmental funds. Pension expense (206,247) Pension revenue 43,078 Change in Net Position - Governmental Activities $ 2 651.139 The notes to the financial statements are an integral part of this statement. 37 THIS PAGE IS LEFT BLANK INTENTIONALLY 38 City of Medina, Minnesota Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund For the Year Ended December 31, 2022 Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Interest on investments Miscellaneous Total Revenues Expenditures Current General government Public safety Police Building inspection Fire Streets and highways Culture and recreation Economic development 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 Budgeted Amounts Original Final $ 4,232,600 345,500 303,773 290,074 95,000 30,000 210,881 5,507,828 1,374,037 2,043,550 441,953 441,448 818,941 271,277 57,907 5,449,113 58,715 234,230 (292,945) (58,715) 3,917,931 $ 3,917,931 The notes to the financial statements are an integral part of this statement. 39 $ 4,232,600 345,500 303,773 290,074 95,000 30,000 210,881 5,507,828 1,374,037 2,043,550 441,953 441,448 818,941 271,277 57,907 5,449,113 58,715 234,230 (292,945) (58,715) 3,917,931 Actual Variance with Amounts Final Budget 4,163,184 541,455 327,154 387,663 49,480 (203,121) 221,118 5,486,933 1,272,489 1,996,308 633,975 458,167 810,154 259,452 5,430,545 56,388 $ (69,416) 195,955 23,381 97,589 (45,520) (233,121) 10,237 (20,895) 101,548 47,242 (192,022) (16,719) 8,787 11,825 57,907 18,568 (2,327) 279,230 45,000 (535,038) (242,093) (255,808) (197,093) (199,420) (199,420) 3,917,931 $ 3,917,931 $ 3,718,511 $ (199,420) City of Medina, Minnesota Statement of Net Position Proprietary Funds December 31, 2022 Business -type Activities -Enterprise funds Nonmajor Assets Current Assets Cash and temporary investments Receivables Accounts Special assessments Due from other governments Prepaid items Total Current Assets Noncurrent Assets Capital assets Land Infrastructure Buildings Improvements Machinery and equipment Construction in progress Less accumulated depreciation Total Noncurrent Assets Total Assets Deferred Outflows of Resources Deferred pension resources 601 Water 602 Sewer $ 4,686,529 $ 2,102,468 62,638 83,519 24,172 24,446 10,540 153 569 37,262 4,784,448 2,247,848 7,393 8,536,281 8,216,454 330,081 1,182,247 353,405 (7,977,654) 10,648,207 15,432,655 37,187 49,000 4,673,356 192,000 2,921,472 57,699 (3,600,709) 603 Storm Water Totals $ 690,667 $ 7,479,664 17,288 2,895 194 163,445 51,513 10,887 37,831 711,044 7,743,340 82,000 138,393 771,939 13,981,576 8,408,454 1,133,263 1,463,344 44,174 4,147,893 3,932 415,036 (513,170) (12,091,533) 4,292,818 1,522,138 16,463,163 6,540,666 2,233,182 24,206,503 35,300 16,439 88,926 The notes to the financial statements are an integral part of this statement. 40 City of Medina, Minnesota Statement of Net Position (Continued) Proprietary Funds December 31, 2022 Business -type Activities - Enterprise funds Liabilities Current Liabilities Accounts payable Accrued interest payable Salaries payable Due to other governments Compensated absences payable - current Bonds payable - current Total Current Liabilities Noncurrent Liabilities Compensated absences payable Net pension liability Total Noncurrent Liabilities Total Liabilities Deferred Inflows of Resources Deferred pension resources Net Position Net investment in capital assets Unrestricted Total Net Position Nonmajor 601 602 603 Water Sewer Storm Water Totals $ 8,909 1,495 4,659 4,019 9,451 205,000 233,533 22,185 121,240 143,425 $ 1,930 $ 4,452 8,891 15,273 21,201 115,089 136,290 2,026 116,079 4,375 123,426 10,882 53,596 64,478 376,958 151,563 187,904 1,849 1,755 817 946 $ 11,785 1,495 11,137 120,098 22,717 205,000 372,232 54,268 289,925 344,193 716,425 4,421 10,443,207 4,292,818 1,522,138 16,258,163 4,647,828 2,129,830 538,762 7,316,420 $ 15,091,035 $ 6,422,648 $ _2,060,900 $ 23,574,583 The notes to the financial statements are an integral part of this statement. 41 THIS PAGE IS LEFT BLANK INTENTIONALLY 42 City of Medina, Minnesota Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the Year Ended December 31, 2022 Business -type Activities - Enterprise funds Nonmajor 601 602 603 Water Sewer Storm Water Operating Revenues Charges for services $ 1,591,731 $ 954,393 $ 294,905 Operating Expenses Wages and salaries Materials and supplies Professional services Repairs and maintenance Insurance Utilities Depreciation Sewer treatment charges Total Operating Expenses 187,072 205,837 40,150 (56,810) 12,506 121,355 412,356 922,466 Operating Income 669,265 Nonoperating Revenues (Expenses) Interest on investments Miscellaneous income Interest and other charges Total Nonoperating Revenues (Expenses) Income Before Contributions and Transfers Capital Contributions from Other Funds Capital Contributions Transfers In Transfers Out Change in Net Position Net Position - January 1, as Restated in Note 9 Net Position, December 31 179,116 84,252 6,330 1,464 39,890 56,231 51,773 906 5,639 815 9,668 149,558 80,466 423,557 - 865,531 224,134 2,012,131 Totals $ 2,841,029 450,440 213,631 136,271 (4,131) 18,960 131,023 642,380 423,557 88,862 70,771 828,898 (145,946) (73,177) (24,261) (243,384) 531 504 234 1,269 2,076 2,076 (143,339) (72,673) (24,027) (240,039) 525,926 16,189 46,744 588,859 240,263 240,263 1,719,004 1,588,894 373,275 3,681,173 205,338 205,338 (127,209) (130,710) (63,585) (321,504) 2,563,322 1,474,373 356,434 4,394,129 12,527,713 4,948,275 1,704,466 19,180,454 $ 15,091,035 $ 6,422,648 $ 2,060,900 $ 23,574,583 The notes to the financial statements are an integral part of this statement. 43 City of Medina, Minnesota Statement of Cash Flows Proprietary Funds For the Year Ended December 31, 2022 Business -type Activities - Enterprise funds Nonmajor Cash Flows from Operating Activities Receipts from customers and users Payments to suppliers Payments to employees Net Cash Provided (Used) by Operating Activities Cash Flows from Noncapital Financing Activities Transfers from other funds Transfers to other funds Net Cash Provided (Used) by Noncapital Financing Activities Cash Flows from Capital and Related Financing Activities Acquisition of capital assets Connection fees Principal paid on bonds Interest paid on bonds Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities Interest received on investments Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, January 1 Cash and Cash Equivalents, December 31 601 Water 602 Sewer 603 Storm Water Totals $ 1,573,633 $ 944,133 $ 288,519 $ 2,806,285 (342,687) (541,717) (62,039) (946,443) (177,384) (167,301) (78,611) (423,296) 1,053,562 235,115 147,869 1,436,546 205,338 205,338 (127,209) (130,710) (63,585) (321,504) 78,129 (130,710) (63,585) (116,166) (1,825,990) (47,123) (1,873,113) 1,719,004 1,719,004 (200,000) (200,000) (6,171) (6,171) (313,157) (47,123) (360,280) (145,946) (73,177) (24,261) (243,384) 672,588 (15,895) 60,023 716,716 4,013,941 2,118,363 630,644 6,762,948 $ 4,686,529 2,102,468 $ 690 667 $ 7,479,664 The notes to the financial statements are an integral part of this statement. 44 City of Medina, Minnesota Statement of Cash Flows (Continued) Proprietary Funds For the Year Ended December 31, 2022 Business -type Activities - Enterprise funds Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Operating income Adjustments to reconcile operating income to net cash provided by operating activities Other items related to operations Depreciation (Increase) decrease in assets and deferred outflows Accounts receivable Due from other governments Special assessments receivable Prepaid items Pension resources Increase (decrease) in liabilities and deferred inflows Accounts payable Due to other governments Salaries payable Compensated absences payable Net pension liability Pension resources Net Cash Provided (Used) by Operating Activities Schedule of Noncash Capital Financing Activities Contribution of assets from developers Contribution of assets from other funds Amortization of bond premium 601 Water 602 Sewer Nonmajor 603 Storm Water Totals $ 669,265 $ 88,862 $ 70,771 $ 828,898 531 412,356 (7,262) (5,663) (5,704) 269 7,014 (20,658) 740 815 3,775 56,845 (58,761) $ 1,053,562 $ 240,263 $ 6,789 The notes to the financial statements are an integral part of this statement. 45 $ 918 3,813 55,750 (54,097) 504 234 149,558 80,466 (5,782) 84 (5,066) (4,402) 5,431 (5,782) (125) (713) 2,624 1,269 642,380 (18,826) (5,704) (11,483) (4,133) 15,069 (458) (2,623) (23,739) 740 386 2,119 2,131 9,719 25,823 138,418 (25,323) (138,181) 235,115 $ _ 147,869 $ 1,436,546 $ 1,588,894 $ $ 37.3,275 $ 1,962,169 - $ 240,263 - $ 6,789 THIS PAGE IS LEFT BLANK INTENTIONALLY 46 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 1: Summary of Significant Accounting Policies A. Reporting Entity The City of Medina, Minnesota (the City) operates under the "Optional Plan A" form of government as defined in the State of Minnesota statutes. 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 specific benefits to, or impose specific financial burdens on the City. 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 City. The City has the following component unit: Blended Component Unit. The Medina Economic Development Authority (MEDA) 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. It is comprised of five members, all of which are City Council members, and has a December 31 year end. The EDA activities are blended and reported in a Capital Project fund (Tax Increment 1-9) due to substantively the same governing board and the financial benefit/burden relationship. Separate financial statements are not issued for this component unit. B. Government -wide and Fund Financial Statements The government -wide financial statements (Le., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the City. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are 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. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 47 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 1: Summary of Significant Accounting Policies (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the 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. The City reports the following major governmental funds: The General fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Debt Service fund accounts for the resources accumulated and payments made for principal and interest on long- term general obligation debt of governmental funds. The Sewer Capital Improvements fund accounts for the costs associated with replacement of the City's utility and road systems. The Road Improvement fund accounts for the costs associated with the replacement of the roads in the City. 48 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 1: Summary of Significant Accounting Policies (Continued) The City reports the following major proprietary funds: The Water fund accounts for the activities of the City's water distribution system, which are financed by the water utility fee, and insure that user charges are sufficient to pay for those costs. The Sewer fund accounts for the activities of the City's wastewater collection operations which are financed by the sanitary sewer utility fee, and insure that user charges are sufficient to pay for those costs. 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 enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. Assets, Deferred Outflows of Resources, 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. The proprietary funds' portion in the government -wide cash and temporary investments pool is considered to be cash and cash equivalents for purposes of the statement of cash flows. 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. Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest category by a national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute section 126C.55. 6. Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System. 7. 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. 49 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 1: Summary of Significant Accounting Policies (Continued) 8. 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. 9. 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. Broker money market funds operate in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the shares. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of December 31, 2022: • U.S. Government Securities of $3,173,121 are valued using quoted market prices (Level 1 inputs) • Municipal Securities of $7,868,634 and brokered certificates of deposit of $5,523,397 are values using a matrix pricing model (Level 2 inputs) The Minnesota Municipal Money Market Fund is regulated by Minnesota statutes and the Board of Directors of the League of Minnesota Cities and is an external investment pool not registered with the Securities Exchange Commission (SEC) that follows the regulatory rules of the SEC. In accordance with GASB Statement No. 79, the City's investment in this pool is valued at amortized cost, which approximates fair value. There are no restrictions or limitations on withdrawals from the 4M Liquid Asset Fund. Investments in the 4M Plus must be deposited for a minimum of 14 calendar days. Withdrawals prior to the 14 -day restriction period will be subject to a penalty equal to seven days interest on the amount withdrawn. Seven days' notice of redemption is required for withdrawals of investments in the 4M Term Series withdrawn prior to the maturity date of that series. A penalty could be assessed as necessary to recoup the Series for any charges, losses, and other costs attributable to the early redemption. Financial statements of the 4M Fund can be obtained by contracting RBC Global Management at 100 South Fifth Street, Suite 2300, Minneapolis, MN 55402-1240. At December 31, 2022, the City had no investments in one issuer (other than investments issued by or explicitly guaranteed by U.S. government, mutual funds, external investment pools, and other pooled investments) that represent 5 percent or more of the City's investments. The investment in the Minnesota Municipal Money Market Mutual Fund is not subject to the custodial credit risk classifications as noted in paragraph 9 of GASB Statement No. 40. Property Taxes The City Council annually adopts a tax levy and certifies it to the County in December for collection 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 delinquent taxes not received within 60 days after year end in the fund financial statements. 50 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 1: Summary of Significant Accounting Policies (Continued) Accounts Receivable Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund receivables are also included for services provided in 2022. The City annually certifies delinquent water, sewer and storm water accounts to the County for collection in the following year. As a result, there has been no allowance for doubtful accounts established for the enterprise funds Special Assessments Special assessments represent the financing for public improvements paid for by benefiting property owners. Assessments were also completed for unreimbursed costs and uncollected City charges for services. These assessments are recorded as receivables upon certification to the County. Special assessments are recognized as revenue when they are certified to the County or 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. Lease Receivable The City's lease receivable is measured at the present value of future lease payments expected to be received during the lease term. A deferred inflow of resources is recorded for the deferred leases. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease. 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." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Prepaid items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of three years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. 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. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the City chose to include all assets accounted for prospectively from the phase 3 GASB 34 implementation date. 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. Donated capital assets are recorded at acquisition value at the time of donation. 51 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 1: Summary of Significant Accounting Policies (Continued) Property, plant and equipment of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Useful Lives in Years Buildings 20 to 40 Land Improvements 20 Building Improvements 20 Furniture and Equipment 5 to 10 Light Vehicles 3 to 5 Machinery and Equipment 5 to 10 Heavy Trucks 7 to 10 Infrastructure 25 to 40 Deferred Outflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items which qualify for reporting in this category. Accordingly, the items, deferred pension resources are reported only in the statement of net position. These items result from actuarial calculations and current year pension contributions made subsequent to the measurement dates. Compensated Absences The City compensates employees who resign or retire in good standing for all unused vacation. Sick leave may be accumulated and banked to a maximum of 960 hours for full-time and regular part-time employees. For sick leave accumulated is excess of 960 hours, the employee may bank the hours in an account established by the City for retirement health insurance premiums. An employee who leaves employment voluntarily, with four of more years of service with the City and gives a 14 calendar day notice of termination of employment will be paid at the base rate of pay, one-third of accumulated sick leave hours. Any sick leave banked in excess of 960 hours will be forfeited. Two options are available in regards to accrued sick leave for an employee who voluntarily leaves after 20 or more years of service with the City. After giving at least a 14 day notice of termination of employment an employee may receive payment for one-half of all accrued sick leave at the employee's base rate of pay at the time of termination including sick leave banked in excess of 960 hours. A second option allows the employee to give the City at least 14 days' notice of termination of employment; which then allows the employee to place any accrued sick leave into the retirement health insurance account including sick leave banked in excess of 960 hours converted to a monetary value by using the employees base rate of pay for that year. Compensation time is also paid out upon termination. All hourly employees can earn compensation time for every hour of overtime they work. Each hour of overtime is accrued into 1.5 hours of compensation time. Also, a police employee who works any of the 11 holidays can accrue at a rate of 1.5 compensation hours per hour worked and be paid out for accruals over 80 hours. Vacation, sick, and compensation time pay are considered expenditures in the year paid in the governmental fund statements. This differs from the proprietary and government -wide statements where vacation, sick, and compensation pay are expensed when earned. The General fund is typically used to liquidate governmental compensated absences. 52 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 1: Summary of Significant Accounting Policies (Continued) Other Postemployment Benefits 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 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. As of December 31, 2022, all City premiums are funded on a pay-as-you-go basis and premiums are based on age. In accordance with GASB Statement 75, the City has a zero liability. Pensions For purposes of measuring the net pension liability, deferred outflows/inflows of resources and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA's fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA's fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The General fund is typically used to liquidate the governmental net pension liability. The total pension expense recognized by the City for the year ended December 31, 2022 is detailed below: GERP Total PEPFP Pension Expense Pension Expense $ 191,748 $ 310,802 $ 502,550 Long-term Obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net position. Recognition of bond premiums and discounts are delayed and amortized over the life of the bonds using the straight line method. Bonds payable are reported net of the applicable bond premium or discount. 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 net 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 City has one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from three sources: intergovernmental revenues delinquent taxes and special assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 53 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 1: Summary of Significant Accounting Policies (Continued) Furthermore, the City has additional items which qualify for reporting in this category on the statement of net position. The items, deferred pension resources and deferred lease resources are reported only in the statement of net position and results from actuarial calculations involving net differences between projected and actual earnings on plan investments and changes in proportions and deferred lease receipts. Net Position Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources. Net position is displayed in three components: a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation/amortization reduced by any outstanding debt attributable to acquire capital assets. b. Restricted net position - Consists 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 that do not meet the definition of "restricted" or "net investment in capital assets". 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. 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 prepaid items. 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. 54 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 1: Summary of Significant Accounting Policies (Continued) The City has formally adopted a fund balance policy for the General fund. The City's policy is to maintain an unrestricted fund balance in the General fund of the greater of (1) 50 percent of the next year's General fund property tax levy, or (2) a minimum of five months of the next year's budgeted expenditures of the General fund. 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 and all special revenue funds. 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 30th, 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 Administrator, 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 is the department level. Budgeted amounts are as originally adopted, or as amended by the City Council. There were no budget amendments during the year. B. Deficit Fund Equity The following funds had deficit fund balances at December 31, 2022: Fund Major Road improvements $ 66,252 The City plans to fund these deficits through calling on Letters of Credit for outstanding developer fees, property taxes and transfers in. Amount 55 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 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 fair value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds, with the exception of irrevocable standby letters of credit issued by Federal Home Loan Banks as this type of collateral only requires collateral pledged equal to 100 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 government entity. As of December 31, 2022 the City's carrying amount of deposits was $616,818 and the bank balance was $678,821. Of the bank balance $250,000 was covered by federal depository insurance and the remaining amount was covered by collateral held by the City's agent in the City's name. 56 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 3: Detailed Notes on All Funds (Continued) Investments As of December 31, 2022, 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. Investment Type Pooled Investments Brokered Money Market 4M Money Market Fund Mutual Fund Non -pooled Investments U.S. Government Agencies Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Brokered Certificates of Deposit Brokered Certificates of Deposit Total Investments Credit Quality/ Ratings (1) N/A N/A N/A AAA AA3 (Moody) AA1 (Moody) M- (Moody) AAA (S&P) AA (S&P) AA3 (Moody) AA1 (Moody) AAA (Moody) AA (Moody) AAA (S&P) AA (S&P) AA+ (S&P) N/A N/A Segmented Time Distribution (2) less than 1 year less than 1 year less than 1 year 1 year to 5 years less than 1 year less than 1 year less than 1 year less than 1 year less than 1 year 1 year to 5 years 1 year to 5 years 1 year to 5 years 1 year to 5 years 1 year to 5 years 1 year to 5 years 1 year to 5 years less than 1 year 1 year to 5 years Amount $ 100,880 7,874,065 40,052 3,173,121 147,371 288,619 132,438 689,788 144,999 945,181 1,370,889 311,728 866,378 688,107 1,497,862 785,274 1,689,530 3,833,867 Fair Value Measurement Using Level 1 3,173,121 24, 580,149 $ 3,173,121 Level 2 147,371 288,619 132,438 689,788 144,999 945,181 1,370,889 311,728 866,378 688,107 1,497,862 785,274 1,689,530 3,833,867 $ 13 392 031 Level 3 (1) Ratings were provided by various rating agencies where applicable to indicate associated credit risk. (2) Interest rate risk disclosed using the segmented time distribution method. N/A Indicates not applicable or available. The investments of the City are subject to the following risk: • Credit Risk: This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments in commercial paper and corporate bonds to be in the top two ratings issued by nationally recognized statistical rating organizations. The City's investment policy states the instruments that the City will invest in will be consistent with the GFOA Policy Statement on the State and Local Laws Concerning Investment Practices and Minnesota statutes 118A. It also states investments in derivatives shall not be allowed. • Custodial Credit Risk - Deposits: For deposits, this is the risk that in the event of bank failure the City's deposits may not be returned to it. The City has a policy in place to address custodial credit risk for deposits, stating all demand deposit accounts, including checking accounts and nonnegotiable certificates of deposit, in accordance with the GFOA Recommended Practices on the Collateralization of Public Deposits and Minnesota statutes 118A will be required to be fully collateralized. 57 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 3: Detailed Notes on All Funds (Continued) • Interest Rate Risk: This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates. The City's investment policy states the City will minimize interest rate rise by structuring the portfolio so that securities mature to meet cash requirements for ongoing operations and investing operating funds primarily in shorter term securities, money market mutual funds or similar investment pools and limiting the average maturity of the portfolio. The policy states the City will not directly invest in securities maturing more than 10 years from the date of purchase or in accordance with the state and local statutes and ordinances unless matched to a specific cash flow. The policy also states the investments will be diversified by investing in securities with varying maturities, continuously investing at least 10 percent of the portfolio in readily available funds such as LGIPs, money market funds to ensure that appropriate liquidity is maintained and never investing more than 20 percent of the portfolio in securities with final maturities greater than five years. • Concentration of Credit Risk: This is the risk of loss attributed to the magnitude of an investment in a single issuer. The City's investment policy states the City will limit investments to avoid over concentration in securities from a specific issuer or business sector, excluding U.S. Treasury securities and limiting investments in securities that have higher credit risks and investing in securities with varying maturities. The policy also states the City will diversify the investment portfolio so the impact of potential losses from any one type of security or from any one individual issuer will be minimized. Cash Summary A reconciliation of cash as shown on the statement of net position for the City follows: Carrying Amount of Deposits $ 616,818 Investments 24,580,149 Cash on Hand 300 Total $ 25,197,267 Cash and Temporary Investments Government -wide $ 25,197,267 58 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 3: Detailed Notes on All Funds (Continued) B. Capital Assets Capital asset activity for the year ended December 31, 2022 was as follows: Beginning Ending Balance Increases Decreases Balance Governmental Activities Capital Assets not Being Depreciated Land $ 813,779 $ 929,070 $ $ 1,742,849 Construction in progress 1,448,027 293,256 (156,724) 1,584,559 Total Capital Assets, not Being Depreciated 2,261,806 1,222,326 (156,724) 3,327,408 Capital Assets Being Depreciated Buildings 9,500,690 9,500,690 Infrastructure 20,469,009 1,376,735 21,845,744 Improvements 4,269,930 1,274,468 5,544,398 Machinery and equipment 3,249,423 195,293 (208,548) 3,236,168 Total Capital Assets Being Depreciated 37,489,052 _ 2,846,496 (208,548) 40,127,000 Less Accumulated Depreciation for Buildings (2,487,899) (245,505) (2,733,404) Infrastructure (7,671,015) (743,199) (8,414,214) Improvements (1,190,525) (218,498) (1,409,023) Machinery and equipment (2,072,825) (286,869) 152,702 (2,206,992) Total Accumulated Depreciation (13,422,264) (1,494,071) 152,702 (14,763,633) Total Capital Assets, Being Depreciated, Net 24,066,788 1,352,425 (55,846) 25,363,367 Governmental Activities Capital Assets, Net $ 26,328,594 $ 2,574,751 $ (212,570) $ 28,690,775 Depreciation expense was charged to functions/programs of the governmental activities as follows: Governmental Activities General government $ 29,334 Public safety 111,680 Streets and highways 1,168,371 Culture and recreation 172,324 Economic development 12,362 Total Depreciation Expense - Governmental Activities $ 1,494,071 59 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 3: Detailed Notes on All Funds (Continued) Beginning Ending Balance Increases Decreases Balance Business -type Activities Capital Assets not Being Depreciated Land $ 138,393 $ $ $ 138,393 Construction in progress 17,818 397,218 415,036 Total Capital Assets not Being Depreciated 156,211 397,218 553,429 Capital Assets Being Depreciated Buildings 8,408,454 8,408,454 Infrastructure 10,321,283 3,660,293 13,981,576 Improvements 1,463,344 1,463,344 Machinery and equipment 4,129,859 18,034 4,147,893 Total Capital Assets Being Depreciated 24,322,940 3,678,327 28,001,267 Less Accumulated Depreciation for Buildings (3,997,810) (191,086) Infrastructure (3,712,984) (308,662) Improvements (424,140) (73,167) Machinery and equipment (3,314,219) (69,465) Total Accumulated Depreciation (11,449,153) (642,380) Total Capital Assets Being Depreciated, Net 12,873,787 3,035,947 Business -type Activities Capital Assets, Net $ 13,029,998 $ 3,433,165 $ Depreciation expense was charged to functions/programs of the business -type activities as follows: Business -type Activities Water Sewer Storm Water Total Depreciation Expense - Business -type Activities (4,188,896) (4,021,646) (497,307) (3,383,684) (12,091,533) 15,909,734 - $ 16,463,163 $ 412,356 149,558 80,466 $ 642,380 60 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 3: Detailed Notes on All Funds (Continued) C. Interfund Receivables, Payables and Transfers Interfund Transfers The composition of interfund transfers for the year ended December 31, 2022 is as follows: Transfer in Transfer Out Debt Nonmajor Fund General Service Governmental Water Total General $ $ $ 535,038 $ $ 535,038 Nonmajor governmental 45,000 196,200 205,338 446,538 Water 87,936 39,273 127,209 Sewer 82,709 48,001 130,710 Storm Water 63,585 63,585 Total $ 279,230 $ 283,474 $ 535,038 $ 205,338 $ 1,303,080 During the year, transfers are used to 1) move revenues from the fund with collection authorization to the Debt Service fund as debt service principal and interest payments become due and 2) move General fund resources to provide an annual subsidy to the transit fund. The City made the following one-time transfers for the year ended December 31, 2022: • The General fund made a budgeted transfer of $535,038 to the nonmajor governmental funds for future infrastructure improvements. • Nonmajor governmental fund transferred $196,200 to the Debt Service fund for future debt service payments. Nonmajor governmental funds also transferred $205,338 to the Water fund for capital purchases. Lastly, nonmajor governmental funds transferred $45,000 to the General fund for future termination benefits. • The Water fund ($87,936), Sewer fund ($82,709) and the Storm Water fund ($63,858) made budgeted transfers to the General fund for operating costs. • The Water fund ($39,273), and the Sewer fund ($48,001) made budgeted transfers to the Debt Service funds for debt service payments. 61 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 3: Detailed Notes on All Funds (Continued) D. Lease Receivable The City leases various tower sites to companies. These agreements contain various renewal and extension options. The latest maturity date is projected to be in in 2034, however, the Utilities anticipates new or revised leasing arrangements to occur in the future. Long-term lease activity for the year ended December 31, 2022 was as follows: Description SBA - Tower Lease T -Mobile Water Tower Lease T -Mobile Tower Lease Vzerizion Tower Lease Issue Date Discount Rate 1/1/2022 1/1/2022 1/1/2022 1/1/2022 Current Year Inflow of 1.3 % $ 20,866 1.3 44,323 1.3 41,360 1.3 23,507 Balance at Year end $ 135,786 288,440 269,156 152,976 130,056 $ 846,358 E. Long-term Debt General Obligation Improvement Bonds The City issues G.O. improvement bonds to finance various improvements and will be repaid from special assessments levied on the properties benefiting from the improvements, tax increment from the district and ad valorem tax levies. All special assessment debt is backed by the full faith and credit of the City. Each year the combined assessment and tax levy equals 105 percent of the amount required for debt service. The excess of 5 percent is to cover any delinquencies in tax or assessment payments. Description G.O. Crossover Refunding Bonds, Series 2013A G.O. Improvement Bonds, Series 2015A G.O. Refunding Bond Series 2016A G.O. Refunding Improvement Bonds, Series 2020A Authorized and Issued $ 1,170,000 1,765,000 1,220,000 980,000 Interest Rate 1.75 - 2.00 % 2.00 - 3.00 2.00 1.35 - 2.00 Issue Date 04/25/13 06/24/15 08/11/16 12/10/20 Maturity Date 02/01/23 02/01/31 02/01/24 02/01/34 Balance at Year End $ 155,000 1,045,000 370,000 5,470,000 Total General Obligation Improvement Bonds $ 7,040,000 62 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 3: Detailed Notes on All Funds (Continued) Annual debt service requirements to maturity for the general obligation improvement bonds are as follows: Year Ending December 31 2023 2024 2025 2026 2027 2028 - 2032 2033 - 2034 Total G.O. Revenue Bonds Governmental Activities Principal $ 725,000 750,000 575,000 590,000 600,000 2,925,000 875,000 Interest Total $ 126,736 111,893 98,068 85,555 72,505 172,358 11,629 $ 851,736 861,893 673,068 675,555 672,505 3,097,358 886,629 $ 7,040,000 $ 678,744 $ 7,718,744 The following bonds were issued to finance capital improvements, and finance acquisition and construction of capital facilities. They will be repaid from future net revenues pledged from the Water fund and are backed by the taxing power of the City. Annual principal and interest payments on the bonds are expected to require over 50 percent of net revenues from the Water fund. For 2022, principal and interest paid and total customer net revenues for the Water fund were $206,171 and $1,591,731, respectively creating a pledged revenue percentage of 13.0%. Authorized Interest Issue Maturity Balance at Description and Issued Rate Date Date Year End G.O. Water Revenue Crossover Refunding Bonds, Series 2013A $ 1,520,000 1.75 - 2.00 % 04/25/13 02/01/23 $ 205,000 Annual debt service requirements to maturity for the general obligation revenue bonds are as follows: Year Ending Business -type Activities December 31, Principal Interest Total 2023 $ 205,000 $ _ 1,793 $ 206,793 63 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 3: Detailed Notes on All Funds (Continued) Changes in Long term Liabilities Long-term liability activity for the year ended December 31, 2022, was as follows: Governmental Activities Bonds Payable General obligation improvement bonds Unamortized premium on bonds Total Bonds Payable Compensated Absences Payable Governmental Activities Long-term Liabilities Business -type Activities Bonds Payable General obligations revenue bonds Unamortized premium on bonds Total Bonds Payable Compensated Absences Payable Beginning Balance Increases $ 7,735,000 $ 290,669 8,025,669 368,041 Decreases Ending Balance Due Within One Year $ (695,000) $ 7,040,000 $ 725,000 (31,480) 259,189 (726,480) 7,299,189 136,622 (133,046) 371,617 725,000 142,801 $ 8,393,710 $_ _13§,.6 $ (859,526) $ 7,670,806 $ 867,801 $ 405,000 $ 6,789 411,789 67,266 23,642 $ (200,000) $ 205,000 $ 205,000 (6,789) (206,789) 205,000 (13,923) 76,985 205,000 22,717 Business -type Activities Long-term Liabilities $ 479,055 $ 23,642 $ (220,712) $ 281,985 $ 227,717 64 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 3: Detailed Notes on All Funds (Continued) F. Components of Fund Balance At December 31, 2022, 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: Nonspendable Prepaid items Restricted for Park Improvements Debt Service Police Expenditures Tax Increment Total Restricted General 85,663 Other Debt Sewer Capital Road Governmental Service Improvements Improvement Funds - $ $ S - $ 2,137,643 $ Total 225 $ 85,888 $ 378,248 $ 378,248 2,137,643 227,450 227,450 134,470 134,470 $ 2,137,643 $ $ $ 740,168 $ 2877,811 Committed to Park Improvements $ $ $ $ $ 777,031 $ 777,031 Police Expenditures - 53,887 53,887 Field House - 3,638 3,638 German Liberal Cemetary - - 186,748 186,748 Community Event 40,730 40,730 Cable 57,805 57,805 Environmental 442,030 442,030 Total Committed Assigned to Capital Improvements Fire Capital Improvements Fire Study Future Termination Benefits Development and Planning Legal Equipment Replacement $ - $ 1,561,869 $ 1,561,869 $ S - $ 3,207,659 $ $ 2,187,286 $ 5,394,945 581,806 581,806 30,000 30,000 320,000 320,000 224,297 224,297 64402 64,402 570,411 570,411 Total Assigned $ 638,699 $ - $ 3,207,659 $ - $ 3,339,503 $ 7,185,861 65 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 4: Defined Benefit Pension Plans - Statewide A. Plan Description The City participates in the following cost -sharing multiple -employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA's defined benefit pension plans are established and administered in accordance with Minnesota statutes, chapters 353 and 356. PERA's defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code. General Employees Retirement Plan All full-time and certain part-time employees of the City are covered by the General Employees Plan. General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. Public Employees Police and Fire Plan The Police and Fire Plan, originally established for police officers and firefighters not covered by a local relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the Police and Fire Plan also covers police officers and firefighters belonging to a local relief association that elected to merge with and transfer assets and administration to PERA. B. Benefits Provided PERA provides retirement, disability and death benefits. Benefit provisions are established by state statute and can only be modified by the state Legislature. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. General Employee Plan Benefits General Employees Plan benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated Plan members. Members hired prior to July 1, 1989 receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2 percent of average salary for each of the first 10 years of service and 1.7 percent of average salary for each additional year. Under Method 2, the accrual rate for Coordinated members is 1.7 percent for average salary for all years of service. For members hired prior to July 1, 1989 a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989 normal retirement age is the age for unreduced Social Security benefits capped at 66. Benefit increases are provided to benefit recipients each January. The postretirement increase is equal to 50 percent of the cost -of -living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1 percent and a maximum of 1.5 percent. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving the annuity or benefit for at least one month but less than a full year as of the June 30 before the effective date of the increase will receive a reduced prorated increase. For members retiring on January 1, 2024, or later, the increase will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from the delay to normal retirement. 66 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 4: Defined Benefit Pension Plans - Statewide (Continued) Police and Fire Plan Benefits Benefits for Police and Fire Plan members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50 percent after five years up to 100 percent after ten years of credited service. Benefits for Police and Fire Plan members first hired after June 30, 2014 vest on a prorated basis from 50 percent after ten years up to 100 percent after twenty years of credited service. The annuity accrual rate is 3 percent of average salary for each year of service. For Police and Fire Plan members who were first hired prior to July 1, 1989, a full annuity is available when age plus years of service equal at least 90. Benefit increases are provided to benefit recipients each January. The postretirement increase is fixed at 1 percent. Recipients that have been receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase will receive the full increase. For recipients receiving the annuity or benefit for at least 25 months but less than 36 months as of the June 30 before the effective date of the increase will receive a reduced prorated increase. C. Contributions Minnesota statutes chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state Legislature. General Employees Fund Contributions Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2022 and the City was required to contribute 7.50 percent for Coordinated Plan members. The City's contributions to the General Employees Fund for the years ending December 31, 2022, 2021 and 2020 were $103,902, $94,515, and $87,115. respectively The City's contributions were equal to the required contributions for each year as set by state statute. Police and Fire Fund Contributions Police and Fire Plan members were required to contribute 11.80 percent of their annual covered salary in fiscal year 2022 and the City was required to contribute 17.70 percent for Police and Fire Plan members. The City's contributions to the Police and Fire Fund for the years ending December 31, 2022, 2021 and 2020 were $175,826, $173,155 and $162,488, respectively. The City's contributions were equal to the required contributions for each year as set by state statute. D. Pension Costs General Employees Fund Pension Costs At December 31, 2022, the City reported a liability of $1,386,006 for its proportionate share of the General Employees Fund's net pension liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of $16 million. The State of Minnesota is considered a non -employer contributing entity and the state's contribution meets the definition of a special funding situation. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled $40,604. The net pension liability was measured as of June 30, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportionate share of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2021 through June 30, 2022 relative to the total employer contributions received from all of PERA's participating employers. The City's proportionate share was 0.0175 percent which was an increase of 0.0007 percent from its proportion measured as of June 30, 2021. 67 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 4: Defined Benefit Pension Plans - Statewide (Continued) City's Proportionate Share of the Net Pension Liability $ 1,386,006 State of Minnesota's Proportionate Share of the Net Pension Liability Associated with the City 40,604 Total $ 1,426,610 For the year ended December 31, 2022, the City recognized pension expense of $185,681 for its proportionate share of the General Employees Plan's pension expense. In addition, the City $6,067 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's contribution of $16 million to the General Employees Fund. At December 31, 2022, the City reported its proportionate share of the General Employees Plan's deferred outflows of resources and deferred inflows of resources, related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences Between Expected and Actual Economic Experience $ 11,577 $ 14,206 Changes in Actuarial Assumptions 301,510 5,379 Net Difference Between Projected and Actual Earnings on Plan Investments 42,844 Changes in Proportion 16,446 1,551 Contributions Paid to PERA Subsequent to the Measurement Date 52,739 Total $ 425,116 $ 21,136 The $52,739 related to pensions resulting from the City's contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2023. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: 2023 $ 128,904 2024 134,101 2025 (37,108) 2026 125,344 Police and Fire Fund_ Pension Costs At December 31, 2022, the City reported a liability of $3,629,239 for its proportionate share of the Police and Fire Fund's net pension liability. The net pension liability was measured as of June 30, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportionate share of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2021 through June 30, 2022 relative to the total employer contributions received from all of PERA's participating employers. The City's proportionate share was 0.0834 percent which was an increase of 0.0042 percent from its proportionate share measured as of June 30, 2021. 68 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 4: Defined Benefit Pension Plans - Statewide (Continued) The State of Minnesota contributed $18 million to the Police and Fire Fund in the plan fiscal year ended June 30, 2021. The contribution consisted of $9 million in direct state aid that does meet the definition of a special funding situation and $9 million in supplemental state aid that does not meet the definition of a special funding situation. The $9 million direct state was paid on October 1, 2020. Thereafter, by October 1 of each year, the state will pay $9 million to the Police and Fire Fund until full funding is reached or July 1, 2048, whichever is earlier. The $9 million in supplemental state aid will continue until the fund is 90 percent funded, or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90 percent funded, whichever occurs later. Strong asset returns for the fiscal year ended 2021 will accelerate the phasing out of these state contributions, although we do not anticipate them to be phased out during the fiscal year ending 2022. The State of Minnesota is included as a non -employer contributing entity in the Police and Fire Retirement Plan Schedule of Employer Allocations and Schedule of Pension Amounts by Employer, Current Reporting Period Only (pension allocation schedules) for the $9 million in direct state aid. Police and Fire Plan employers need to recognize their proportionate share of the State of Minnesota's pension expense (and grant revenue) under GASB 68 special funding situation accounting and financial reporting requirements. For the year ended December 31, 2022, the City recognized pension expense (revenue) of 30,770 for its proportionate share of Police and Fire Plan's pension expense (revenue). The State of Minnesota is not included as a non -employer contributing entity in the Police and Fire Pension Plan pension allocation schedules for the $9 million in state aid. The City recognized $7,506 for the year ended December 31, 2020 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota's on -behalf contributions to the Police and Fire Fund. At December 31, 2022, the City reported its proportionate share of Police and Fire Plan's deferred outflows of resources and deferred inflows of resources, related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences Between Expected and Actual Economic Experience $ 217,923 $ 4,744 Changes in Actuarial Assumptions 2,111,211 35,953 Net Difference Between Projected and Actual Earnings on Plan Investments 96,206 Changes in Proportion 48,512 36,207 Contributions Paid to PERA Subsequent to the Measurement Date 86,016 Total $ 2,559,868 $ 76,904 The $86,016 reported as deferred outflows of resources related to pensions resulting from the City's contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2023. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: 2023 2024 $ 466,416 472,070 2025 413,467 2026 743,033 2027 301,962 69 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 4: Defined Benefit Pension Plans - Statewide (Continued) E. Long-term Expected Return on Investment The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return using a building-block method in which best -estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Class Domestic Equity Private Markets Fixed Income International Equity Long-term Target Expected Real Allocation Rate of Return 33.5 % 25.0 25.0 16.5 Total 100.0 % 5.10 % 5.90 0.75 5.30 F. Actuarial Assumptions The total pension liability in the June 30, 2022 actuarial valuation was determined using an individual entry -age normal actuarial cost method. The long-term rate of return on pension plan investments used in the determination of the total liability is 6.5 percent. This assumption is based on a review of inflation and investments return assumptions from a number of national investment consulting firms. The review provided a range of return investment return rates deemed to be reasonable by the actuary. An investment return of 6.5 percent was deemed to be within that range of reasonableness for financial reporting purposes. Salary growth assumptions in the General Employees Plan range in annual increments from 10.25 percent after one year of service to 3.0 percent after 29 years of service and 6.0 percent per year thereafter. In the Police and Fire Plan, salary growth assumptions range from 11.75 percent after one year of service to 3.0 percent after 24 years of service. Mortality rates for the General Employees Plan are based on the Pub -2010 General Employee Mortality Table. Mortality rates for the Police and Fire Plan is based on the Pub -2010 Public Safety Employee Mortality tables. The tables are adjusted slightly to fit PERA's experience. Actuarial assumptions used in the June 30, 2022 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the General Employees Plan was completed in 2019. The assumption changes were adopted by the Board and become effective with the July 1, 2020 actuarial valuation. The most recent four-year experience study for the Police and Fire Plan was completed in 2020 were adopted by the Board and became effective with the July 1.2021 actuarial valuation. 70 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 4: Defined Benefit Pension Plans - Statewide (Continued) The following changes in actuarial assumptions and plan provisions occurred in 2022: General Employees Fund Changes in Actuarial Assumptions • The mortality improvement scale was changed from Scale MP -2020 to Scale MP -2021. Changes in Plan Provisions • There were no changes in plan provisions since the previous valuation Police and Fire Fund Changes in Actuarial Assumptions • The mortality improvement scale was changed from Scale MP -2020 to Scale MP -2021. • The single discount rate changed from 6.50 percent to 5.40 percent. Changes in Plan Provisions • There have been no changes since the prior valuation. G. Discount Rate The discount rate used to measure the total pension liability in 2022 was 6.50 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Fund and the Police and Fire Fund were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. H. Pension Liability Sensitivity The following presents the City's proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate one percentage point lower or one percentage point higher than the current discount rate: General Employees Fund Police and Fire Fund 1 Percent 1 Percent Decrease (5.50%) Current (6.50%) Increase (7.50%) $ 2,189,269 $ 1,386,006 $ 727,206 5,492,387 3,629,239 2,122,995 I. Pension Plan Fiduciary Net Position Detailed information about each pension plan's fiduciary net position is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the internet at www.mnpera.org. 71 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 5: 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 In accordance with Minnesota statutes, the City may not incur or be subject to net debt in excess of 3 percent of the market value of taxable property within the City. The City has no debt applicable to this limit at year end. C. Tax Increment Districts The City's tax increment district is 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. Note 6: Jointly Governed Organizations Pioneer - Sarah Creek Watershed Management Commission The Cities of Independence, Loretto, Maple Plain, Medina, Minnetrista, and Greenfield, Minnesota, as equal participants, are the members of the Pioneer - Sarah Creek Watershed Management Commission (the "Commission"). The purpose of the Commission is to preserve and use natural water management programs required by Minnesota Statutes 1036.201 to 1038.251. The Commission is governed by a board comprised of one representative and one alternate of each Member City. The City remitted $19,294 to the commission in 2021. The contribution as reported in the City's Water Resource Department fund. Complete financial statements for the Commission can be obtained at the City's Municipal Center. Note 7: Conduit Debt Obligations The City has issued revenue obligations to finance and refinance, in whole or in part, the cost of the acquisition, construction, reconstruction, improvement The financing authorized the issuance of $7,000,000. The City hereby authorizes the Note to be issued as a "tax-exempt bond" the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. At December 31, 2022, the balance of the bond outstanding was $4,646,468. Neither, the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. 72 City of Medina, Minnesota Notes to the Financial Statements December 31, 2022 Note 7: Conduit Debt Obligations (Continued) The City has issued revenue bonds to provide financial assistance to private -sector entities to finance multifamily housing developments. The financing authorized the issuance not to exceed $10,000,000. The City hereby authorizes the Note to be issued as a "tax-exempt bond" the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. At December 31, 2022, the balance of the bond outstanding was $9,654,447. Neither, the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. The City has issued revenue obligations to finance and refinance, in whole or in part, the cost of the acquisition, construction, reconstruction, improvement The financing authorized the issuance of $10,000,000. The City hereby authorizes the Note to be issued as a "tax-exempt bond" the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. At December 31, 2022, the balance of the bond outstanding was $10,000,000. Neither, the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. Note 8: Change in Accounting Principles For fiscal year 2022, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 87, Leases. GASB Statement No. 87 enhances the relevance and consistency of information of the government's leasing activities. It establishes requirements for lease accounting based on the principle that leases are financings of the right to use an underlying asset. A lessee is required to recognize a lease liability and an intangible right to use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. These changes were incorporated in the City's 2022 financial statements. The City's recognition of the beginning balances related to the lease liability and the intangible right to use lease asset were equal balances and had no effect on the beginning net position of the Governmental Activities. Note 9: Prior Period Adjustment The following table shows the prior period adjustment: Fund Net Position January 1, 2022 Net Position as Previously Prior Period January 1, 2022 Reported Restatement (1) as Restated Business -type Activities $ 1,820,545 $ (116,079) $ 1,704,466 Business -type Activities Storm Water $ 1,820,545 $ (116,079) $ 1,704,466 The adjustments noted above were made for previously recorded grant revenues returned for lack of expenditures. 73 THIS PAGE IS LEFT BLANK INTENTIONALLY 74 REQUIRED SUPPLEMENTARY INFORMATION CITY OF MEDINA MEDINA, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2022 75 City of Medina, Minnesota Required Supplemental Information For the Year Ended December 31, 2022 Schedule of Employer's Share of PERA Net Pension Liability - General Employees Fund Fiscal Year Ending City's Proportion of the Net Pension Liability 06/30/22 0.0175 06/30/21 0.0168 06/30/20 0.0167 06/30/19 0.0168 06/30/18 0.0175 06/30/17 0.0171 06/30/16 0.0178 06/30/15 0.0166 City's Proportionate Share of the Net Pension Liability (a) State's Proportionate Share of the Net Pension Liability Associated with the City (b) % $ 1,386,006 $ 40,604 717,435 21,892 1,001,241 30,848 928,834 28,999 970,828 31,891 1,091,653 13,726 1,445,272 18,946 860,298 - Total (a+b) City's Covered Payroll (c) $ 1,426,610 739,327 1,032,089 957,833 1,002,719 1,091,653 1,464,218 860,298 $ 1,308,812 1,207,627 1,189,024 1,191,702 1,179,495 1,101,593 1,106,840 961,020 City's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll ((a+b)/c) 105.9 % 59.4 84.2 77.9 82.3 99.1 130.6 89.5 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability Note: Schedule is intended to show 10 year trend. Additional years will be reported as they become available. Schedule of Employer's PERA Contributions - General Employees Fund Year Ending 12/31/22 12/31/21 12/31/20 12/31/19 12/31/18 12/31/17 12/31/16 12/31/15 Statutorily Required Contribution (a) Contributions in Relation to the Statutorily Contribution Required Deficiency Contribution (Excess) (b) (a -b) $ 103,902 $ 103,902 $ 94,515 94,515 87,115 87,115 90,945 90,945 88,679 88,679 85,109 85,109 81,610 81,610 77,467 77,467 City's Covered Payroll (c) $ 1,385,361 1,260,195 1,161,532 1,212,601 1,182,386 1,134,782 1,088,131 1,032,893 76.7 % 87.0 79.0 80.2 79.5 75.9 68.9 78.2 Contributions as a Percentage of Covered Payroll (b/c) Note: Schedule is intended to show 10 -year trend. Additional years will be reported as they become available. 7.50 % 7.50 7.50 7.50 7.50 7.50 7.50 7.50 76 City of Medina, Minnesota Required Supplemental Information (Continued) For the Year Ended December 31, 2022 Notes to the Required Supplementary Information - General Employee Fund Changes in Actuarial Assumptions 2022 - The mortality improvement scale was changed from Scale MP -2020 to Scale MP -2021. 2021- The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. The mortality improvement scale was changed from Scale MP -2019 to Scale MP -2020. 2020 - The price inflation assumption was decreased from 2.50% to 2.25%. The payroll growth assumption was decreased from 3.25% to 3.00%. Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25% Tess than previous rates. Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years 2-5 and slightly higher thereafter. Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. The base mortality table for healthy annuitants and employees was changed from the RP -2014 table to the Pub -2010 General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RP - 2014 disabled annuitant mortality table to the PUB -2010 General/Teacher disabled annuitant mortality table, with adjustments. The mortality improvement scale was changed from Scale MP -2018 to Scale MP -2019. The assumed spouse age difference was changed from two years older for females to one year older. The assumed number of married male new retirees electing the 100% Joint & Survivor option changed from 35% to 45%. The assumed number of married female new retirees electing the 100% Joint & Survivor option changed from 15% to 30%. The corresponding number of married new retirees electing the Life annuity option was adjusted accordingly. 2019 - The mortality projection scale was changed from MP -2017 to MP -2018. 2018 - The mortality projection scale was changed from MP -2015 to MP -2017. The assumed benefit increase was changed from 1.00 percent per year through 2044 and 2.50 percent per year thereafter to 1.25 percent per year. 2017 - The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non -vested deferred members. The revised CSA loads are now 0.0 percent for active member Iiability, 15.0 percent for vested deferred member liability and 3.0 percent for non -vested deferred member liability. The assumed post - retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter. 2016 - The assumed post -retirement benefit increase rate was changed from 1.0 percent per year through 2035 and 2.5 percent per year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was changed from 7.9 percent to 7.5 percent. Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. 2015 - The assumed post -retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per year thereafter to 1.0 percent per year through 2035 and 2.5 percent per year thereafter. 77 City of Medina, Minnesota Required Supplemental Information (Continued) For the Year Ended December 31, 2022 Notes to the Required Supplementary Information - General Employee Fund (Continued) Changes in Plan Provisions 2022 - There were no changes in plan provisions since the previous valuation. 2021 - There were no changes in plan provisions since the previous valuation. 2020 - Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020 through December 31, 2023 and 0.0% after. Augmentation was eliminated for privatizations occurring after June 30, 2020. 2019 - The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The state's special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. 2018 - The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024. Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018. Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. Contribution stabilizer provisions were repealed. Postretirement benefit increases were changed from 1.00 percent per year with a provision to increase to 2.50 percent upon attainment of 90.00 percent funding ratio to 50.00 percent of the Social Security Cost of Living Adjustment, not less than 1.00 percent and not more than 1.50 percent, beginning January 1, 2019. For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal retirement age; does not. apply to Rule of 90 retirees, disability benefit recipients, or survivors. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. 2017 - The State's contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018, and $6,000,000 thereafter. The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The state's contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031. 2016 - There were no changes in plan provisions since the previous valuation. 2015 - On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892 million. Upon consolidation, state and employer contributions were revised. 78 City of Medina, Minnesota Required Supplemental Information (Continued) For the Year Ended December 31, 2022 Schedule of Employer's Share of PERA Net Pension Liability - Police and Fire Fund Fiscal Year Ending 06/30/22 06/30/21 06/30/20 06/30/19 06/30/18 06/30/17 06/30/16 06/30/15 City's Proportion of the Net Pension Liability 0.0834 0.0792 0.0807 0.0838 0.0791 0.0790 0.0870 0.0900 City's Proportionate Share of the Net Pension Liability (a) State's Proportionate Share of the Net Pension Liability Associated with the City (b) $ 3,629,239 $ 611,340 1,063,712 892,136 843,125 1,066,594 3,491,461 1,022,611 158,648 27,497 City's Covered Total Payroll (a+b) (c) $ 3,787,887 $ 1,013,255 638,837 936,265 1,063,712 910,923 892,136 883,844 843,125 833,645 1,066,594 813,313 3,491,461 825,751 1,022,611 804,599 City's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll ((a+b)/c) 358.2 % 65.3 116.8 100.9 101.1 131.1 422.8 127.1 Note: Schedule is intended to show 10 year trend. Additional years will be reported as they become available. Schedule of Employer's PERA Contributions - Police and Fire Fund Year Ending 12/31/22 12/31/21 12/31/20 12/31/19 12/31/18 12/31/17 12/31/16 12/31/15 Statutorily Required Contribution (a) Contributions in Relation to the Statutorily Required Contribution (b) Contribution Deficiency (Excess) (a -b) $ 175,826 $ 175,826 $ 173,155 173,155 162,488 162,488 152,505 152,505 139,304 139,304 133,772 133,772 131,872 131,872 130,345 130,345 City's Covered Payroll (c) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 70.5 % 93.7 87.2 89.3 88.8 85.4 63.9 86.6 Contributions as a Percentage of Covered Payroll (b/c) $ 993,368 17.70 % 978,276 17.70 918,009 17.70 899,735 16.95 859,900 16.20 825,751 16.20 814,025 16.20 804,599 16.20 Note: Schedule is intended to show 70 year trend. Additional years will be reported as they become available. 79 City of Medina, Minnesota Required Supplemental Information (Continued) For the Year Ended December 31, 2022 Notes to the Required Supplementary Information - Police and Fire Fund Chances in Actuarial Assumptions 2022 - The mortality improvement scale was changed from Scale MP -2020 to Scale MP -2021. The single discount rate changed from 6.50 percent to 5.40 percent. 2021 - The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. The inflation assumption was changed from 2.50 percent to 2.25 percent. The payroll growth assumption was changed from 3.25 percent to 3.00 percent. The base mortality table for healthy annuitants and employees was changed from the RP -2014 table to the Pub -2010 Public Safety Mortality table. The mortality improvement scale was changed from MP -2019 to MN -2020. The base mortality table for disabled annuitants was changed from the RP -2014 healthy annuitant mortality table (with future mortality improvement according to Scale MP -2019) to the Pub - 2010 Public Safety disabled annuitant mortality table (with future mortality improvement according to Scale MP -2020). Assumed rates of salary increase were modified as recommended in the July 14, 2020 experience study. The overall impact is a decrease in gross salary increase rates. Assumed rates of retirement were changed as recommended in the July 14, 2020 experience study. The changes result in slightly more unreduced retirements and fewer assumed early retirements. Assumed rates of withdrawal were changed from select and ultimate rates to service -based rates. The changes result in more assumed terminations. Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49. Overall, proposed rates result in more projected disabilities. Assumed percent married for active female members was changed from 60 percent to 70 percent. Minor changes to form of payment assumptions were applied. 2020 - The mortality projection scale was changed from MP -2018 to MP -2019. 2019 - The mortality projection scale was changed from MP -2017 to MP -2018. 2018 - The mortality projection scale was changed from MP -2016 to MP -2017. As set by statute, the assumed post - retirement benefit increase was changed from 1.0 percent per year through 2064 and 2.5 percent per year, thereafter, to 1.0 percent for all years, with no trigger. 2017 - Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer retirements. The Combined Service Annuity (CSA) Toad was 30 percent for vested and non -vested deferred members. The CSA has been changed to 33 percent for vested members and 2 percent for non -vested members. The base mortality table for healthy annuitants was changed from the RP -2000 fully generational table to the RP -2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP -2016. The base mortality table for disabled annuitants was changed from the RP -2000 disabled mortality table to the mortality tables assumed for healthy retirees. Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. Assumed percentage of married female members was decreased from 65 percent to 60 percent. Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. The assumed percentage of female members electing joint and survivor annuities was increased. The assumed post -retirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year through 2064 and 2.50 percent thereafter. The single discount rate was changed from 5.6 percent to 7.5 percent. 2016 - The assumed post -retirement benefit increase rate was changed from 1.0 percent per year through 2037 and 2.5 percent per year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was changed from 7.9 percent to 5.6 percent. The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. 2015 - The assumed post -retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per year thereafter to 1.0 percent per year through 2037 and 2.5 percent per year thereafter. 80 4 City of Medina, Minnesota Required Supplemental Information (Continued) For the Year Ended December 31, 2022 Notes to the Required Supplementary Information - Police and Fire Fund (Continued) Changes in Plan Provisions 2022 - There were no changes in plan provisions since the previous valuation. 2021 - There were no changes in plan provisions since the previous valuation. 2020 - There were no changes in plan provisions since the previous valuation. 2019 - There were no changes in plan provisions since the previous valuation. 2018 - As set by statute, the assumed post -retirement benefit increase was changed from 1.0 percent per year through 2064 and 2.5 percent per year, thereafter, to 1.0 percent for all years, with no trigger. An end date of July 1, 2048 was added to the existing $9.0 million state contribution. New annual state aid will equal $4.5 million in fiscal years 2019 and 2020, and $9.0 million thereafter until the plan reaches 100 percent funding, or July 1, 2048, if earlier. Member contributions were changed from 10.80 percent to 11.30 percent of pay, effective January 1, 2019 and 11.80 percent of pay, effective January 1, 2020. Employer contributions were changed from 16.20 percent to 16.95 percent of pay, effective January 1, 2019 and 17.70 percent of pay, effective January 1, 2020. Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018. Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. 2017 - Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer retirements. The combined service annuity (CSA) load was 30.00 percent for vested and non -vested, deferred members. The CSA has been changed to 33.00 percent for vested members and 2.00 percent for non -vested members. The base mortality table for healthy annuitants was changed from the RP -2000 fully generational table to the RP -2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP -2016. The base mortality table for disabled annuitants was changed from the RP -2000 disabled mortality table to the mortality tables assumed for healthy retirees. Assumed termination rates were decreased to 3.00 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. Assumed percentage of married female members was decreased from 65.00 percent to 60.00 percent. Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. The assumed percentage of female members electing joint and survivor annuities was increased. The assumed postretirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year through 2064 and 2.50 percent thereafter. The single discount rate was changed from 5.60 percent per annum to 7.50 percent per annum. 2016 - There were no changes in plan provisions since the previous valuation. 2015 - The post -retirement benefit increase to be paid after attainment of the 90 percent funding threshold was changed, from inflation up to 2.5 percent, to a fixed rate of 2.5 percent. 81 THIS PAGE IS LEFT BLANK INTENTIONALLY 82 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF MEDINA MEDINA, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2022 83 City of Medina, Minnesota Nonmajor Governmental Funds Combining Balance Sheet December 31, 2022 Total Nonmajor Special Capital Governmental Revenue Projects Funds Assets Cash and temporary investments $ 1,435,385 $ 4,216,423 $ 5,651,808 Accounts receivable 650 650 Due from other governments 1,516 4,229 5,745 Prepaid items 225 - 225 Total Assets $ 1,437,776 $ 4,220,652 $ 5,658,428 Liabilities Accounts payable $ 816 $ 13,609 $ 14,425 Due to other governments 2,238 2,238 Total Liabilities 816 15,847 16,663 Fund Balances Nonspendable 225 - 225 Restricted 227,450 512,718 740,168 Committed 1,209,285 352,584 1,561,869 Assigned 3,339,503 3,339,503 Total Fund Balances 1,436,960 4,204,805 5,641,765 Total Liabilities and Fund Balances $ 1,437,776 $ 4,220,652 $ 5,658,428 84 City of Medina, Minnesota Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended December 31, 2022 Revenues Taxes Property taxes Tax increments Franchise fees Charges for services Fines and forfeitures Interest on investments Miscellaneous Total Revenues Expenditures Current Public safety Culture and recreation Capital outlay General government Public safety Streets and highways Culture and recreation Economic development Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Sale of capital assets Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, January 1 Fund Balances, December 31 Special Revenue Capital Projects $ 111,882 $ 55,757 24,130 19,379 (50,232) 130,927 291,843 1,547,622 (142,148) 50,000 8,362 114,507 10,084 148,362 281,315 10,528 4,000 (45,000) (41,000) (30,472) 1,467,432 35,394 213,889 288,081 956,206 229,604 Total Nonmajor Governmental Funds 312,172 $ 424,054 574,939 574,939 55,757 752,659 776,789 19,379 (192,380) 180,927 1,839,465 8,362 114,507 35,394 223,973 288,081 1,104,568 229,604 1,723,174 2,004,489 (175,552) (165,024) 29,440 531,038 (401,538) 158,940 (16,612) 29,440 535,038 (446,538) 117,940 (47,084) 4,221,417 5,688,849 $ 1,436,960 $ 4,204,805 $ 5,641,765 85 City of Medina, Minnesota Nonmajor Special Revenue Funds Combining Balance Sheet December 31, 2022 204 226 227 230 Municipal Field Charitable Environmental Park House - Gambling Assets Cash and temporary investments $ 442,030 $ 423,097 $ 3,638 $ 29,877 Accounts receivable 650 Due from other governments 1,516 Prepaid items 225 - Total Assets $ 442,255 $ 425,263 $ 3,638 $ 29,877 Liabilities Accounts payable $ $ 816 $ $ Fund Balances Nonspendable $ 225 $ - $ $ Restricted Committed 442,030 424,447 3,638 29,877 Total Fund Balances 442,255 424,447 3,638 29,877 Total Liabilities and Fund Balances $ 442,255 $ 425,263 $ 3,638 $ 29 877 86 235 Police Forfeiture 236 Police Reserve Equipment 238 German Liberal Cemetery 240 Community Event 245 Crime Prevention 250 Cable Franchise Total $ 267,438 $ 12,154 $ 186,748 $ 10,853 $ 1,745 $ 57,805 $ 1,435,385 650 1,516 225 $ 267,438 $ 12,154 $ 186,748 $ 10,853 $ 1,745 $ 57,805 $ 1,437,776 $ $ $ $ $ $ $ 816 $ $ $ - $ $ $ 227,450 39,988 12,154 186,748 10,853 1,745 267,438 12,154 18 6, 748 10,853 1,745 $ 225 227,450 57,805 1,209,285 57,805 1,436,960 $ 267,438 $ 12,154 $ 186,748 $ 10,853 $ 1,745 $ 57,805 $ 1,437,776 87 City of Medina, Minnesota Nonmajor Special Revenue Funds Combining Statement of Revenue, Expenditures and Changes in Fund Balances For the Year Ended December 31, 2022 204 226 227 230 Municipal Field Charitable Environmental Park House Gambling Revenues Taxes Property Franchise fees Charges for services Fines and forfeitures Interest on investments Miscellaneous Total Revenues Expenditures Current Public safety Culture and recreation Capital outlay Public safety Culture and recreation Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures $ 111,882 $ $ (16,237) (14,121) (152) (651) 45,977 44,474 2,658 23,265 29,740 142,235 2,506 22,614 74,766 384 144,126 74,766 144,510 3,487 3,487 (45,026) (2,275) (981) 22,614 Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances (45,026) (2,275) (981) 22,614 Fund Balances, January 1 487,281 426,722 4,619 7,263 Fund Balances, December 31 $ 44Z255 $ 424447 $ 3,638 $ 29,877 88 235 236 238 240 245 250 Police Police Reserve German Liberal Community Crime Cable Forfeiture Equipment _ Cemetery Event Prevention Franchise Total $ $ $ 24,130 19,379 (9,247) (492) (6,325) 2,702 - 10,132 _ 2,210 17,805 7,329 1,033 5,854 (627) 5,751 5,124 4,326 16,400 $ $ 111,882 55,757 55,757 24,130 19,379 (125) (2,255) (50,232) 6,100 130,927 5,975 4,230 53,502 291,843 15,144 8,362 114,507 10,084 4,236 148,362 7,329 _ 6,887 4,326 16,400 4,230 19,380 281,315 2,803 (4,677) 13,479 (11,276) 1,745 34,122 10,528 4,000 4,000 4,000 (45,000) (45,000) (45,000) (41,000) 2,803 (4,677) 13,479 (7,276) 1,745 (10,878) (30,472) 264,635 16,831 173,269 18,129 68,683 1,467,432 $ 267438 $ _ 12,154 $ 186,748 $ 10,853 $ 1745 $ 57,805 $ 1,436,960 89 City of Medina, Minnesota Nonmajor Capital Projects Funds Combining Balance Sheet December 31, 2022 Assets Cash and temporary investments Due from other governments Total Assets Liabilities Accounts payable Due to other governments Total Liabilities Fund Balances Restricted Committed Assigned Total Fund Balances Total Liabilities and Fund Balances 225 Park Dedication 401 General Capital Improvement $ 740,853 $ 223,847 $ 740,853 $ 223,847 $ 10,021 $ 10,021 378,248 352,584 223,847 730,832 223,847 $ 740,853 $ 223,847 402 Water Capital Improvement 406 Tax Increment 1-9 $ 1,967,027 $ 136,708 1,967,027 $ 3,588 $ 3,588 1,963,439 136,708 2,238 2,238 134,470 1,963,439 134,470 $ 1,967,027 $ 136,708 90 411 405 Equipment Fire Replacement Facility Total $ 566,182 $ 581,806 $ 4,216,423 4,229 - 4,229 $ 570,411 $ 581,806 $ 4,220,652 - $ 13,609 2,238 15,847 512,718 352,584 570,411 581,806 3,339,503 570,411 581,806 4,204,805 570,411 $ 581,806 $ 4,220,652 91 City of Medina, Minnesota Nonmajor Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended December 31, 2022 Revenues Taxes Property taxes Tax increments Charges for services Interest on investments Miscellaneous Total Revenues Expenditures Capital outlay General government Public safety Streets and highways Culture and recreation Economic development Total Expenditures 225 Park Dedication 401 General Capital Improvement 164,748 (38,579) (8,556) 126,169 956,206 (8,556) 26,850 956,206 26,850 Excess (Deficiency) of Revenues Over (Under) Expenditures (830,037 Other Financing Sources (Uses) Proceeds from sale of capital assets Transfers in Transfer out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, January 1 Fund Balances, December 31 (35,406) (830,037) (35,406) 1,560,869 259,253 $ 730,832 $ 223,847 402 Water Capital Improvement 587,911 (72,765) 515,146 277,373 277,373 237,773 406 Tax Increment 1-9 574,939 574,939 229,604 229,604 345,335 (205,338) (196,209 (205,338) (196,200) 32,435 1,931,004 149,135 (14,665) $ 1,963,439 $ 134,470 92 411 405 Equipment Fire Replacement Faculity Total $ 312,172 $ $ 312,172 574,939 752,659 (8,283) (13,965) (142,148) 50,000 - 50,000 353,889 (13,965) 1,547,622 8,544 35,394 213,889 213,889 10,708 288,081 956,206 229,604 233,141 1,723,174 120,748 (13,965) (175,552) 29,440 235,267 295,771 29,440 531,038 (401,538) 264,707 295,771 158,940 385,455 281,806 (16,612) 184,956 300,000 4,221,417 $ 570,411 $ 581,806 $ 4,204,805 93 City of Medina, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Continued on the Following Pages) For the Year Ended December 31, 2022 (With Comparative Actual Amounts for the Year Ended December 31, 2021) 2022 2021 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts Revenues Taxes Property taxes $ 4,232,600 $ 4,232,600 $ 4,163,184 $ (69,416) $ 3,724,608 Licenses and permits 345,500 345,500 541,455 195,955 525,793 Intergovernmental Federal 27,000 27,000 5,369 (21,631) 4,129 State Local government aid - 12,615 Property tax credits 4,000 4,000 3,330 (670) 3,474 Police state aid 105,000 105,000 118,685 13,685 101,398 Fire state aid 50,000 50,000 59,159 9,159 51,800 PERA aid 1,773 1,773 - (1,773) - Other grants and aids 103,000 103,000 131,063 28,063 515,849 County Other grants and aids 13,000 13,000 9,548 (3,452) 11,370 Total intergovernmental 303,773 303,773 327,154 23,381 700,635 Charges for services General government Public safety Public works Culture and recreation Total charges for services 24,400 24,400 17,746 (6,654) 18,960 224,274 224,274 327,301 103,027 329,058 4,400 4,400 5,862 1,462 6,395 37,000 37,000 36,754 (246) 45,281 290,074 290,074 387,663 97,589 399,694 Fines and forfeitures 95,000 95,000 49,480 (45,520) Special assessments Interest on investments 63,904 32 30,000 30,000 (203,121) (233,121) (58,954) Miscellaneous Contributions and donations 1,000 1,000 3,800 Other 209,881 209,881 217,318 7,437 111,638 Total miscellaneous 210,881 210,881 221,118 10,237 _ 113,788 2,800 2,150 Total Revenues 5,507,828 5,507,828 5,486,933 (20,895) 5,469,500 94 City of Medina, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Continued) For the Year Ended December 31, 2022 (With Comparative Actual Amounts for the Year Ended December 31, 2021) 2022 2021 Budgeted Amounts Actual Variance with Actual _ Original Final Amounts Final Budget Amounts Expenditures Current General government Mayor and council Personal services $ 17,494 $ 17,494 $ 17,494 $ - $ 17,496 Other services and charges 8,050 8,050 9,492 (1,442) 9,082 Total mayor and council 25,544 25,544 26,986 (1,442) 26,578 Administration Personal services 568,502 568,502 525,790 42,712 529,382 Supplies 5,100 5,100 4,112 988 5,029 Other services and charges 118,100 118,100 126,470 (8,370) 108,274 Total administration 691,702 691,702 656,372 35,330 642,685 Elections Personal services 11,842 11,842 15,423 (3,581) Supplies 1,000 1,000 1,176 (176) 33 Other services and charges 11,625 11,625 6,714 4,911 331 Total elections 24,467 24,467 23,313 1,154 364 Assessing Other services and charges 172,500 172,500 121,737 50,763 102,019 Planning and zoning Personal services 153,574 153,574 151,997 1,577 141,914 Supplies 750 750 93 657 867 Other services and charges 60,300 60,300 58,875 1,425 39,178 Total planning and zoning 214,624 214,624 210,965 3,659 181,959 Public works facility Supplies 2,500 2,500 1,205 1,295 896 Other services and changes 85,300 85,300 93,965 (8,665) 60,608 Total public works facility 87,800 87,800 95,170 (7,370) 61,504 95 City of Medina, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Continued) For the Year Ended December 31, 2022 (With Comparative Actual Amounts for the Year Ended December 31, 2021) 2022 2021 Budgeted Amounts Original Final Actual Variance with Actual Amounts Final Budget Amounts Expenditures (Continued) Current (continued) General government (continued) Other general government Supplies $ 23,300 $ 23,300 $ 27,371 $ (4,071) $ 22,716 Other services and changes 134,100 134,100 110,575 23,525 112,222 Total other general government 157,400 157,400 137,946 19,454 134,938 Total general government 1,374,037 1,374,037 1,272,489 101,548 1,150,047 Public safety Police Personal services 1,758,100 1,758,100 1,679,361 78,739 1,631,324 Supplies 68,500 68,500 70,141 (1,641) 67,962 Other services and charges 216,950 216,950 246,806 (29,856) 188,961 Total police 2,043,550 2,043,550 1,996,308 47,242 1,888,247 Building inspection Personal services 242,803 242,803 218,121 24,682 153,326 Supplies 950 950 401 549 Other services and charges 198,200 198,200 415,453 (217,253) 304,945 Total building inspection Fire Other services and charges Total public safety 441,953 441,953 633,975 (192,022) 458,271 441,448 441,448 458,167 (16,7191 422,484 2,926,951 2,926,951 3,088,450 (161,499) 2,769,002 Streets and highways Streets Personal services 330,169 330,169 355,930 (25,761) 312,792 Supplies 239,200 239,200 247,706 (8,506) 192,852 Other services and charges 224,250 224,250 198,479 25,771 159,788 Total streets and highways 793,619 793,619 802,115 (8,496) 665,432 Sanitation and recycling Personal services 11,472 11,472 Supplies 8,400 8,400 Other services and charges 5,450 5,450 Total sanitation and recycling 25,322 25,322 7,571 3,901 12,266 8,400 180 468 4,982 2,155 8,039 17,283 14,601 Total public works 818,941 818,941 810,154 8,787 680,033 96 a City of Medina, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Continued) For the Year Ended December 31, 2022 (With Comparative Actual Amounts for the Year Ended December 31, 2021) 202.2 Budgeted Amounts Actual Original Final Amounts Expenditures (Continued) Current (continued) Culture and recreation Personal services $ 107,432 $ 107,432 $ 101,770 $ 5,662 Supplies 34,520 34,520 15,809 18,711 Other services and charges 129,325 129,325 141,873 (12,548) Total culture and recreation 271,277 271,277 259,452 11,825 227,828 2021 Variance with Actual Final Budget Amounts Economic development Other services and charges 57,907 57,907 57,907 $ 77,971 26,966 122,891 Total Expenditures 5,449,113 _ 5,449,113 5,430,545 18,568 4,826,910 Excess (Deficiency) of Revenues Over (Under) Expenditures 58,715 58,715 56,388 (2,327) 642,590 Other Financing Sources (Uses) Transfers in 234,230 234,230 279,230 45,000 272,409 Transfers out (292,945) (292,945) (535,038) (242,093) (504,000) Total Other Financing Sources (Uses) (58,715) (58,715) (255,808) (197,093) (231,591) Net Change in Fund Balances (199,420) (199,420) 410,999 Fund Balances, January 1 3,917,931 3,917,931 3,917,931 _ 3,506,932 Fund Balances, December 31 $ 3,917,931 $ 3,917,931 $ 3,718,511 $ (199,420) $ 3,917.931 97 City of Medina, Minnesota Debt Service Funds Combining Balance Sheet December 31, 2022 Assets Cash and temporary investments Receivables Taxes Special assessments Due from other governments Total Assets 319 321 G.0 G.O. Refunding Refunding Bonds Bonds 2020A 2013A 322 G.O. Improvement Bonds 2015A 323 G.O. Refunding Bonds 2016A 324 G.O. Refunding Improvement Bonds 2020A Total $ 456,416 $ 238,163 $ 306,075 $ 80,549 $ 1,050,909 $ 2,132,112 4,266 2,411 1,098 373,841 2,933 1,794 804 $ 463,615 S 242,368 S 681,818 7,777 7,775 381,618 5,531 88,326 S 1,050,909 $ 2,527.036 Deferred Inflows of Resources Unavailable revenue - taxes $ 4,266 S 2,411 $ 1,098 $ - $ $ 7,775 Unavailable revenue - special assessments - - 373,841 7,777 381,618 Total Deferred Inflows of Resources 4,266 2,411 374,939 7,777 389,393 Fund Balances Restricted for debt service 459,349 239,957 306,879 80,549 1,050,909 2,137,643 Total Deferred Inflows of Resources and Fund Balances S 463,615 S 242,368 $ 681,818 $ 88,326 $ 1,050,909 S 2,527,036 98 City of Medina, Minnesota Debt Service Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances For the Year Ended December 31, 2022 Revenues Taxes Special assessments Interest on investments Total Revenues Expenditures Debt service Principal Interest and other charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfer in Net Change in Fund Balances Fund Balances, January 1 Fund Balances, December 31 319 G.O Refunding Bonds 2020A 321 G.O. Refunding Bonds 2013A 322 G.O. Improvement Bonds 2015A $ 217,116 $ 132,745 $ 59,561 95,706 (10,675) (4,728) (7,030) 206,441 128,017 148,237 160,000 76,779 236,779 155,000 4,903 159,903 115,000 31,371 146,371 (30,338) (31,886) 1,866 54,154 23,816 435,533 33,120 1,234 238,723 $ 459,349 $ 239,957 1,866 305,013 S 306,879 323 324 G.O. Refunding G.O. Refunding Bonds Improvement 2016A Bonds 2020A Total 8,739 8,739 175,000 10,222 $ $ 409,422 104,445 (37,279) (59,712) (37,279) 454,155 90,000 22,017 185,222 112,017 695,000 145,292 840,292 (176,483) (149,296) (386,137) 196,200 283,474 19,717 (149,296) (102,663) 60,832 1,200,205 2,240,306 $ 80,549 S 1,050,909 $ 2,137,643 99 City of Medina, Minnesota Summary Financial Report Revenues and Expenditures For General Operations Governmental Funds For the Years Ended December 31, 2022 and 2021 Percent Total Increase 2022 2021 (Decrease) Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Interest on investments Miscellaneous Total Revenues Per Capita Expenditures Current General government Public safety Streets and highways Culture and recreation Capital outlay General government Public safety Streets and highways Culture and recreation Economic development Debt service Principal Interest and other Total Expenditures Per Capita Total Long-term Indebtedness Per Capita General Fund Balance - December 31 Per Capita The purpose of this report is to provide a summary of financial information concerning the City of Medina to interested citizens The complete financial statements may be examined at City Hall, 2052 County Road 24, Medina, Minnesota 55340-9790. Questions about this report should be directed to the Finance Director at (763) 473-4643. $ 5,627,445 $ 5,218,215 7.8 % 541,455 525,793 3.0 1,094,011 1,593,116 (31.3) 1,255,325 1,208,704 3.9 68,859 92,691 (25.7) 193,061 1,064,005 (81.9) (587,758) (156,489) 275.6 402,045 358,907 12.0 $ 8,594,443 $ 9,904,942_ $ 1,207 $ 1,449 $ 1,272,489 3,096,812 810,494 373,959 35,394 223,973 1,583,305 1,104,568 229,604 695,000 145,292 $ 9,570,890 $ 1,344 $ 7,040,000 988 $ 1,150,047 2,770,700 680,033 302,131 8,117 301,401 990,888 452,349 230,126 630,000 176,804 $ 7,692,596_ $ 1,125 $ 7,735,000 1,131 (13.2) % (16.7) % 10.7 % 11.8 19.2 23.8 336.1 (25.7) 59.8 144.2 (0.2) 10.3 (17.8) 24.4 % 19.4 % (9.0) % (12.6) $ 3,718,511 522 $ 3,917,931 573 (5.1) % (8.9) 100 OTHER REQUIRED REPORT CITY OF MEDINA MEDINA, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2022 101 THIS PAGE IS LEFT BLANK INTENTIONALLY 102 INDEPENDENT AUDITOR'S REPORT ON MINNESOTA LEGAL COMPLIANCE Honorable Mayor and City Council City of Medina, Minnesota We have audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Medina, Minnesota (the City), as of and for the year ended December 31, 2022, and the related notes to the financial statements which collectively comprise the City's basic financial statements, and have issued our report thereon dated May 31, 2023. In connection with our audit, nothing came to our attention that caused us to believe that the City of Medina failed to comply with the provisions of the contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing sections of the Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minn. Stat. § 6.65, insofar as they relate to accounting matters. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City's noncompliance with the above referenced provisions, insofar as they relate to accounting matters. This report is intended solely for the information and use of those charged with governance and management of the City of Medina and the State Auditor and is not intended to be, and should not be, used by anyone other than these specified parties. 15ar Abdo Minneapolis, Minnesota May 31, 2023 1.nghla► 4) the Math fur -wort 103 Abdo Lighting the path forward City of Medina 2022 Financial Statement Audit Introduction • Audit Results • General Fund Results • Other Governmental Funds • Enterprise Funds • Key Performance Indicators Audit Results Auditor's Opinion Unmodified Clean Audit Opinion — Findings Noted on Next Slide Abdo Minnesota Legal Compliance ';1-N-4*\ No instances of non- compliance noted 3 A udit Results 2022 Audit Findings Preparation of Financial Statements Internal Control Finding • Material Audit Adjustment Internal Control Finding General Fund -Comparing Unassigned Fund Balance to Future Year Budget $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 86,570,045 64.4% 2018 2019 2020 2021 2022 2023 Unassigned Fund Balance -- Budget -- Minimum Fund Balance P olicy 5 General Fund Budget to Actual Revenues Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) Final Budgeted Amounts Actual Amounts $ 5,507,828 $ 5,486,933 5,449,113 5,430,545 58,715 _ 56,388 234,230 (292,945) (58,715) 279,230 (535,038) (255,808) Variance with Final Budget $ (20,895) 18,568 (2,327) 45,000 (242,093) (197,093) Net Change in Fund Balances (199,420) (199,420) Fund Balances, January 1 3,917,931 3,917,931 Fund Balances, December 31 $ 3,917,931 $ 3,718,511 $ (199,420) 6 Fund Nonmajor Environmental Municipal Park Field House Police Forfeiture Police Reserve Equipment German Liberal Cemetery Community Event Charitable Gaming Crime Prevention Cable Franchise Total $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- I Restricted Fund Balances December 31, 2022 2021 $ 442,255 $ 424,447 3,638 267,438 12,154 186,748 10,853 29,877 1,745 57,805 487,281 426,722 4,619 264,635 16,831 173,269 18,129 7,263 68,683 1436960 $ 1,467 ,432 2020 2021 ■ 2022 Note: Insignificant Nonspendable balances not presented. 1, 44 Committed Increase (Decrease) $ (45,026) (2,275) (981) 2,803 (4,677) 13,479 (7,276) 22,614 1,745 (10,878) (30,472) Special Revenue Fund Balances r"v:'. �� Fund Ma jor Road Improvements Sewer Capital Improvements Total Majo r Nonmajor Park Dedication General Capital Improvement Tax Increment 1-9 Water Capital Improvements Fire Facility Equipment Replacement Total Nonmajor Total $7,000,000 $6,000,000 55,000,000 84,000,000 $3,000,000 $2,000,000 $1,000,000 4 S- $0,000,000) Restricted Fund Balances De ce mber 31, 2022 2021 Increase (Decrease ) $ (66,252) $ 340,228 $ (406,480) 3,207,659 3,282,853 (75,194) 3,141,407 3,623,081 _481,674) 730,832 223,847 134,470 1,963,439 581,806 570,411 4,204,805 1,560,869 (830,037) 259,253 (35, 406) (14,665) 149,135 1,931,004 32,435 300,000 281,806 184,956 385,455 4,221,417 (16.612) $ 7346,212 $ 7,844,498 $_ (498,286). Committed Assign ed 2020 2021 e 2022 Note: Insignificant Nonspendable balance not presented for 2021. Unassigned Capital Pr oject Fund Balances 8 Debt Description Cash Total Bonds Maturity Balance Assets Outstanding Date 319 G. O. Refunding Improvement B onds 2020A $ 456,416 $ 463,615 321 G.O. Refunding Bonds 2013A 238,163 242,368 1 $ 1, 155,000 202355,000 20313 322 G.0 Refunding Bonds 2015A 323 G. O. Improvements Bonds 2016A 306 ,075 681,818 1,045,000 2024 80,549 88,326 370,000 2024 324 G.O. Refu nding Bonds 2020A 1,050,909 1,050,909 4,445,000 2034 Total 132 112 $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- l^ cl o $ 2,527,036 S 7040,000 Total Remaining Interest Payments S 678744 2023 2024 2025 2026 2027 2028 Principal Interest 2029 2030 2031 2032 Debt Service 31,800,000 $1,600,000 4 81,400,000 $1,200,000 31,000,000 3800,000 S600,000 $400,000 3200,000 $- r•i 2019 2019 2020 2020 2021 2021 2022 2022 Operating Disbursemen ts • Debt Paymen ts (Including Related Transfers) Operating Receipts 36,000,000 35,000,000 $4,000,000 83,000,000 $2,793,160 $2,000,000 31,000,000 $4,013,941 33,272,300 ••••=mt•.p $4,686,529 2019 2020 2021 2022 muss Cash Balance —4— Minimum Target Balance (Following Year Debt Service Plus 6 Months of Operating C osts) Water Fund Cash Flows from Operations a nd Cash Balances Note: 2o21B Bonds paid off in 2020 kmi&A io $1,000,000 8900,000 8800,000 $700,000 8600,000 8500,000 -� 8400,000 -I $300,000 $200,000 $100,000 $- 2019 2019 82, 500,000 $2,000,000 81,500,000 - $1,000,000 $500,000 -1 $ 81,812,088 2020 2020 2021 2021 2022 2022 Operating Disbursements Operating Receipts 2019 $2,023,594 2020 $2,118,363 2021 $2,102,468 2022 Cash Balance —e—M inimum Target Balanc e Follo wigYear Debt Service Plus 6 Months of Operating Costs) 1"1 - Sewer Fund Cash Flows from Operations and Cash Balances 11 $450,000 $400,000 $350,000 $300,000 $250,000 S200,000 $150,000 $100,000 S50,000 Abdo 2019 2019 2020 2020 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 S- $497,521 2021 2021 2022 2022 Operating Disbursements +Operating Receipts $345,291 2019 2020 $630,644 2021 $690,667 2022 MNCash Balance —di,—Minimum Target Balance (Following Year Debt Service Plus 6 Months of OperatinkCosts) Storm Water Fund Cash Flows fr om Operations and Cash Balances 12 61 Cash and Investments Balances $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- $25,363,720 2020 $25,492,813 2021 $25,197,267 2022 General Fund Capital Projects Funds ■ Special Revenue Funds Debt Service Funds i Enterprise Funds 13 Taxes Key Performance Indicators Taxes Per Capita Tax Rates 70. 0% 60.0% 50.0% 40.0% 30.0% 20. 0% 10. 0% 0.0% $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $- 2019 2020 2021 2022 2019 2020 2021 2022 Class 4Cities 58.1% 58.8% 57. 6% N/A - - Class 4 Cities $574 8606 5630 N/A Cities in Hennepin County 41. 5% 41. 5% 40.1% N/A Cities in Hennepin County $785 $847 8878 N/A tCityofMedina 21. 5% _22.5% 225% 22.6% —6 —City of Medina $695 $735 $763 $784 14 Debt Key Performance Indicators $2,500 $2,000 51, 500 91,000 9500 S- 2019 Class 4 Cities 82,005 Cities in Hennepin County 91,751 —City of M edina $1,685 Debt Per Capita 2020 92,150 91,803 $2,096 2021 92,198 $1,817 S1,234 2022 N/A N/A 91,054 Debt Service Exp enditures as a Percent of Current Expenditures 40.00% 35 .00% 30.00% 25.00% 20.00% 15.00% 10 .00% 5.00% 0.00% 2019 Class 4 Cities 14.16% Cities in Hennepin County 13 .23% —.—City of Medina 18.20% 2020 13.39% 12.80% 35.06% 2021 13.38% 12 .62% 14 .13% 2022 N/A N/A 13.14% 15 Expenditu res Key Performance Indicators S1,000 $900 $800 S700 $600 S500 $400 $300 $200 5100 $ 2019 Class 4 Cities $791 Cities in Hennepin County $872 a City of Medina $693 Current Expenditures Per Capita Capital Expenditures Per Capita $600 $500 S400 $300 $200 $100 $- 1 1 1 2020 2021 2022 $839 $856 N/A 5913 $929 N/A $733 $763 $790 L. 2019 Class 4Cities $426 Cities in Hennepin County S369 ■City of Medina S231 2020 2021 2022 $558 $527 N/A $430 $447 N/A $312 5290 $446 16 Your Abdo Team Steve McDonald, CPA Managing Partner smcdo nald@ abdo solutions. com Abdo r r T .... .. 4 Justin N ilson, CPA L uke Vogt Senior Manager Senior Associat e justin. nilson@abdosolutions.com luke.vo gt@abdo solutions.com Cierra Nagovsky Associate Hope Winters Intern cierra.nagovsky@abdosolutions .com hope .winters @abd osolutions.c om 17 MEMORANDUM TO: Mayor and City Council FROM: Jim Stremel, City Engineer DATE: May 31, 2023 MEETING: June 6, 2023 City Council SUBJECT: Hackamore Rd Improvement Project – Award Background & Progress to Date The Hackamore Road Improvement Project was initiated back in early 2020 with the intention of addressing increased traffic volume, deteriorating pavement conditions, and pedestrian connectivity along this corridor. The preliminary design efforts allowed both the cities of Medina and Corcoran to coordinate and partner with multiple development projects to inform critical infrastructure connections, access to Hackamore Road, securing of right-of-way, and accommodating of the required stormwater management outside of the roadway corridor. These coordination efforts have contributed to a less costly project than would have otherwise been possible. In June of 2022, both cities authorized final design in anticipation of bidding and construction in 2023. Since that time, the project has progressed to final completion that includes the stormwater permitting through the watershed district (ECWMC), WCA/BWSR wetland mitigation, and agency reviews through MnDOT/Hennepin County. The City Council approved the plans and specifications and authorized bidding for the project. At the March 7th meeting and since that time bids have been received. Both cities have been working through a joint powers agreement (JPA) where the City of Medina would be the lead agency for the project and entering into the contract for construction. The City of Corcoran has finalized agreements with the developers and have included the pertinent information into the JPA included with the Council agenda packet. Project Bidding: Four bids were received with the apparent low bid submitted by Valley Paving, Inc. in the amount of $5,445,445.00; the engineer’s estimate was $6,350,165.25. A summary of the project bid abstract is enclosed. Estimated Project Costs & Funding Review The current estimated project costs are detailed in the table below and incorporate anticipated construction costs, a 10% construction contingency factor, and indirect costs which include engineering, legal, financing, right-of-way acquisition, and administrative costs. Agenda Item #8A 2 Description Estimated Project Cost Street Improvements $ 4,996,000 Trail Improvements $ 350,000 Wetland Mitigation $ 45,000 Storm Sewer Improvements $ 962,000 CR 116 Intersection Costs $ 934,000 Grand Total for Project $ 7,287,000 The cities have received funding from the Minnesota Department of Transportation LRIP grant ($700,000) and Hennepin County ($399,000). Medina has obtained approximately $737,000 toward the project from the Reserve of Medina project. Corcoran has secured $3,929,026.84 from projects adjacent to Hackamore Road. Medina and Corcoran City Councils have previously expressed support for splitting the remaining “gap” 50/50 after these other funding contributions. The estimated gap is approximately $1.5 million. Next Steps & Schedule Assuming the City Council awards the project, construction by the City’s contractor would begin in the summer after the utility relocations are complete. The utility relocations are scheduled to begin mid-June and be completed by the end of July, when the City’s contractor would then begin work. The contractor has indicated to the City that the project will be substantially complete by July of 2024. Once a pre-construction meeting is held, a more detailed construction schedule will be available. Recommended Actions 1. Consider a motion to approve the Joint Powers Agreement between the cities of Corcoran and Medina. 2. Adopt the resolution accepting the lowest responsible bid and awarding the contract to Valley Paving, Inc. for the Hackamore Road Improvement Project in the amount of $5,445,445.00. Resolution No. ________ June 6, 2023 Member ___________ introduced the following resolution and moved its adoption: CITY OF MEDINA RESOLUTION NO. _______ RESOLUTION ACCEPTING BIDS AND AWARDING THE CONTRACT WHEREAS, pursuant to an advertisement for bids for the Hackamore Road Improvement Project (the “Project”), the improvement of Hackamore Road from approximately 1,800 lineal feet west of CR 116 east to the intersection of CR 101 by reconstructing the existing pavement, road widening, installation of storm sewer, and constructing pedestrian mobility improvements, bids were received, opened electronically, and tabulated according to the law, and the following four bids were received complying with the advertisement: Company Grand Total Bid Valley Paving, Inc. $5,445,445.00 New Look Contracting, Inc. $5,777,377.51 Omann Contracting Companies, Inc. $5,913,021.89 Asphalt Surface Technologies Corporation $5,952,575.49 AND WHEREAS, it appears that Valley Paving, Inc. of Shakopee, MN is the lowest responsible bidder based on the Grand Total Bid. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Medina, Minnesota, contingent on the City entering into the previously approved joint powers agreement for the Project with the City of Corcoran, as follows: 1. The Mayor and City Administrator are hereby authorized and directed to enter into a contract with Valley Paving, Inc. in the name of the City of Medina for the Project, according to the plans and specifications therefor approved by the City Council and on file in the office of the City Administrator. 2. The City Administrator or their designee is hereby authorized and directed to return forthwith to all bidders the deposits made with their bids, except that the deposits of the successful bidder and the next lowest bidder shall be retained until a contract has been signed. Resolution No. ________ June 6, 2023 2 DATE. By: _______________________ Kathleen Martin, Mayor Attest: By: ___________________________ Caitlyn Walker, City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member ___________ and upon a vote being taken thereon, the following voted in favor thereof: And the following voted against same: Whereupon said resolution was declared duly passed and adopted. 1 ME230-788-838291.v9 JOINT POWERS AGREEMENT BETWEEN THE CITY OF MEDINA AND THE CITY OF CORCORAN REGARDING THE HACKAMORE ROAD IMPROVEMENT PROJECT THIS AGREEMENT (“Agreement”) is made and entered into this ____ day of ____________, 20___ by and between the city of Medina (“Medina”) and the city of Corcoran (“Corcoran”), both of which are municipal corporations under the laws of Minnesota. Medina and Corcoran may be individually referred to herein as “party” and collectively referred to herein as “parties.” RECITALS WHEREAS, Medina and Corcoran desire to reconstruct Hackamore Road from approximately 1,800 lineal feet west of C.R. 116 to the westerly quadrant of C.R. 101 and install related trail and utility improvements (the “Project”); and WHEREAS, the parties agree that the cost of the Project shall include both direct and indirect costs, the latter to include, without limitation, appraisal costs, easement acquisition costs, landscaping/screening costs, lighting costs, and wetland credit acquisition all which are necessary for Project implementation; and WHEREAS, Medina and Corcoran share jurisdiction over Hackamore Road and the Project will benefit both cities; and WHEREAS, Medina and Corcoran previously each contracted with WSB & Associates, Inc. (the “Engineer”) to prepare 100% plans and provide bidding and construction services for the Project; and WHEREAS, the plans and specifications for the Project have been approved by Medina and Corcoran, Medina has advertised for bids for the Project in accordance with state law, and bids were recently opened; and WHEREAS, Minnesota Statutes, section 471.59 authorizes political subdivisions of the state to enter into joint powers agreements for the joint exercise of powers common to each. NOW, THEREFORE, in consideration of the mutual undertakings herein expressed, Medina and Corcoran agree as follows: I. PURPOSE The purpose of this Agreement is to set forth the terms of the agreement Medina and Corcoran 2 ME230-788-838291.v9 have reached regarding the design, construction and financing of the Project, all in accordance with Minnesota Statutes, section 471.59. II. AGREEMENT 1. Medina and Corcoran agree to share costs owed to the Engineer as it relates to the Project as follows: a. Medina and Corcoran shall equally share in all costs owed to the Engineer as it relates to the Project, including, but not necessarily limited to, all engineering services contained within the Engineer’s June 1, 2022 proposal, which both parties previously approved and executed. The Engineer has invoiced the parties separately for their respective shares of such costs prior to construction contract approval. To date, Corcoran has paid $214,320.00 directly to the Engineer for its share of Project design work (the “Corcoran Design Contribution”). The Corcoran Design Contribution was collected by Corcoran from a third-party developer and so this amount is included as part of Corcoran’s total Project contribution in section II.3.c below and therefore is not part of Corcoran’s contribution to the below-defined Funding Gap. After the Project contract is awarded, the Engineer shall invoice its professional fees to Medina as Project owner notwithstanding the cost-sharing required herein. Medina shall review, authorize payment, and pay any approved invoice and then draw upon any funds posted by Corcoran to reimburse itself for Corcoran’s 50-50 share of those costs. Medina shall provide written notice to Corcoran of such action. Alternatively, if insufficient funds have been posted by Corcoran at the time of Engineer invoicing, Medina may promptly invoice Corcoran for its share of those costs, and Corcoran shall thereafter pay such invoice, except for any disputed amounts, within 30 days. For the sake of clarity, all costs owed to the Engineer are considered part of the total estimated Project cost provided in section II.3 below. 2. For purposes of carrying out the Project, Medina will be considered the “project owner” and therefore will be charged with entering into a contract for the Project with a selected contractor and will also administer said contract. Therefore, the parties agree that: a. Medina has coordinated with the Engineer to advertise and receive bids for the Project and the lowest responsible bidder submitted a total base bid to construct the Project for $5,445,455.00. Said amount is acceptable to the parties. Accordingly, upon both parties approving and entering into this Agreement, Medina agrees that, as the identified Project owner, it will award the construction contract to the abovementioned lowest responsible bidder, administer Project construction, and conduct inspections of the Project, all with the assistance of the Engineer. b. While Corcoran shall have the right to inspect, review and comment on construction of the Project throughout the term of this Agreement, Medina shall have oversight and final approval on administration of the contract documents for 3 ME230-788-838291.v9 the Project and shall use its best efforts to ensure that the Project is completed reasonably within the timeframes and deadlines within such documents. Notwithstanding the foregoing, Medina shall not be responsible or liable for any delays in construction, Project failure, or failure of the Project to meet design or contract standards. c. Corcoran hereby grants to Medina and its contractors the right to use its portion of Hackamore Road and immediately adjacent streets, public rights of way and easements in Corcoran for purposes of constructing the Project, including any excavations necessary to perform work incidental to the performance of this Agreement. Corcoran hereby agrees to cooperate and work together with Medina in good faith in the execution of the Project. d. Corcoran further agrees to notify and coordinate access and other matters with its property owners regarding the construction schedule of the Project, to any extent reasonably required. e. In consideration for the parties’ acquisition of certain temporary easement to permit an enlarged staging area, and further in consideration of certain third party Project contributions, the parties agree to include a Project quantities modification or change order which modifies the originally approved plans for the boulevard design for the portions of the north side of Hackamore Road, which are adjacent to the real property owned by Lakeview Development Company, LLC (the “Lakeview Property”), from rural to urban, to include the installation of concrete curb and gutter along the length of the north side of Hackamore Road adjacent to the Lakeview Property. This modification shall be included in the total Project cost and, accordingly, will increase the Funding Gap, which the parties agree is to be split evenly. 3. The Project has been bid and, based on the low base bid provided in subsection II.2.a above, is estimated to cost a total of $7,287,000, which includes all indirect costs as described in the Engineer’s memorandum to both parties’ governing bodies, dated March 2, 2023, or otherwise contemplated herein. The parties hereby agree that said total Project cost will be funded through the following mechanisms: a. The Project was pledged $700,000 of grant funding from the MnDOT Local Road Improvement Program (“LRIP”). b. The Project was pledged $399,000 in funding from Hennepin County for the signals and street improvements at the intersection of Hackamore Road and County Road 116. c. Through past developments located near the Project, Medina previously secured $736,949.05 in cash that it has available for the Project, and Corcoran likewise previously secured $3,929,026.84 in cash from affected developments and landowners that it will contribute to the Project. Both Medina and Corcoran agree 4 ME230-788-838291.v9 that such moneys are to be used solely for the Project, and each further represent and warrant that such funding will be available when payments are required pursuant to subsection II.3.e below. d. In light of the estimated Project cost, the funding mechanisms identified in subsections II.3.a through II.3.c above will not cover the total Project cost, and, accordingly, Medina and Corcoran agree to each be responsible for an equal, 50- 50 share of all additional Project costs that exceed $5,764,975.89 (the “Funding Gap”). Based on the numbers now known, the Funding Gap is estimated to be $1,522,024.11, subject to necessary change orders or other legitimate modifiers. The specific manner through which each party chooses to pay its 50% share of the Funding Gap will be in that party’s sole discretion, provided, however, that each party hereby represents and warrants to the other that it has identified and will follow through with any processes required to secure its share of the Funding Gap. Options available to the Parties may include, but are not necessarily limited to, general fund contributions, municipal state aid contributions, special assessments, and bonding. e. In addition to the previously paid Corcoran Design Contribution, and to ensure that Medina has adequate finances available and on hand to pay for the Project when payments become due under the respective contract, Corcoran agrees that it will make a cash payment to Medina in the amount of $775,000.00 (the “Initial Payment”) within thirty (30) days of invoicing by Medina, and such invoice may be provided to Corcoran any time after the Project contract has been awarded. Corcoran further agrees that it will make a second payment to Medina of $2,939,706.84 (the “Second Payment”) within ninety (90) days following the Initial Payment. Notwithstanding the above payment schedule, if at any time during the Project Medina reasonably determines that it will be required to cashflow any portion of Corcoran’s share of the Project costs, it may invoice Corcoran for such additional amount and Corcoran shall thereafter pay said invoice, less any disputed amounts, within thirty (30) days. Upon the Project’s Substantial Completion, as that term is defined in the respective construction contract, Medina will provide a total Project cost analysis and invoice Corcoran for Corcoran’s share of the then-current Funding Gap, and Corcoran shall pay the same, except for any disputed amounts, within thirty (30) days. Upon Final Completion, Medina will invoice Corcoran for Corcoran’s share of the remaining Funding Gap, and Corcoran shall pay the same, except for any disputed amounts, within thirty (30) days. If any portion of an invoice is disputed, the parties shall promptly meet to resolve the dispute. f. Any legal or administrative costs associated with an individual party’s own method for financing its portion of the Funding Gap, as contemplated above, irrespective of the manner or form of such financing, will be solely the responsibility of that individual party and not considered part of the Funding Gap that the Parties intend to share equally. Notwithstanding the foregoing, any legal or administrative fees deemed reasonably necessary to facilitate construction of 5 ME230-788-838291.v9 the Project itself will be considered part of the total Project cost and will therefore increase the Funding Gap, and said fees will be shared equally. Said fees include, but are not necessarily limited to, costs related to preparing and reviewing Project bid documents and construction contracts. 4. Following the execution of a construction contract for the Project by Medina, the Project shall be constructed in accordance with the Plans, subject to necessary change orders that may be implemented only in accordance with this section II.4. The authority to approve a change order shall be determined based on whether the proposed change order constitutes a “minor change order” or “major change order,” as described below. a. A minor change order is one that, in the Engineer’s reasonable discretion is deemed necessary to carry out the Project, will not materially change the Project to meet its intended purposes, and will not increase the total amount owed under the construction contract by more $50,000.00. Additionally, a change order contemplated pursuant to subsection II.2.e above is considered a minor change order. The parties each authorize the Engineer to approve minor change orders while administering the Project in accordance with customary construction administration practices and pursuant to the terms and conditions of the construction contract. b. A major change order is any change order that does not constitute a minor change order, and any major change order must be approved by both governing bodies of the parties before implementation. In the event that any change order results in increased Project costs, the parties agree to work together and in good faith to ensure that Medina, as Project owner, has adequate cash on hand to make all required progress payments to the Engineer and the contractor, as the case may be, notwithstanding the payment schedule contemplated in subsection II.3.e above. However, nothing in this paragraph shall be interpreted to relieve Medina of its obligation to budget and secure adequate funding for its contemplated financial obligations set forth in this Agreement. 5. Each party shall be solely responsible for its share of the costs of the Project, as provided in section II.3 above. 6. As a part of this Project, the parties agree to collaborate on and establish a mutually acceptable recordable form agreement to address the long-term maintenance of certain stormwater and other Project improvements. 7. Medina and Corcoran shall each maintain its own insurance covering its minimum tort levels in amounts provided for in Minn. Stat. Ch. 466, as amended. 8. Pursuant to Minn. Stat. § 471.59, subd. 1a(a), as amended, this Agreement is intended to be and shall be construed as a “cooperative activity” and it is the intent of the parties that they shall be deemed a “single governmental unit” for the purposes of liability; provided, however, that each party expressly declines responsibility for the acts or omissions of the 6 ME230-788-838291.v9 other. Nothing in this Agreement shall be construed to waive or limit any immunity from, or limitation on, the liability of either party as provided by law. Under no circumstances shall a party be required to pay on behalf of itself and other parties, any amounts in excess of the limits on liability established in Minnesota Statutes Chapter 466 applicable to any one party. The statutory limits of liability for the two parties may not be added together or stacked to increase the maximum amount of liability for any party. 9. Each city agrees to indemnify and hold harmless the other from any claims, losses, costs, expenses or damages, including reasonable attorneys’ fees, resulting from the acts or omissions of the respective officers, agents, or employees of the indemnifying party, to the extent such acts or omissions are directly related to activities conducted by the indemnifying party under this Agreement. This section shall survive any termination or expiration of this Agreement and will also remain subject to the liability limitations in section II.7 above. 10. Any failure to comply with any of the terms and conditions of this Agreement, which failure continues for thirty (30) days after written notice from the non-defaulting party, shall constitute an event of default (“Event of Default”). Upon the occurrence of any Event of Default by either party, the non-defaulting party may bring legal action to enforce the terms hereof, but the parties shall not be entitled to damages of any kind beyond specific performance of the requirements of this Agreement, including, but not limited to, attorneys’ fees. Prior to initiating any legal action, however, the parties shall attempt, in good faith, to negotiate a settlement or resolution of the Event of Default. 11. This Agreement shall terminate automatically upon the completion of the Project and satisfaction of all financial obligations contained herein. Maintenance of Hackamore Road following completion of the Project shall be determined under a separate agreement or understanding between the cities. 12. All recitals above are incorporated into this Agreement as if fully set forth herein. It is understood and agreed that the entire agreement of the parties is contained herein and that this Agreement supersedes all oral agreements and all negotiations between the parties relating to the subject matter thereof, as well as any previous agreement presently in effect between the parties regarding the subject matter thereof. Any alterations, variations, or modifications of the provisions of this Agreement shall be valid only when they have been reduced to writing and duly signed by the parties. 13. For purposes of delivery of any notice required by this Agreement, the notice shall be effective if delivered by certified or registered U.S. mail, postage prepaid, or hand delivered to: a) As to Medina: City of Medina 2052 County Road 24 Medina, MN 55340 Attn: City Administrator 7 ME230-788-838291.v9 b) As to Corcoran: City of Corcoran 8200 County Road 116 Corcoran, MN 55340 Attn: City Administrator 14. Failure by any party to insist, in any one or more instances, upon strict performance of any term, covenant or condition of this Agreement or to exercise any option contained in this Agreement shall not be construed as a waiver or a relinquishment for the future of such term, covenant, condition or option, but the same shall continue and remain in full force and effect. The parties shall not be deemed to have waived any provision of this Agreement until expressed in a signed writing. 15. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 16. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other. 17. If any term or provision in this Agreement is deemed invalid or unenforceable by any recognized tribunal, the remainder of this Agreement shall be valid and enforceable to the extent permitted by law. 18. This Agreement is declared to be a Minnesota contract and all of its terms shall be construed in accordance with Minnesota law. Any action to enforce rights or obligations under this Agreement shall be brought in Hennepin County. 19. The parties shall each pay their own attorneys’ fees in connection with the preparation and negotiation of this Agreement. 20. The parties each affirm and acknowledge that it has fully read, appreciates, and understands the words, terms, conditions and provisions of this Agreement and is fully satisfied with the same. Each party affirms and acknowledges that it has been, or had the opportunity to be represented by legal counsel of its choice. 21. Each party represents and warrants that it has the power and authority to enter into this Agreement. Each party further represents and warrants that the person or persons executing this Agreement on its behalf has full and complete legal authority to do so, and thereby binds the respective party to the Agreement. [signatures to follow] 8 ME230-788-838291.v9 IN WITNESS WHEREOF, Medina and Corcoran have caused this Agreement to be executed on their behalf by their appropriate officers. Dated: , 20___. CITY OF MEDINA By: Kathleen Martin, Mayor And by: Scott T. Johnson, City Administrator 9 ME230-788-838291.v9 Dated: , 20___. CITY OF CORCORAN By: Tom McKee, Mayor And by: Jessica Beise, City Administrator Planning Department Update Page 1 of 2 June 6, 2023 City Council Meeting TO: Mayor Martin and Members of the City Council FROM: Dusty Finke, Planning Director DATE: June 1, 2023 MEETING: June 6, 2023 City Council SUBJECT: Planning Department Updates Land Use Application Review A) Preserve of Medina (fka Blooming Meadows) – east of Holy Name Dr, north of CR24 – Tim Boser has requested PUD General Plan and Preliminary Plat approval for a 5-lot rural subdivision. The applicant proposes to restore a large area of wetlands and create a wetland bank in addition to the lots. The City reviewed a concept plan for this project last year. A public hearing is tentatively scheduled for the June 13 meeting. B) 2382 Highway 55 Rezoning – Alexander Petrashov has requested to rezone the subject property from the Commercial-Highway (CH) district to the Business (B) district. The subject site is guided Business in the City’s comprehensive plan. A public hearing is scheduled for the June 13 Planning Commission meeting. C) Reflections Dental Site Plan Review – 872 Highway 55 - Nitya Investments has applied for a Site Plan Review to construct a new commercial building. The existing building is proposed to be demolished and the site redeveloped. Staff is conducting preliminary review and will present to Planning Commission when complete, potentially at the June 13 meeting. D) School Lake Nature Preserve 3rd Addition and PUD Amendment – School Lake Nature Preserve LLC has requested to separate the area of the formal garden from one of the lots within the development. The garden area is proposed as a stand alone outlot. A public hearing is tentatively scheduled for the June 13 meeting. E) 1225 Maplewood Concept Plan – John and Lisa James have requested review of a concept plan for a three-lot subdivision. Staff is conducting preliminary review and will schedule for a public hearing when complete, potentially at the July 11 Planning Commission meeting. F) Cates Industrial Park – Comprehensive Plan Amendment– Oppidan has submitted preliminary plat and site plan review for a 310,000 square foot warehouse/office development east of Willow Drive, north of Chippewa Road. The Planning Commission held a public hearing at the March 14 meeting and recommended approval. The City Council adopted approval documents on May 16. Staff will await final plat application. G) Meander Park and Boardwalk – Meander Rd, east of Arrowhead Dr – Medina Ventures had requested PUD General Plan and Preliminary Plat approval for a development to include four residential units north of Meander Rd, and commercial uses south of Meander Rd including a venue, restaurant, daycare, and speculative retail space. The City Council granted amended PUD and Final Plat approval at the April 18 meeting. Staff will work with the applicant to finalize the conditions of approval in anticipation of construction this summer. H) Loram/Scannell Medina Industrial – Loram and Scannell have submitted materials for the City to prepare an EAW for a warehouse/industrial development east of Arrowhead Drive, south of Highway 55, to the south of Loram’s existing facility. The council granted approval of the preliminary plat and site plan review at the February 7 meeting. The Council granted final plat approval on 5/2/2023. Staff will work with the applicant on conditions of approval. The applicant hopes to start construction in June. MEMORANDUM Planning Department Update Page 2 of 2 June 6, 2023 City Council Meeting I) 3844 Linden Dr E. – Highlands PUD Amendment – Joe McCusker has requested an amendment of the design standards of the Medina Highlands PUD to allow a deck to extend off the side of his twinhome unit. The amendment would apply only to this lot. The Planning Commission held a public hearing at the April 11 meeting and City Council approved on May 2. The project will now be closed. J) BAPS Site Plan Review – 1400 Hamel Road – BAPS Minneapolis Medina has requested an amendment to their approved site plan review. The applicant has submitted updated architectural information based on the City’s updated regulations pertaining to architectural elements. The applicant has also proposed minor adjustments to the site layout previously approved. The Council reviewed at the November 9 meeting and recommended approval. The Council approved the amended Site Plan Review at the December 6 meeting. The applicant has indicated that they intend to start construction during the spring of 2023. K) 500 Hamel Road Apartment Concept Plan – Medina Apartments LLC has requested review of a concept plan review for development of a 97-unit apartment building at 500 Hamel Rd. The Planning Commission held a public hearing at their August 10 meeting and Council provided comments on August 16. The developer met with neighbors on September 12 and the parties have indicated that they will meet again to discuss the project. L) Hamel Townhomes Final Plat – 342 Hamel Rd – Hamel Townhomes, LLC has requested final plat approval for a 30-unit townhome development. The Council granted final plat approval on August 16. Staff will work with the applicant to finalize documents prior to beginning of construction. M) Ditter Heating and Cooling Site Plan Review – 820 Tower Drive – Ditter Heating and Cooling has requested a Site Plan Review for an approximately 5,000 square foot addition to its building. The application is incomplete for review and will be scheduled for a hearing when complete. N) Pioneer Trail Preserve – This project has been preliminarily approved and the City is awaiting final plat application. Other Projects A) Restaurant Forum – staff met with two restauranteurs to discuss how the City may support existing restaurants and potentially support additional restaurants opening in Medina. B) Hackamore Road – staff is finalizing the Joint Powers Agreement with Corcoran and preparing to present along with the contract to the City Council on June 6. Staff also held a neighborhood meeting on May 30 to update owners about the project and impacts over the summer. C) Peg’s Countryside Café Addition – Rene Calle has requested Administrative Site Plan Review for an addition to the rear of Peg’s Countryside Café. Updated materials were recently submitted and are under review. D) CommonBond TIF and Fee Waiver requests – staff presented the request for fee waivers at the May 2 worksession and is compiling information for the TIF request at the June 6 MEDA meeting. TO: Honorable Mayor and City Council FROM: Jason Nelson, Director of Public Safety DATE: June 1, 2023 RE: Department Updates On May 20th we held our annual Bike Rodeo. We moved the location this year to the Hamel Community Building parking lot. It was a great day for the bike rodeo as the weather was perfect, and we had over 35 kids show up. There were also numerous other citizens who were utilizing the park and stopped to speak with the police, fire departments, and North Memorial. Community Service Officers Wiese and Milinkovich, along with our Reserve Officers, did a great job organizing the event. Update on our homicide case from 2022. Due to the great follow up investigation the Hennepin County Attorney’s Office has agreed to upgrade the charges from 2nd Degree Murder to 1st Degree Murder. As you are aware, the suspect is still in custody, and they will convene a Grand Jury to indict. Investigator Scharf, even though he has left the organization for South Lake Minnetonka Police Department, is still working many hours on the case with the County Attorney’s Office and will continue to do so until the completion of the case. Community Service Officer Jacob Milinkovich has turned in his resignation and his last day is June 2nd. He has accepted a full-time police officer position with the Shakopee Police Department. Shakopee is an area that he grew up and wanted to return to the area. We wish him well with the next chapter in his law enforcement career. Community Service Officer Tanner Wiese is in the summer skills portion of his schooling and will be completed in July of this year. I have had extensive talks with Tanner and am very happy with his work ethic and his dedication to the job. I have advised him that I am going to recommend that he be hired contingent on finishing his schooling and passing the P.O.S.T licensing exam and other background checks that we will conduct. Tanner is very excited about the opportunity. We are still looking to hire one more officer to backfill for the Sergeant position in July, but I have decided to wait until there is a resolution to the next union contract before we attempt to start the hiring process again. At that point, the wages and other contract options can be communicated with the posting so that we can be more competitive. Officer Hall will be promoted to Sergeant on July 1st. He will continue to work the patrol schedule until we have another person hired to fill the patrol schedule. I really appreciate future Sergeant Hall’s willingness to do what it takes for the organization. He is definitely a team player. Patrol: The following are updates of Patrol Officers between May 11, 2023, and May 30, 2023: Citations – 34 Warnings – 79 PD Accidents – 5 PI Accidents – 0 Medicals – 14 Falls – 5 Suspicious Calls – 11 Traffic Complaints – 0 Other Agency Assists – 13 Business/Residential Alarms - 9 Welfare Checks - 9 On 05/12/2023 officers were dispatched to a traffic complaint in the area of Hamel Road and Willow Drive. Resident reported the sound of a vehicle speeding back and forth in the area. While checking the area officer located vehicle driving 67 mph in 40 mph zone. Vehicle was not believed to be related to the traffic complaint but was still cited. On 05/13/2023 an officer working in the area of the Automotoplex car show stopped a Ferrari for driving 92 mph in 55 mph zone. Driver said he was trying to get home before his car got rained on. He was issued a citation for speeding in excess of 20 mph over the posted limit. On 05/15/2023 resident reported receiving a phone call that had their daughter’s number on caller ID. When they answered, they heard a female crying and then a male got on the phone telling her he had her daughter and if she didn’t send money, he would hurt her. Resident was coached on how to send money and had attempted to send money using various methods which failed. Resident ultimately was able to get hold of their daughter who was fine and hadn’t been the person who had called her. The resident luckily did not lose any money from the attempted scam. On 05/16/2023 at 2007 hours officer was dispatched to check on a male who appeared intoxicated walking along County Road 19 near Independence Street. The officer did locate the male who was highly intoxicated and said he was staying at Baker Park Campground and was on his way back there. The male said he was currently homeless and camping at the campground. He was provided transport back to his campsite. Three Rivers PD was advised of the incident and of the male. On 05/17/2023 officers were dispatched to a suspected theft in progress at Target. Asset Protection advised a known shoplifter was in the store removing price tags and security devices from Dyson vacuums. Suspect was then seen on his phone, abandoned all property and left the store without taking anything. Suspect was seen walking to a waiting vehicle on the west side of the shopping complex. It is believed someone in the waiting vehicle saw a squad arriving in the area and tipped off the person inside the store. The suspect was known to Target from previous thefts. On 05/19/2023 at 1921 hours officer was dispatched to smoke in the building at Okalee of Medina. Upon arrival it was learned the smoke was from burnt food in one of the apartments. Loretto and Hamel Fire Department assisted with ventilating the smoke from the building. On 05/20/2023 at 1100 hours officer responded to the 1900 block of Hamel Road on a burglary report. Officer learned overnight two suspects entered an outbuilding on the property and stole several thousands of dollars of equipment and tools. The case has been forwarded to Investigations for follow up. On 05/24/2023 at 1000 hours officer was dispatched to a damage to property report at Liquor Depot. Upon arrival officer learned a customer had pulled in to park and their foot had slipped off the brake and hit the gas. The vehicle then struck and broke off a post for the front overhang of the building. The officer collected insurance information and provided it to the building owner. On 05/25/2023 at 1548 hours an individual showed up at the police department to pick up a permit to purchase card. The individual was found to have a warrant for his arrest out of Anoka County for theft. The male was placed under arrest and transported to Hennepin County Jail. On 05/26/2023 officer was dispatched to a drunk problem in the 2400 block of Tamarack Drive. A male at the residence called providing an address, and he believed he had been drinking but not sure and did not know where he was. Upon arrival the officer found an extremely intoxicated male who had a BAC of .34 on a PBT. The male wanted to be transported to the hospital and was assisted to a waiting ambulance. On 05/26/2023 at 1913 hours officers were dispatched to a theft that had just occurred at Aldi’s. Assistant manager reported a male entered the store, selected two shopping bags from the front, and then proceeded to the meat department and filled both bags full of meat products. The male then exited the store and ran to a waiting getaway vehicle and left east on Highway 55. The manager was able to provide a license plate on the vehicle. The vehicle was found to have been associated with a similar theft in 2022 in Champlin. Case forwarded to Investigations. On 05/28/2023 at 1917 hours officer was dispatched to a theft from auto report at Holy Name Park. Officer learned someone had parked their vehicle in the lot and left their purse in the back seat under a blanket. When they returned to their car, they found a back window broken and purse missing. The victim cancelled all credit cards that were in the purse and found none had been attempted as of yet. On 05/29/2023 officer was dispatched to a domestic in the 500 block of Clydesdale Circle. Upon arrival officer met with an adult female who said she had been fostering a 17-year-old juvenile female, and that the female continued to disobey her and bring drugs into the house, and she no longer wanted the female to stay with her. She stated she had attempted to call someone from Hennepin County but because of the holiday she was unable to reach anyone. The foster mother then left saying she needed to get to a BBQ. The officer made several calls and was eventually able to get hold of a counselor who was known to the juvenile and agreed to take in the juvenile. The case will be forwarded to investigations to follow up with Hennepin County and possibly charge the foster mother with neglect. Investigations: Attended Warrant Writing Class. Was called in for/received a criminal sexual conduct case. Sent receiving stolen property case to the Hennepin County Attorney for charging. Received and sent harassment restraining order case in for charging. Closed a criminal sexual conduct case. Received and sent in for charges a child protection incident. Investigations currently has 10 active/open cases. 1 TO: Medina Mayor and Members of the City Council FROM: Steve Scherer, Public Works Director DATE: May 30, 2023 MEETING: June 6, 2023 SUBJECT: Public Works Update Streets • The Hackamore Road project JPA with the city of Corcoran and contract with Valley Paving is in your packet for approval. Because the project is starting later than originally planned. The city will be flexible so the contractor can get as much completed in 2023 as possible. • The Meadowood’s Trail, Cheyenne Trail, and Foxberry Farms paving projects should be complete by the time you read this update. After the asphalt firms up, Public Works will be able to complete the last bit of shouldering and seeding. • Phase I of the Clydesdale Trail project (from 600 Clydesdale to the intersection at Hwy 55 and up to the turnabout) has begun. Phase II is scheduled to start mid-June. • Pavement in the Highlands is scheduled for the week of June 4th. Water/Sewer/Stormwater • The filter media replacement at the treatment plant is now complete; the final pay request and change order are in the packet for approval. • The boy scout storm drain marker conservation project in the Foxberry neighborhood was completed over Memorial weekend. The scouts handed out educational flyers to residents and encouraged households to adopt drains. • The sewer lines along County Road 19 down to Hwy 12 were cleaned and sealed up. We noticed buildup in some of the manholes as we performed our test metering, thus wasted no time getting the section cleaned (we serve other cities on this line through the Quad Cities agreement). • We also cleaned and televised the Foxberry Farms area sewers and discovered a significant amount of leakage in the manholes that I will work to address this summer. Parks/Trails • Pickleball nets were installed last week, and immediately occupied. We have received several positive comments with gratitude for the amenity. • The annual park commission tour on Wednesday, May 17 was a success. Participants visited or drove by several parks before stopping for lunch. The tour observed bustling activity at Hamel Legion, with every amenity being utilized, and plenty of parking still available. We also stopped at the Medina Lake Preserve site, where we have applied for grant assistance to clean up the forest area. Additionally, the park MEMORANDUM 2 commission visited Hunter (under “construction”) and Lakeshore (“construction” starting soon) parks. ORDER CHECKS MAY 16, 2023 – JUNE 6, 2023 054348 LARSON, MARILYN ANDREA ............................................... $78,000.00 054349 DEREK & ERIN BLOOM ................................................................. $6.04 054350 ECM PUBLISHERS INC .............................................................. $197.41 054351 HAMEL ATHLETIC CLUB ........................................................... $100.00 054352 HINDU SOCIETY OF MN ............................................................ $500.00 054353 KNIGHT BARRY TITLE UNITED LLC ........................................... $41.27 054354 KROLL, WILLIAM ................................................................... $10,000.00 054355 US HOME CORP ........................................................................ $151.17 054356 METRO WEST INSPECTION ................................................ $16,077.59 054357 PULTE GROUP ........................................................................... $271.24 054358 YASMIN, REBEKA ...................................................................... $500.00 054359 HAMEL LIONS CLUB ............................................................... $4,000.00 054360 KELZER, MARY BETH ................................................................ $250.00 054361 KHATRI, MAZHAR ...................................................................... $500.00 054362 MN SECRETARY OF STATE-NOTARY ..................................... $120.00 054363 ODP BUSINESS SOLUTION LLC ............................................ $1,587.28 054364 ARROWHEAD HOLDINGS .................................................... $10,000.00 054365 PRIGGE, TANWI ......................................................................... $250.00 054366 SANKEY, BRAD ............................................................................ $60.00 054367 STANDARD INSURANCE COMPANY .................................... $1,157.30 054368 WESTBRANCH 4TH TOWNHOMES ASSOC ............................ $250.00 054369 ALDRICH, COLE .................................................................... $10,000.00 054370 BUENDORF, JOSEPHINE .......................................................... $445.00 054371 CERNEY, LISA/DEL .................................................................... $500.00 054372 HENN COUNTY INFO TECH ................................................... $2,407.07 054373 HENN COUNTY TAXPAYER SVCS DEPT ................................. $382.00 054374 MINNESOTA U.I. FUND ................................................................ $25.00 054375 SORENSON, ANDREW/SARAH ................................................... $41.33 054376 ADAMS PEST CONTROL INC .................................................... $107.72 054377 ASPEN MILLS INC ................................................................... $1,448.85 054378 BEAUDRY OIL & PROPANE ................................................... $4,113.94 054379 BROCK WHITE ........................................................................... $347.55 054380 C & H SPORT SURFACES, INC ............................................ $12,900.00 054381 CAREFREE SERVICES INC .................................................... $8,206.00 054382 CORE & MAIN LP .................................................................... $1,361.76 054383 DDA HUMAN RESOURCES INC ............................................. $5,150.00 054384 DITTER COOLING & HEATING .................................................. $947.00 054385 DODGE OF BURNSVILLE ..................................................... $82,240.00 054386 EHLERS & ASSOC INC. .......................................................... $6,420.00 054387 ESRI, INC. ................................................................................... $808.00 054388 ESS BROS. & SONS, INC. ...................................................... $3,447.50 054389 GO 2 HAMEL LLC ....................................................................... $390.86 054390 HAWKINS INC. .............................................................................. $70.00 054391 JIMMY'S JOHNNYS INC ............................................................. $878.01 054392 KD & COMPANY RECYCLING INC ............................................ $289.67 054393 KRISTI J PAULSON, CHARTERED ......................................... $2,459.80 054394 LEAGUE OF MINNESOTA CITIES ............................................. $164.40 054395 LEAGUE OF MN CITIES INS.TRUST ......................................... $250.00 054396 MONTICELLO, CITY OF ............................................................. $194.00 054397 MOTLEY AUTO SERVICE LLC .................................................... $40.50 054398 NAPA OF CORCORAN INC ........................................................ $169.07 054399 NELSON ELECTRIC MOTOR REPAIR ...................................... $425.00 054400 NUTRIEN AG SOLUTIONS, INC ........................................... $12,184.00 054401 ON-SITE MEDICAL SERVICES ............................................... $1,460.00 054402 PREMIUM WATERS INC .............................................................. $19.49 054403 ROLF ERICKSON ENTERPRISES INC ................................... $9,290.67 054404 SCHMIDT CURB COMPANY INC ........................................ $138,375.00 054405 SHANK CONSTRUCTORS INC ........................................... $223,291.34 054406 SHERI'S CUSTOM EAR PLUGS LLC ......................................... $975.00 054407 SITEONE LANDSCAPE SUPPLY LLC ....................................... $229.55 054408 SOLUTION BUILDERS INC ........................................................ $151.75 054409 STREICHER'S ............................................................................. $714.76 054410 SUN LIFE FINANCIAL ................................................................. $681.85 054411 TEGRETE CORP ..................................................................... $1,418.00 054412 TIMESAVER OFFSITE ................................................................ $196.75 054413 TOTAL CONTROL SYSTEMS INC. ......................................... $2,779.84 054414 SSI MN TRANCHE 1 #10322006 ............................................. $4,305.02 054415 SSI MN TRANCHE 3 #10327096 ............................................. $5,652.89 054416 WESTSIDE WHOLESALE TIRE ................................................. $499.84 054417 WIN911 ........................................................................................ $800.00 Total Checks $673,675.08 ELECTRONIC PAYMENTS MAY 16, 2023 – JUNE 6, 2023 006846E AFLAC ......................................................................................... $491.08 006847E MINNESOTA U.I. FUND ........................................................... $1,710.00 006848E FURTHER.................................................................................... $164.55 006849E ELAN FINANCIAL SERVICE .................................................... $8,091.77 006850E PR PERA ................................................................................ $20,464.19 006851E PR FED/FICA ......................................................................... $20,215.62 006852E PR MN Deferred Comp ............................................................ $3,582.00 006853E PR STATE OF MINNESOTA .................................................... $4,477.90 006854E CITY OF MEDINA ......................................................................... $24.00 006855E FURTHER................................................................................. $2,177.39 006856E FURTHER................................................................................. $2,172.04 006857E PR FED/FICA ........................................................................... $1,356.06 006858E PR STATE OF MINNESOTA ....................................................... $530.30 006859E FARMERS STATE BANK OF HAMEL .......................................... $12.00 006860E MINNESOTA, STATE OF ......................................................... $1,248.00 006861E CENTERPOINT ENERGY ........................................................ $2,733.95 006862E DELTA DENTAL ....................................................................... $3,184.42 006863E GREAT AMERICA FINANCIAL SERVI ....................................... $178.95 006864E THE VALVOLINE COMPANY 68 .................................................. $91.22 006865E WRIGHT HENN COOP ELEC ASSN ....................................... $2,989.11 006866E FARMERS STATE BANK OF HAMEL ........................................ $150.00 Total Electronic Checks $76,044.55 PAYROLL DIRECT DEPOSIT MAY 24, 2023 0512738 VOID ................................................................................................ $0.00 REISSUED MANUAL CK#20456 0512739 WIESE, TANNER L ..................................................................... $878.19 0512740 ALTENDORF, JENNIFER L. .................................................... $1,166.03 0512741 BARNHART, ERIN A. ............................................................... $2,882.60 0512742 BOECKER, KEVIN D. ............................................................... $2,962.82 0512743 CONVERSE, KEITH A. ............................................................ $2,400.84 0512744 DEMARS, LISA ........................................................................ $1,648.46 0512745 DION, DEBRA A. ...................................................................... $2,198.99 0512746 ENDE, JOSEPH ....................................................................... $2,121.39 0512747 FINKE, DUSTIN D. ................................................................... $3,122.31 0512748 GLEASON, JOHN M................................................................. $1,945.64 0512749 GREGORY, THOMAS .............................................................. $2,182.35 0512750 HALL, DAVID M. ....................................................................... $2,405.81 0512751 HANSON, JUSTIN .................................................................... $2,593.17 0512752 JOHNSON, SCOTT T. .............................................................. $3,022.87 0512753 KLAERS, ANNE M. .................................................................. $1,781.45 0512754 LEUER, GREGORY J. ............................................................. $2,568.85 0512755 MCGILL, CHRISTOPHER R. ................................................... $1,809.80 0512756 MCKINLEY, JOSHUA D ........................................................... $2,326.62 0512757 MYHRE, JORDAN J ................................................................. $2,469.64 0512758 NELSON, JASON ..................................................................... $3,044.17 0512759 RATKE, TREVOR J .................................................................. $2,014.90 0512760 REINKING, DEREK M .............................................................. $2,199.09 0512761 RUCKE, MARIA ........................................................................ $1,842.74 0512762 SCHARF, ANDREW ................................................................. $1,483.04 0512763 SCHEIBE, CONNIE L ............................................................... $1,598.52 0512764 SCHERER, STEVEN T. ........................................................... $2,967.71 0512765 VINCK, JOHN J ........................................................................ $2,082.49 0512766 VOGEL, NICHOLE ................................................................... $1,077.10 0512767 WALKER, CAITLYN M. ............................................................ $2,174.23 0512768 BURSCH, JEFFREY ................................................................ $1,506.35 Total Payroll Direct Deposit $64,478.17 PAYROLL MANUAL CHECK – MAY 25, 2023 & MAY 30, 2023 020456 MILINKOVICH, JACOB ............................................................... $863.57 020457 SCHARF, ANDREW ................................................................ $5,799.24 Total Payroll Manual Check $6,662.81