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2017.08.15 Council Meeting Packet Posted: August 11, 2017 City Council Meeting Schedule August 15, 2017 Time Type of meeting Location 6:20 p.m. City Council work session to discuss: • Proposed changes to nuisance abatement procedures in the new Chapter 6 • Constituent issues update • City manager monthly check-in • New business • Announcements Conference Room A 6:45 p.m. Economic Development Authority (EDA) meeting Council Chambers 7 p.m. City Council meeting Council Chambers Following the City Council meeting EDA work session to discuss: • Bass Lake Road streetscape project update • Home improvement program update • 5900 – 56th Avenue project update Conference Room A Auxiliary aids are available upon request to individuals with disabilities by calling the City Clerk at (763) 531-1145 at least 96 hours in advance. TTY users may call Minnesota Relay at 711 or 1-800-627-3529. 4141 Douglas Drive North • Crystal, Minnesota 55422-1696 Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov Posted: August 11, 2017 City Council Work Session Agenda August 15, 2017 6:20 p.m. Conference Room A Pursuant to due call and notice given in the manner prescribed by Section 3.01 of the City Charter, the work session of the Crystal City Council was held at ______ p.m. on Aug. 15, 2017 in Conference Room A, 4141 Douglas Dr. N., Crystal, Minnesota. I. Attendance Council Members Staff ____ LaRoche ____ Norris ____ Parsons ____ Therres ____ Adams ____ Gilchrist ____ Budziszewski ____ Revering ____ Dahl ____ Ray ____ Deshler ____ Sutter ____ Kolb ____ Serres II. Agenda The purpose of the work session is to discuss the following agenda items: 1. Proposed changes to nuisance abatement procedures in the new Chapter 6 2. Constituent issues update 3. City manager monthly check-in 4. New business* 5. Announcements* * Denotes no supporting information included in the packet. III. Adjournment The work session adjourned at ______ p.m. Auxiliary aids are available upon request to individuals with disabilities by calling the City Clerk at (763) 531- 1145 at least 96 hours in advance. TTY users may call Minnesota Relay at 711 or 1-800-627-3529. 4141 Douglas Drive North • Crystal, Minnesota 55422-1696 Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov 4141 Douglas Drive North • Crystal, Minnesota 55422-1696 Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov 1 505471v1 TJG CR225-423 Kennedy Troy J. Gilchrist 470 US Bank Plaza 200 South Sixth Street Minneapolis MN 55402 (612) 337-9214 telephone (612) 337-9310 fax tgilchrist@kennedy-graven.com http://www.kennedy-graven.com & Graven C H A R T E R E D Also: St. Cloud Office 501 W. Germain Street, Suite 304 St. Cloud, MN 56301 (320) 240-8200 telephone MEMORANDUM To:Crystal City Council From:Troy Gilchrist, City Attorney Date:August 10, 2017 Re:Amendments to Chapter 6 --------------------------------------------------------------------------------------------------------------------- The proposed amendments to Chapter 6 of the City Code will replace the existing Chapter 6 and reflects an approach of removing regulations the City Council determines are no longer needed, are adequately addressed by state regulations, or do not track with how the City actually handles these issues administratively. The resulting regulations are more streamlined, simpler to read, and easier for staff to implement. The proposed Chapter 6 amendment addresses the following subjects: 1.Public nuisances and their abatement; 2.Garbage, refuse, and recycling, including requirements applicable to residents and haulers; 3.Vegetation,including cutting grass, controlling noxious weeds, and requiring warning signs for pesticide application; and 4.Noise controls related to noise generated from a wide range of sources. The ordinance includes the changes suggested by the City Council during its work session discussions,as well as some additional changes suggested by staff to the nuisance abatement procedure (Section 600). The previous abatement procedure followed the approach in the League of Minnesota Cities’ sample ordinance, which staff pointed out does not track with how the City has traditionally addressed nuisance abatements. There is a need to respond to situations like the accumulation of outdoor refuse in a timelier manner than provided for under the previous 2 505471v1 TJG CR225-423 draft language, especially considering that these violations almost always occur at properties with vacant buildings where no one is taking care of the property.For example, in the first half of 2017, City staff abated trash nuisances at 12 properties. Ten occurred at vacant buildings. Of the other two, one was an unlicensed rental where the owner and tenants simply did not care. The other was owner-occupied, but the owner did not object to or question the abatement. That said, it would be beneficial to all parties for the City Code to allow the issuance of abatement orders without having to wait for a City Council meeting, but to make it clear the owner and occupant have a right to request a hearing before the City Council if they object to the order. Staff expects this hearing provision to be seldom used because outdoor refuse accumulations generally occur because the property is vacant or abandoned, or if occupied, because neither the owner nor occupant is concerned in the first place. Enclosed is a redline showing all changes made to the amendment from the version reviewed by the City Council at its July 13th work session, including those made to the nuisance abatement process. DRAFT 7-3-17 CITY OF CRYSTAL ORDINANCE #2017-____ AN ORDINANCE AMENDING CHAPTER 6 OF THE CRYSTAL CITY CODE The City of Crystal ordains: ARTICLE I. Chapter VI of the Crystal City Code is hereby deleted in its entirety and replaced with the following: CHAPTER VI PUBLIC HEALTH Section 600 – Public nuisances 600.01.Public nuisance prohibition.Subdivision 1. Prohibition.A person must not act, or fail to act, in a manner that is or causes a public nuisance. For purpose of this section, a person that does any of the following is guilty of maintaining a public nuisance: Maintains or permits a condition which unreasonably annoys, injures, or endangers the(a) safety, health, morals, comfort or repose of any considerable number of members of the public; Interferes with, obstructs, or renders dangerous for passage, any public highway or(b) right-of-way, or waters used by the public; or Does any other act or omission declared by law or city ordinance to be a public nuisance.(c) Subd. 2. Hazardous buildings. This section does not apply to the procedures available to the city under Minnesota Statutes, sections 463.15 through 463.261 to correct or remove a hazardous condition of any hazardous building or property, which may occur through a separate action or in conjunction with a nuisance abatement action under this section. 600.03.Duties of city officersofficials. City officials may apply and enforce any provision of this section relating to public nuisances in the city. Any peace officer or other designated city official shall have the power tomay inspect private premises in accordance with the law and take all reasonable precautions to prevent the commission and maintenance of public nuisances.Except in emergency situations of imminent danger to human life and safety, no peace officer or designated city official will enter private property for the purpose of inspecting or preventing public nuisances without the permission of the owner, resident, or other person in control of the property, unless the officer or person designated has obtained a warrant or order from a court of competent jurisdiction authorizing entry. 1 DRAFT 7-3-17 600.05.Abatement procedure. Subdivision 1.ProcedureSeverability. The nuisance abatement procedure in this subsection is separate from, but may run concurrent with, the administrative enforcement procedure in Section 306 of this code. Subd. 2.Nuisance abatement order. Whenever a peace officer or other designated city official determines that a public nuisance is being maintained or exists in the city, the official may notify in writingissue a nuisance abatement order to the owner of record orand occupant of the premises of such fact and order that the nuisance be terminated or abated. The notice of violation shall. The order shall be mailed to the owner at the address on record with the county for mailing tax statements for the premises and shall also be posted on the premises. The order shall identify the nuisance, specify the steps towhat must be takendone to abate the nuisance, and provide a reasonable period of time, not less than 10 days, within which the nuisance is to be abated. If the notice of violation is not complied with within the time specified, the city council may, after notice to the owner or occupant and an opportunity to be heard, determine that the condition identified in the notice of violation is a nuisance and further order that if the nuisance is not abated within the time prescribed by the city councilmust be abated. The order shall also contain a clear statement of the right of the owner or occupant to request a hearing before the city council. If the nuisance conditions identified in the order are not fully corrected by the indicated date, the city may abate the nuisance. Subd. 3. Opportunity to be heard. Upon receipt of a nuisance abatement order, the owner or occupant may forestall abatement action by the city by requesting a hearing before the city council. Such request must be in writing and received by the city no later than 4:30 p.m. on the compliance date indicated in the order. Upon receipt of such request, the city manager shall place the matter on the agenda for the next available city council meeting. At the meeting the city council will provide the owner and occupant an opportunity to be heard regarding the matter. At the conclusion of the hearing the city council may act to uphold, modify or dismiss the nuisance abatement order. If the city council upholds or modifies the order, it shall also identify a date by which the nuisance must be abated. The city shall provide the owner and occupant written notice of the city council’s decision and the date by which the nuisance must be abated. Subd. 2.Notice. The notice shall be served by a peace officer or designated city official on the owner of record or occupant of the premises either in person or by certified mail. If the premises are not occupied, the owner of record is unknown, or if the owner of record or occupant refuses to accept notice, notice of the violation shall be served by posting it on the premises. Subd. 4. City abatement. If the owner or occupant fails to comply with the nuisance abatement order by the established compliance date, the city may act to protect the public health, safety, and welfare by taking such actions as it determines are reasonable to abate the nuisance. Subd.3.5.Emergency procedure; summary enforcement. In cases of emergency, where delay in abatement required to complete the procedure and noticeprocedural requirements as set forth in subdivisions 1 and 2 and 3 of this subsection will permit a continuing nuisance to unreasonably endanger public health, safety, or welfare, the city councilmanager may order summary enforcement and abate the nuisance. To proceed with summary enforcement, the peace officer or other designated city official shall determine that a public nuisance exists or is being maintained on premises in the city and that delay in abatement will unreasonably endanger public 2 DRAFT 7-3-17 health, safety, or welfare. The officer or designated official shall notify in writing the occupant orand owner of the premises of the nature of the nuisance, whether public health, safety, or welfare will be unreasonably endangered by delay in abatement required to complete the procedure set forth in subdivision 1subdivisions 2 and 3 of this subsection and may order that the nuisance be immediately terminated or abated. The order shall be hand delivered to the owner or occupant and, if neither is available, it shall be mailed to the owner at the address on record with the county for mailing tax statements for the premises and shall also be posted on the premises. If the nuisance is not immediately terminated or abated, the city councilmanager may order summary enforcement and abate the nuisance. Subd.4.6.Immediate abatement. Nothing in this section shall prevent the city, without notice or other process, from immediately abating any condition that poses an imminent and serious hazard to human life or safety. Subd.5.7.Judicial remedy. Nothing in this section shall prevent the city from seeking a judicial remedy as authorized by law. 600.07.Recovery of costcosts. Subdivision 1.Personal liability. The owner of the premises on which a nuisance has been abated by the city, or a person who has caused a public nuisance on property not owned by that person, shall be personally liable for the cost to the city of the abatement, including administrative costs. After the work has been completed and the cost determined, the city clerk or other city official shall prepare a bill for the cost and mail it to the responsible party. Thereupon the amount shall be immediately due and payable to the city. Subd. 2.Assessment. After notice and hearing as provided in Minnesota Statutes, section 429.061, as it may be amended from time to time, if the nuisance is a public health or safety hazard on private property, the city clerk shall, on or before September 1 following abatement of the nuisance, list the total unpaid charges along with all other such charges as well as other charges for current services to be assessed under Minnesota Statutes, section 429.101 against each separate lot or parcel to which the charges are attributable. The city council may then spread the charges against the property under that statute and any other pertinent statutes for certification to the county auditor and collection along with current taxes the following year or in annual installments, not exceeding ten, as the city council may determine in each case. 600.09.Penalty. Any person who fails to comply with an abatement notice shall be guilty of a misdemeanor. Each additional day of noncompliance constitutes a separate offense. Section 605 – Garbage and refuse 605.01.Definitions. For purposes of this section, the following terms shall have the meanings given them. Subd. 1.Approved. "Approved" means acceptable to the health authority following the determination as to compliance with established public health practices and standards. Subd. 2.Composting.“Composting” means a microbial process that converts plant 3 DRAFT 7-3-17 materials to a usable organic soil amendment or mulch. Subd. 3.Dumpster.“Dumpster” means a large container for temporary storage of refuse, recycling, or source-separated compostable material. Subd. 4.Health authority. "Health authority" means any officer or employee designated by the city manager to enforce the provisions of this section. Subd. 5. Litter. “Litter” includes all of the following: Refuse, as defined in this subsection;(a) The meaning given by Minnesota Statutes, section 609.68; and(b) Abandoned property in the form of deteriorated, wrecked or derelict property in(c) unusable condition or left unprotected from the elements. The term "abandoned property" includes, but is not limited to, deteriorated, wrecked, inoperable, unlicensed, partially dismantled, or abandoned motor vehicles, trailers, boats, machinery, refrigerators, washing machines, household appliances, plumbing fixtures and furniture. Subd. 6.Owner. "Owner" means any person, firm, corporation, or other partnership or organization who alone, jointly, or severally with others may be in ownership of, or have charge, care, or control of, any premises or business within the city as owner, employee or agent of the owner, or as trustee or guardian of the estate or person of the title holder. Subd. 7.Pests. "Pests" means any insects, vermin, rodents, birds or any other living agent capable of reproducing itself that causes or may potentially cause harm to the public health or significant economic damage. Subd. 8.Premises. "Premises" means any dwelling, house, building or other structure or parcel of property. Subd. 9.Public place. "Public place" means any and all streets, sidewalks, boulevards, alleys, parks, public buildings, and other public ways. Subd. 10.Recycling. "Recycling" means the process of collecting and preparing recyclable materials and reusing the materials in their original form or using them in manufacturing processes that do not cause the destruction of recyclable materials in a manner that precludes further use. Subd. 11.Recyclable materials. "Recyclable materials" means materials that are separated from mixed municipal solid waste for the purpose of recycling or composting, including paper, glass, plastics, metals, automobile oil, batteries, source-separated compostable materials, and sole source food waste streams that are managed through biodegradative 4 DRAFT 7-3-17 processes. Refuse-derived fuel or other material that is destroyed by incineration is not a recyclable material. Subd. 12.Refuse. "Refuse" means solid waste from residential, commercial, industrial, and community activities that the generator of the waste aggregates for collection. Refuse does not include recyclable materials, source-separated compostable materials or yard waste. Subd. 13.Refuse enclosure. "Refuse enclosure" means an enclosure capable of containing all refuse, recyclable materials, source-separated compostable materials, and yard waste stored by an establishment between pickups. Subd. 14.Refuse enclosure - food service. "Refuse enclosure - food service" means an enclosure constructed for sanitary temporary storage of refuse, recyclable materials, and source-separated compostable materials generated by food establishments. Subd. 15.Roll-off container.“Roll-off container” means a usually open-top dumpster characterized by a rectangular footprint. Typ ical container sizes are 10, 15, 20, 30, and 40 cubic yards. Subd. 16.Source-separated compostable materials.“Source-separated compostable materials” has the meaning given it in Minnesota Statutes, section 115A.03, subd. 32a. Subd. 17.Vehicle. "Vehicle" means every device in, upon or by which any person or property is or may be transported or drawn upon a thoroughfare including devices used exclusively upon stationary rails or tracks. Subd. 18.Waste matter.“Waste matter” means, collectively, refuse, recyclable materials, yard waste, and source-separated materials. Subd. 19.Yard waste.“Yard waste” means garden wastes, leaves, lawn cuttings, weeds, shrub and tree waste, and prunings. 605.03.Refuse storage and disposal. Subdivision 1.Containers required. The owner of any residential premises, and any other person having refuse, must provide and keep on such premises sufficient containers for the storage of refuse accumulated on the premises between disposal or collection. Each such container must be water tight, must have tight fitting covers, must be impervious to pests and absorption of moisture, and must not exceed 96 gallons in size unless otherwise specifically authorized in writing by the health authority. Refuse on any premises must be stored in the containers required. All refuse from demolition or construction sites must be stored in roll-off containers or dumpsters and may not be stored on the ground. Commercial, business, industrial, or other such establishments having a refuse volume in excess of two cubic yards per week and all six family and larger dwellings, must store refuse in roll-off containers or dumpsters, or an approved equivalent, provided by its licensed collector. These containers must be so located as to be accessible to collection equipment and so as not to require an intermediate transfer. 5 DRAFT 7-3-17 Subd. 2.Sanitary disposal. Refuse must be disposed of in a sanitary manner as approved by the health authority and must not constitute a public nuisance. Subd. 3.Frequency and manner of collection. The contents of refuse containers must be collected at least every other week, or more frequently if necessary or required by the provisions of any other ordinance of the city, by a collector licensed under this section. The collector must transfer the contents of the containers to the vehicle without spilling them, or if any spilling occurs, the collector must clean it up immediately and completely. Collection must be conducted in such a manner as to not create a public nuisance. Upon each collection, the containers must be completely emptied and returned to where they are kept, and the covers of the containers must be replaced. Subd. 4. Placement of containers. The preferred location for storage of containers is in an enclosed building. However,(a) if stored outside, containers must be placed and kept in a neat and orderly manner and maintained in such a way as to not unreasonably interfere with the use of the adjoining property. Containers may be placed at their designated collection location the evening before(b) the applicable collection day and shall be removed from that location no later than 12:00 p.m. on the day following the applicable collection day. Properties with a sidewalk directly behind the curb may place containers on that part(c) of the sidewalk closest to the curb in accordance with subdivision 4(b). Containers may never be placed on public streets or interfere in any way with the(d) removal of snow from the roadways. Subd. 5.Defective containers. If a container is found to be in poor repair, corroded or otherwise defective so as to permit pests to enter, or does not meet other requirements of this section, the health authority may notify the provider or user of the container of the deficiency and require repair or replacement of the container. If the deficiency is not corrected, the health authority may condemn the deficient container and affix a tag so stating such condemnation. It is unlawful for any person to place or deposit refuse in a container which has been condemned. Subd. 6.Dumpsters and roll-off containers. A dumpster or roll-off container may not be located in any public place. A dumpster or roll-off container may not be located on any residential premises for more than three consecutive months during any 12-month period. The city manager, or its designee, is authorized to issue temporary permits for placement of a dumpster or roll-off container on any residential premises for more than three consecutive months when special circumstances exist justifying the issuance of the temporary permit and the purposes of this section will not be impaired thereby. The permit must be displayed on the dumpster or roll-off container or elsewhere on the premises. All dumpsters and roll-off containers must have the current licensed collector's name, address and phone number in clearly legible letters no less than three inches in height. No fee is required for the temporary permit. 6 DRAFT 7-3-17 605.05.RefuseExterior storage and disposal - commercial and industrial. Subdivision 1. Dumpsters. Exterior storage of refuse, including dumpsters, at buildings in property zoned for commercial or industrial uses must conform to the following rules: The refuse must be contained in a refuse enclosure or in the case of food(a) establishments, in a refuse enclosure - food service; and The exterior storage area must be constructed in compliance with the open and(b) outdoor storage requirements contained in the city’s zoning regulations. 605.07.Refuse hauler regulations. Subdivision 1.License required. It is unlawful to engage in hauling or conveying of waste matter from a premises, other than one's own domicile, in the city without a license. Each vehicle so used must be licensed. Subd. 2.License procedure. Applications for license or renewal of license must contain a description of the types and makes of motor vehicles used for collection, a schedule of services to be made to the customers, the frequency of service to be rendered, and full information where and how the material collected will be disposed of, and any other information the health authority will require. Applications to provide routine weekly collection and removal of refuse from residences must provide complete collection of all refuse which normally results from day to day use of this typ e of property except furnishings, appliances, building or construction wastes and similar bulky wastes for which individuals must make special arrangements. The health authority may require vehicle inspection before processing the license application. An application for license under this section must be submitted to the health authority for review and recommendation and approved by the city council if it meets the requirements of this section. Fees for licenses are set by appendix IV. Subd. 3.Pricing requirement. Applications for license or renewal of license must contain a description of refuse collection charges. The charges must increase with the volume or weight of the refuse collected from a premises. The charges imposed on a premises that recycle shall not be greater than the charges imposed on a premises that do not recycle. Subd. 4.Insurance. Applicants for licenses or renewals of licenses must file with each application a copy of an insurance policy or policies and an endorsement, under which there is coverage as to each vehicle in the minimum amounts of $1,000,000 for bodily injury to each person; $1,000,000 aggregate per occurrence; and, $1,000,000 for loss or damage to property. Every policy must provide that it will not be cancelled or terminated for any reason without at least ten days' written notice thereof first being given to the city. Subd. 5.Vehicle specificationsdecals; specifications.Whenever a license or renewal has been granted hereunder, the health authority will furnish to the licensee a decal for each vehicle signifying that the vehicle is licensed by the city. The licensee must apply the decal to the left forward side of the vehicle’s body or in another visible location as required by the health authority. Old, expired, or otherwise invalid decals must be removed. Licenses and decals are non-transferable to other vehicles. Every vehicle used to collect refuse must also clearly identify 7 DRAFT 7-3-17 the name and phone number of the owner or operator of that vehicle. Subd. 6.Vehicle construction, maintenance and loading. Every vehicle used to collect waste matter must be constructed in such a way that all waste matter is securely transported, and that there is no dripping or leaking of any collected materials. Vehicles must be equipped with the necessary tools to handle spills and the hauler must clean up any spills immediately. Vehicles must be equipped with an audible electronic back-up alarm. Vehicles must be kept in good repair, regularly cleaned, and maintained in a way to prevent persistent odors. Subd. 7.Service cancellation. A licensed refuse hauler must cancel service to any premises when the only container or containers thereon have been condemned and may cancel service for cause or when the party charged for the collection service is two months or more overdue in payment for such services. When a refuse hauler cancels service to any premises, written notice thereof must be served upon or mailed to the occupant, manager or owner of the premises and a copy of the notice must be mailed to the health authority. Subd. 8.Vehicle storage and parking. It is unlawful to park or store a refuse collection vehicle within 100 feet of any residential premises, or within 200 feet of any food establishment, for purposes other than, or for periods inconsistent with, providing collection at said premises. Subd. 9.Collection schedules and districts. The city council has the authority to create and modify collection districts for refuse and recycling and may designate specific days during which collection in each district may occur. Licensed haulers must establish their collection routes and days of collection in a manner consistent with the city’s approved collection districts and specified days of collection. Violation of this subdivision is grounds for revocation of the hauler's license. It is not a violation of this subsection to collect refuse or recyclable materials on a day other than the specified collection day if the collection is due to a missed pick up or is during a week in which a legal holiday occurs. 605.09.Public nuisance; abatement. Unless stored in containers in compliance with this section, any accumulation of refuse on any premises is deemed a public nuisance and may be abated under section 600 of this code. 605.11.Composting. Subdivision 1.Compost containers. Composting shall only be conducted within a covered or uncovered container, enclosed on all vertical sides, and constructed of (i) wood, (ii) wire mesh, (iii) a combination of wood and wire, (iv) metal barrels with ventilation, or (v) commercially fabricated bins or barrels. Containers shall be of a durable material and shall be constructed and maintained in a structurally sound manner. Wood used in the construction of a compost container must be sound and free of rot. Subd. 2.Size. The maximum size for a compost area on residential lots shall be 15 cubic yards. The maximum size on non-residential lots shall be 25 cubic yards for lots under 10,000 square feet and 120 cubic yards for lots over 10,000 square feet. Subd. 3.Location on property. A compost container may not be placed closer than five feet from a property line or closer than 20 feet to any habitable building not on the subject 8 DRAFT 7-3-17 property. The compost may be located only in a rear yard as defined in the zoning regulations. Subd. 4.Prohibited contents. The following materials may not be placed in a compost: meat, fats, oils, grease, bones, whole eggs, milk or other dairy products, human or pet wastes, pesticides, herbicides, noxious weeds, diseased plant material in which the disease vector cannot be rendered harmless through the composting process, and any garbage or refuse that may cause a public health risk or create nuisance conditions. Subd. 5.Compost; construction. A compost may be constructed of (i) wood, (ii) wire mesh, (iii) a combination of wood and wire, (iv) metal barrels with ventilation, or (v) commercially fabricated bins or barrels.Subd. 6.Maintenance. Compost materials shall be layered, aerated, moistened, turned, and managed to promote effective decomposition of the materials in a safe, secure and sanitary manner. Compost materials shall be covered with a layer of material such as leaves, straw, wood chips, or finished compost to reduce odor. Subd.7.Technical assistance. The city manager is directed to prepare informational materials to assist persons operating a compost in the efficient and odor free operation of a compost and to offer technical assistance to those persons on the proper operation and maintenance of a compost.Subd. 8.6.Nuisance. Operating a compost in a manner that results in objectionable odors or placing prohibited materials in a compost are both deemed public nuisances and may be abated under section 600 of this code. 605.13.Wood piles. Subdivision 1.General rule. The outside storage of cut firewood for residential buildings is permitted in residential zoning districts of the city subject to the provisions of this subsection. The rules in this subsection do not apply to wood stored inside of a building. Subd. 2.Location and storage. All firewood located upon a residential premises must be cut/split, prepared for use, and stored in neat, secure stacks. Stacks of wood may be located only in rear yards as defined in the zoning regulations and may not be located on a property line. A stack of wood located within five feet of the lot property line must be screened with a solid wall or fence. 605.15.Litter.Subdivision 1.General rule. It is unlawful to throw, scatter or deposit litter on or in private or public property, bodies of water, vehicles or structures within the city. Property owners must maintain their premises free of refuse or other litter, except as otherwise expressly authorized by this section. The owner, lessee or occupant of private property, whether occupied or vacant, must maintain the property free of litter. Subd. 2.Nuisance; abatement. The accumulation of excess litter on private property is deemed a public nuisance and may be abated under section 600 of this code. Subd. 3.Not exclusive. The authority granted by this subsection is in addition and independent of the authority granted and the procedure established by section 1315 of this code. Section 610 - Recycling 9 DRAFT 7-3-17 610.01.Definitions.For purposes of this section, the following terms shall have the meanings given them. Subd. 1.Dwelling unit. "Dwelling unit" means a residential structure in the city that is designated by the recycling authority to receive recycling collection services. Subd. 2.Generator and mixed municipal solid waste. "Generator" and "mixed municipal solid waste" have the meanings given those terms in Minnesota Statutes, section 115A.03. Subd. 3.Multifamily dwelling.“Multifamily dwelling” means a building designed with three or more dwellings exclusively for occupancy by three or more families living independently of each other. Subd. 4.Recycling and recyclable materials.“Recycling” and “recyclable materials” have the meanings given those terms in subsection 605.01 of this code. Subd. 5.Recycling authority. "Recycling authority" means the official designated by the city manager to perform the powers and duties of the recycling authority as provided in this section. The recycling authority may be the administrator of the Hennepin Recycling Group joint powers entity of which the city is a member. Subd. 6.Recycling container. "Recycling container" means a receptacle designated by the recycling authority for the accumulation and collection of recyclable materials at a dwelling unit. Subd. 7.Recycling collection services. "Recycling collection services" means the collection of recyclable materials accumulated in recycling containers from a location at a dwelling unit that is designated by the recycling authority for regular collection. Subd. 8.Recycling services. "Recycling services" means recycling collection services, carryout collection services, and any other services provided to a dwelling unit in accordance with this section. 610.03.Recycling authority; powers. The recycling authority is responsible for supervising and controlling the collection, processing, and marketing of recyclable materials from all dwelling units in the city. The recycling authority may contract with one or more haulers or processors for the collection, processing and marketing of some or all types of recyclable materials from dwelling units. The recycling authority may adopt and enforce additional rules not inconsistent with this section as necessary for the collection, processing, and marketing of recyclable materials, including but not limited to rules governing the days and hours of collection, the types of recyclable materials to be collected, the manner in which generators must prepare recyclable materials for collection, the recycling containers to be used, and the location of recycling containers for collection. The rules of the recycling authority are not effective until approved by the city council. 10 DRAFT 7-3-17 610.05.Recycling rates; billings. Subdivision 1.Rates. The city council may establish rates for recycling services from time to time by resolution. By resolution the city council may also charge the cost of recycling containers to owners or occupants of dwelling units as a recycling service. Subd. 2.Billing. Each owner or occupant of a dwelling unit must pay the rates for recycling collection services, unless an exemption is obtained as provided in this section. The amounts payable for recycling services will be shown as a separate charge on the utility bill for the dwelling unit and will be payable according to the same terms as those provided in this code for utility bills. 610.07.Assessment of unpaid bills. On or before September 1st of each year, the city clerk must list the total unpaid charges for recycling services against each lot or parcel to which they are attributable. The city council may then spread the charges against the property benefitted as a special assessment in the same manner as provided for current services by Minnesota Statutes, section 429.101 and other pertinent statutes for certification to the director of property taxation of Hennepin County and collection the following year along with the current taxes. 610.09.Rate exemption. Subdivision 1.Exemption. A dwelling unit will not be billed for recycling collection services if the owner or occupant of the dwelling unit establishes that the recyclable materials generated at the dwelling unit are separated from mixed municipal solid waste by the generator, are separately collected, and are delivered to a final destination for reuse in their original form or for use in a manufacturing process. Subd. 2.Application. Application for an exemption must be made by the owner or occupant of the dwelling unit to the recycling authority. The owner or occupant must produce evidence to the recycling authority of the amount, by weight and type, or recyclable materials that are separated, collected and delivered for reuse in their original form or for use in a manufacturing process. The recycling authority may establish additional reasonable criteria for determining when an exemption will be granted. The recycling authority's decision to grant or deny a request for exemption is final. Subd. 3.Expiration and renewal. Rate exemptions granted under this subsection shall automatically expire after three years. Upon expiration, the owner or occupant may reapply pursuant to the application requirements contained in subdivision 2. 610.11.Ownership of recyclable materials; scavenging prohibited. Subdivision 1.Ownership. Recyclable materials are the property of the generator until collected by authorized city employees, collectors or haulers. Recyclable materials become the property of the city, authorized collector, or authorized hauler upon collection. Subd. 2.No scavenging. It is unlawful for a person, other than authorized employees of the city or authorized haulers, to distribute, collect, remove or dispose of recyclable materials after the materials have been placed or deposited for collection. This subdivision shall not apply during city-sanctioned curbside cleanup events. 11 DRAFT 7-3-17 Subd. 3.Penalty. A violation of this subsection is a misdemeanor and may be punished as provided in chapter 115 of this code. 610.13.Relation to other provisions of code. To the extent that the provisions of this section are inconsistent with the provisions of section 605 of this code, the provisions of this section govern. 610.15.Multifamily dwellings. Subdivision 1.Recycling services. Owners of multifamily dwellings containing more than eight dwelling units must provide recycling collection services to all residents of the dwelling. Recyclable materials must be collected at least once per month. Subd. 2.Recycling; notice. Owners of multifamily dwellings must provide notice to all new tenants of the opportunity to dispose of recyclable materials as well as the location of the disposal site. Subd. 3.Recycling; preparation. Owners of multifamily dwellings must provide information to all new tenants related to the proper preparation of recyclable materials for collection. Subd. 4.Recycling containers. Owners of multifamily dwellings must insure that stolen or broken containers for recyclable materials are replaced within a reasonable time. Subd. 5.Landfilling prohibited. It is unlawful for an owner of a multifamily dwelling or an agent or contractor of an owner, to transport for disposal or to dispose of recyclable materials in a solid waste disposal facility, or to contract for such transportation or disposal. Subd. 6.Penalties. Violation of subdivisions 1, 2, 3 or 4 of this subsection is punishable as a petty misdemeanor. Upon a third or subsequent violation of subdivisions 1, 2, 3 or 4 by the same owner, the violation is punishable as a misdemeanor. Violation of subdivision 5 of this subsection is punishable as a misdemeanor. 610.17.Commercial buildings. Subdivision 1.Responsibility. Owners of commercial buildings must meet the recycling requirements imposed upon them by Minnesota Statutes, section 115A.151, as it may be amended from time to time. Subd. 2.Penalties. A violation of this subsection is punishable as a petty misdemeanor. Upon a third or subsequent violation by the same owner, the violation is punishable as a misdemeanor. 610.19.Defective recycling containers. If a recycling container is found to be in poor repair, corroded or otherwise defective so as to permit pests to enter, or does not meet other requirements of this section, the recycling authority may notify the provider or user of the deficiency and require repair or replacement of the recycling container. If the deficiency is not corrected, the recycling authority may condemn the deficient recycling container and affix a tag so stating such condemnation. It is unlawful for any person to place or deposit recyclable materials in a recycling container which has been condemned. 12 DRAFT 7-3-17 Section 615 – Vegetation 615.01.Definitions.For purposes of this section, the following terms shall have the meanings given them. Subd. 1.Maintenance plan.“Maintenance plan” means a document submitted with an application for a native vegetation permit demonstrating a precise course of maintenance for numerous individual plants in a landscape over months and seasons. Subd. 2.Native vegetation.“Native vegetation” means those indigenous trees, shrubs, wildflowers, grasses and other plants that have naturally adapted themselves to the climate and soils of the area but require cultivation and maintenance to remain viable. Subd. 3.Native vegetation permit.“Native vegetation permit” means a permit issued by the city pursuant to this section allowing an owner or occupant to cultivate native vegetation upon their property, subject to the restrictions of this section. Subd. 4.Natural habitat.“Natural habitat” means specially uncultivated valued and sensitive habitat whereupon native vegetation exists in a pristine state and provides habitat for a variety of species native to the area. Such vegetation shall maintain itself in a stable condition with minimal human intervention. Subd. 5.Noxious weed.“Noxious weed” means an annual, biennial, or perennial plant designated by the Minnesota Commissioner of Agriculture or the city council as injurious to public health, the environment, public roads, crops, livestock, or other property. Subd. 6.Rain garden.“Rain garden” means a shallow planted depression in the ground designed to allow for stormwater runoff to slowly infiltrate the soil. Subd. 7.Rank vegetation.“Rank vegetation” means uncultivated vegetation growing at a rapid rate due to unplanned, unintentional, or accidental circumstances. Subd.7.8.Turf grass.“Turf grass” means cultivated vegetation consisting of a highly maintained surface of dense grass underlain by a thick root system. Subd.8.9.Weeds.“Weeds” means unsuitable, unwanted, or uncultivated vegetation, often causing injury to the desired vegetation type. 615.03.Weed inspector. As provided by state law, the mayor is the weed inspector. These duties may be assigned to the city manager or the city manager’s designee. 615.05.General rules. Subdivision 1.Lot areas. All lot areas not designated for buildings, pedestrians or vehicles, parking, recreation, and storage shall be provided with turf grass, native vegetation, or combined ground cover of cultivated vegetation, garden, hedges, trees and shrubbery. 13 DRAFT 7-3-17 Subd. 2.Noxious weed prohibition. No owner or occupant of any lot shall allow any noxious weeds to grow on any part or portion of said lot. Subd. 3.Height limitation. No owner or occupant shall allow any turf grass, weeds, or rank vegetation to grow to a height greater than eight inches on any lot or parcel of land. However, a native vegetation permit exempts an owner or occupant from this subsection. The height of native vegetation shall be as stated in the native vegetation permit. 615.07.Native vegetation permit. Subdivision 1.Application. The application for a native vegetation permit and renewal application, which shall be provided by the city manager, or its designee, shall contain the following: The Latin and common names of the species the property owner or occupant plans(a) to cultivate. A maintenance plan, which shall contain the following:(b) A planting diagram showing the location and mature height of all specimens(1) of native vegetation; and Detailed information on the upkeep of the planting and any long-term(2) maintenance requirements. Subd. 2.Permit issuance. Upon submission of an application in accordance with this subsection, the city manager, or its designee, shall review the application and either approve or deny it. If approved and issued, the permit grants any property owner or occupant with written permission of the owner the ability to cultivate native vegetation on the applicable property. A native vegetation permit shall be valid for five years from the date of approval. The city manager, or its designee, shall not approve a permit for any applicant having unresolved city code violations or administrative citations. 615.09.Compliance. The city manager, or its designee, may regularly inspect any property holding a native vegetation permit for compliance with the maintenance plan on file with the city. For any property out of compliance with the maintenance plan, the city manager, or its designee, shall provide mailed notice to the permit holder requiring that the property conform to the maintenance plan within 30 days. Should that period pass without action by the permit holder, the city manager, or its designee, shall: Revoke the native vegetation permit;(a) Remove all improperly maintained native vegetation;(b) Declare the property ineligible for a native vegetation permit, unless sold, for a(c) period of two years; and 14 DRAFT 7-3-17 Assess the property for all fees associated with any removal of improperly(d) maintained native vegetation in accordance with Minnesota Statutes, section 429.101 and subsection 8.02 of the city charter. 615.11.Additional exemptions. Subdivision 1.Exemptions. The following exemptions shall apply according to their terms. Subd. 2.Vacant land. The owner of vacant and unoccupied land consisting of a contiguous tract of one acre or more is exempt from the eight-inch limit, provided that weeds, turf grass, native vegetation, and rank vegetation thereon are cut at least twice annually. The first cutting shall not be later than June 1, and the last cutting shall be no earlier than July 15. Subd. 3. Natural habitat. All private lands designated by the city council as natural habitat shall be exempt(a) from the provisions of this section. All public lands designated in the city’s comprehensive plan as natural habitat(b) shall be exempt from the provisions of this section. Subd. 4. Rain gardens. An area comprised of a rain garden is exempt from the eight-inch limit. However, in no event shall a rain garden contain noxious weeds and all rain gardens shall be maintained by the owner or occupant to ensure that they properly function and meet all other requirements of this section. 615.13.Penalty. A person who fails or neglects to cut and remove or otherwise eradicate weeds or grass as directed in this section, or who fails, neglects, or refuses to comply with the provisions of any notice provided under this section, or who violates any provision of this section, or who resists or obstructs the cutting, removal, or eradication of weeds or grass under this section, is guilty of a misdemeanor. Each day on which the violation continues is a separate offense. Section 620 – Warning signs for pesticide application 620.01.Definitions.For purposes of this section, the following terms shall have the meanings given them. Subd. 1.Commercial applicator.“Commercial applicator” means a person who is engaged in the business of applying fertilizer for hire. Subd. 2.Fertilizer.“Fertilizer” means a substance containing one or more recognized plant nutrients that is used for its plant nutrient content and designed for use or claimed to have value in promoting plant growth. Fertilizer does not include animal and vegetable manures that are not manipulated, marl, lime, limestone, and other products exempted by Rule by the Minnesota Commissioner of Agriculture. 15 DRAFT 7-3-17 Subd. 3.Noncommercial applicator.“Noncommercial applicator” means a person who applies fertilizer during the course of employment, but who is not a commercial lawn fertilizer applicator. Subd. 4.Pesticide.“Pesticide” means a substance or mixture of substances intended to prevent, destroy, repel, or mitigate a pest, and a substance or mixture of substances intended for use as a plant regulator, defoliant or desiccant. 620.03.Warning signs for pesticide application. All commercial or noncommercial applicators that apply pesticides to turf areas must post or affix warning signs on the property where the pesticides are applied. The warning signs shall comply with the requirements of Minnesota Statutes, section 18B.09, subdivision 3. 620.05. Penalty. Any person violating this section shall be guilty of a petty misdemeanor. Section 625 - Noise control 625.01.General rule. No person shall cause to be made any loud audible noises that unreasonably or unnecessarily annoy, disturb, or cause any breach of peace. Any person who causes such noise that can be heard from the exterior of their structure or property, whether public or private, or motor vehicle is in violation of his section. 625.03.Unlawful noises. Subdivision 1.Prohibited. The following acts are declared to be loud, disturbing, and unnecessary noises in violation of this section, but said enumeration shall not be deemed to be exclusive. Subd. 2.Horns, signaling devices, etc. The sounding of any horn or signaling device on any automobile, motorcycle, or other vehicle, except as a danger warning. Subd. 3.Noise amplifying devices and musical instruments. The using, operating, or permitting to be played any musical instrument or other machine or device that is used for the production or reproduction of sound in such manner as to disturb the peace, quiet or repose of a person or persons of ordinary sensibilities. The use or operation of any musical instrument or other machine or device for the(a) production or reproduction of sound in such a manner as to be plainly audible at a distance of fifty (50) feet from such instrument, machine, or device shall be prima facie evidence of a violation of this section. When sound violating this section is produced or reproduced by a machine or device(b) that is located in or on a vehicle, the person in charge or control of the vehicle at the time of the violation is guilty of the violation. This section shall not apply to sound produced by the following:(c) Amplifying equipment used in connection with activities which are authorized,(1) 16 DRAFT 7-3-17 sponsored or permitted by the city, so long as the activity is conducted pursuant to the conditions of the license, permit or contract authorizing such activity; Church bells, chimes or carillons;(2) School bells;(3) Anti-theft devices; and(4) Machines or devices for the production of sound on or in authorized emergency(5) vehicles. Subd. 4.Advertising. The using, operating, or permitting to be played any musical instrument or other machine or device for the producing or reproducing of sound which is cast upon the public streets for the purpose of commercial advertising or attracting the attention of the public to any building or structure.Subd. 5.Yelling, shouting, etc. Yelling, shouting, hooting, whistling, or singing at any time or place so as to unreasonably annoy or disturb the quiet, comfort or repose of persons in any office, or in any dwelling, hotel, motel, or other place of residence, or of any persons in the vicinity. Subd.6.5.Animals, birds, etc. No person shall keep any animal that unreasonably disturbs the comfort or repose of persons in the vicinity. Subd.7.6.Whistles or sirens. The blowing of a locomotive whistle or steam whistle attached to any stationary boiler or any siren whatsoever except to give notice of the time to begin or stop work or as a warning of fire or danger (or to test such equipment), or by public emergency vehicles. Subd.8.7.Exhausts. The discharge into the open air of the exhaust of any vehicle except through a muffler or other device which will effectively prevent loud or explosive noises therefrom. Subd.9.8.Defect in vehicle or load. The use of any automobile, motorcycle, or vehicle so out of repair, so loaded, or in such manner as to create a loud and unnecessary grating, grinding, rattling, or other noise which shall disturb the comfort or repose of any persons in the vicinity. Subd.10.Sound trucks for advertising purposes. The use of sound trucks or any other vehicle equipped with sound amplifying devices for the purposes of advertising.Subd. 11.9. Loading, unloading, opening boxes. The creation of a loud and excessive noise in connection with loading or unloading any vehicle or the opening and destruction of bales, boxes, crates, on containers. Subd.12.10.Construction or repairing of buildings. No person shall engage in the erection (including excavating), demolition, alteration, or repair of any building except between the hours of 7:00 a.m. and 10:00 p.m. on any weekday or between the hours of 8:00 a.m. and 17 DRAFT 7-3-17 9:00 p.m. on any weekend or holiday, further excepting that the building inspector may, in cases of emergency, grant permission to repair at any time when said inspector finds that such repair work will not affect the health and safety of the persons in the vicinity. When such construction is authorized by the building inspector, the inspector shall inform the city clerk of the permit. Subd.13.11.Schools, courts, churches, hospitals. The creation of any excessive noise on any street or private property adjacent to any school, institution of learning, church, court, or hospital while the same are in use which unreasonably interferes with the use thereof provided conspicuous signs are displayed in such streets indicating that the same is a school, hospital or court street. Subd.14.12.Noisy parties and gatherings. No person shall, between the hours of 10:00 p.m. and 7:00 a.m., congregate at, or participate in any party or gathering of two or more people from which noise emanates of a sufficient volume so as to disturb the peace, quiet, or repose of another person. No person shall knowingly remain at such a noisy party or gathering. Noise of such volume as to be clearly audible at a distance of 50 feet from the(a) structure or building in which the party or gathering is occurring, or in the case of apartment buildings, in the adjacent hallway or apartment, shall be prima facie evidence of a violation of this section. When a police officer determines that a party or gathering is in violation of this(b) section, the officer may order all persons present at the premises where the violation is occurring, other than the owner or tenants of the premises, to disbursedisperse immediately. No person shall knowingly remain at such a party or gathering. The following are exempt from violation of this section:(c) Activities which are duly organized, sponsored or licensed by the city, so long as(1) the activity is conducted pursuant to the conditions of the license, permit or contract authorizing such activity; Church bells, chimes or carillons; and(2) Persons who have gone to a party for the sole purpose of abating the violation.(3) Every owner or tenant of the premises where a party or gathering in violation of this(d) subsection occurs, who is present at such party or gathering, is guilty of a misdemeanor. Any person who refuses to disburse from a party or gathering in violation of this section after being ordered by a police officer to do so, is guilty of a misdemeanor. Subd.15.13.Noise standards. Any noise that exceeds the noise standards established in Minnesota Rules, chapter 7030, which is incorporated in and made part of this section. 625.05.Exemptions authorized. Upon special request made by contractors, the city council may 18 DRAFT 7-3-17 exempt contractors performing public works operations from the requirements set forth in this section. 625.07.Penalty. Any person who violates any part of this section shall be guilty of a misdemeanor. ARTICLE II. This ordinance is effective upon adoption and 30 days after publication. First Reading: ____________, 2017 Second Reading: __________, 2017 Council Adoption:_________, 2017 Publication: Effective Date: BY THE CITY COUNCIL Jim Adams, Mayor ATTEST: ____________________________ Christina Serres, City Clerk 19 1 CITY OF CRYSTAL ORDINANCE #2017-____ AN ORDINANCE AMENDING CHAPTER 6 OF THE CRYSTAL CITY CODE The City of Crystal ordains: ARTICLE I . Chapter VI of the Crystal City Code is hereby deleted in its entirety and replaced with the following: CHAPTER VI PUBLIC HEALTH Section 600 – Public nuisances 600.01. Public nuisance prohibition. Subdivision 1. Prohibition. A person must not act, or fail to act, in a manner that is or causes a public nuisance. For purpose of this section, a person that does any of the following is guilty of maintaining a public nuisance: (a) Maintains or permits a condition which unreasonably annoys, injures, or endangers the safety, health, morals, comfort or repose of any considerable number of members of the public; (b) Interferes with, obstructs, or renders dangerous for passage, any public highway or right- of-way, or waters used by the public; or (c) Does any other act or omission declared by law or city ordinance to be a public nuisance. Subd. 2. Hazardous buildings. This section does not apply to the procedures available to the city under Minnesota Statutes, sections 463.15 through 463.261 to correct or remove a hazardous condition of any hazardous building or property, which may occur through a separate action or in conjunction with a nuisance abatement action under this section. 600.03. Duties of city officials. City officials may apply and enforce any provision of this section relating to public nuisances in the city. Any peace officer or other designated city official may inspect private premises in accordance with the law and take all reasonable precautions to prevent the commission and maintenance of public nuisances. 600.05. Abatement procedure. Subdivision 1. Severability. The nuisance abatement procedure in this subsection is separate from, but may run concurrent with, the administrative enforcement procedure in Section 306 of this code. Subd. 2. Nuisance abatement order. Whenever a peace officer or other designated city 2 official determines that a public nuisance is being maintained or exists in the city, the official may issue a nuisance abatement order to the owner of record and occupant of the premises. The order shall be mailed to the owner at the address on record with the county for mailing tax statements for the premises and shall also be posted on the premises. The order shall identify the nuisance, specify what must be done to abate the nuisance, and provide a reasonable period of time, not less than 10 days, within which the nuisance must be abated. The order shall also contain a clear statement of the right of the owner or occupant to request a hearing before the city council. If the nuisance conditions identified in the order are not fully corrected by the indicated date, the city may abate the nuisance. Subd. 3. Opportunity to be heard. Upon receipt of a nuisance abatement order, the owner or occupant may forestall abatement action by the city by requesting a hearing before the city council. Such request must be in writing and received by the city no later than 4:30 p.m. on the compliance date indicated in the order. Upon receipt of such request, the city manager shall place the matter on the agenda for the next available city council meeting. At the meeting the city council will provide the owner and occupant an opportunity to be heard regarding the matter. At the conclusion of the hearing the city council may act to uphold, modify or dismiss the nuisance abatement order. If the city council upholds or modifies the order, it shall also identify a date by which the nuisance must be abated. The city shall provide the owner and occupant written notice of the city council’s decision and the date by which the nuisance must be abated. Subd. 4. City abatement. If the owner or occupant fails to comply with the nuisance abatement order by the established compliance date, the city may act to protect the public health, safety, and welfare by taking such actions as it determines are reasonable to abate the nuisance. Subd. 5. Emergency procedure; summary enforcement. In cases of emergency, where delay in abatement required to complete the procedural requirements as set forth in subdivisions 2 and 3 of this subsection will permit a continuing nuisance to unreasonably endanger public health, safety, or welfare, the city manager may order summary enforcement and abate the nuisance. To proceed with summary enforcement, the peace officer or other designated city official shall determine that a public nuisance exists or is being maintained on premises in the city and that delay in abatement will unreasonably endanger public health, safety, or welfare. The officer or designated official shall notify in writing the occupant and owner of the premises of the nature of the nuisance, whether public health, safety, or welfare will be unreasonably endangered by delay in abatement required to complete the procedure set forth in subdivisions 2 and 3 of this subsection and may order that the nuisance be immediately terminated or abated. The order shall be hand delivered to the owner or occupant and, if neither is available, it shall be mailed to the owner at the address on record with the county for mailing tax statements for the premises and shall also be posted on the premises. If the nuisance is not immediately terminated or abated, the city manager may order summary enforcement and abate the nuisance. Subd. 6. Immediate abatement. Nothing in this section shall prevent the city, without notice or other process, from immediately abating any condition that poses an imminent and serious hazard to human life or safety. Subd. 7. Judicial remedy. Nothing in this section shall prevent the city from seeking a 3 judicial remedy as authorized by law. 600.07. Recovery of costs. Subdivision 1. Personal liability. The owner of the premises on which a nuisance has been abated by the city, or a person who has caused a public nuisance on property not owned by that person, shall be personally liable for the cost to the city of the abatement, including administrative costs. After the work has been completed and the cost determined, the city clerk or other city official shall prepare a bill for the cost and mail it to the responsible party. Thereupon the amount shall be immediately due and payable to the city. Subd. 2. Assessment. After notice and hearing as provided in Minnesota Statutes, section 429.061, as it may be amended from time to time, if the nuisance is a public health or safety hazard on private property, the city clerk shall, on or before September 1 following abatement of the nuisance, list the total unpaid charges along with all other such charges as well as other charges for current services to be assessed under Minnesota Statutes, section 429.101 against each separate lot or parcel to which the charges are attributable. The city council may then spread the charges against the property under that statute and any other pertinent statutes for certification to the county auditor and collection along with current taxes the following year or in annual installments, not exceeding ten, as the city council may determine in each case. 600.09. Penalty. Any person who fails to comply with an abatement notice shall be guilty of a misdemeanor. Each additional day of noncompliance constitutes a separate offense. Section 605 – Garbage and refuse 605.01. Definitions. For purposes of this section, the following terms shall have the meanings given them. Subd. 1. Approved. "Approved" means acceptable to the health authority following the determination as to compliance with established public health practices and standards. Subd. 2. Composting. “Composting” means a microbial process that converts plant materials to a usable organic soil amendment or mulch. Subd. 3. Dumpster. “Dumpster” means a large container for temporary storage of refuse, recycling, or source-separated compostable material. Subd. 4. Health authority. "Health authority" means any officer or employee designated by the city manager to enforce the provisions of this section. Subd. 5. Litter. “Litter” includes all of the following: (a) Refuse, as defined in this subsection; (b) The meaning given by Minnesota Statutes, section 609.68; and 4 (c) Abandoned property in the form of deteriorated, wrecked or derelict property in unusable condition or left unprotected from the elements. The term "abandoned property" includes, but is not limited to, deteriorated, wrecked, inoperable, unlicensed, partially dismantled, or abandoned motor vehicles, trailers, boats, machinery, refrigerators, washing machines, household appliances, plumbing fixtures and furniture. Subd. 6. Owner. "Owner" means any person, firm, corporation, or other partnership or organization who alone, jointly, or severally with others may be in ownership of, or have charge, care, or control of, any premises or business within the city as owner, employee or agent of the owner, or as trustee or guardian of the estate or person of the title holder. Subd. 7. Pests. "Pests" means any insects, vermin, rodents, birds or any other living agent capable of reproducing itself that causes or may potentially cause harm to the public health or significant economic damage. Subd. 8. Premises. "Premises" means any dwelling, house, building or other structure or parcel of property. Subd. 9. Public place. "Public place" means any and all streets, sidewalks, boulevards, alleys, parks, public buildings, and other public ways. Subd. 10. Recycling. "Recycling" means the process of collecting and preparing recyclable materials and reusing the materials in their original form or using them in manufacturing processes that do not cause the destruction of recyclable materials in a manner that precludes further use. Subd. 11. Recyclable materials. "Recyclable materials" means materials that are separated from mixed municipal solid waste for the purpose of recycling or composting, including paper, glass, plastics, metals, automobile oil, batteries, source-separated compostable materials, and sole source food waste streams that are managed through biodegradative processes. Refuse-derived fuel or other material that is destroyed by incineration is not a recyclable material. Subd. 12. Refuse. "Refuse" means solid waste from residential, commercial, industrial, and community activities that the generator of the waste aggregates for collection. Refuse does not include recyclable materials, source-separated compostable materials or yard waste. Subd. 13. Refuse enclosure. "Refuse enclosure" means an enclosure capable of containing all refuse, recyclable materials, source-separated compostable materials, and yard waste stored by an establishment between pickups. Subd. 14. Refuse enclosure - food service. "Refuse enclosure - food service" means an enclosure constructed for sanitary temporary storage of refuse, recyclable materials, and source- separated compostable materials generated by food establishments. 5 Subd. 15. Roll-off container. “Roll-off container” means a usually open-top dumpster characterized by a rectangular footprint. Typical container sizes are 10, 15, 20, 30, and 40 cubic yards. Subd. 16. Source-separated compostable materials. “Source-separated compostable materials” has the meaning given it in Minnesota Statutes, section 115A.03, subd. 32a. Subd. 17. Vehicle. "Vehicle" means every device in, upon or by which any person or property is or may be transported or drawn upon a thoroughfare including devices used exclusively upon stationary rails or tracks. Subd. 18. Waste matter. “Waste matter” means, collectively, refuse, recyclable materials, yard waste, and source-separated materials. Subd. 19. Yard waste. “Yard waste” means garden wastes, leaves, lawn cuttings, weeds, shrub and tree waste, and prunings. 605.03. Refuse storage and disposal. Subdivision 1. Containers required. The owner of any residential premises, and any other person having refuse, must provide and keep on such premises sufficient containers for the storage of refuse accumulated on the premises between disposal or collection. Each such container must be water tight, must have tight fitting covers, must be impervious to pests and absorption of moisture, and must not exceed 96 gallons in size unless otherwise specifically authorized in writing by the health authority. Refuse on any premises must be stored in the containers required. All refuse from demolition or construction sites must be stored in roll-off containers or dumpsters and may not be stored on the ground. Commercial, business, industrial, or other such establishments having a refuse volume in excess of two cubic yards per week and all six family and larger dwellings, must store refuse in roll-off containers or dumpsters, or an approved equivalent, provided by its licensed collector. These containers must be so located as to be accessible to collection equipment and so as not to require an intermediate transfer. Subd. 2. Sanitary disposal. Refuse must be disposed of in a sanitary manner as approved by the health authority and must not constitute a public nuisance. Subd. 3. Frequency and manner of collection. The contents of refuse containers must be collected at least every other week, or more frequently if necessary or required by the provisions of any other ordinance of the city, by a collector licensed under this section. The collector must transfer the contents of the containers to the vehicle without spilling them, or if any spilling occurs, the collector must clean it up immediately and completely. Collection must be conducted in such a manner as to not create a public nuisance. Upon each collection, the containers must be completely emptied and returned to where they are kept, and the covers of the containers must be replaced. Subd. 4. Placement of containers. (a) The preferred location for storage of containers is in an enclosed building. However, 6 if stored outside, containers must be placed and kept in a neat and orderly manner and maintained in such a way as to not unreasonably interfere with the use of the adjoining property. (b) Containers may be placed at their designated collection location the evening before the applicable collection day and shall be removed from that location no later than 12:00 p.m. on the day following the applicable collection day. (c) Properties with a sidewalk directly behind the curb may place containers on that part of the sidewalk closest to the curb in accordance with subdivision 4(b). (d) Containers may never be placed on public streets or interfere in any way with the removal of snow from the roadways. Subd. 5. Defective containers. If a container is found to be in poor repair, corroded or otherwise defective so as to permit pests to enter, or does not meet other requirements of this section, the health authority may notify the provider or user of the container of the deficiency and require repair or replacement of the container. If the deficiency is not corrected, the health authority may condemn the deficient container and affix a tag so stating such condemnation. It is unlawful for any person to place or deposit refuse in a container which has been condemned. Subd. 6. Dumpsters and roll-off containers. A dumpster or roll-off container may not be located in any public place. A dumpster or roll-off container may not be located on any residential premises for more than three consecutive months during any 12-month period. The city manager, or its designee, is authorized to issue temporary permits for placement of a dumpster or roll-off container on any residential premises for more than three consecutive months when special circumstances exist justifying the issuance of the temporary permit and the purposes of this section will not be impaired thereby. The permit must be displayed on the dumpster or roll-off container or elsewhere on the premises. All dumpsters and roll-off containers must have the current licensed collector's name, address and phone number in clearly legible letters no less than three inches in height. No fee is required for the temporary permit. 605.05. Exterior storage - commercial and industrial. Exterior storage of refuse, including dumpsters, at buildings in property zoned for commercial or industrial uses must conform to the following rules: (a) The refuse must be contained in a refuse enclosure or in the case of food establishments, in a refuse enclosure - food service; and (b) The exterior storage area must be constructed in compliance with the open and outdoor storage requirements contained in the city’s zoning regulations. 605.07. Refuse hauler regulations. Subdivision 1. License required. It is unlawful to engage in hauling or conveying of waste matter from a premises, other than one's own domicile, in the city without a license. Each vehicle so used must be licensed. 7 Subd. 2. License procedure. Applications for license or renewal of license must contain a description of the types and makes of motor vehicles used for collection, a schedule of services to be made to the customers, the frequency of service to be rendered, and full information where and how the material collected will be disposed of, and any other information the health authority will require. Applications to provide routine weekly collection and removal of refuse from residences must provide complete collection of all refuse which normally results from day to day use of this type of property except furnishings, appliances, building or construction wastes and similar bulky wastes for which individuals must make special arrangements. The health authority may require vehicle inspection before processing the license application. An application for license under this section must be submitted to the health authority for review and recommendation and approved by the city council if it meets the requirements of this section. Fees for licenses are set by appendix IV. Subd. 3. Pricing requirement. Applications for license or renewal of license must contain a description of refuse collection charges. The charges must increase with the volume or weight of the refuse collected from a premises. The charges imposed on a premises that recycle shall not be greater than the charges imposed on a premises that do not recycle. Subd. 4 . Insurance. Applicants for licenses or renewals of licenses must file with each application a copy of an insurance policy or policies and an endorsement, under which there is coverage as to each vehicle in the minimum amounts of $1,000,000 for bodily injury to each person; $1,000,000 aggregate per occurrence; and, $1,000,000 for loss or damage to property. Every policy must provide that it will not be cancelled or terminated for any reason without at least ten days' written notice thereof first being given to the city. Subd. 5 . Vehicle decals; specifications. Whenever a license or renewal has been granted hereunder, the health authority will furnish to the licensee a decal for each vehicle signifying that the vehicle is licensed by the city. The licensee must apply the decal to the left forward side of the vehicle’s body or in another visible location as required by the health authority. Old, expired, or otherwise invalid decals must be removed. Licenses and decals are non-transferable to other vehicles. Every vehicle used to collect refuse must also clearly identify the name and phone number of the owner or operator of that vehicle. Subd. 6. Vehicle construction, maintenance and loading. Every vehicle used to collect waste matter must be constructed in such a way that all waste matter is securely transported, and that there is no dripping or leaking of any collected materials. Vehicles must be equipped with the necessary tools to handle spills and the hauler must clean up any spills immediately. Vehicles must be equipped with an audible electronic back-up alarm. Vehicles must be kept in good repair, regularly cleaned, and maintained in a way to prevent persistent odors. Subd. 7. Service cancellation. A licensed refuse hauler must cancel service to any premises when the only container or containers thereon have been condemned and may cancel service for cause or when the party charged for the collection service is two months or more overdue in payment for such services. When a refuse hauler cancels service to any premises, written notice thereof must be served upon or mailed to the occupant, manager or owner of the premises and a copy of the notice must be mailed to the health authority. 8 Subd. 8. Vehicle storage and parking. It is unlawful to park or store a refuse collection vehicle within 100 feet of any residential premises, or within 200 feet of any food establishment, for purposes other than, or for periods inconsistent with, providing collection at said premises. Subd. 9. Collection schedules and districts. The city council has the authority to create and modify collection districts for refuse and recycling and may designate specific days during which collection in each district may occur. Licensed haulers must establish their collection routes and days of collection in a manner consistent with the city’s approved collection districts and specified days of collection. Violation of this subdivision is grounds for revocation of the hauler's license. It is not a violation of this subsection to collect refuse or recyclable materials on a day other than the specified collection day if the collection is due to a missed pick up or is during a week in which a legal holiday occurs. 605.09. Public nuisance; abatement. Unless stored in containers in compliance with this section, any accumulation of refuse on any premises is deemed a public nuisance and may be abated under section 600 of this code. 605.11. Composting. Subdivision 1. Compost containers. Composting shall only be conducted within a covered or uncovered container, enclosed on all vertical sides, and constructed of (i) wood, (ii) wire mesh, (iii) a combination of wood and wire, (iv) metal barrels with ventilation, or (v) commercially fabricated bins or barrels. Containers shall be durable and shall be constructed and maintained in a structurally sound manner. Wood used in the construction of a compost container must be sound and free of rot. Subd. 2. Size. The maximum size for a compost area on residential lots shall be 15 cubic yards. The maximum size on non-residential lots shall be 25 cubic yards for lots under 10,000 square feet and 120 cubic yards for lots over 10,000 square feet. Subd. 3. Location on property. A compost container may not be placed closer than five feet from a property line or closer than 20 feet to any habitable building not on the subject property. The compost may be located only in a rear yard as defined in the zoning regulations. Subd. 4. Prohibited contents. The following materials may not be placed in a compost: meat, fats, oils, grease, bones, whole eggs, milk or other dairy products, human or pet wastes, pesticides, herbicides, noxious weeds, diseased plant material in which the disease vector cannot be rendered harmless through the composting process, and any garbage or refuse that may cause a public health risk or create nuisance conditions. Subd. 5. Maintenance. Compost materials shall be layered, aerated, moistened, turned, and managed to promote effective decomposition of the materials in a safe, secure and sanitary manner. Compost materials shall be covered with a layer of material such as leaves, straw, wood chips, or finished compost to reduce odor. Subd. 6. Nuisance. Operating a compost in a manner that results in objectionable odors or placing prohibited materials in a compost are both deemed public nuisances and may be abated 9 under section 600 of this code. 605.13. Wood piles. Subdivision 1. General rule. The outside storage of cut firewood for residential buildings is permitted in residential zoning districts of the city subject to the provisions of this subsection. The rules in this subsection do not apply to wood stored inside of a building. Subd. 2. Location and storage. All firewood located upon a residential premises must be cut/split, prepared for use, and stored in neat, secure stacks. Stacks of wood may be located only in rear yards as defined in the zoning regulations and may not be located on a property line. A stack of wood located within five feet of the lot property line must be screened with a solid wall or fence. 605.15. Litter. Subdivision 1. General rule. It is unlawful to throw, scatter or deposit litter on or in private or public property, bodies of water, vehicles or structures within the city. Property owners must maintain their premises free of refuse or other litter, except as otherwise expressly authorized by this section. The owner, lessee or occupant of private property, whether occupied or vacant, must maintain the property free of litter. Subd. 2. Nuisance; abatement. The accumulation of excess litter on private property is deemed a public nuisance and may be abated under section 600 of this code. Subd. 3. Not exclusive. The authority granted by this subsection is in addition and independent of the authority granted and the procedure established by section 1315 of this code. Section 610 - Recycling 610.01. Definitions. For purposes of this section, the following terms shall have the meanings given them. Subd. 1. Dwelling unit. "Dwelling unit" means a residential structure in the city that is designated by the recycling authority to receive recycling collection services. Subd. 2. Generator and mixed municipal solid waste. "Generator" and "mixed municipal solid waste" have the meanings given those terms in Minnesota Statutes, section 115A.03. Subd. 3. Multifamily dwelling. “Multifamily dwelling” means a building designed with three or more dwellings exclusively for occupancy by three or more families living independently of each other. Subd. 4. Recycling and recyclable materials. “Recycling” and “recyclable materials” have the meanings given those terms in subsection 605.01 of this code. Subd. 5. Recycling authority. "Recycling authority" means the official designated by the city manager to perform the powers and duties of the recycling authority as provided in this section. The recycling authority may be the administrator of the Hennepin Recycling Group 10 joint powers entity of which the city is a member. Subd. 6. Recycling container. "Recycling container" means a receptacle designated by the recycling authority for the accumulation and collection of recyclable materials at a dwelling unit. Subd. 7. Recycling collection services. "Recycling collection services" means the collection of recyclable materials accumulated in recycling containers from a location at a dwelling unit that is designated by the recycling authority for regular collection. Subd. 8. Recycling services. "Recycling services" means recycling collection services, carryout collection services, and any other services provided to a dwelling unit in accordance with this section. 610.03. Recycling authority; powers. The recycling authority is responsible for supervising and controlling the collection, processing, and marketing of recyclable materials from all dwelling units in the city. The recycling authority may contract with one or more haulers or processors for the collection, processing and marketing of some or all types of recyclable materials from dwelling units. The recycling authority may adopt and enforce additional rules not inconsistent with this section as necessary for the collection, processing, and marketing of recyclable materials, including but not limited to rules governing the days and hours of collection, the types of recyclable materials to be collected, the manner in which generators must prepare recyclable materials for collection, the recycling containers to be used, and the location of recycling containers for collection. The rules of the recycling authority are not effective until approved by the city council. 610.05. Recycling rates; billings. Subdivision 1. Rates. The city council may establish rates for recycling services from time to time by resolution. By resolution the city council may also charge the cost of recycling containers to owners or occupants of dwelling units as a recycling service. Subd. 2. Billing. Each owner or occupant of a dwelling unit must pay the rates for recycling collection services, unless an exemption is obtained as provided in this section. The amounts payable for recycling services will be shown as a separate charge on the utility bill for the dwelling unit and will be payable according to the same terms as those provided in this code for utility bills. 610.07. Assessment of unpaid bills. On or before September 1st of each year, the city clerk must list the total unpaid charges for recycling services against each lot or parcel to which they are attributable. The city council may then spread the charges against the property benefitted as a special assessment in the same manner as provided for current services by Minnesota Statutes, section 429.101 and other pertinent statutes for certification to the director of property taxation of Hennepin County and collection the following year along with the current taxes. 610.09. Rate exemption. Subdivision 1. Exemption. A dwelling unit will not be billed for recycling collection services if the owner or occupant of the dwelling unit establishes that the 11 recyclable materials generated at the dwelling unit are separated from mixed municipal solid waste by the generator, are separately collected, and are delivered to a final destination for reuse in their original form or for use in a manufacturing process. Subd. 2. Application. Application for an exemption must be made by the owner or occupant of the dwelling unit to the recycling authority. The owner or occupant must produce evidence to the recycling authority of the amount, by weight and type, or recyclable materials that are separated, collected and delivered for reuse in their original form or for use in a manufacturing process. The recycling authority may establish additional reasonable criteria for determining when an exemption will be granted. The recycling authority's decision to grant or deny a request for exemption is final. Subd. 3. Expiration and renewal. Rate exemptions granted under this subsection shall automatically expire after three years. Upon expiration, the owner or occupant may reapply pursuant to the application requirements contained in subdivision 2. 610.11. Ownership of recyclable materials; scavenging prohibited. Subdivision 1. Ownership. Recyclable materials are the property of the generator until collected by authorized city employees, collectors or haulers. Recyclable materials become the property of the city, authorized collector, or authorized hauler upon collection. Subd. 2. No scavenging. It is unlawful for a person, other than authorized employees of the city or authorized haulers, to distribute, collect, remove or dispose of recyclable materials after the materials have been placed or deposited for collection. This subdivision shall not apply during city-sanctioned curbside cleanup events. Subd. 3. Penalty. A violation of this subsection is a misdemeanor and may be punished as provided in chapter 115 of this code. 610.13. Relation to other provisions of code. To the extent that the provisions of this section are inconsistent with the provisions of section 605 of this code, the provisions of this section govern. 610.15. Multifamily dwellings. Subdivision 1. Recycling services. Owners of multifamily dwellings containing more than eight dwelling units must provide recycling collection services to all residents of the dwelling. Recyclable materials must be collected at least once per month. Subd. 2. Recycling; notice. Owners of multifamily dwellings must provide notice to all new tenants of the opportunity to dispose of recyclable materials as well as the location of the disposal site. Subd. 3. Recycling; preparation. Owners of multifamily dwellings must provide information to all new tenants related to the proper preparation of recyclable materials for collection. Subd. 4. Recycling containers. Owners of multifamily dwellings must insure that stolen or broken containers for recyclable materials are replaced within a reasonable time. 12 Subd. 5. Landfilling prohibited. It is unlawful for an owner of a multifamily dwelling or an agent or contractor of an owner, to transport for disposal or to dispose of recyclable materials in a solid waste disposal facility, or to contract for such transportation or disposal. Subd. 6. Penalties. Violation of subdivisions 1, 2, 3 or 4 of this subsection is punishable as a petty misdemeanor. Upon a third or subsequent violation of subdivisions 1, 2, 3 or 4 by the same owner, the violation is punishable as a misdemeanor. Violation of subdivision 5 of this subsection is punishable as a misdemeanor. 610.17. Commercial buildings. Subdivision 1. Responsibility. Owners of commercial buildings must meet the recycling requirements imposed upon them by Minnesota Statutes, section 115A.151, as it may be amended from time to time. Subd. 2. Penalties. A violation of this subsection is punishable as a petty misdemeanor. Upon a third or subsequent violation by the same owner, the violation is punishable as a misdemeanor. 610.19. Defective recycling containers. If a recycling container is found to be in poor repair, corroded or otherwise defective so as to permit pests to enter, or does not meet other requirements of this section, the recycling authority may notify the provider or user of the deficiency and require repair or replacement of the recycling container. If the deficiency is not corrected, the recycling authority may condemn the deficient recycling container and affix a tag so stating such condemnation. It is unlawful for any person to place or deposit recyclable materials in a recycling container which has been condemned. Section 615 – Vegetation 615.01. Definitions. For purposes of this section, the following terms shall have the meanings given them. Subd. 1. Maintenance plan. “Maintenance plan” means a document submitted with an application for a native vegetation permit demonstrating a precise course of maintenance for numerous individual plants in a landscape over months and seasons. Subd. 2. Native vegetation. “Native vegetation” means those indigenous trees, shrubs, wildflowers, grasses and other plants that have naturally adapted themselves to the climate and soils of the area but require cultivation and maintenance to remain viable. Subd. 3. Native vegetation permit. “Native vegetation permit” means a permit issued by the city pursuant to this section allowing an owner or occupant to cultivate native vegetation upon their property, subject to the restrictions of this section. Subd. 4. Natural habitat. “Natural habitat” means specially uncultivated valued and sensitive habitat whereupon native vegetation exists in a pristine state and provides habitat for a variety of species native to the area. Such vegetation shall maintain itself in a stable condition 13 with minimal human intervention. Subd. 5. Noxious weed. “Noxious weed” means an annual, biennial, or perennial plant designated by the Minnesota Commissioner of Agriculture or the city council as injurious to public health, the environment, public roads, crops, livestock, or other property. Subd. 6. Rain garden. “Rain garden” means a shallow planted depression in the ground designed to allow for stormwater runoff to slowly infiltrate the soil. Subd. 7. Rank vegetation. “Rank vegetation” means uncultivated vegetation growing at a rapid rate due to unplanned, unintentional, or accidental circumstances. Subd. 8. Turf grass. “Turf grass” means cultivated vegetation consisting of a highly maintained surface of dense grass underlain by a thick root system. Subd. 9. Weeds. “Weeds” means unsuitable, unwanted, or uncultivated vegetation, often causing injury to the desired vegetation type. 615.03. Weed inspector. As provided by state law, the mayor is the weed inspector. These duties may be assigned to the city manager or the city manager’s designee. 615.05. General rules. Subdivision 1. Lot areas. All lot areas not designated for buildings, pedestrians or vehicles, parking, recreation, and storage shall be provided with turf grass, native vegetation, or combined ground cover of cultivated vegetation, garden, hedges, trees and shrubbery. Subd. 2. Noxious weed prohibition. No owner or occupant of any lot shall allow any noxious weeds to grow on any part or portion of said lot. Subd. 3. Height limitation. No owner or occupant shall allow any turf grass, weeds, or rank vegetation to grow to a height greater than eight inches on any lot or parcel of land. However, a native vegetation permit exempts an owner or occupant from this subsection. The height of native vegetation shall be as stated in the native vegetation permit. 615.07. Native vegetation permit. Subdivision 1. Application. The application for a native vegetation permit and renewal application, which shall be provided by the city manager, or its designee, shall contain the following: (a) The Latin and common names of the species the property owner or occupant plans to cultivate. (b) A maintenance plan, which shall contain the following: (1) A planting diagram showing the location and mature height of all specimens of native vegetation; and 14 (2) Detailed information on the upkeep of the planting and any long-term maintenance requirements. Subd. 2. Permit issuance. Upon submission of an application in accordance with this subsection, the city manager, or its designee, shall review the application and either approve or deny it. If approved and issued, the permit grants any property owner or occupant with written permission of the owner the ability to cultivate native vegetation on the applicable property. A native vegetation permit shall be valid for five years from the date of approval. The city manager, or its designee, shall not approve a permit for any applicant having unresolved city code violations or administrative citations. 615.09. Compliance. The city manager, or its designee, may regularly inspect any property holding a native vegetation permit for compliance with the maintenance plan on file with the city. For any property out of compliance with the maintenance plan, the city manager, or its designee, shall provide mailed notice to the permit holder requiring that the property conform to the maintenance plan within 30 days. Should that period pass without action by the permit holder, the city manager, or its designee, shall: (a) Revoke the native vegetation permit; (b) Remove all improperly maintained native vegetation; (c) Declare the property ineligible for a native vegetation permit, unless sold, for a period of two years; and (d) Assess the property for all fees associated with any removal of improperly maintained native vegetation in accordance with Minnesota Statutes, section 429.101 and subsection 8.02 of the city charter. 615.11. Additional exemptions. Subdivision 1. Exemptions. The following exemptions shall apply according to their terms. Subd. 2. Vacant land. The owner of vacant and unoccupied land consisting of a contiguous tract of one acre or more is exempt from the eight-inch limit, provided that weeds, turf grass, native vegetation, and rank vegetation thereon are cut at least twice annually. The first cutting shall not be later than June 1, and the last cutting shall be no earlier than July 15. Subd. 3. Natural habitat. (a) All private lands designated by the city council as natural habitat shall be exempt from the provisions of this section. (b) All public lands designated in the city’s comprehensive plan as natural habitat shall be exempt from the provisions of this section. Subd. 4. Rain gardens. An area comprised of a rain garden is exempt from the eight-inch 15 limit. However, in no event shall a rain garden contain noxious weeds and all rain gardens shall be maintained by the owner or occupant to ensure that they properly function and meet all other requirements of this section. 615.13. Penalty. A person who fails or neglects to cut and remove or otherwise eradicate weeds or grass as directed in this section, or who fails, neglects, or refuses to comply with the provisions of any notice provided under this section, or who violates any provision of this section, or who resists or obstructs the cutting, removal, or eradication of weeds or grass under this section, is guilty of a misdemeanor. Each day on which the violation continues is a separate offense. Section 620 – Warning signs for pesticide application 620.01. Definitions. For purposes of this section, the following terms shall have the meanings given them. Subd. 1. Commercial applicator. “Commercial applicator” means a person who is engaged in the business of applying fertilizer for hire. Subd. 2. Fertilizer. “Fertilizer” means a substance containing one or more recognized plant nutrients that is used for its plant nutrient content and designed for use or claimed to have value in promoting plant growth. Fertilizer does not include animal and vegetable manures that are not manipulated, marl, lime, limestone, and other products exempted by Rule by the Minnesota Commissioner of Agriculture. Subd. 3. Noncommercial applicator. “Noncommercial applicator” means a person who applies fertilizer during the course of employment, but who is not a commercial lawn fertilizer applicator. Subd. 4. Pesticide. “Pesticide” means a substance or mixture of substances intended to prevent, destroy, repel, or mitigate a pest, and a substance or mixture of substances intended for use as a plant regulator, defoliant or desiccant. 620.03. Warning signs for pesticide application. All commercial or noncommercial applicators that apply pesticides to turf areas must post or affix warning signs on the property where the pesticides are applied. The warning signs shall comply with the requirements of Minnesota Statutes, section 18B.09, subdivision 3. 620.05. Penalty. Any person violating this section shall be guilty of a petty misdemeanor. Section 625 - Noise control 625.01. General rule. No person shall cause to be made any loud audible noises that unreasonably or unnecessarily annoy, disturb, or cause any breach of peace. Any person who causes such noise that can be heard from the exterior of their structure or property, whether public or private, or motor vehicle is in violation of his section. 16 625.03. Unlawful noises. Subdivision 1. Prohibited. The following acts are declared to be loud, disturbing, and unnecessary noises in violation of this section, but said enumeration shall not be deemed to be exclusive. Subd. 2. Horns, signaling devices, etc. The sounding of any horn or signaling device on any automobile, motorcycle, or other vehicle, except as a danger warning. Subd. 3. Noise amplifying devices and musical instruments. The using, operating, or permitting to be played any musical instrument or other machine or device that is used for the production or reproduction of sound in such manner as to disturb the peace, quiet or repose of a person or persons of ordinary sensibilities. (a) The use or operation of any musical instrument or other machine or device for the production or reproduction of sound in such a manner as to be plainly audible at a distance of fifty (50) feet from such instrument, machine, or device shall be prima facie evidence of a violation of this section. (b) When sound violating this section is produced or reproduced by a machine or device that is located in or on a vehicle, the person in charge or control of the vehicle at the time of the violation is guilty of the violation. (c) This section shall not apply to sound produced by the following: (1) Amplifying equipment used in connection with activities which are authorized, sponsored or permitted by the city, so long as the activity is conducted pursuant to the conditions of the license, permit or contract authorizing such activity; (2) Church bells, chimes or carillons; (3) School bells; (4) Anti-theft devices; and (5) Machines or devices for the production of sound on or in authorized emergency vehicles. Subd. 4. Yelling, shouting, etc. Yelling, shouting, hooting, whistling, or singing at any time or place so as to unreasonably annoy or disturb the quiet, comfort or repose of persons in any office, or in any dwelling, hotel, motel, or other place of residence, or of any persons in the vicinity. Subd. 5. Animals, birds, etc. No person shall keep any animal that unreasonably disturbs the comfort or repose of persons in the vicinity. Subd. 6. Whistles or sirens. The blowing of a locomotive whistle or steam whistle 17 attached to any stationary boiler or any siren whatsoever except to give notice of the time to begin or stop work or as a warning of fire or danger (or to test such equipment), or by public emergency vehicles. Subd. 7. Exhausts. The discharge into the open air of the exhaust of any vehicle except through a muffler or other device which will effectively prevent loud or explosive noises therefrom. Subd. 8. Defect in vehicle or load. The use of any automobile, motorcycle, or vehicle so out of repair, so loaded, or in such manner as to create a loud and unnecessary grating, grinding, rattling, or other noise which shall disturb the comfort or repose of any persons in the vicinity. Subd. 9. Loading, unloading, opening boxes. The creation of a loud and excessive noise in connection with loading or unloading any vehicle or the opening and destruction of bales, boxes, crates, on containers. Subd. 10. Construction or repairing of buildings. No person shall engage in the erection (including excavating), demolition, alteration, or repair of any building except between the hours of 7:00 a.m. and 10:00 p.m. on any weekday or between the hours of 8:00 a.m. and 9:00 p.m. on any weekend or holiday, further excepting that the building inspector may, in cases of emergency, grant permission to repair at any time when said inspector finds that such repair work will not affect the health and safety of the persons in the vicinity. When such construction is authorized by the building inspector, the inspector shall inform the city clerk of the permit. Subd. 11. Schools, courts, churches, hospitals. The creation of any excessive noise on any street or private property adjacent to any school, institution of learning, church, court, or hospital while the same are in use which unreasonably interferes with the use thereof provided conspicuous signs are displayed in such streets indicating that the same is a school, hospital or court street. Subd. 12. Noisy parties and gatherings. No person shall, between the hours of 10:00 p.m. and 7:00 a.m., congregate at, or participate in any party or gathering of two or more people from which noise emanates of a sufficient volume so as to disturb the peace, quiet, or repose of another person. No person shall knowingly remain at such a noisy party or gathering. (a) Noise of such volume as to be clearly audible at a distance of 50 feet from the structure or building in which the party or gathering is occurring, or in the case of apartment buildings, in the adjacent hallway or apartment, shall be prima facie evidence of a violation of this section. (b) When a police officer determines that a party or gathering is in violation of this section, the officer may order all persons present at the premises where the violation is occurring, other than the owner or tenants of the premises, to disperse immediately. No person shall knowingly remain at such a party or gathering. (c) The following are exempt from violation of this section: 18 (1) Activities which are duly organized, sponsored or licensed by the city, so long as the activity is conducted pursuant to the conditions of the license, permit or contract authorizing such activity; (2) Church bells, chimes or carillons; and (3) Persons who have gone to a party for the sole purpose of abating the violation. (d) Every owner or tenant of the premises where a party or gathering in violation of this subsection occurs, who is present at such party or gathering, is guilty of a misdemeanor. Any person who refuses to disburse from a party or gathering in violation of this section after being ordered by a police officer to do so, is guilty of a misdemeanor. Subd. 13. Noise standards. Any noise that exceeds the noise standards established in Minnesota Rules, chapter 7030, which is incorporated in and made part of this section. 625.05. Exemptions authorized. Upon special request made by contractors, the city council may exempt contractors performing public works operations from the requirements set forth in this section. 625.07. Penalty. Any person who violates any part of this section shall be guilty of a misdemeanor. ARTICLE II. This ordinance is effective upon adoption and 30 days after publication. First Reading: ____________, 2017 Second Reading: __________, 2017 Council Adoption:_________, 2017 Publication: Effective Date: BY THE CITY COUNCIL Jim Adams, Mayor ATTEST: ____________________________ Christina Serres, City Clerk CITY MANAGER WORK PLAN MONTHLY CHECK IN – AUGUST 2017 Goals: - Operational planning to be sure staff work plans achieve Council priorities o Monthly check in with Council o Constituent Issues – follow through and resolution – on-going, also track resolved constituent issues - Advocacy on Council policies o Include staff recommendations on staff reports – on-going - Budget Financial Management – continue work towards fiscally sound and stable financial policies and practices o Long term financial planning:  2018 budget – preliminary budget at August 10 work session  Parks master plan in development for parks funding – to be discussed in 2018 budget work sessions  Goal is to be debt free – need long term financial planning to determine needs - Strategic leadership for achievement of Council goals o Thriving Business Climate  City Code Review Task Force has completed its review; staff now reviewing Code for proposed changes to City Council (First reading of changes to Chapter 6 on August 15 agenda, Chapter 7 reviewed at 7/13/17 work session and Zoning Code revisions in process)  2017 EDA Work Plan identifies opportunity areas  Bass Lake Road streetscape update in design phase o Create Strong Neighborhoods  Community Outreach Task Force continues monthly meetings and volunteer projects (Bee Friendly planting, Performance in the Park event, 2018 Crystal Ball planning) and faith community  Bassett Creek regional bike trail in progress – ribbon cutting 8/24  Updated neighborhood signs approved and ordered  Master park planning underway – open house 8/9/17  Railroad Quiet Zones – approval process underway; Council will consider plans and specifications at August 15 meeting  Phase 16 street reconstruction and last phase of alley reconstruction underway o Fiscally sound and stable policies and procedures – see above AGENDA ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL •• •• REGULAR MEETING •• •• TUESDAY, AUGUST 15, 2017 6:45 P.M. CRYSTAL CITY HALL COUNCIL CHAMBERS 1. Call to order * 2. Roll call * 3. Approval of minutes from the July 18, 2017 regular meeting 4. Public Hearing: Consider a resolution authorizing the sale of 4837 Lakeland Avenue North to Novak-Fleck for new home construction 5. Other business * 6. Adjournment * *Items for which no materials are included in the packet Page 1 of 2 Minutes of the Crystal Economic Development Authority Regular Meeting July 18, 2017 President Kolb called the regular meeting of the Crystal Economic Development Authority to order at 6:40 p.m. Upon call of the roll, the following members were present: Jim Adams, John Budziszewski, Elizabeth Dahl, Jeff Kolb, Nancy LaRoche and Olga Parsons. The following staff members were present: Anne Norris, Executive Director, John Sutter, Deputy Executive Director, Dan Olson, City Planner, Stephanie Revering, Police Chief, and Troy Gilchrist, City Attorney. Motion by Commissioner LaRoche (Adams) to approve the minutes of the June 20, 2017 special meeting. Motion carried. The EDA considered a proposal from Novak-Fleck for new home construction at 4837 Lakeland Avenue North. Mr. Olson presented the proposal for EDA consideration. Motion by Commissioner Adams (Dahl) to tentatively accept the proposal from Novak-Fleck for 4837 Lakeland Avenue North to be considered at a public hearing on August 15, 2017. Motion carried. The EDA considered a resolution amending the Purchase and Redevelopment Agreement for 5201 49 th Avenue North to change the house plan. Mr. Olson presented the revised house plan for EDA consideration. Motion by Commissioner LaRoche (Parsons) to adopt the resolution amending the Purchase and Redevelopment Agreement for 5201 49 th Avenue North to change the house plan. Motion carried. Mr. Sutter presented a status update on the upcoming closure of the Housing Resource Center and the alternatives being developed by staff for EDA consideration in the future. Motion by Commissioner Parsons (Dahl) to adjourn. Motion Carried The meeting adjourned at 6:59 p.m. _______________________________ Jeff Kolb, President ATTEST: Page 2 of 2 ______________________________ Olga Parsons, Secretary City Council Meeting Agenda August 15, 2017 7 p.m. Council Chambers The city manager’s comments are bolded. 1. Call to Order, Roll Call and Pledge of Allegiance Girl Scout Troop 16218 will lead the Pledge of Allegiance. 2. Approval of Agenda The Council will consider approval of the agenda.* 3. Appearances 3.1 Karsten Nelson of West Metro Fire-Rescue District Firefighters Relief Association.* 3.2 Chief Revering will recognize Reserve Captain Nathan Betters on his promotion. 3.3 Chief Revering will present the Chief’s Award to Hennepin County Dispatcher Ashley Jacobson. 3.4 CenterPoint Energy will present Crystal Police Department with a $2,500 grant for a mobile police radio. 3.5 Chief Revering will recognize Officer Andy Robles for his MADD Award and DWI All- Star Award. 3.6 Hennepin County staff will present the City of Crystal with the Most Active Community Award for the city’s participation in the Step To It Challenge. 4. Consent Agenda The Council will consider the following items, which are routine and non-controversial in nature, in a single motion: 4.1 Approval of the minutes from the following meetings: a. The regular City Council meeting on July 18, 2017. b. The regular City Council work session on July 18, 2017. c. The regular City Council work session on August 10, 2017. 4141 Douglas Drive North • Crystal, Minnesota 55422-1696 Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov Crystal City Council Meeting Agenda August 15, 2017 Page 2 of 6 4.2 Approval of the list of license applications submitted by the city clerk to the City Council, a list that is on file in the office of the city clerk. 4.3 Approval of a resolution accepting the following donations: a. $76.45 from Chipotle Mexican Grill for Crystal Police Explorers. b. $500 from Crystal Frolics for Crystal Recreation Senior Card Tournament. c. $20,000 from VFW Post 494 for Crystal Frolics. d. $1,000 from West Metro Fire-Rescue District Firefighters Relief Association for Crystal Airport Open House. 4.4 Approval of a solicitor license for Vytene Pranyte from July 23 – Aug. 21, 2017, selling educational books on behalf of Southwestern Advantage (this license was pre- approved by City Manager Anne Norris on July 18, 2017). 4.5 Approval of a special permit to serve wine and beer at Lions Valley Place Park for a party on Aug. 26, 2017, from 5 – 10 p.m., submitted by Keily Preciado Garcia. 4.6 Approval of a special permit for wine and beer at Bassett Creek Park on Nov. 18 and 19, 2017, from 10 a.m. – 5 p.m., submitted by Ryan Larson of Birchwood Bike and Racing Team, for the State Cyclocross Championships. 4.7 Approval of a resolution ordering preparation of an assessment roll, declaring the amount to be assessed and setting the date for 2017 delinquent accounts. 4.8 Approval of a Joint Powers Agreement with the City of Minneapolis for the 2018 Super Bowl (police services). 5. Open Forum (The City Council appreciates hearing from citizens about items of concern and desires to set aside time during each meeting for Open Forum. To provide ample opportunity for all, speaking time is limited to three minutes and topic discussion is limited to ten minutes. The Mayor may, as presiding officer, extend the total time allowed for a topic. By rule, no action may be taken on any item brought before the Council during Open Forum. The Council may place items discussed during Open Forum onto subsequent council meeting agendas.) 6. Regular Agenda 6.1 The Council will consider approval of disbursements over $25,000 submitted by the finance department to the city council, a list that is on file in the office of the finance department. Recommend approval of disbursements over $25,000. Crystal City Council Meeting Agenda August 15, 2017 Page 3 of 6 6.2 The Council will consider plans and specifications and authorizing advertisement for bids for a train horn quiet zone at the Douglas Dr. and West Broadway crossings of the Canadian Pacific railway. In anticipation of approval by the FRA of the proposed quiet zone design plans, recommend approval of the plans and specifications and authorizing advertising for bids for this project. Staff is hopeful the improvements can be made before the end of the year. 6.3 The Council will consider a resolution authorizing closing part of 51st Pl. west of Douglas Dr. to facilitate quiet zone improvements. As discussed in work sessions, part of the design for the quiet zone at Douglas Drive requires the closure of a part of 51st Place west of Douglas. Recommend approval of the resolution authorizing this closure as part of the quiet zone improvement. 6.4 The Council will consider second reading and adoption of an ordinance amending city code provisions for telecommunications equipment in the right-of-way and a resolution approving summary language for publication. At its July 18 meeting, the Council approved the first reading of an ordinance amending the right of way and zoning sections of the City Code to address recent legislative changes governing placement and location of small cell telecommunications equipment. Recommend approval of the second reading of the ordinance making these changes to the City Code as well as approving summary language for publication. 6.5 The Council will consider first reading of an ordinance amending Chapter 6 of the City Code. At its July work session, the City Council reviewed proposed changes to Chapter 6 of the City Code to update and simplify it and remove outdated provisions. Recommend approval of the first reading of the ordinance amending Chapter 6 of City Code. 6.6 The Council will consider first reading of an ordinance amending Section 211 of the City Code. Crystal City Council Meeting Agenda August 15, 2017 Page 4 of 6 Earlier this year the City Council discussed indexing Council salaries to some regional benchmark. At its July work session, the Council discussed using the percentage increase to the compensation limit established annually by the Minnesota Office of Management and Budget for local government employees as the index. Recommend approval of the first reading of an ordinance making this the adjustment for Council salaries. 6.7 The Council will consider approval of prosecuting attorney services agreement for 2018. Crystal has contracted with MacMillan, Wallace & Athanases, PLLC, for many years for prosecuting attorney services and the current contract expires at the end of 2017. MacMillan, Wallace and Athanases will continue the 2017 rates for a 2018 contract. Recommend approval of authorizing execution of a contract for 2018 with MacMillan, Wallace & Athanases, PLLC, for prosecuting attorney services. 6.8 The Council will consider approval of 2018 West Metro Fire-Rescue District budget. The West Metro Fire Rescue District Board approved its 2018 budget at its July 12 meeting. The recently amended joint powers agreement requires both city councils to approve the budget by August 31. The total 2018 WMFRD budget (general fund and capital) is $2,295,850.00, an increase of $105,350 (4.8%) from the 2017 budget. The increase is due primarily to salaries, workers comp insurance, legal fees, communications, financial services, and increasing the contribution to the capital fund by $20,000 in order to fully fund future capital needs. According to the District funding formula, Crystal’s share of the 2018 budget is 49.8146% of the costs, or $1,143,668, an increase of $59,397, over Crystal’s share in 2017. Recommend approval of the 2018 West Metro Fire Rescue District 2018 budget. 6.9 The Council will consider a resolution awarding the sale of General Obligation Improvement Bonds, Series 2017A, in the original aggregate principal amount of $4,955,000; fixing their form and specifications; directing their execution and delivery; and providing for their payment. At its July meeting, the Council authorized the issuance and sale of bonds for Phase 16 of street reconstruction. Paul Steinman of Springsted will be at the meeting to provide a recommendation for the award of the bond sale. Crystal City Council Meeting Agenda August 15, 2017 Page 5 of 6 7. Announcements a. Crystal Business Association meets on Wednesday, Aug. 16 at 8:30 a.m. at Crystal City Hall. b. The City Council will hold a budget work session on Thursday, Aug. 17 at 6:30 p.m. in the Community Room at City Hall. c. Three Rivers Bassett Creek Regional Trail Grand Opening Event is on Thursday, Aug. 24 at 3 p.m. at Valley Place Park. d. Beacon Academy will hold a ribbon cutting on Monday, Aug. 28 for their new facility at 3415 Louisiana Ave. N. e. Full Proof Ministry is hosting a Community Civic Day on August 26, 11 a.m. – 4:30 p.m. at 4835 West Broadway. f. The next city council meeting is Tuesday, Sept. 5 at 7 p.m. in the Council Chambers at City Hall. g. 2017 Diaper Need Awareness Week is from Sept. 25 – Oct. 1. Donate diapers all September at the Crystal Community Center. h. 3rd Annual Run for Rocco Fundraiser is on Saturday, Sept. 30 at Bassett Creek Park; 8:30 a.m. Kids Race; 9 a.m. Run/Walk. i. Kids Garage Sale is on Saturday, Sept. 30 from 8:30 a.m. – noon at Crystal Community Center. j. Special Materials Drop Off Day is on Saturday, Oct. 14 from 8 a.m. – 3 p.m. at the Brooklyn Park Operations and Maintenance Facility. k. West Metro Fire-Rescue District Open House is on Saturday, Oct. 14 from 9 a.m. – noon at Fire Station No. 3, 4251 Xylon Ave. N. l. Girl and Boy Scout troops are invited to lead the pledge at City Council meetings. Troops who are interested may contact city staff for information. m. City council meetings and work sessions are open to the public. Current and previous meetings are available for viewing and listening at www.crystalmn.gov. 8. Adjournment 9. August 15, 2017 Meeting Schedule Crystal City Council Meeting Agenda August 15, 2017 Page 6 of 6 Time Type of meeting Location 6:20 p.m. City Council work session to discuss: • Proposed changes to nuisance abatement procedures in the new Chapter 6 • Constituent issues update • City manager monthly check-in • New business* • Announcements* Conference Room A 6:45 p.m. Economic Development Authority (EDA) meeting Council Chambers 7 p.m. City Council meeting Council Chambers Following the City Council meeting EDA work session to discuss: • Bass Lake Road streetscape project update • Home improvement program update • 5900 – 56th Avenue project update Conference Room A * Denotes no supporting information included in the packet. Have a great weekend. See you at Tuesday’s meeting. CCCRRRYYYSSSTTTAAALLL PPPOOOLLLIIICCCEEE DDDEEEPPPAAARRRTTTMMMEEENNNTTT “Service with Compassion, Integrity, & Professionalism” TO: Mayor and Council Members FROM: Stephanie K. Revering, Chief of Police CC: Anne Norris, City Manager DATE: August 10, 2017 SUBJECT: COUNCIL MEETING: August 15, 2017 ___________________________________________________________________________ MMEEMMOORRAANNDDUUMM At the August 15, 2017 council meeting we will recognize volunteer Reserve Officer Nathan Betters for his promotion to Captain. Thank you and if you have any questions please let me know. 3.2 CCCRRRYYYSSSTTTAAALLL PPPOOOLLLIIICCCEEE DDDEEEPPPAAARRRTTTMMMEEENNNTTT “Service with Compassion, Integrity, & Professionalism” TO: Mayor and Council Members FROM: Stephanie K. Revering, Chief of Police CC: Anne Norris, City Manager DATE: August 10, 2017 SUBJECT: COUNCIL MEETING: August 15, 2017 ___________________________________________________________________________ MMEEMMOORRAANNDDUUMM On July 12, 2017, the Crystal Police Department responded to the tragic homicide of one of our residents who lived on the 4800 block of Yates Avenue. Hennepin County Sheriff’s Dispatcher Ashley Jacobson took the original 911 call. Due to her tremendous efforts, we will be presenting her with the Chief’s Award at the August 15, 2017 council meeting. Thank you and if you have any questions please let me know. 3.3 CCCRRRYYYSSSTTTAAALLL PPPOOOLLLIIICCCEEE DDDEEEPPPAAARRRTTTMMMEEENNNTTT “Service with Compassion, Integrity, & Professionalism” TO: Mayor and Council Members FROM: Stephanie K. Revering, Chief of Police CC: Anne Norris, City Manager DATE: August 10, 2017 SUBJECT: COUNCIL MEETING: August 15, 2017 ___________________________________________________________________________ MMEEMMOORRAANNDDUUMM In April 2017, the police department applied for a CenterPoint Energy Community Partnership Grant. We were informed we will be receiving $2500 to purchase a new mobile radio for one of our squad cars. A representative from CenterPoint Energy will be at the August 15, 2017 council meeting to present us with the funds. Thank you and if you have any questions please let me know. 3.4 CCCRRRYYYSSSTTTAAALLL PPPOOOLLLIIICCCEEE DDDEEEPPPAAARRRTTTMMMEEENNNTTT “Service with Compassion, Integrity, & Professionalism” TO: Mayor and Council Members FROM: Stephanie K. Revering, Chief of Police CC: Anne Norris, City Manager DATE: August 10, 2017 SUBJECT: COUNCIL MEETING: August 15, 2017 ___________________________________________________________________________ MMEEMMOORRAANNDDUUMM At the August 15, 2017 council meeting we will recognize Officer Andy Robles on receiving the 2016 MADD Outstanding Rookie Award and the MN Department of Public Safety 2016 DWI All Star Award. Thank you and if you have any questions please let me know. 3.5 Memorandum DATE: August 7, 2017 TO: Mayor and City Council Anne Norris, City Manager FROM: Scott Berggren, Recreation Supervisor SUBJECT: Step to It Challenge Award This past May the City of Crystal participated with 24 other Hennepin County communities in the Step to It Challenge. The purpose of the challenge is to motivate people of all ages and abilities to become more physically active. Over 300 Crystal residents logged their activity, which was converted to steps using the online conversion tool at steptoit.org. In the end, the City of Crystal logged almost 98 million steps and was named “Most Active Community”, above much larger cities Brooklyn Park, Bloomington and Plymouth. This was the most participation Crystal has ever seen in the 8 years they have participated in the challenge. In addition to increasing physical activity, the challenge also connected neighbors, coworkers, family and friends around a common goal. Hennepin County Staff will present the City of Crystal with their “Most Active Community” award during the council meeting. 3.6 City Council meeting minutes July 18, 2017 Page 1 of 6 1.Call to Order, Roll Call and Pledge of Allegiance Pursuant to due call and notice thereof, the regular meeting of the Crystal City Council was held on July 18, 2017 at 7 p.m. in the Council Chambers at City Hall, 4141 Douglas Dr. N. in Crystal, Minnesota. Mayor Adams called the meeting to order. Roll Call Mayor Adams asked the city clerk to call the roll for elected officials. Upon roll call, the following attendance was recorded: Council members present: LaRoche, Parsons, Adams, Budziszewski, Dahl and Kolb. Absent: Deshler. City staff present: City Manager A. Norris, City Attorney T. Gilchrist, Assistant City Manager/Human Resources Manager K. Therres, City Planner D. Olson, Public Works Director/City Engineer M. Ray, Police Chief S. Revering, Community Development Director J. Sutter and City Clerk C. Serres. Pledge of Allegiance Mayor Adams led the Council and audience in the Pledge of Allegiance. 2.Approval of Agenda The Council considered approval of the agenda. Moved by Council Member Kolb and seconded by Council Member LaRoche to approve the agenda. Motion carried. 3. Appearances 3.1 The appearance from a representative of West Metro Fire-Rescue District Firefighters Relief Association has been postponed to a future Council meeting. 3.2 The appearance from a representative of CenterPoint Energy has been postponed to a future Council meeting. 4.Consent Agenda The Council considered the following items, which are routine and non-controversial in nature, in a single motion: 4141 Douglas Dr. N., Crystal, MN 55422-1696 763-531-1000 • Fax: 763-531-1188 • www.crystalmn.gov 4.1(a) City Council meeting minutes July 18, 2017 Page 2 of 6 4.1 Approval of the minutes from the following meetings: a. The regular City Council meeting on June 20, 2017. b. The regular City Council work session on June 20, 2017. c. The regular City Council work session on July 13, 2017. 4.2 Approval of the list of license applications submitted by the city clerk to the City Council, a list that is on file in the office of the city clerk. 4.3 Approval of Res. No. 2017-74, accepting the following donations: a. $20 from an anonymous individual for Crystal Police K-9 Unit. b. $60.83 from Buffalo Wild Wings for Crystal Police Explorers. c. $1,500 from Crystal Lions for Crystal Airport Open House. d. $5,000 from Crystal Lions for Crystal Frolics. e. $100 from Crystal Lions for Crystal Police Crime Prevention. f. $200 from Golden Valley VFW Post 7051 for Crystal Airport Open House. g. $354.34 from various donation boxes for Crystal Police K-9 Unit. 4.4 Acceptance of the resignations of Rozina Brink and Matt Kowalski from the Community Outreach Task Force. 4.5 Acceptance of the resignation of Jaime Nugent from the Environmental Quality Commission. 4.6 Approval of Res. No. 2017-75, appointing Burt Orred, Jr. to the Shingle Creek Watershed Management Commission. 4.7 Approval of a Res. No. 2017-76, canceling special assessment for 4233 Louisiana Ave. N. Moved by Council Member LaRoche and seconded by Council Member Dahl to approve the consent agenda. Motion carried. 5. Open Forum The following person addressed the Council: • Janet Moore expressed her gratitude for the opportunity to serve the community as commissioner of the Shingle Creek Watershed Management Commission. 6. Regular Agenda 6.1 The Council considered approval of disbursements over $25,000 submitted by the finance department to the City Council, a list that is on file in the office of the finance department. 4.1(a) City Council meeting minutes July 18, 2017 Page 3 of 6 Moved by Council Member Kolb and seconded by Council Member Parsons to approve the list of disbursements over $25,000. Voting aye: LaRoche, Parsons, Adams, Budziszewski, Dahl and Kolb. Absent, not voting: Deshler. Motion carried. 6.2 The Council considered approval of a private kennel license at 6926 46th Ave. N., submitted by Taylor Griffin. City Clerk C. Serres and applicant Taylor Griffin addressed the Council. Moved by Council Member LaRoche and seconded by Council Member Budziszewski to approve the private kennel license at 6926 46th Ave. N., submitted by Taylor Griffin. Voting aye: LaRoche, Parsons, Adams, Budziszewski, Dahl and Kolb. Absent, not voting: Deshler. Motion carried. 6.3 The Council considered civil penalties for violation of liquor license regulations by Advancer Mercantile, LLC d/b/a Liquor Barrel Wine and Spirits located at 5628 West Broadway. City Clerk C. Serres addressed the Council. Council Member Budziszewski made a motion to impose a penalty of $750 and a license suspension of one day for violation of liquor license regulations. Motion failed for lack of a second. Moved by Council Member Parsons and seconded by Council Member Dahl to impose a penalty of $750 for violation of liquor license regulations. By roll call and voting aye: Adams, Dahl, Kolb and Parsons. Voting nay: Budziszewski and LaRoche. Absent, not voting: Deshler. Motion carried. 6.4 The Council considered civil penalties for violation of liquor license regulations by Milton’s Café, LLC d/b/a Milton’s Café located at 3545 Douglas Dr. N. City Clerk C. Serres and business owners Phil and Francine Weber addressed the Council. 4.1(a) City Council meeting minutes July 18, 2017 Page 4 of 6 Council Member Budziszewski made a motion to impose a penalty of $750 and a license suspension of one day for violation of liquor license regulations. Motion failed for lack of a second. Moved by Council Member Kolb and seconded by Council Member LaRoche to impose a penalty of $500 for violation of liquor license regulations. By roll call and voting aye: Dahl, Kolb, LaRoche, Parsons and Adams. Voting nay: Budziszewski. Absent, not voting: Deshler. Motion carried. 6.5 The Council considered a resolution providing for the issuance and sale of General Obligation Improvement Bonds, Series 2017A, in the approximate amount of $4,955,000 for the Phase 16 Street Reconstruction Project. City Manager A. Norris addressed the Council. Moved by Council Member Parsons and seconded by Council Member Kolb to adopt the following resolution, the reading of which was dispensed with by unanimous consent: RESOLUTION NO. 2017 – 77 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2017A, IN THE PROPOSED AGGREGATE PRINCIPAL AMOUNT OF $4,955,000 Voting aye: LaRoche, Parsons, Adams, Dahl and Kolb. Absent, not voting: Deshler. Abstention: Budziszewski. Motion carried, resolution declared adopted. 6.6 The Council considered a resolution approving a front setback variance for a new single family home at 5140 Lakeside Ave. N. City Planner Dan Olson addressed the Council. Moved by Council Member LaRoche and seconded by Council Member Dahl to adopt the following resolution, the reading of which was dispensed with by unanimous consent: 4.1(a) City Council meeting minutes July 18, 2017 Page 5 of 6 RESOLUTION NO. 2017 – 78 RESOLUTION APPROVING A VARIANCE FOR 5140 LAKESIDE AVENUE NORTH Voting aye: LaRoche, Parsons, Adams, Budziszewski, Dahl and Kolb. Absent, not voting: Deshler. Motion carried, resolution declared adopted. 6.7 The Council considered a resolution authorizing the execution of a joint cooperation agreement for participation in the Urban Hennepin County Community Development Block Grant program in fiscal years 2018-2020. Community Development Director J. Sutter addressed the Council. Moved by Council Member Kolb and seconded by Council Member Parsons to adopt the following resolution, the reading of which was dispensed with by unanimous consent: RESOLUTION NO. 2017 – 79 RESOLUTION AUTHORIZING THE EXECUTION OF A JOINT COOPERATION AGREEMENT BETWEEN THE CITY OF CRYSTAL AND HENNEPIN COUNTY FOR PARTICIPATION IN THE URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM IN FISCAL YEARS 2018 – 2020 Voting aye: LaRoche, Parsons, Adams, Budziszewski, Dahl and Kolb. Absent, not voting: Deshler. Motion carried, resolution declared adopted. 6.8 The Council considered first reading of an ordinance amending city code provisions for telecommunications equipment in the right-of-way. City Attorney T. Gilchrist addressed the Council. Moved by Council Member Kolb and seconded by Council Member LaRoche to adopt the following amended ordinance with additional language to Section 802.19, Subdivision 3 to read, “g) New wireless support structures erected for the sitting of small wireless facilities in the right-of-way adjacent to R-1 zoning district require a conditional use permit in accordance with section 515.33, subdivision 4(f).” ORDINANCE NO. 2017 – 02 4.1(a) City Council meeting minutes July 18, 2017 Page 6 of 6 AN ORDINANCE RELATING TO THE REGULATION OF SMALL CELL WIRELESS FACILITIES; AMENDING SECTIONS 515 AND 802 OF THE CRYSTAL CITY CODE And further, that the second and final reading will be held on August 15, 2017. Voting aye: LaRoche, Parsons, Adams, Budziszewski, Dahl and Kolb. Absent, not voting: Deshler. Motion carried. 7. Announcements The Council made several announcements about upcoming events. 8. Adjournment Moved by Council Member Budziszewski and seconded by Council Member LaRoche to adjourn the meeting. Motion carried. The meeting adjourned at 8:23 p.m. ____________________________ Jim Adams, Mayor ATTEST: _________________________________________ Chrissy Serres City Clerk 4.1(a) City Council work session minutes July 18, 2017 Pursuant to due call and notice given in the manner prescribed by Section 3.01 of the City Charter, the work session of the Crystal City Council was held at 8:35 p.m. on July 18, 2017 in Conference Room A at City Hall, 4141 Douglas Dr. N., Crystal, Minnesota. Mayor Adams called the meeting to order. I.Attendance The city clerk recorded the attendance for City Council members and staff: Council members present: LaRoche, Parsons, Adams, Budziszewski, Dahl and Kolb. Absent: Deshler. City staff present: City Manager A. Norris, Assistant City Manager K. Therres, City Attorney T. Gilchrist, Public Works Director/City Engineer M. Ray, Police Chief S. Revering, Community Development Director J. Sutter and City Clerk C. Serres. II.Agenda The Council and staff discussed the following agenda items: 1.Blue Line update 2.Bass Lake Road streetscape project design 3.Nuisance/disorderly house ordinance 4.Constituent issues update 5.City manager monthly check-in 6.New business 7.Announcements III.Adjournment The work session adjourned at 9:54 p.m. ________________________________ Jim Adams, Mayor ATTEST: ________ Chrissy Serres City Clerk 4141 Douglas Dr. N., Crystal, MN 55422-1696 763-531-1000 • Fax: 763-531-1188 • www.crystalmn.gov 4.1(b) City Council work session minutes Aug. 10, 2017 Pursuant to due call and notice given in the manner prescribed by Section 3.01 of the City Charter, the work session of the Crystal City Council was held at 6:37 p.m. on Aug. 10, 2017 in the Community Room at City Hall, 4141 Douglas Dr. N., Crystal, Minnesota. Mayor Adams called the meeting to order. I.Attendance The city clerk recorded the attendance for City Council members and staff: Council members present: LaRoche, Parsons, Adams, Dahl, Deshler and Kolb. Absent: Budziszewski. City staff present: City Manager A. Norris, Recreation Director J. Elholm, Fire Chief S. Larson, AEM Financial Solutions President J. McGann, Public Works Director/City Engineer M. Ray, Police Chief S. Revering, Community Development Director J. Sutter and City Clerk C. Serres. II.Agenda The Council and staff discussed the following agenda item: 1.2018 budget III.Adjournment The work session adjourned at 8:17 p.m. ________________________________ Jim Adams, Mayor ATTEST: ________ Chrissy Serres City Clerk 4141 Douglas Dr. N., Crystal, MN 55422-1696 763-531-1000 • Fax: 763-531-1188 • www.crystalmn.gov 4.1(c) Page 1 of 2 City of Crystal Council Meeting August 15, 2017 Applications for City License Carnival w/Games Brunswick United Methodist Church 6122 42nd Ave N Crystal, MN 55422 (September 16th, 2017) Rental – New 4755 Welcome Ave N – Silvia Cha (Conditional) 5910 36th Ave N – Reese Pfeiffer and Michael Fruen (Conditional) 5127 53rd Ave N – Investors Capital (Conditional) Rental – Renewal 4111 Adair Ave N – Donald G Mattox (Conditional) 5648 Adair Ave N – Iasis IV LLC (Conditional) 5030 Angeline Ave N – Kirk Wettschreck (Conditional) 5415 Angeline Ave N – Matthew and Priya Lingen (Conditional) 5417 Angeline Ave N – Xuyan Janet Lang (Conditional) 3130 Aquila Ave N – Tom Durkin (Conditional) 3601-3603 Douglas Dr N – Robert and Katherine Kern (Conditional) 5261 Edgewood Ave N – Steven and Kristina Malecha (Conditional) 5525 Fairview Ave N – Travis Blackwell and Ilisha Lin (Conditional) 5150 Florida Ave N – Gina Kilgore 2717-2719 Hampshire Ave N – Ebielador Itie (Conditional) 2925 Hampshire Ave N – Michael Kaldor 4125 Hampshire Ave N – Hakizumwami Runesha 5817 Hampshire Ave N – Deanna Forkey 5324 Jersey Ave N – Andrew Patrias 5943 Jersey Ave N – JMW Investments 4950 Lakeland Ave N – Todd R Haugan & Assoc. LTD 6920 Lombardy La – Tamara K Miller (Conditional) 4849 Louisiana Ave N – Pradeep Khakural 5644 Maryland Ave N – IH2 Property Illinois, LP 5673 Maryland Ave N – Chad Tesmer (Conditional) 3220 – 3226 Nevada Ave N – Andrey and Tatiana Ryvlin 4724 – Nevada Ave N – RHA3 LLC 3406 Noble Ave N – Susan Kowaliw (Conditional) 3540 Noble Ave N – TMC Management Corp 8332 Northern Dr – Vincent Martin 5817 Orchard Ave N – JDA Group LLC 5844 Orchard Ave N – Libman Bros LLC 5812 Quail Ave N – Dwayne Meier 3401 Regent Ave N – Matthew Meyer (Conditional) 5439 Twin Lake Ter – Kurschner Companies LLC 3217 Utah Ave N – Jason Flaa 4.2 Page 2 of 2 3633 Vera Cruz Ave N – Nelson Family FDN RE HLD LLC (Conditional) 3709 Vera Cruz Ave N – Nelson Family FDN RE HLD LLC 3041 Virginia Ave N – Sarah Edstrom 3308 Xenia Ave N – Edward T Johnston 4323 Xenia Ave N – JDA Group LLC 3709 Yates Ave N – Jeremy Hemsworth (Conditional) 3160 Yukon Ave N – Lisa Hathy and Michael Lungstrom 5619 Zane Ave N – Reese Pfeiffer and Michael Fruen (Conditional) 8308 32nd Pl N – Brent Rohs (Conditional) 6600 34th Ave N – Matthew Healy (Conditional) 6816 38th Ave N – Reid W Kinde (Conditional) 5311 50th Ave N – Jeffrey Roehl 6723 50th Ave N – Matthew Selden 5401 51st Ave N – Crystal Leased Hsg Ascts I 6515 52nd Ave N – Raymond B Martin III and Lisa Martin 6729 52nd Ave N – Chris and Christina Jensen (Conditional) 5700 57th Ave N – Gerald R Ziemiecki (Conditional) 6324 61st Ave N – Ignacio Ruiz Ruiz (Conditional) 4.2 CITY OF CRYSTAL RESOLUTION NO. 2017 - RESOLUTION ACCEPTING DONATIONS FROM CHIPOTLE MEXICAN GRILL, CRYSTAL FROLICS, VFW POST 494 AND WEST METRO FIRE-RESCUE DISTRICT RELIEF ASSOCIATION WHEREAS, Minnesota Statute §465.03 requires that all gifts and donations of real or personal property be accepted only with the adoption of a resolution; and WHEREAS, said donations must be accepted by a resolution adopted by the City Council. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Crystal to accept the following donations: Donor Purpose Amount Chipotle Mexican Grill Crystal Police Explorers $76.45 Crystal Frolics Crystal Recreation Senior Card Tournament $500 VFW Post 494 Crystal Frolics $20,000 West Metro Fire-Rescue District Crystal Airport Open House $1,000 Relief Association And BE IT FURTHER RESOLVED that the Crystal City Council sincerely thanks the above-named for their generous donation. Dated: August 15, 2017 By: __________________________ Jim Adams, Mayor ATTEST: __________________________ Chrissy Serres City Clerk 4.3 MEMORANDUM DATE: July 18, 2017 TO: Crystal City Council City Manager Anne Norris FROM: Administrative Services Coordinator Trudy Tassoni SUBJECT: Solicitor license for Vytene Pranyte Vytene Pranyte is requesting a solicitor license for July 23 – August 21, 2017, to sell educational books on behalf of Southwestern Advantage. The books will be shipped from Nashville, TN. The applicant passed a criminal history background check conducted by the Police Department. City Manager Anne Norris pre-approved the license on July 18, 2017. Council Action Requested As part of the Consent Agenda, approve the solicitor license for Vytene Pranyte to go door-to- door from July 23 – August 21, 2017, selling educational books on behalf of Southwestern Advantage. Her application is available for review in the city clerk’s office. COUNCIL STAFF REPORT Consent Agenda: Solicitor Licenses August 15, 2017 Council Meeting 4.4 MEMORANDUM DATE: August 9, 2017 TO: Crystal City Council City Manager Anne Norris FROM: Administrative Services Coordinator Trudy Tassoni SUBJECT: Application for Special Permit for Beer/Wine at Lions Valley Place Park Keily Preciado Garcia has applied for a special permit to serve beer/wine at Lions Valley Place Park on Saturday, Aug. 26, 2017, from 5 – 10 p.m., for up to 50 guests to attend a gender reveal party. She has reserved the park and picnic shelter through the Crystal Community Center. Council Action Requested As part of the Consent Agenda on August 15, 2017, approve the Special Permit for Beer/Wine submitted by Keily Preciado Garcia. Her application is available for review in the city clerk’s office. COUNCIL STAFF REPORT Consent Agenda: Special Permit for Wine/Beer Council Meeting 08/15/2017 4.5 MEMORANDUM DATE: August 3, 2017 TO: Crystal City Council City Manager Anne Norris FROM: Administrative Services Coordinator Trudy Tassoni SUBJECT: Application for Special Permit for Beer/Wine at Bassett Creek Park Ryan Larson of Birchwood Bike & Racing Team has applied for a special permit to serve beer/wine at Bassett Creek Park on Nov. 18 & 19, 2017, from 10 a.m. – 5 p.m., for the annual State Cyclo cross Championships. They expect approximately 250 guests each day. The city received a Certificate of Liability Insurance showing liquor liability coverage through New Hampshire Insurance Company and naming the City of Crystal as the certificate holder. Council Action Requested As part of the Consent Agenda on August 15, 2017, approve the Special Permit for Beer/Wine submitted by Ryan Larson of Birchwood Bike & Racing Team. His application is available for review in the city clerk’s office. COUNCIL STAFF REPORT Consent Agenda: Special Permit for Wine/Beer Council Meeting 08/15/2017 4.6 Memorandum DATE: August 7, 2017 TO: Mayor and City Council Anne Norris, City Manager FROM: Jean McGann, Finance Director SUBJECT: Resolution Ordering the Preparation of an Assessment Roll, Declaring the Amount to be Assessed, and Setting the Date for a Public Hearing for Year 2017 Delinquent Accounts. Introduction: Each year, the City levies special assessments on properties that have received services during the year, but have not paid the invoices that were sent out. These services include: utility charges, administrative citations, garbage and refuse removal, nuisance abatements, weed mowing, tree trimming/removal, and false alarm fines. Discussion: Receivables that are included in the assessment are those that were delinquent on July 31, 2017. The total amounts due as shown on the resolution will be reduced by customer payments as they come in. In 2016, 44.1% of the August balance was collected prior to certification to Hennepin County in December. Service August 2016 August 2017 Change Utility charges 563,038.49$ 554,684.31$ -1.5% Administrative citations 42,449.06 34,182.00 -19.5% Garbage and refuse removal 4,472.61 3,994.41 -10.7% Weed mowing 4,044.95 2,000.52 -50.5% False alarm fees 1,800.00 1,440.00 -20.0% 615,805.11$ 596,301.24$ -3.2% The resolution sets the public hearing for October 17, 2017 at 7:00 PM. Letters will be sent in mid September to the owners of each property with an assessment to notify them of the special assessment and of this public hearing. Notice of the public hearing will also be published in the Crystal/Robbinsdale Sun Post in late September. Recommended City Council Action(s): It is recommended that the City Council approve the resolution. 4.7 RESOLUTION NO. 2017-____ RESOLUTION ORDERING PREPARATION OF AN ASSESSMENT ROLL, DECLARING AMOUNT TO BE ASSESSED, AND SETTING A PUBLIC HEARING DATE - FOR 2017 DELINQUENT ACCOUNTS WHEREAS, properties within the city have benefited from services provided. BE IT RESOLVED that the City Council of the City of Crystal, Minnesota, hereby approves the following: 1. That an assessment roll be prepared for delinquent payment of services 2. That amounts currently eligible for assessment are declared to be: Utility charges $554,684.31 Administrative citations $34,182.00 Garbage and refuse removal $3,994.41 Mowing $2,000.52 False alarm calls $1,440.00 3. That a public hearing will be held on Tuesday, October 17, 2017 The City Council will meet in the Council Chambers at City Hall, 4141 Douglas Drive N., on Tuesday, October 17, 2017, at 7:00 p.m., or as soon thereafter as the matter may be heard, to consider assessments to be levied against properties benefiting from services provided. Property owners may appear at this public hearing to object to proposed assessments against their property. The Finance Director is hereby directed to cause notice of the hearing on proposed assessments to be published once in the official newspaper at least two weeks prior to the hearing. The notice shall include the total amount of proposed assessments. Mailed notice shall be given to the owner of each parcel described in the assessment roll not less than two weeks prior to the hearing. The owner of any property so assessed may, at any time prior to certification of the assessment to Hennepin County, pay the whole of the assessment on such property. • If the entire assessment is paid by 4:30 p.m. on Wednesday, November 29, 2017, no interest will be charged. • Delinquent balances not paid by 4:30 p.m. on Wednesday, November 29, 2017, will be assessed against the property. This means that the delinquent balance will be reported to Hennepin County, which will add it to the 2018 property tax statement for the Service Address. Assessed amounts will accrue interest at an annual rate of twelve percent (12%) from November 1, 2017, through December 31, 2018. • An owner may, at any time thereafter, pay to Hennepin County the entire amount of the assessment remaining unpaid, with interest (12%) accrued to December 31st of the year in which such payment is made. Adopted by the City Council of the City of Crystal this 15th day of August, 2017. ___________________________ Jim Adams, Mayor ATTEST: _________________________ Christina Serres, City Clerk 4.7 CCCRRRYYYSSSTTTAAALLL PPPOOOLLLIIICCCEEE DDDEEEPPPAAARRRTTTMMMEEENNNTTT “Service with Compassion, Integrity, & Professionalism” TO: Mayor and Council Members FROM: Stephanie K. Revering, Chief of Police CC: Anne Norris, City Manager DATE: August 10, 2017 SUBJECT: COUNCIL MEETING: August 15, 2017/Consent Agenda ___________________________________________________________________________ MMEEMMOORRAANNDDUUMM On May 16, 2017, I presented information to you regarding the 2018 Super Bowl. The City of Minneapolis and its police department is looking for assistance from police departments from the State of Minnesota to assist them with the 2018 Super Bowl. Attached is the Joint Powers Cooperative Agreement regarding public safety related to the 2018 National Football League Super Bowl Security. Thank you and if you have any questions please let me know. 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 6.1 PAGE 1 OF 2 _____________________________________________________________________ FROM: John Sutter, Community Development Director _____________________________________________________________________ DATE: August 10, 2017 TO: Anne Norris, City Manager (for August 15 Council meeting) SUBJECT: Consider a resolution approving plans and specifications and authorizing advertisement for bids for a train horn quiet zone at the Douglas Drive and West Broadway crossings of the Canadian Pacific STATUS UPDATE •Hennepin County will not participate in the roadway improvements but they will absorb the costs of relocating the driveway and other changes to their property at 5170 West Broadway. •Washburn-McReavy has granted the city a temporary construction easement and permanent t roadway easement for the porkchop median at 51st Place and West Broadway. •Staff has been told that FRA approval is imminent. We expect to receive written confirmation between now and the 8/15 Council meeting. •In any case, staff needs Council authorization at this time so we can advertise for bids in time for a September 19 bid award date. •Staff presumes that the Council does not need to see the entire spec book or plan set. However, some illustrative excerpts are attached to this report. ANTICIPATED TIMELINE 8/16 Bid Advertisement (online) 8/24 Bid Advertisement (SunPost) 9/13 Bid opening 9/19 City Council - bid award and contract authorization 10/2 Anticipated construction start 11/6 Deadline for substantial completion 11/8 Inspection meeting with FRA, Canadian Pacific and Hennepin County 11/9 Notice of Establishment filed (assuming no revisions needed) 11/13 Deadline for final completion 11/29 Quiet Zone in effect COUNCIL STAFF REPORT Plans & Specs and Bid Advertisement Train Horn Quiet Zones Douglas Drive & West Broadway 6.2 PAGE 2 OF 2 BUDGET The most recent estimated total cost was $207,000. The updated cost estimate is as follows: Engineering $ 37,115 Quiet Zone application, plans & specs, bidding, final FRA inspection and Notice of Establishment Constr. Serv. $ 7,000 This would be supervision of actual construction under a separate contract to be considered in September. Construction $ 162,750 Contingency $ 6,500 -------------- Total: $ 213,365 The funding source will be the EDA fund balance. REQUESTED COUNCIL ACTION City Council action on the attached resolution is requested. 6.2 RESOLUTION NO. 2017 - ______ APPROVING PLANS AND SPECIFICATIONS AND ORDERING ADVERTISEMENT FOR BIDS DOUGLAS DRIVE AND WEST BROADWAY AVENUE TRAIN HORN QUIET ZONE PROJECT #2017-08 WHEREAS, pursuant to Resolution 2016-143 adopted by the City Council on November 11, 2016, SRF Consulting Group, Inc. has prepared plans and specifications for construction of improvements to establish a train horn quiet zone at the Douglas Drive and West Broadway Avenue crossings of the Canadian Pacific Railroad; and WHEREAS, the plans and specifications are on file at Crystal City Hall, 4141 Douglas Drive North, Crystal, Minnesota; and WHEREAS, the plans and specifications have been reviewed and approved by Hennepin County; and WHEREAS, the Federal Railroad Administration has approved the city’s application for a train horn quiet zone. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CRYSTAL, MINNESOTA: 1.The plans and specifications for construction of improvements to establish a train horn quiet zone at the Douglas Drive and West Broadway Avenue crossings of the Canadian Pacific Railroad are hereby approved. 2.The advertisement for bids for construction of said improvements is hereby ordered. Adopted by the Crystal City Council this 15th day of August 2017. Jim Adams, Mayor ATTEST: ____________________________ Christina Serres, City Clerk 6.2 Train Horn Quiet Zone Douglas Drive and West Broadway N at the Canadian Pacific Railway Douglas Drive crossing: West Broadway crossing: Traffic Movement Changes Required for the Quiet Zone: 6.2 ADVERTISEMENT FOR BIDS Crystal, Minnesota Douglas Drive and West Broadway Avenue Quiet Zones City Project No. 2017-08 Notice is hereby given that sealed bids will be received by the City Engineer until 10:00 A.M. LOCAL TIME ON WEDNESDAY, SEPTEMBER 13, 2017, at Crystal City Hall, at which time they will be publicly opened and read aloud, for the furnishing of all design, labor and materials for the approximate construction of: Item Quantity Units PAVEMENT MARKING REMOVAL 1300 L F REMOVE CONCRETE CURB 440 L F REMOVE WALK 2600 S F REMOVE PAVEMENT 870 S Y SAWING CONCRETE OR BITUMINOUS PAVEMENT 1300 L F EXCAVATION - COMMON 160 C Y COMMON EMBANKMENT (CV) 170 C Y AGGREGATE BASE (CV) CLASS 5 120 C Y BITUMINOUS PAVEMENT 100 TON 4" CONCRETE WALK 2100 S F 6" CONCRETE WALK 600 S F CONCRETE CURB & GUTTER 700 L F CONCRETE MEDIAN DESIGN SPECIAL 130 S Y TRAFFIC CONTROL 1 L S SIGN PANELS TYPE C 130 S F SILT FENCE; TYPE MS 400 L F TURF ESTABLISHMENT 1 L S PAVEMENT MARKING EPOXY GR IN 1850 L F Bids shall be on the forms provided for that purpose and according to the Contract Documents dated August 7, 2017, which were prepared by the City of Crystal. Bid forms and Contract Documents may be examined at the office of the City Engineer, 4141 Douglas Drive North, Crystal, Minnesota 55422 (763-531-1161). Complete Digital image copies of the Bidding Documents are available at www.questcdn.com for a fee of $10.00 by entering eBidDocTM Number #5306887 on the website’s Project Search page. For assistance and free membership registration, contact QuestCDN at 952.233.1632 or info@questcdn.com. Bid security in the amount of 5% of the bid must accompany each bid in accordance with the Instructions to Bidders. Bids shall be directed to the City Engineer, securely sealed and endorsed upon the outside wrapper, “BID FOR DOUGLAS DRIVE AND WEST BROADWAY AVENUE QUIET ZONES, CITY PROJECT NO. 2017-08.” The City of Crystal reserves the right to reject any and all bids, to waive irregularities and informalities therein and to award the Contract in the best interests of the City. 6.2 The Crystal City Council will consider award of this contract at their regular meeting to be held at 7:00 p.m. on Tuesday, September 19, 2017, in the Council Chambers at 4141 Douglas Drive North, Crystal, Minnesota. The substantial completion date for all work is November 6, 2017, with all work to be completed by November 13, 2017. Christina Serres (Published in the Crystal-Robbinsdale Sun Post 08/24/17 City Clerk and at QuestCDN 08/16/17) City of Crystal, Minnesota 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 PAGE 1 OF 2 _____________________________________________________________________ FROM: John Sutter, Community Development Director _____________________________________________________________________ DATE: August 10, 2017 TO: Anne Norris, City Manager (for August 15 Council meeting) SUBJECT: Consider a resolution authorizing closing part of 51st Place west of Douglas Drive for train horn quiet zone improvements As the Council may recall, the approved train horn quiet zone design requires the closure of 51st Place west of Douglas Drive. The segment to be closed would extend approximately 110 feet west of the centerline of Douglas Drive: COUNCIL STAFF REPORT Close 51st Place west of Douglas Drive for Train Horn Quiet Zone 6.3 PAGE 2 OF 2 The adjacent properties were notified in July 2016 and January 2017 of this potential closure. The January 2017 mailing is attached. As discussed with the Council in the August 2016 work session, the owner of the apartment building at 5153 Douglas Drive has verbally expressed opposition to the road closure but had also expressed support for the train horn quiet zone. Conversely, one of the residents of that building has verbally expressed support despite the road closure. In any case, there is an alternate route readily available via Corvallis Avenue and the apartment residents will be among the primary beneficiaries of the train horn quiet zone. City Council action on the attached resolution is requested. 6.3 4141 Douglas Drive North • Crystal, Minnesota 55422-1696 Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov To: Resident or Business near the Canadian Pacific Railroad crossings From: John Sutter, Community Development Director Date: January 23, 2017 Subject: Train Horn Quiet Zone Update You may recall previous letters in spring and summer 2016 about the city’s plans for a train horn quiet zone where Douglas Drive and West Broadway cross the Canadian Pacific. Since then, the city has further refined the design, received approval from other local and state agencies, and submitted a Quiet Zone Application to the Federal Railroad Administration. Construction is anticipated in the third quarter of 2017. Once the quiet zone improvements are constructed, some traffic movements will no longer be possible. Please see the map below and the updated layouts on the other side of this sheet. If you would like more information, please see “Potential Railroad Quiet Zone” under “What’s Happening” at www.crystalmn.gov. If you have questions please feel free to contact me at (763) 531-1130 or john.sutter@crystalmn.gov. The city will send another update before construction begins later this year. TRAFFIC MOVEMENT CHANGES REQUIRED FOR THE QUIET ZONE: 6.3 UPDATED LAYOUT FOR QUIET ZONE IMPROVEMENTS AT DOUGLAS DRIVE: UPDATED LAYOUT FOR QUIET ZONE IMPROVEMENTS AT WEST BROADWAY: 6.3 RESOLUTION NO. 2017 - ______ APPROVING THE CLOSURE OF 51ST PLACE NORTH DIRECTLY WEST OF DOUGLAS DRIVE NORTH WHEREAS, 51st Place North is adjacent to the Canadian Pacific Railway in the City of Crystal; and WHEREAS, the City Council desires to implement a train horn quiet zone that includes the Douglas Drive North crossing of the Canadian Pacific Railway; and WHEREAS, certain public improvements must be constructed to meet the requirements of the Federal Railroad Administration and Hennepin County in order to implement the train horn quiet zone; and WHEREAS, construction of these improvements will require the closure of 51st Place North from Douglas Drive North to a point approximately 110 feet west of the centerline of Douglas Drive North (“Closure Segment”); and WHEREAS, the Closure Segment is not a critical roadway facility in the City; and WHEREAS, the existing connection of streets made by the Closure Segment is served by a parallel street, Corvallis Avenue, located one block away; and WHEREAS, the City Council is authorized by Minnesota Statutes, section 412.221, subd. 6 to close and barricade streets under its jurisdiction. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CRYSTAL, MINNESOTA: 1. The closure of 51st Place North from Douglas Drive North to a point approximately 110 feet west of the centerline of Douglas Drive North is hereby approved. 2. The closure shall be effective upon installation of barricades and signs on the closed portion of 51st Place North. Adopted by the Crystal City Council this 15th day of August 2017. Jim Adams, Mayor ATTEST: ____________________________ Christina Serres, City Clerk 6.3 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 1 CITY OF CRYSTAL ORDINANCE #2017-____ AN ORDINANCE AMENDING CHAPTER 6 OF THE CRYSTAL CITY CODE The City of Crystal ordains: ARTICLE I. Chapter VI of the Crystal City Code is hereby deleted in its entirety and replaced with the following: CHAPTER VI PUBLIC HEALTH Section 600 – Public nuisances 600.01. Public nuisance prohibition. Subdivision 1. Prohibition. A person must not act, or fail to act, in a manner that is or causes a public nuisance. For purpose of this section, a person that does any of the following is guilty of maintaining a public nuisance: (a) Maintains or permits a condition which unreasonably annoys, injures, or endangers the safety, health, morals, comfort or repose of any considerable number of members of the public; (b) Interferes with, obstructs, or renders dangerous for passage, any public highway or right- of-way, or waters used by the public; or (c) Does any other act or omission declared by law or city ordinance to be a public nuisance. Subd. 2. Hazardous buildings. This section does not apply to the procedures available to the city under Minnesota Statutes, sections 463.15 through 463.261 to correct or remove a hazardous condition of any hazardous building or property, which may occur through a separate action or in conjunction with a nuisance abatement action under this section. 600.03. Duties of city officials. City officials may apply and enforce any provision of this section relating to public nuisances in the city. Any peace officer or other designated city official may inspect private premises in accordance with the law and take all reasonable precautions to prevent the commission and maintenance of public nuisances. 600.05. Abatement procedure. Subdivision 1. Severability. The nuisance abatement procedure in this subsection is separate from, but may run concurrent with, the administrative enforcement procedure in Section 306 of this code. Subd. 2. Nuisance abatement order. Whenever a peace officer or other designated city 6.5 2 official determines that a public nuisance is being maintained or exists in the city, the official may issue a nuisance abatement order to the owner of record and occupant of the premises. The order shall be mailed to the owner at the address on record with the county for mailing tax statements for the premises and shall also be posted on the premises. The order shall identify the nuisance, specify what must be done to abate the nuisance, and provide a reasonable period of time, not less than 10 days, within which the nuisance must be abated. The order shall also contain a clear statement of the right of the owner or occupant to request a hearing before the city council. If the nuisance conditions identified in the order are not fully corrected by the indicated date, the city may abate the nuisance. Subd. 3. Opportunity to be heard. Upon receipt of a nuisance abatement order, the owner or occupant may forestall abatement action by the city by requesting a hearing before the city council. Such request must be in writing and received by the city no later than 4:30 p.m. on the compliance date indicated in the order. Upon receipt of such request, the city manager shall place the matter on the agenda for the next available city council meeting. At the meeting the city council will provide the owner and occupant an opportunity to be heard regarding the matter. At the conclusion of the hearing the city council may act to uphold, modify or dismiss the nuisance abatement order. If the city council upholds or modifies the order, it shall also identify a date by which the nuisance must be abated. The city shall provide the owner and occupant written notice of the city council’s decision and the date by which the nuisance must be abated. Subd. 4. City abatement. If the owner or occupant fails to comply with the nuisance abatement order by the established compliance date, the city may act to protect the public health, safety, and welfare by taking such actions as it determines are reasonable to abate the nuisance. Subd. 5. Emergency procedure; summary enforcement. In cases of emergency, where delay in abatement required to complete the procedural requirements as set forth in subdivisions 2 and 3 of this subsection will permit a continuing nuisance to unreasonably endanger public health, safety, or welfare, the city manager may order summary enforcement and abate the nuisance. To proceed with summary enforcement, the peace officer or other designated city official shall determine that a public nuisance exists or is being maintained on premises in the city and that delay in abatement will unreasonably endanger public health, safety, or welfare. The officer or designated official shall notify in writing the occupant and owner of the premises of the nature of the nuisance, whether public health, safety, or welfare will be unreasonably endangered by delay in abatement required to complete the procedure set forth in subdivisions 2 and 3 of this subsection and may order that the nuisance be immediately terminated or abated. The order shall be hand delivered to the owner or occupant and, if neither is available, it shall be mailed to the owner at the address on record with the county for mailing tax statements for the premises and shall also be posted on the premises. If the nuisance is not immediately terminated or abated, the city manager may order summary enforcement and abate the nuisance. Subd. 6. Immediate abatement. Nothing in this section shall prevent the city, without notice or other process, from immediately abating any condition that poses an imminent and serious hazard to human life or safety. Subd. 7. Judicial remedy. Nothing in this section shall prevent the city from seeking a 6.5 3 judicial remedy as authorized by law. 600.07. Recovery of costs. Subdivision 1. Personal liability. The owner of the premises on which a nuisance has been abated by the city, or a person who has caused a public nuisance on property not owned by that person, shall be personally liable for the cost to the city of the abatement, including administrative costs. After the work has been completed and the cost determined, the city clerk or other city official shall prepare a bill for the cost and mail it to the responsible party. Thereupon the amount shall be immediately due and payable to the city. Subd. 2. Assessment. After notice and hearing as provided in Minnesota Statutes, section 429.061, as it may be amended from time to time, if the nuisance is a public health or safety hazard on private property, the city clerk shall, on or before September 1 following abatement of the nuisance, list the total unpaid charges along with all other such charges as well as other charges for current services to be assessed under Minnesota Statutes, section 429.101 against each separate lot or parcel to which the charges are attributable. The city council may then spread the charges against the property under that statute and any other pertinent statutes for certification to the county auditor and collection along with current taxes the following year or in annual installments, not exceeding ten, as the city council may determine in each case. 600.09. Penalty. Any person who fails to comply with an abatement notice shall be guilty of a misdemeanor. Each additional day of noncompliance constitutes a separate offense. Section 605 – Garbage and refuse 605.01. Definitions. For purposes of this section, the following terms shall have the meanings given them. Subd. 1. Approved. "Approved" means acceptable to the health authority following the determination as to compliance with established public health practices and standards. Subd. 2. Composting. “Composting” means a microbial process that converts plant materials to a usable organic soil amendment or mulch. Subd. 3. Dumpster. “Dumpster” means a large container for temporary storage of refuse, recycling, or source-separated compostable material. Subd. 4. Health authority. "Health authority" means any officer or employee designated by the city manager to enforce the provisions of this section. Subd. 5. Litter. “Litter” includes all of the following: (a) Refuse, as defined in this subsection; (b) The meaning given by Minnesota Statutes, section 609.68; and 6.5 4 (c) Abandoned property in the form of deteriorated, wrecked or derelict property in unusable condition or left unprotected from the elements. The term "abandoned property" includes, but is not limited to, deteriorated, wrecked, inoperable, unlicensed, partially dismantled, or abandoned motor vehicles, trailers, boats, machinery, refrigerators, washing machines, household appliances, plumbing fixtures and furniture. Subd. 6. Owner. "Owner" means any person, firm, corporation, or other partnership or organization who alone, jointly, or severally with others may be in ownership of, or have charge, care, or control of, any premises or business within the city as owner, employee or agent of the owner, or as trustee or guardian of the estate or person of the title holder. Subd. 7. Pests. "Pests" means any insects, vermin, rodents, birds or any other living agent capable of reproducing itself that causes or may potentially cause harm to the public health or significant economic damage. Subd. 8. Premises. "Premises" means any dwelling, house, building or other structure or parcel of property. Subd. 9. Public place. "Public place" means any and all streets, sidewalks, boulevards, alleys, parks, public buildings, and other public ways. Subd. 10. Recycling. "Recycling" means the process of collecting and preparing recyclable materials and reusing the materials in their original form or using them in manufacturing processes that do not cause the destruction of recyclable materials in a manner that precludes further use. Subd. 11. Recyclable materials. "Recyclable materials" means materials that are separated from mixed municipal solid waste for the purpose of recycling or composting, including paper, glass, plastics, metals, automobile oil, batteries, source-separated compostable materials, and sole source food waste streams that are managed through biodegradative processes. Refuse-derived fuel or other material that is destroyed by incineration is not a recyclable material. Subd. 12. Refuse. "Refuse" means solid waste from residential, commercial, industrial, and community activities that the generator of the waste aggregates for collection. Refuse does not include recyclable materials, source-separated compostable materials or yard waste. Subd. 13. Refuse enclosure. "Refuse enclosure" means an enclosure capable of containing all refuse, recyclable materials, source-separated compostable materials, and yard waste stored by an establishment between pickups. Subd. 14. Refuse enclosure - food service. "Refuse enclosure - food service" means an enclosure constructed for sanitary temporary storage of refuse, recyclable materials, and source- separated compostable materials generated by food establishments. 6.5 5 Subd. 15. Roll-off container. “Roll-off container” means a usually open-top dumpster characterized by a rectangular footprint. Typical container sizes are 10, 15, 20, 30, and 40 cubic yards. Subd. 16. Source-separated compostable materials. “Source-separated compostable materials” has the meaning given it in Minnesota Statutes, section 115A.03, subd. 32a. Subd. 17. Vehicle. "Vehicle" means every device in, upon or by which any person or property is or may be transported or drawn upon a thoroughfare including devices used exclusively upon stationary rails or tracks. Subd. 18. Waste matter. “Waste matter” means, collectively, refuse, recyclable materials, yard waste, and source-separated materials. Subd. 19. Yard waste. “Yard waste” means garden wastes, leaves, lawn cuttings, weeds, shrub and tree waste, and prunings. 605.03. Refuse storage and disposal. Subdivision 1. Containers required. The owner of any residential premises, and any other person having refuse, must provide and keep on such premises sufficient containers for the storage of refuse accumulated on the premises between disposal or collection. Each such container must be water tight, must have tight fitting covers, must be impervious to pests and absorption of moisture, and must not exceed 96 gallons in size unless otherwise specifically authorized in writing by the health authority. Refuse on any premises must be stored in the containers required. All refuse from demolition or construction sites must be stored in roll-off containers or dumpsters and may not be stored on the ground. Commercial, business, industrial, or other such establishments having a refuse volume in excess of two cubic yards per week and all six family and larger dwellings, must store refuse in roll-off containers or dumpsters, or an approved equivalent, provided by its licensed collector. These containers must be so located as to be accessible to collection equipment and so as not to require an intermediate transfer. Subd. 2. Sanitary disposal. Refuse must be disposed of in a sanitary manner as approved by the health authority and must not constitute a public nuisance. Subd. 3. Frequency and manner of collection. The contents of refuse containers must be collected at least every other week, or more frequently if necessary or required by the provisions of any other ordinance of the city, by a collector licensed under this section. The collector must transfer the contents of the containers to the vehicle without spilling them, or if any spilling occurs, the collector must clean it up immediately and completely. Collection must be conducted in such a manner as to not create a public nuisance. Upon each collection, the containers must be completely emptied and returned to where they are kept, and the covers of the containers must be replaced. Subd. 4. Placement of containers. (a) The preferred location for storage of containers is in an enclosed building. However, 6.5 6 if stored outside, containers must be placed and kept in a neat and orderly manner and maintained in such a way as to not unreasonably interfere with the use of the adjoining property. (b) Containers may be placed at their designated collection location the evening before the applicable collection day and shall be removed from that location no later than 12:00 p.m. on the day following the applicable collection day. (c) Properties with a sidewalk directly behind the curb may place containers on that part of the sidewalk closest to the curb in accordance with subdivision 4(b). (d) Containers may never be placed on public streets or interfere in any way with the removal of snow from the roadways. Subd. 5. Defective containers. If a container is found to be in poor repair, corroded or otherwise defective so as to permit pests to enter, or does not meet other requirements of this section, the health authority may notify the provider or user of the container of the deficiency and require repair or replacement of the container. If the deficiency is not corrected, the health authority may condemn the deficient container and affix a tag so stating such condemnation. It is unlawful for any person to place or deposit refuse in a container which has been condemned. Subd. 6. Dumpsters and roll-off containers. A dumpster or roll-off container may not be located in any public place. A dumpster or roll-off container may not be located on any residential premises for more than three consecutive months during any 12-month period. The city manager, or its designee, is authorized to issue temporary permits for placement of a dumpster or roll-off container on any residential premises for more than three consecutive months when special circumstances exist justifying the issuance of the temporary permit and the purposes of this section will not be impaired thereby. The permit must be displayed on the dumpster or roll-off container or elsewhere on the premises. All dumpsters and roll-off containers must have the current licensed collector's name, address and phone number in clearly legible letters no less than three inches in height. No fee is required for the temporary permit. 605.05. Exterior storage - commercial and industrial. Exterior storage of refuse, including dumpsters, at buildings in property zoned for commercial or industrial uses must conform to the following rules: (a) The refuse must be contained in a refuse enclosure or in the case of food establishments, in a refuse enclosure - food service; and (b) The exterior storage area must be constructed in compliance with the open and outdoor storage requirements contained in the city’s zoning regulations. 605.07. Refuse hauler regulations. Subdivision 1. License required. It is unlawful to engage in hauling or conveying of waste matter from a premises, other than one's own domicile, in the city without a license. Each vehicle so used must be licensed. 6.5 7 Subd. 2. License procedure. Applications for license or renewal of license must contain a description of the types and makes of motor vehicles used for collection, a schedule of services to be made to the customers, the frequency of service to be rendered, and full information where and how the material collected will be disposed of, and any other information the health authority will require. Applications to provide routine weekly collection and removal of refuse from residences must provide complete collection of all refuse which normally results from day to day use of this type of property except furnishings, appliances, building or construction wastes and similar bulky wastes for which individuals must make special arrangements. The health authority may require vehicle inspection before processing the license application. An application for license under this section must be submitted to the health authority for review and recommendation and approved by the city council if it meets the requirements of this section. Fees for licenses are set by appendix IV. Subd. 3. Pricing requirement. Applications for license or renewal of license must contain a description of refuse collection charges. The charges must increase with the volume or weight of the refuse collected from a premises. The charges imposed on a premises that recycle shall not be greater than the charges imposed on a premises that do not recycle. Subd. 4. Insurance. Applicants for licenses or renewals of licenses must file with each application a copy of an insurance policy or policies and an endorsement, under which there is coverage as to each vehicle in the minimum amounts of $1,000,000 for bodily injury to each person; $1,000,000 aggregate per occurrence; and, $1,000,000 for loss or damage to property. Every policy must provide that it will not be cancelled or terminated for any reason without at least ten days' written notice thereof first being given to the city. Subd. 5. Vehicle decals; specifications. Whenever a license or renewal has been granted hereunder, the health authority will furnish to the licensee a decal for each vehicle signifying that the vehicle is licensed by the city. The licensee must apply the decal to the left forward side of the vehicle’s body or in another visible location as required by the health authority. Old, expired, or otherwise invalid decals must be removed. Licenses and decals are non-transferable to other vehicles. Every vehicle used to collect refuse must also clearly identify the name and phone number of the owner or operator of that vehicle. Subd. 6. Vehicle construction, maintenance and loading. Every vehicle used to collect waste matter must be constructed in such a way that all waste matter is securely transported, and that there is no dripping or leaking of any collected materials. Vehicles must be equipped with the necessary tools to handle spills and the hauler must clean up any spills immediately. Vehicles must be equipped with an audible electronic back-up alarm. Vehicles must be kept in good repair, regularly cleaned, and maintained in a way to prevent persistent odors. Subd. 7. Service cancellation. A licensed refuse hauler must cancel service to any premises when the only container or containers thereon have been condemned and may cancel service for cause or when the party charged for the collection service is two months or more overdue in payment for such services. When a refuse hauler cancels service to any premises, written notice thereof must be served upon or mailed to the occupant, manager or owner of the premises and a copy of the notice must be mailed to the health authority. 6.5 8 Subd. 8. Vehicle storage and parking. It is unlawful to park or store a refuse collection vehicle within 100 feet of any residential premises, or within 200 feet of any food establishment, for purposes other than, or for periods inconsistent with, providing collection at said premises. Subd. 9. Collection schedules and districts. The city council has the authority to create and modify collection districts for refuse and recycling and may designate specific days during which collection in each district may occur. Licensed haulers must establish their collection routes and days of collection in a manner consistent with the city’s approved collection districts and specified days of collection. Violation of this subdivision is grounds for revocation of the hauler's license. It is not a violation of this subsection to collect refuse or recyclable materials on a day other than the specified collection day if the collection is due to a missed pick up or is during a week in which a legal holiday occurs. 605.09. Public nuisance; abatement. Unless stored in containers in compliance with this section, any accumulation of refuse on any premises is deemed a public nuisance and may be abated under section 600 of this code. 605.11. Composting. Subdivision 1. Compost containers. Composting shall only be conducted within a covered or uncovered container, enclosed on all vertical sides, and constructed of (i) wood, (ii) wire mesh, (iii) a combination of wood and wire, (iv) metal barrels with ventilation, or (v) commercially fabricated bins or barrels. Containers shall be durable and shall be constructed and maintained in a structurally sound manner. Wood used in the construction of a compost container must be sound and free of rot. Subd. 2. Size. The maximum size for a compost area on residential lots shall be 15 cubic yards. The maximum size on non-residential lots shall be 25 cubic yards for lots under 10,000 square feet and 120 cubic yards for lots over 10,000 square feet. Subd. 3. Location on property. A compost container may not be placed closer than five feet from a property line or closer than 20 feet to any habitable building not on the subject property. The compost may be located only in a rear yard as defined in the zoning regulations. Subd. 4. Prohibited contents. The following materials may not be placed in a compost: meat, fats, oils, grease, bones, whole eggs, milk or other dairy products, human or pet wastes, pesticides, herbicides, noxious weeds, diseased plant material in which the disease vector cannot be rendered harmless through the composting process, and any garbage or refuse that may cause a public health risk or create nuisance conditions. Subd. 5. Maintenance. Compost materials shall be layered, aerated, moistened, turned, and managed to promote effective decomposition of the materials in a safe, secure and sanitary manner. Compost materials shall be covered with a layer of material such as leaves, straw, wood chips, or finished compost to reduce odor. Subd. 6. Nuisance. Operating a compost in a manner that results in objectionable odors or placing prohibited materials in a compost are both deemed public nuisances and may be abated 6.5 9 under section 600 of this code. 605.13. Wood piles. Subdivision 1. General rule. The outside storage of cut firewood for residential buildings is permitted in residential zoning districts of the city subject to the provisions of this subsection. The rules in this subsection do not apply to wood stored inside of a building. Subd. 2. Location and storage. All firewood located upon a residential premises must be cut/split, prepared for use, and stored in neat, secure stacks. Stacks of wood may be located only in rear yards as defined in the zoning regulations and may not be located on a property line. A stack of wood located within five feet of the lot property line must be screened with a solid wall or fence. 605.15. Litter. Subdivision 1. General rule. It is unlawful to throw, scatter or deposit litter on or in private or public property, bodies of water, vehicles or structures within the city. Property owners must maintain their premises free of refuse or other litter, except as otherwise expressly authorized by this section. The owner, lessee or occupant of private property, whether occupied or vacant, must maintain the property free of litter. Subd. 2. Nuisance; abatement. The accumulation of excess litter on private property is deemed a public nuisance and may be abated under section 600 of this code. Subd. 3. Not exclusive. The authority granted by this subsection is in addition and independent of the authority granted and the procedure established by section 1315 of this code. Section 610 - Recycling 610.01. Definitions. For purposes of this section, the following terms shall have the meanings given them. Subd. 1. Dwelling unit. "Dwelling unit" means a residential structure in the city that is designated by the recycling authority to receive recycling collection services. Subd. 2. Generator and mixed municipal solid waste. "Generator" and "mixed municipal solid waste" have the meanings given those terms in Minnesota Statutes, section 115A.03. Subd. 3. Multifamily dwelling. “Multifamily dwelling” means a building designed with three or more dwellings exclusively for occupancy by three or more families living independently of each other. Subd. 4. Recycling and recyclable materials. “Recycling” and “recyclable materials” have the meanings given those terms in subsection 605.01 of this code. Subd. 5. Recycling authority. "Recycling authority" means the official designated by the city manager to perform the powers and duties of the recycling authority as provided in this section. The recycling authority may be the administrator of the Hennepin Recycling Group 6.5 10 joint powers entity of which the city is a member. Subd. 6. Recycling container. "Recycling container" means a receptacle designated by the recycling authority for the accumulation and collection of recyclable materials at a dwelling unit. Subd. 7. Recycling collection services. "Recycling collection services" means the collection of recyclable materials accumulated in recycling containers from a location at a dwelling unit that is designated by the recycling authority for regular collection. Subd. 8. Recycling services. "Recycling services" means recycling collection services, carryout collection services, and any other services provided to a dwelling unit in accordance with this section. 610.03. Recycling authority; powers. The recycling authority is responsible for supervising and controlling the collection, processing, and marketing of recyclable materials from all dwelling units in the city. The recycling authority may contract with one or more haulers or processors for the collection, processing and marketing of some or all types of recyclable materials from dwelling units. The recycling authority may adopt and enforce additional rules not inconsistent with this section as necessary for the collection, processing, and marketing of recyclable materials, including but not limited to rules governing the days and hours of collection, the types of recyclable materials to be collected, the manner in which generators must prepare recyclable materials for collection, the recycling containers to be used, and the location of recycling containers for collection. The rules of the recycling authority are not effective until approved by the city council. 610.05. Recycling rates; billings. Subdivision 1. Rates. The city council may establish rates for recycling services from time to time by resolution. By resolution the city council may also charge the cost of recycling containers to owners or occupants of dwelling units as a recycling service. Subd. 2. Billing. Each owner or occupant of a dwelling unit must pay the rates for recycling collection services, unless an exemption is obtained as provided in this section. The amounts payable for recycling services will be shown as a separate charge on the utility bill for the dwelling unit and will be payable according to the same terms as those provided in this code for utility bills. 610.07. Assessment of unpaid bills. On or before September 1st of each year, the city clerk must list the total unpaid charges for recycling services against each lot or parcel to which they are attributable. The city council may then spread the charges against the property benefitted as a special assessment in the same manner as provided for current services by Minnesota Statutes, section 429.101 and other pertinent statutes for certification to the director of property taxation of Hennepin County and collection the following year along with the current taxes. 610.09. Rate exemption. Subdivision 1. Exemption. A dwelling unit will not be billed for recycling collection services if the owner or occupant of the dwelling unit establishes that the 6.5 11 recyclable materials generated at the dwelling unit are separated from mixed municipal solid waste by the generator, are separately collected, and are delivered to a final destination for reuse in their original form or for use in a manufacturing process. Subd. 2. Application. Application for an exemption must be made by the owner or occupant of the dwelling unit to the recycling authority. The owner or occupant must produce evidence to the recycling authority of the amount, by weight and type, or recyclable materials that are separated, collected and delivered for reuse in their original form or for use in a manufacturing process. The recycling authority may establish additional reasonable criteria for determining when an exemption will be granted. The recycling authority's decision to grant or deny a request for exemption is final. Subd. 3. Expiration and renewal. Rate exemptions granted under this subsection shall automatically expire after three years. Upon expiration, the owner or occupant may reapply pursuant to the application requirements contained in subdivision 2. 610.11. Ownership of recyclable materials; scavenging prohibited. Subdivision 1. Ownership. Recyclable materials are the property of the generator until collected by authorized city employees, collectors or haulers. Recyclable materials become the property of the city, authorized collector, or authorized hauler upon collection. Subd. 2. No scavenging. It is unlawful for a person, other than authorized employees of the city or authorized haulers, to distribute, collect, remove or dispose of recyclable materials after the materials have been placed or deposited for collection. This subdivision shall not apply during city-sanctioned curbside cleanup events. Subd. 3. Penalty. A violation of this subsection is a misdemeanor and may be punished as provided in chapter 115 of this code. 610.13. Relation to other provisions of code. To the extent that the provisions of this section are inconsistent with the provisions of section 605 of this code, the provisions of this section govern. 610.15. Multifamily dwellings. Subdivision 1. Recycling services. Owners of multifamily dwellings containing more than eight dwelling units must provide recycling collection services to all residents of the dwelling. Recyclable materials must be collected at least once per month. Subd. 2. Recycling; notice. Owners of multifamily dwellings must provide notice to all new tenants of the opportunity to dispose of recyclable materials as well as the location of the disposal site. Subd. 3. Recycling; preparation. Owners of multifamily dwellings must provide information to all new tenants related to the proper preparation of recyclable materials for collection. Subd. 4. Recycling containers. Owners of multifamily dwellings must insure that stolen or broken containers for recyclable materials are replaced within a reasonable time. 6.5 12 Subd. 5. Landfilling prohibited. It is unlawful for an owner of a multifamily dwelling or an agent or contractor of an owner, to transport for disposal or to dispose of recyclable materials in a solid waste disposal facility, or to contract for such transportation or disposal. Subd. 6. Penalties. Violation of subdivisions 1, 2, 3 or 4 of this subsection is punishable as a petty misdemeanor. Upon a third or subsequent violation of subdivisions 1, 2, 3 or 4 by the same owner, the violation is punishable as a misdemeanor. Violation of subdivision 5 of this subsection is punishable as a misdemeanor. 610.17. Commercial buildings. Subdivision 1. Responsibility. Owners of commercial buildings must meet the recycling requirements imposed upon them by Minnesota Statutes, section 115A.151, as it may be amended from time to time. Subd. 2. Penalties. A violation of this subsection is punishable as a petty misdemeanor. Upon a third or subsequent violation by the same owner, the violation is punishable as a misdemeanor. 610.19. Defective recycling containers. If a recycling container is found to be in poor repair, corroded or otherwise defective so as to permit pests to enter, or does not meet other requirements of this section, the recycling authority may notify the provider or user of the deficiency and require repair or replacement of the recycling container. If the deficiency is not corrected, the recycling authority may condemn the deficient recycling container and affix a tag so stating such condemnation. It is unlawful for any person to place or deposit recyclable materials in a recycling container which has been condemned. Section 615 – Vegetation 615.01. Definitions. For purposes of this section, the following terms shall have the meanings given them. Subd. 1. Maintenance plan. “Maintenance plan” means a document submitted with an application for a native vegetation permit demonstrating a precise course of maintenance for numerous individual plants in a landscape over months and seasons. Subd. 2. Native vegetation. “Native vegetation” means those indigenous trees, shrubs, wildflowers, grasses and other plants that have naturally adapted themselves to the climate and soils of the area but require cultivation and maintenance to remain viable. Subd. 3. Native vegetation permit. “Native vegetation permit” means a permit issued by the city pursuant to this section allowing an owner or occupant to cultivate native vegetation upon their property, subject to the restrictions of this section. Subd. 4. Natural habitat. “Natural habitat” means specially uncultivated valued and sensitive habitat whereupon native vegetation exists in a pristine state and provides habitat for a variety of species native to the area. Such vegetation shall maintain itself in a stable condition 6.5 13 with minimal human intervention. Subd. 5. Noxious weed. “Noxious weed” means an annual, biennial, or perennial plant designated by the Minnesota Commissioner of Agriculture or the city council as injurious to public health, the environment, public roads, crops, livestock, or other property. Subd. 6. Rain garden. “Rain garden” means a shallow planted depression in the ground designed to allow for stormwater runoff to slowly infiltrate the soil. Subd. 7. Rank vegetation. “Rank vegetation” means uncultivated vegetation growing at a rapid rate due to unplanned, unintentional, or accidental circumstances. Subd. 8. Turf grass. “Turf grass” means cultivated vegetation consisting of a highly maintained surface of dense grass underlain by a thick root system. Subd. 9. Weeds. “Weeds” means unsuitable, unwanted, or uncultivated vegetation, often causing injury to the desired vegetation type. 615.03. Weed inspector. As provided by state law, the mayor is the weed inspector. These duties may be assigned to the city manager or the city manager’s designee. 615.05. General rules. Subdivision 1. Lot areas. All lot areas not designated for buildings, pedestrians or vehicles, parking, recreation, and storage shall be provided with turf grass, native vegetation, or combined ground cover of cultivated vegetation, garden, hedges, trees and shrubbery. Subd. 2. Noxious weed prohibition. No owner or occupant of any lot shall allow any noxious weeds to grow on any part or portion of said lot. Subd. 3. Height limitation. No owner or occupant shall allow any turf grass, weeds, or rank vegetation to grow to a height greater than eight inches on any lot or parcel of land. However, a native vegetation permit exempts an owner or occupant from this subsection. The height of native vegetation shall be as stated in the native vegetation permit. 615.07. Native vegetation permit. Subdivision 1. Application. The application for a native vegetation permit and renewal application, which shall be provided by the city manager, or its designee, shall contain the following: (a) The Latin and common names of the species the property owner or occupant plans to cultivate. (b) A maintenance plan, which shall contain the following: (1) A planting diagram showing the location and mature height of all specimens of native vegetation; and 6.5 14 (2) Detailed information on the upkeep of the planting and any long-term maintenance requirements. Subd. 2. Permit issuance. Upon submission of an application in accordance with this subsection, the city manager, or its designee, shall review the application and either approve or deny it. If approved and issued, the permit grants any property owner or occupant with written permission of the owner the ability to cultivate native vegetation on the applicable property. A native vegetation permit shall be valid for five years from the date of approval. The city manager, or its designee, shall not approve a permit for any applicant having unresolved city code violations or administrative citations. 615.09. Compliance. The city manager, or its designee, may regularly inspect any property holding a native vegetation permit for compliance with the maintenance plan on file with the city. For any property out of compliance with the maintenance plan, the city manager, or its designee, shall provide mailed notice to the permit holder requiring that the property conform to the maintenance plan within 30 days. Should that period pass without action by the permit holder, the city manager, or its designee, shall: (a) Revoke the native vegetation permit; (b) Remove all improperly maintained native vegetation; (c) Declare the property ineligible for a native vegetation permit, unless sold, for a period of two years; and (d) Assess the property for all fees associated with any removal of improperly maintained native vegetation in accordance with Minnesota Statutes, section 429.101 and subsection 8.02 of the city charter. 615.11. Additional exemptions. Subdivision 1. Exemptions. The following exemptions shall apply according to their terms. Subd. 2. Vacant land. The owner of vacant and unoccupied land consisting of a contiguous tract of one acre or more is exempt from the eight-inch limit, provided that weeds, turf grass, native vegetation, and rank vegetation thereon are cut at least twice annually. The first cutting shall not be later than June 1, and the last cutting shall be no earlier than July 15. Subd. 3. Natural habitat. (a) All private lands designated by the city council as natural habitat shall be exempt from the provisions of this section. (b) All public lands designated in the city’s comprehensive plan as natural habitat shall be exempt from the provisions of this section. Subd. 4. Rain gardens. An area comprised of a rain garden is exempt from the eight-inch 6.5 15 limit. However, in no event shall a rain garden contain noxious weeds and all rain gardens shall be maintained by the owner or occupant to ensure that they properly function and meet all other requirements of this section. 615.13. Penalty. A person who fails or neglects to cut and remove or otherwise eradicate weeds or grass as directed in this section, or who fails, neglects, or refuses to comply with the provisions of any notice provided under this section, or who violates any provision of this section, or who resists or obstructs the cutting, removal, or eradication of weeds or grass under this section, is guilty of a misdemeanor. Each day on which the violation continues is a separate offense. Section 620 – Warning signs for pesticide application 620.01. Definitions. For purposes of this section, the following terms shall have the meanings given them. Subd. 1. Commercial applicator. “Commercial applicator” means a person who is engaged in the business of applying fertilizer for hire. Subd. 2. Fertilizer. “Fertilizer” means a substance containing one or more recognized plant nutrients that is used for its plant nutrient content and designed for use or claimed to have value in promoting plant growth. Fertilizer does not include animal and vegetable manures that are not manipulated, marl, lime, limestone, and other products exempted by Rule by the Minnesota Commissioner of Agriculture. Subd. 3. Noncommercial applicator. “Noncommercial applicator” means a person who applies fertilizer during the course of employment, but who is not a commercial lawn fertilizer applicator. Subd. 4. Pesticide. “Pesticide” means a substance or mixture of substances intended to prevent, destroy, repel, or mitigate a pest, and a substance or mixture of substances intended for use as a plant regulator, defoliant or desiccant. 620.03. Warning signs for pesticide application. All commercial or noncommercial applicators that apply pesticides to turf areas must post or affix warning signs on the property where the pesticides are applied. The warning signs shall comply with the requirements of Minnesota Statutes, section 18B.09, subdivision 3. 620.05. Penalty. Any person violating this section shall be guilty of a petty misdemeanor. Section 625 - Noise control 625.01. General rule. No person shall cause to be made any loud audible noises that unreasonably or unnecessarily annoy, disturb, or cause any breach of peace. Any person who causes such noise that can be heard from the exterior of their structure or property, whether public or private, or motor vehicle is in violation of his section. 6.5 16 625.03. Unlawful noises. Subdivision 1. Prohibited. The following acts are declared to be loud, disturbing, and unnecessary noises in violation of this section, but said enumeration shall not be deemed to be exclusive. Subd. 2. Horns, signaling devices, etc. The sounding of any horn or signaling device on any automobile, motorcycle, or other vehicle, except as a danger warning. Subd. 3. Noise amplifying devices and musical instruments. The using, operating, or permitting to be played any musical instrument or other machine or device that is used for the production or reproduction of sound in such manner as to disturb the peace, quiet or repose of a person or persons of ordinary sensibilities. (a) The use or operation of any musical instrument or other machine or device for the production or reproduction of sound in such a manner as to be plainly audible at a distance of fifty (50) feet from such instrument, machine, or device shall be prima facie evidence of a violation of this section. (b) When sound violating this section is produced or reproduced by a machine or device that is located in or on a vehicle, the person in charge or control of the vehicle at the time of the violation is guilty of the violation. (c) This section shall not apply to sound produced by the following: (1) Amplifying equipment used in connection with activities which are authorized, sponsored or permitted by the city, so long as the activity is conducted pursuant to the conditions of the license, permit or contract authorizing such activity; (2) Church bells, chimes or carillons; (3) School bells; (4) Anti-theft devices; and (5) Machines or devices for the production of sound on or in authorized emergency vehicles. Subd. 4. Yelling, shouting, etc. Yelling, shouting, hooting, whistling, or singing at any time or place so as to unreasonably annoy or disturb the quiet, comfort or repose of persons in any office, or in any dwelling, hotel, motel, or other place of residence, or of any persons in the vicinity. Subd. 5. Animals, birds, etc. No person shall keep any animal that unreasonably disturbs the comfort or repose of persons in the vicinity. Subd. 6. Whistles or sirens. The blowing of a locomotive whistle or steam whistle 6.5 17 attached to any stationary boiler or any siren whatsoever except to give notice of the time to begin or stop work or as a warning of fire or danger (or to test such equipment), or by public emergency vehicles. Subd. 7. Exhausts. The discharge into the open air of the exhaust of any vehicle except through a muffler or other device which will effectively prevent loud or explosive noises therefrom. Subd. 8. Defect in vehicle or load. The use of any automobile, motorcycle, or vehicle so out of repair, so loaded, or in such manner as to create a loud and unnecessary grating, grinding, rattling, or other noise which shall disturb the comfort or repose of any persons in the vicinity. Subd. 9. Loading, unloading, opening boxes. The creation of a loud and excessive noise in connection with loading or unloading any vehicle or the opening and destruction of bales, boxes, crates, on containers. Subd. 10. Construction or repairing of buildings. No person shall engage in the erection (including excavating), demolition, alteration, or repair of any building except between the hours of 7:00 a.m. and 10:00 p.m. on any weekday or between the hours of 8:00 a.m. and 9:00 p.m. on any weekend or holiday, further excepting that the building inspector may, in cases of emergency, grant permission to repair at any time when said inspector finds that such repair work will not affect the health and safety of the persons in the vicinity. When such construction is authorized by the building inspector, the inspector shall inform the city clerk of the permit. Subd. 11. Schools, courts, churches, hospitals. The creation of any excessive noise on any street or private property adjacent to any school, institution of learning, church, court, or hospital while the same are in use which unreasonably interferes with the use thereof provided conspicuous signs are displayed in such streets indicating that the same is a school, hospital or court street. Subd. 12. Noisy parties and gatherings. No person shall, between the hours of 10:00 p.m. and 7:00 a.m., congregate at, or participate in any party or gathering of two or more people from which noise emanates of a sufficient volume so as to disturb the peace, quiet, or repose of another person. No person shall knowingly remain at such a noisy party or gathering. (a) Noise of such volume as to be clearly audible at a distance of 50 feet from the structure or building in which the party or gathering is occurring, or in the case of apartment buildings, in the adjacent hallway or apartment, shall be prima facie evidence of a violation of this section. (b) When a police officer determines that a party or gathering is in violation of this section, the officer may order all persons present at the premises where the violation is occurring, other than the owner or tenants of the premises, to disperse immediately. No person shall knowingly remain at such a party or gathering. (c) The following are exempt from violation of this section: 6.5 18 (1) Activities which are duly organized, sponsored or licensed by the city, so long as the activity is conducted pursuant to the conditions of the license, permit or contract authorizing such activity; (2) Church bells, chimes or carillons; and (3) Persons who have gone to a party for the sole purpose of abating the violation. (d) Every owner or tenant of the premises where a party or gathering in violation of this subsection occurs, who is present at such party or gathering, is guilty of a misdemeanor. Any person who refuses to disburse from a party or gathering in violation of this section after being ordered by a police officer to do so, is guilty of a misdemeanor. Subd. 13. Noise standards. Any noise that exceeds the noise standards established in Minnesota Rules, chapter 7030, which is incorporated in and made part of this section. 625.05. Exemptions authorized. Upon special request made by contractors, the city council may exempt contractors performing public works operations from the requirements set forth in this section. 625.07. Penalty. Any person who violates any part of this section shall be guilty of a misdemeanor. ARTICLE II. This ordinance is effective upon adoption and 30 days after publication. First Reading: ____________, 2017 Second Reading: __________, 2017 Council Adoption:_________, 2017 Publication: Effective Date: BY THE CITY COUNCIL Jim Adams, Mayor ATTEST: ____________________________ Christina Serres, City Clerk 6.5 Memorandum DATE: August 10, 2017 TO: Mayor and City Council FROM: Anne Norris, City Manager SUBJECT: Ordinance amending Section 211 of the City Code BACKGROUND: Earlier this year the City Council discussed indexing Council salaries to some regional benchmark. At its July work session, the Council discussed using the percentage increase to the compensation limit established annually by the Minnesota Office of Management and Budget for local government employees as the index. Attached is an ordinance amending Section 211 of the City Code making this change. RECOMMENDATION: Recommend approval of the first reading of the ordinance amending Section 211 of the City Code. Attach: 6.6 504535v1 TJG CR225-423 CITY OF CRYSTAL ORDINANCE #2017-____ AN ORDINANCE AMENDING SECTION 211.01 OF THE CRYSTAL CITY CODE The City Council of the City of Crystal ordains: Section 1. Chapter II, Section 211.01 of the Crystal city code is hereby amended by adding a new subdivision 2 as follows: Subd. 2. Salary Adjustments. On or before December 1 of even numbered years beginning in 2018, the annual salaries of the mayor and other members of the city council shall be adjusted, as provided in this subdivision, with an effective date of January 1 in the following year. The salaries shall be adjusted and fixed by increasing them in the same amount as the most current percentage increase (CPI-U) in the Compensation Limit for Local Government Employees annually published by the Minnesota Office of Management and Budget, pursuant to Minnesota Statutes, section 43A.17. Section 2. This ordinance is effective upon adoption and 30 days after publication. First Reading: ____________, 2017 Second Reading: __________, 2017 Council Adoption:_________, 2017 Publication: Effective Date: BY THE CITY COUNCIL Jim Adams, Mayor ATTEST: ____________________________ Christina Serres, City Clerk 6.6 CCCRRRYYYSSSTTTAAALLL PPPOOOLLLIIICCCEEE DDDEEEPPPAAARRRTTTMMMEEENNNTTT “Service with Compassion, Integrity, & Professionalism” TO: Mayor and Council Members FROM: Stephanie K. Revering, Chief of Police CC: Anne Norris, City Manager DATE: August 10, 2017 SUBJECT: COUNCIL MEETING: August 15, 2017 ___________________________________________________________________________ MMEEMMOORRAANNDDUUMM As you are aware, the police department receives prosecutorial services from MacMillan, Wallace & Athanases, PLLC. Attached to this memorandum is a 2018 Legal Services Agreement. The compensation terms are at the same level as they are in 2017. Staff is asking for approval or the 2018 agreement. Thank you and if you have any questions please let me know. 6.7 6.7 6.7 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 Memorandum DATE: August 15, 2017 TO: Mayor and City Council Anne Norris, City Manager FROM: Jean McGann, AEM Financial Solutions, LLC SUBJECT: Consideration of a Resolution Awarding the Sale of General Obligation Improvement Bonds, Series 2017A, In the original aggregate principal amount of $4,955,000; fixing their form and specifications; directing their execution and delivery; and providing for their payment Background The Phase 16 Street construction is underway. This is the last phase of a program which reconstructs all streets within the City. A Public Hearing for assessments as well as the final assessment and award of contracts associated with this project were completed in April of this year. On July 18, 2017 the City Council approved a resolution providing for the issuance and sale of General Obligation Improvement Bonds, Series 2017A, in the approximately aggregate principal amount of $4,955,000. Discussion The City Council is asked to consider awarding the sale of bonds which will finance the special assessment component of the Phase 16 construction. It is anticipated the special assessments levied for Phase 16 will be sufficient to make all principal and interest payments on the bonds. The bonds will be general obligations of the City. This means the City pledges its full faith and credit and power to levy general property taxes, if needed, to repay the bonds. An application for a rating on the Bonds was been made to Moody’s Investors Service. The last rating from Moody’s was an Aa2 made on July 14, 2016. The City was notified on August 8, 2017 that Moody’s has reaffirmed the rating of Aa2 for this new bond issue as well as all previous outstanding bond issues. 6.9 Proposals from potential buyers will be received at the offices of Springsted until 10:00 AM on August 15, 2017. Paul Steinman, Vice-President at Springsted, will be presenting the results of the sale during the Council meeting. Conclusion The City Council is requested to review and approve the resolution authorizing the sale of approximately $4,955,000 in General Obligation Improvement Bonds, Series 2017A. The Resolution awarding the Sale was prepared by Kennedy & Graven. The credit rating report prepared by Moody’s is also attached. 6.9 503179v1 MNI CR225-445 Extract of Minutes of Meeting of the City Council of the City of Crystal, Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Crystal, Minnesota, was duly held in the City Hall in said City on Tuesday, August 15, 2017, commencing at 7:00 P.M. The following members were present: and the following were absent: * * * * * * * * * The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City’s General Obligation Improvement Bonds, Series 2017A, in the original aggregate principal amount of $________. The City Manager presented a tabulation of the proposals that had been received in the manner specified in the Terms of Proposal for the Bonds. The proposals were as set forth in EXHIBIT A attached. After due consideration of the proposals, Member ____________________ then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: 6.9 503179v1 MNI CR225-445 2 RESOLUTION NO. ______ A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2017A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $________; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the City Council of the City of Crystal, Hennepin County, Minnesota (the “City”) as follows: Section 1. Sale of Bonds. 1.01. Authorization. Pursuant to a resolution adopted by the City Council of the City on July 18, 2017, the City provided preliminary approval to issue and sell its General Obligation Improvement Bonds, Series 2017A (the “Bonds”), pursuant to Minnesota Statutes, Chapters 429 and 475, as amended (the “Act”), in order to finance certain assessable public improvements designated as the Phase 16 Street Reconstruction Project, including but not limited to gravel base, concrete curb and gutter, boulevard restoration and bituminous surfacing construction, and in some areas drain tile, rain garden and storm sewer construction (collectively, the “Improvements”). 1.02. Award to the Purchaser and Interest Rates. The proposal of __________________ (the “Purchaser”) to purchase the Bonds of the City described in the Terms of Proposal thereof is determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $__________ (par amount of $________, [plus original issue premium of $_________,] [less original issue discount of $__________,] less underwriter’s discount of $________), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2019 % 2027 % 2020 2028 2021 2029 2022 2030 2023 2031 2024 2032 2025 2033 2026 True interest cost: ________________% 1.03. Purchase Contract. The amount proposed by the Purchaser in excess of the minimum bid shall be credited to the Debt Service Fund hereinafter created or deposited in the Construction Fund hereinafter created, as determined by the Finance Director of the City in consultation with the City’s municipal advisor. The Finance Director is directed to deposit the good faith check or deposit of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith deposits of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 6.9 503179v1 MNI CR225-445 3 1.04. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Act in the total principal amount of $________, originally dated September 14, 2017, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2019 $ 2027 $ 2020 2028 2021 2029 2022 2030 2023 2031 2024 2032 2025 2033 2026 1.05. Optional Redemption. The City may elect on February 1, 2027, and on any day thereafter to prepay Bonds due on or after February 1, 2028. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in Section 7 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. [1.06. Mandatory Redemption; Term Bonds. To be completed if Term Bonds are requested by the Purchaser.] Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2018, to the registered owners of record as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the 6.9 503179v1 MNI CR225-445 4 registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner’s attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner’s order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. 6.9 503179v1 MNI CR225-445 5 (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Registrar. The City appoints U.S. Bank National Association, St. Paul, Minnesota as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon thirty (30) days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the Finance Director must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in EXHIBIT B attached hereto with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Execution of Bonds. The Bonds will be printed or typewritten in substantially the form attached hereto as EXHIBIT B. 3.02. Approving Legal Opinion. The City Manager is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, 6.9 503179v1 MNI CR225-445 6 which will be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. Section 4. Payment; Security; Pledges and Covenants. 4.01. Debt Service Fund. The Bonds are payable from the General Obligation Improvement Bonds, Series 2017A Debt Service Fund (the “Debt Service Fund”) hereby created, and the proceeds of special assessments levied or to be levied (the “Assessments”) for the Improvements described in Section 1.01 hereof are hereby pledged to the Debt Service Fund. There is hereby appropriated to the Debt Service Fund (i) capitalized interest financed with proceeds of the Bonds, if any; and (ii) amounts over the minimum purchase price of the Bonds paid by the Purchaser, to the extent deposited therein, in accordance with Section 1.03 hereof. 4.02. Construction Fund. The proceeds of the Bonds, less the appropriations made in Section 4.01, plus a portion of the amount over the minimum purchase price of the Bonds paid by the Purchaser, together with any other funds appropriated for the Improvements and Assessments collected during the construction of the Improvements, will be deposited in a separate construction fund (the “Construction Fund”) to be used solely to defray expenses of the Improvements and the payment of principal of and interest on the Bonds prior to the completion and payment of all costs of the Improvements. Any balance remaining in the Construction Fund after completion of the Improvements may be used to pay the cost in whole or in part of any other improvement instituted under the Act under the direction of the City Council. When the Improvements are completed and the cost thereof paid, the Construction Fund is to be closed and subsequent collections of Assessments for the Improvements are to be deposited in the Debt Service Fund. 4.03. City Covenants. It is hereby determined that the Improvements will directly and indirectly benefit abutting property, and the City hereby covenants with the holders from time to time of the Bonds as follows: (a) The City has caused or will cause the Assessments for the Improvements to be promptly levied so that the first installment will be collectible not later than 2018 and will take all steps necessary to assure prompt collection, and the levy of the Assessments is hereby authorized. The City Council will cause to be taken with due diligence all further actions that are required for the construction of each Improvement financed wholly or partly from the proceeds of the Bonds, and will take all further actions necessary for the final and valid levy of the Assessments and the appropriation of any other funds needed to pay the Bonds and interest thereon when due. (b) In the event of any current or anticipated deficiency in Assessments, the City Council will levy ad valorem taxes in the amount of the current or anticipated deficiency. (c) The City will keep complete and accurate books and records showing receipts and disbursements in connection with the Improvements, Assessments levied therefor and other funds appropriated for their payment, collections thereof and disbursements therefrom, monies on hand and, the balance of unpaid Assessments. (d) The City will cause its books and records to be audited at least annually and will furnish copies of such audit reports to any interested person upon request. (e) One hundred percent (100%) of the cost of the assessable Improvements described herein will be specially assessed against benefited properties. 6.9 503179v1 MNI CR225-445 7 4.04. General Obligation Pledge. If a payment of principal of or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the Finance Director will pay the principal or interest from the general fund of the City, and the general fund will be reimbursed for those advances out of the proceeds of Assessments when collected. 4.05. Debt Service Coverage. It is hereby determined that the estimated collection of Assessments for the payment of principal and interest on the Bonds will produce at least five percent (5%) in excess of the amount needed to meet, when due, the principal and interest payments on the Bonds and that no tax levy is needed at this time. 4.06. Certificate of Taxpayer Services Division Manager as to Registration. The City Clerk is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager of Hennepin County, Minnesota, and to obtain the certificate required by Section 475.63 of the Act. Section 5. Authentication of Transcript. 5.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 5.02. Certification as to Official Statement. The Mayor, City Manager, and Finance Director are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 5.03. Other Certificates. The Mayor, the City Manager, and the Finance Director are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the City or incumbency of its officers, at the closing the Mayor, the City Manager, and the Finance Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Finance Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds. Section 6. Tax Covenant. 6.01. Tax-Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 6.9 503179v1 MNI CR225-445 8 6.02. No Rebate Required. (a)The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States, if the Bonds (together with other obligations reasonably expected to be issued in calendar year 2017) exceed the small-issuer exception amount of $5,000,000. (b)For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the City finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code. 6.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be “private activity bonds” within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. Qualified Tax-Exempt Obligations. In order to qualify the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not “private activity bonds” as defined in Section 141 of the Code; (b)the City designates the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code; (c)the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds which are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2017 will not exceed $10,000,000; and (d)not more than $10,000,000 of obligations issued by the City during calendar year 2017 have been designated for purposes of Section 265(b)(3) of the Code. 6.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 7. Book-Entry System; Limited Obligation of City. 7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (“DTC”). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 7.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent 6.9 503179v1 MNI CR225-445 9 will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City’s obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words “Cede & Co.” will refer to such new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 7.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which shall govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 7.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificate, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owner in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 7.05. Payments to Cede & Co. Notwithstanding any other provision of this resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and all notices with respect to the Bond will be made and given, respectively in the manner provided in DTC’s Operational Arrangements, as set forth in the Representation Letter. 6.9 503179v1 MNI CR225-445 10 Section 8. Continuing Disclosure. 8.01. Execution of Continuing Disclosure Certificate. “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 8.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 9. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. (The remainder of this page is intentionally left blank.) 6.9 503179v1 MNI CR225-445 11 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 the same: whereupon said resolution was declared duly passed and adopted. 6.9 503179v1 MNI CR225-445 A-1 EXHIBIT A PROPOSALS 6.9 503179v1 MNI CR225-445 B-1 EXHIBIT B FORM OF BOND No. R-_____ UNITED STATES OF AMERICA $__________ STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF CRYSTAL GENERAL OBLIGATION IMPROVEMENT BOND SERIES 2017A Rate Maturity Date of Original Issue CUSIP % February 1, 20__ September 14, 2017 Registered Owner: Cede & Co. The City of Crystal, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the “City”), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above or registered assigns, the principal sum of $_______ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above (calculated on the basis of a 360 day year of twelve 30 day months), payable February 1 and August 1 in each year, commencing August 1, 2018, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, St. Paul, Minnesota, as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1, 2027, and on any day thereafter to prepay Bonds due on or after February 1, 2028. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company (“DTC”) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. The City Council has designated the issue of Bonds of which this Bond forms a part as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. This Bond is one of an issue in the aggregate principal amount of $________ all of like original issue date and tenor, except as to number, maturity date, redemption privilege, and interest rate, all issued pursuant to a resolution adopted by the City Council on August 15, 2017 (the “Resolution”), for the 6.9 503179v1 MNI CR225-445 B-2 purpose of providing money to defray the expenses incurred and to be incurred in making local improvements, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapters 429 and 475, as amended, and the principal hereof and interest hereon are payable from special assessments against property specially benefited by local improvements, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in special assessments, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner’s attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner’s attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota, to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Crystal, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. Dated: September 14, 2017 CITY OF CRYSTAL, MINNESOTA (Facsimile) (Facsimile) Mayor City Manager _________________________________ 6.9 503179v1 MNI CR225-445 B-3 CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION By Authorized Representative _________________________________ ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT _________ Custodian _________ (Cust) (Minor) TEN ENT -- as tenants by entireties under Uniform Gifts or Transfers to Minors Act, State of _______________ JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ________________________________________ ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto ________________________________________ the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint _________________________ attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor’s signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. 6.9 503179v1 MNI CR225-445 B-4 Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”), the New York Stock Exchange, Inc. Medallion Signatures Program (“MSP”) or other such “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee ________________________________________ PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration Registered Owner Signature of Officer of Registrar Cede & Co. Federal ID #13-2555119 6.9 503179v1 MNI CR225-445 STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) SS. ) CITY OF CRYSTAL ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Crystal, Hennepin County, Minnesota (the “City”), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on August 15, 2017, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City’s General Obligation Improvement Bonds, Series 2017A, in the original aggregate principal amount of $________. WITNESS My hand officially as such City Clerk and the corporate seal of the City this ____ day of ________, 2017. City Clerk City of Crystal, Minnesota (SEAL) 6.9 503179v1 MNI CR225-445 STATE OF MINNESOTA COUNTY OF HENNEPIN CERTIFICATE OF TAXPAYER SERVICES DIVISION MANAGER AS TO REGISTRATION WHERE NO AD VALOREM TAX LEVY I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby certify that a resolution adopted by the City Council of the City of Crystal, Minnesota (the “City”), on August 15, 2017, relating to the City’s General Obligation Improvement Bonds, Series 2017A, dated September 14, 2017, in the original aggregate principal amount of $________, has been filed in my office and said obligations have been registered on the register of obligations in my office. WITNESS My hand and official seal this ____ day of __________, 2017. Taxpayer Services Division Manager Hennepin County, Minnesota (SEAL) Deputy County Auditor 6.9 U.S. PUBLIC FINANCE CREDIT OPINION 8 August 2017 New Issue Contacts Francis A Mamo 212-553-3826 Analyst frank.mamo@moodys.com Alexandra S. Parker 212-553-4889 MD-Public Finance alexandra.parker@moodys.com David Levett 312-706-9990 AVP-Analyst david.levett@moodys.com CLIENT SERVICES Americas 1-212-553-1653 Asia Pacific 852-3551-3077 Japan 81-3-5408-4100 EMEA 44-20-7772-5454 City of Crystal, MN New Issue: Moody's assigns Aa2 to Crystal, MN's 2017 GO bonds Summary Rating Rationale Moody's Investors Service has assigned a Aa2 to the City of Crystal, MN's $5.0 million General Obligation Improvement Bonds, Series 2017A. Moody's also maintains the Aa2 rating on the city's outstanding general obligation unlimited tax (GOULT) bonds. Following the sale, the city will have $18.9 million of GOULT debt outstanding. The Aa2 rating reflects the city's stable financial operations, very strong reserves, and manageable debt and pension burden. Additionally incorporated into the rating is the city's moderately sized tax base which serves as a bedroom community for the broader Twin Cities metropolitan area and resident income levels that are below average for the Aa2 rating category. Credit Strengths » Stable financial operations and very healthy reserves » Manageable debt burden Credit Challenges » Below average wealth levels for similarly rated cities Rating Outlook Moody's does not typically assign outlooks to local governments with this amount of debt. Factors that Could Lead to an Upgrade » Significant expansion of the tax base » Strengthening of socioeconomic characteristics Factors that Could Lead to a Downgrade » Deterioration in the tax base or weakening of socioeconomic characteristics » Prolonged operating deficits and/or a significant reduction in reserves » Significant increase in the city's debt or pension burden 6.9 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Key Indicators Exhibit 1 Crystal (City of) MN 2012 2013 2014 2015 2016 E conomy/Tax Base Total Full Value ($000) $ 1,392,171 $ 1,347,506 $ 1,423,119 $ 1,557,406 $ 1,644,786 Full Value Per Capita $ 62,592 $ 60,261 $ 63,365 $ 68,890 $ 71,976 Median Family Income (% of US Median)108.3% 109.9% 109.0% 106.3% 106.3% Finances Operating Revenue ($000) $ 14,752 $ 15,417 $ 15,227 $ 14,765 $ 14,632 Fund Balance as a % of Revenues 80.0% 85.3% 84.9% 91.7% 87.4% Cash Balance as a % of Revenues 82.3%88.5%90.7% 93.0% 89.9% Debt/Pensions Net Direct Debt ($000) $ 13,554 $ 15,877 $ 13,686 $ 14,956 $ 15,901 Net Direct Debt / Operating Revenues (x)0.9x 1.0x 0.9x 1.0x 1.1x Net Direct Debt / Full Value (%)1.0% 1.2% 1.0% 1.0% 1.0% Moody's - adjusted Net Pension Liability (3-yr average) to Revenues (x)1.6x 1.6x 1.7x 1.6x 2.1x Moody's - adjusted Net Pension Liability (3-yr average) to Full Value (%)1.7% 1.8% 1.8% 1.5% 1.9% Post-sale net direct debt is $18.9 million; net direct debt/full value 1.1%; and net direct debt/operating revenues 1.3x. Total Full Value for 2017 is $1.8 billion. Source: City of Crystal, MN's Audited Financial Statements; Moody's Investors Service; U.S. Census Bureau Recent Developments Since Moody's last report dated July 14, 2016, the city released audited financial statements for fiscal 2016 that show an $826,000 use of reserves across the general and debt service funds that brought available fund balance to $12.8 million or a still very healthy 87.4% of operating revenues. The draw was a planned use of reserves for various one time capital needs as well as early retirement of the city's Series 2005A and 2006A bonds. Issuance of the Series 2017A bonds is the only other material development. Detailed Rating Considerations Economy and Tax Base: Moderately sized Twin Cities suburb We expect the city's mature tax base to remain stable given recovering housing valuation and limited room for future development. Fully valued at $1.8 billion (2017 economic market value), the tax base has experienced several years of growth, including 5.6% and 6.7% in 2016 and 2017, respectively. Officials attribute a majority of the recent growth to a recovering housing market following the recession; however, residential development activity has aided these trends. While mostly built out, the city has two residential subdivisions with a total of 24 lots that are in the process of being completed. Additionally, the city's Economic Development Authority has continued its practice of buying blighted, abandoned, or vacant homes for redevelopment. Given the city's built-out and mature tax base, population trends have been flat to declining for a number of years. Estimated 2015 population was 22,607, 0.5% below 2000 and 5.0% below 1990. Residents benefit from employment opportunities throughout the Twin Cities metro. As of May 2017, unemployment was 3.2%, in line with the state (3.4%) and below the national (4.1%) rate for the same period. Resident income levels approximate the nation, but are below average for the Aa2 rating category, with median family income at 106.3% of the national median. Financial Operations and Reserves: Stable financial operations; very strong reserves The city's financial position is expected to remain strong due to stable operations and management's commitment to maintaining a strong fund balance. The city has a history of healthy fund balances, typically ending the fiscal year with an available general and debt service fund balance in excess of 90% of revenues. While the city ended fiscal 2016 operationally balanced, it spent down $826,000 of its reserves due to planned capital projects and the early retirement of debt. Despite the draw, available fund balance remained very healthy, totaling $12.8 million or 87.4% of operating revenues. Officials budgeted for balanced operations in fiscal 2017 and year-to- This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. 2 8 August 2017 City of Crystal, MN: New Issue: Moody's assigns Aa2 to Crystal, MN's 2017 GO bonds 6.9 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE date results through June show revenues and expenditures closely tracking budgeted estimates. The city has no additional plans to spend down reserves for one time needs. LIQUIDITY Net cash across the city's operating funds is strong and totaled $13.2 million, or 89.9% of operating revenues, at the end of fiscal 2016. Debt and Pensions: Manageable debt and pension burden The city's debt and pension burden is expected to remain manageable given no additional borrowing plans in the near term. Following the sale of the Series 2017A bonds, the city's direct debt will be $18.9 million, equal to an average 1.1% of full value and 1.3x operating revenue. In the three years through fiscal 2016, Moody's adjusted net pension liability (ANPL) for the city averaged $31.1 million, equal to 1.9% of full value and 2.1x operating revenue. The city's fixed costs, consisting of debt service and retirement contributions, are somewhat above average and consumed 24.6% of operating revenues in fiscal 2016. DEBT STRUCTURE All of the city's debt is fixed rate and amortizes over the long-term. Approximately 77.3% of the city's outstanding debt will be retired within ten years. DEBT-RELATED DERIVATIVES The city is not party to any interest rate swaps or other derivative agreements. PENSIONS AND OPEB The city participates in two multiple-employer cost-sharing plans, the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF). While ultimately dependent on state legislative action, pension contributions will likely rise to finance growing unfunded liabilities. Minnesota statutes establish local government retirement contributions as a share of annual payroll. The employer contribution rates are currently set at 7.5% of payroll for GERF and at 16.2% of payroll for PEPFF. Crystal's total fiscal 2016 pension contribution was $721,000, or 4.9% of operating revenues. In fiscal 2016, contributions to PEPFF and GERF from all participating governments in aggregate amounted to only 87% and 99%, respectively, of the plans' “tread water” indictors. Employer contributions that tread water equal the sum of current year service cost and interest on reported net pension liabilities at the start of the year. If plan assumptions are met exactly, contributions equal to the tread water indicator will prevent the reported net pension liabilities from growing. Other post-employment benefits (OPEB) do not represent a material credit risk for the city. The city administers a single-employer defined benefit healthcare plan. The plan provides healthcare insurance for eligible retirees and their spouses through the city's group health insurance plan, which covers both active and retired members. As of January 1, 2016, the most recent actuarial valuation date, the city's unfunded actuarial accrued liability for OPEB was a modest $0.9 million. Management and Governance: Strong institutional framework Crystal's management team has a formal policy to maintain a general fund balance of at least 45% of revenues. Management has consistently adjusted property tax rates to maintain level collections and balanced operations. Minnesota cities have an Institutional Framework score of Aa, which is high. Institutional Framework scores measure a sector's legal ability to increase revenues and decrease expenditures. The sector has one or more major revenue sources that are not subject to any caps. Revenues tend to be predictable, as cities rely primarily on property taxes and state Local Government Aid (LGA), which is distributed based on demographic and tax base factors. Revenue-raising flexibility is moderate as cities generally benefit from unlimited levying authority, except during years in which the state has imposed limits. Levy limits are not in place for the 2017-2019 biennium. Across the sector, fixed and mandated costs are generally moderate. Minnesota has public sector unions, which can limit the ability to cut expenditures. Expenditures mostly consist of personnel costs, which are highly predictable. Legal Security The Series 2017A bonds are ultimately secured by a dedicated property tax levy, unlimited as to rate and amount. The city expects to repay the debt with special assessment revenues. The security benefits from a statutory lien, but there is no lockbox structure. 3 8 August 2017 City of Crystal, MN: New Issue: Moody's assigns Aa2 to Crystal, MN's 2017 GO bonds 6.9 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Use of Proceeds The Series 2017A bonds will finance various street and utility improvement projects within the city. Obligor Profile The City of Crystal is a mature Twin Cities suburb that comprises 5.8 square miles. The population was recorded at 22,151 in the 2010 Census. Methodology The principal methodology used in this rating was US Local Government General Obligation Debt published in December 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology. Ratings Exhibit 2 Crystal (City of) MN Issue Rating General Obligation Improvement Bonds, Series 2017A Aa2 Rating Type Underlying LT Sale Amount $4,955,000 Expected Sale Date 08/15/2017 Rating Description General Obligation Source: Moody's Investors Service 4 8 August 2017 City of Crystal, MN: New Issue: Moody's assigns Aa2 to Crystal, MN's 2017 GO bonds 6.9 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE © 2017 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. 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REPORT NUMBER 1084671 5 8 August 2017 City of Crystal, MN: New Issue: Moody's assigns Aa2 to Crystal, MN's 2017 GO bonds 6.9 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Contacts Francis A Mamo 212-553-3826 Analyst frank.mamo@moodys.com CLIENT SERVICES Americas 1-212-553-1653 Asia Pacific 852-3551-3077 Japan 81-3-5408-4100 EMEA 44-20-7772-5454 6 8 August 2017 City of Crystal, MN: New Issue: Moody's assigns Aa2 to Crystal, MN's 2017 GO bonds 6.9 ________________________________ * Preliminary; subject to change. Th e i n f o r m a t i o n c o n t a i n e d i n t h i s P r e l i m i n a r y O f f i c i a l S t a t e m e n t i s d e e m e d b y t h e Ci t y to b e f i n a l a s o f t h e d a t e h e r e o f ; h o w e v e r , t h e p r i c i n g a n d u n d e r w r i t i n g i n f o r m a t i o n i s s u b j e c t t o c o m p l e t i o n o r a m e n d m e n t . Un d e r n o c i r c u m s t a n c e s s h a l l t h i s P r e l i m i n a r y O f f i c i a l S t a t e m e n t c o n s t i t u t e a n o f f e r t o s e l l o r t h e s o l i c i t a t i o n o f a n o f f e r to b u y, n o r s h a l l t h e r e b e a n y s a l e o f t h e s e s e c u r i t i e s i n a n y j u r i s d i c t i o n i n w h i c h s u c h o f f e r , so l i c i t a t i o n o r s a l e w o u l d b e u n l a w f u l p r i o r t o r e g i s t r a t i o n o r q u a l i f i c a t i o n u n d e r t h e s e c u r i t i e s l a w s o f a n y s u c h j u r i s d i c t io n . PRELIMINARY OFFICIAL STATEMENT DATED JULY 25, 2017 NEW ISSUE Moody’s Rating: Requested BANK QUALIFIED In the opinion of Kennedy & Graven, Chartered, Bond Counsel, based on present federal and Minnesota laws, regulations, ruling s and decisions, and assuming compliance with certain covenants, interest on the Bonds is excluded from gross income for federal in come tax purposes and, to the same extent, from taxable net income of individuals, estates and trusts for Minnesota income purposes, and is not a preference item for pu rposes of computing the federal alternative minimum tax or the Minnesota alternative min imum tax imposed on individuals, trusts, and estates. Such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain cor porations and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income. No opinion will be expressed by Bond Counsel regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Bonds or arising wit h respect to ownership of the Bonds. See “TAX EXEMPTION” and “OTHER FEDERAL TAX CONSIDERATIONS” herein for additional information. $4,955,000* City of Crystal, Minnesota General Obligation Improvement Bonds, Series 2017A (the “Bonds”) (Book Entry Only) Dated Date: Date of Delivery Interest Due: Each February 1 and August 1, commencing August 1, 2018 The Bonds will mature February 1 in the years and amounts* as follows: 2019 $460,000 2020 $360,000 2021 $355,000 2022 $345,000 2023 $340,000 2024 $335,000 2025 $330,000 2026 $320,000 2027 $315,000 2028 $310,000 2029 $305,000 2030 $300,000 2031 $295,000 2032 $295,000 2033 $290,000 Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth above. The City may elect on February 1, 2027, and on any day thereafter, to redeem Bonds due on or after February 1, 2028 at a price of par plus accrued interest. The Bonds are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special assessments against benefited properties for repayment of the Bonds. The proceeds of the Bonds will be used to finance various street and utility improvement projects within the City. Proposals shall be for not less than $4,905,450 plus accrued interest, if any, on the total principal amount of the Bonds. Proposals shall specify rates in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public as stated on the proposal for each maturity must be 98.0% or greater. Following receipt of proposals, a good faith deposit will be required to be delivered to the City by the lowest bidder as described in the “Terms of Proposal” herein. Award of the Bonds will be made on the basis of True Interest Cost (TIC). The City will designate the Bonds as “qualified tax-exempt obligations” pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The Bonds will be issued as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). DTC will act as securities depository for the Bonds. Individual purchases may be made in book entry form only, in the principal amount of $5,000 and integral multiples thereof. Investors will not receive physical certificates representing their interest in the Bonds purchased. (See “Book Entry System” herein.) U.S. Bank National Association, Saint Paul, Minnesota will serve as registrar (the “Registrar”) for the Bonds. The Bonds will be available for delivery at DTC on or about September 14, 2017. PROPOSALS RECEIVED: August 15, 2017 (Tuesday) until 10:30 A.M., Central Time AWARD: August 15, 2017 (Tuesday) at 7:00 P.M., Central Time Further information may be obtained from SPRINGSTED Incorporated, Municipal Advisor to the City, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101-2887 (651) 223-3000. 6.9 CITY OF CRYSTAL, MINNESOTA CITY COUNCIL Jim Adams Mayor John Budziszewski Council Member Elizabeth Dahl Council Member Julie Deshler Council Member Jeff Kolb Council Member Nancy LaRoche Council Member Olga Parsons Council Member CITY MANAGER Anne Norris FINANCE DIRECTOR/TREASURER Jean McGann MUNICIPAL ADVISOR Springsted Incorporated Saint Paul, Minnesota BOND COUNSEL Kennedy & Graven, Chartered Minneapolis, Minnesota 6.9 For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the City from time to time, may be treated as a Preliminary Official Statement with respect to the Bonds described herein that is deemed final as of the date hereof (or of any such supplement or correction) by the City. By awarding the Bonds to any underwriter or underwriting syndicate submitting a Proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded copies of the Final Official Statement in the amount specified in the Terms of Proposal. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Bonds, other than as contained in the Preliminary Official Statement or the Final Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the City. Certain information contained in the Preliminary Official Statement or the Final Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness or accuracy. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE PRELIMINARY OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE PRELIMINARY OFFICIAL STATEMENT NOR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE RESPECTIVE DATE THEREOF. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entiret y by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Preliminary Official Statement or the Final Official Statement, they will be furnished upon request. Any CUSIP numbers for the Bonds included in the Final Official Statement are provided for convenience of the owners and prospective investors. The CUSIP numbers for the Bonds are assigned by an organization unaffiliated with the City. The City is not responsible for the selection of the CUSIP numbers and makes no representation as to the accuracy thereof as printed on the Bonds or as set forth in the Final Official Statement. No assurance can be given by the City that the CUSIP numbers for the Bonds will remain the same after the delivery of the Final Official Statement or the date of issuance and delivery of the Bonds. 6.9 TABLE OF CONTENTS Page(s) Terms of Proposal .............................................................................................................................. i-v Introductory Statement ....................................................................................................................... 1 Continuing Disclosure ....................................................................................................................... 1 The Bonds .......................................................................................................................................... 2 Authority and Purpose ....................................................................................................................... 4 Sources and Uses of Funds ................................................................................................................ 4 Security and Financing ...................................................................................................................... 5 Future Financing ................................................................................................................................ 5 Litigation ............................................................................................................................................ 5 Legality .............................................................................................................................................. 5 Tax Exemption ................................................................................................................................... 5 Other Federal Tax Considerations ..................................................................................................... 6 Bank-Qualified Tax-Exempt Obligations .......................................................................................... 7 Rating ................................................................................................................................................. 7 Municipal Advisor ............................................................................................................................. 8 Certification ....................................................................................................................................... 8 City Property Values .......................................................................................................................... 9 City Indebtedness ............................................................................................................................... 10 City Tax Rates, Levies and Collections ............................................................................................. 12 Cash and Investments ........................................................................................................................ 13 General Information Concerning the City ......................................................................................... 14 Governmental Organization and Services .......................................................................................... 18 Proposed Form of Legal Opinion ............................................................................................ Appendix I Continuing Disclosure Certificate ............................................................................................ Appendix II Summary of Tax Levies, Payment Provisions, and Minnesota Real Property Valuation ..................................................................................... Appendix III Excerpt of 2016 Comprehensive Annual Financial Report ..................................................... Appendix IV 6.9 ________________________________ * Preliminary; subject to change. - i - THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $4,955,000* CITY OF CRYSTAL, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2017A (BOOK ENTRY ONLY) Proposals for the above-referenced obligations (the “Bonds”) will be received by the City of Crystal, Minnesota (the “City”) on Tuesday, August 15, 2017 (the “Sale Date”) until 10:30 A.M., Central Time at the offices of Springsted Incorporated (“Springsted”), 380 Jackson Street, Suite 300, Saint Paul, Minnesota, 55101, after which time proposals will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at 7:00 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Springsted will assume no liability for the inability of a bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds regardless of the manner in which the proposal is submitted. (a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223-3046 to Springsted. Signed proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final proposal price and coupons, by telephone (651) 223-3000 or fax (651) 223-3046 for inclusion in the submitted proposal. OR (b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via PARITY®. For purposes of the electronic bidding process, the time as maintained by PARITY® shall constitute the official time with respect to all proposals submitted to PARITY®. Each bidder shall be solely responsible for making necessary arrangements to access PARITY® for purposes of submitting its electronic proposal in a timely manner and in compliance with the requirements of the Terms of Proposal. Neither the City, its agents, nor PARITY® shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the City, its agents, nor PARITY® shall be responsible for a bidder’s failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or interruptions of or any damages caused by the services of PARITY®. The City is using the services of PARITY® solely as a communication mechanism to conduct the electronic bidding for the Bonds, and PARITY® is not an agent of the City. If any provisions of this Terms of Proposal conflict with information provided by PARITY®, this Terms of Proposal shall control. Further information about PARITY®, including any fee charged, may be obtained from: PARITY®, 1359 Broadway, 2nd Floor, New York, New York 10018 Customer Support: (212) 849-5000 6.9 - ii - DETAILS OF THE BONDS The Bonds will be dated as of the date of delivery and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 2018. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Bonds will mature February 1 in the years and amounts* as follows: 2019 $460,000 2020 $360,000 2021 $355,000 2022 $345,000 2023 $340,000 2024 $335,000 2025 $330,000 2026 $320,000 2027 $315,000 2028 $310,000 2029 $305,000 2030 $300,000 2031 $295,000 2032 $295,000 2033 $290,000 * The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds or the amount of any maturity or maturities in multiples of $5,000. In the event the amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same gross spread per $1,000 of Bonds as that of the original proposal. Gross spread for this purpose is the differential between the price paid to the City for the new issue and the prices at which the proposal indicates the securities will be initially offered to the investing public. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth above. In order to designate term bonds, the proposal must specify “Years of Term Maturities” in the spaces provided on the proposal form. BOOK ENTRY SYSTEM The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company (“DTC”), New York, New York, which will act as securities depository for the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The lowest bidder (the “Purchaser”), as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable regulations of the Securities and Exchange Commission. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The City may elect on February 1, 2027, and on any day thereafter, to redeem Bonds due on or after February 1, 2028. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be redeemed. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All redemptions shall be at a price of par plus accrued interest. 6.9 - iii - SECURITY AND PURPOSE The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special assessments against benefited properties for repayment of the Bonds. The proceeds of the Bonds will be used to finance various street and utility improvement projects within the City. BIDDING PARAMETERS Proposals shall be for not less than $4,905,450 plus accrued interest, if any, on the total principal amount of the Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals on the Sale Date unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public as stated on the proposal for each maturity must be 98.0% or greater. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will be accepted. ESTABLISHMENT OF ISSUE PRICE PRIOR TO CLOSING In order to provide the City with information necessary for compliance with Section 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the “Code”), the Purchaser will be required to assist the City in establishing the issue price of the Bonds and shall complete, execute, and deliver to the City prior to the closing date, a written certification in a form acceptable to the Purchaser, the City, and Bond Counsel (the “Issue Price Certificate”) containing the following for each maturity of the Bonds (and, if different interest rates apply within a maturity, to each separate CUSIP number within that maturity): (i) the interest rate; (ii) the reasonably expected initial offering price to the “public” (as said term is defined in Treasury Regulation Section 1.148-1(f) (the “Regulation”)) or the sale price; and (iii) pricing wires or equivalent communications supporting such offering or sale price. However, such Issue Price Certificate may indicate that the Purchaser has purchased the Bonds for its own account in a capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Bonds for sale to the public. Any action to be taken or documentation to be received by the City pursuant hereto may be taken or received on behalf of the City by Springsted. The City intends that the sale of the Bonds pursuant to this Terms of Proposal shall constitute a “competitive sale” as defined in the Regulation based on the following: (i) the City shall cause this Terms of Proposal to be disseminated to potential bidders in a manner that is reasonably designed to reach potential bidders; (ii) all bidders shall have an equal opportunity to submit a bid; (iii) the City reasonably expects that it will receive bids from at least three bidders that have established industry reputations for underwriting municipal bonds such as the Bonds; and (iv) the City anticipates awarding the sale of the Bonds to the bidder who provides a proposal with the lowest true interest cost, as set forth in this Terms of Proposal (See “AWARD” herein). Any bid submitted pursuant to this Terms of Proposal shall be considered a firm offer for the purchase of the Bonds, as specified in the proposal. The Purchaser shall constitute an “underwriter” as said term is defined in the Regulation. By submitting its proposal, the Purchaser confirms that it shall require any agreement among underwriters, a selling group agreement, or other agreement to which it is a party relating to the initial sale of the Bonds, to include provisions requiring compliance with the provisions of the Code and the Regulation regarding the initial sale of the Bonds. If all of the requirements of a “competitive sale” are not satisfied, the City shall advise the Purchaser of such fact prior to the time of award of the sale of the Bonds to the Purchaser. In such event, any proposal submitted will not be subject to cancellation or withdrawal. Within twenty-four (24) hours 6.9 - iv - of the notice of award of the sale of the Bonds, the Purchaser shall advise the City and Springsted if a “substantial amount” (as defined in the Regulation) of any maturity of the Bonds (and, if different interest rates apply within a maturity, to each separate CUSIP number within that maturity) has been sold to the public and the price at which such substantial amount was sold. The City will treat such sal e price as the “issue price” for such maturity, applied on a maturity-by-maturity basis. The City will not require the Purchaser to comply with that portion of the Regulation commonly described as the “hold-the-offering- price” requirement for the remaining maturities, but the Purchaser may elect such option. If the Purchaser exercises such option, the City will apply the initial offering price to the public provided in the proposal as the issue price for such maturities. If the Purchaser does not exercis e that option, it shall thereafter promptly provide the City and Springsted the prices at which a substantial amount of such maturities are sold to the public; provided such determination shall be made and the City and Springsted notified of such prices not later than three (3) business days prior to the closing date. GOOD FAITH DEPOSIT To have its proposal considered for award, the Purchaser is required to submit a good faith deposit to the City in the amount of $49,550 (the “Deposit”) no later than 1:30 P.M., Central Time on the Sale Date. The Deposit may be delivered as described herein in the form of either (i) a certified or cashier’s check payable to the City; or (ii) a wire transfer. The Purchaser shall be solely responsible for the timely delivery of its Deposit whether by check or wire transfer. Neither the City nor Springsted have any liability for delays in the receipt of the Deposit. If the Deposit is not received by the specified time, the City may, at its sole discretion, reject the proposal of the lowest bidder, direct the second lowest bidder to submit a Deposit, and thereafter award the sale to such bidder. Certified or Cashier’s Check. A Deposit made by certified or cashier’s check will be considered timely delivered to the City if it is made payable to the City and delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101 by the time specified above. Wire Transfer. A Deposit made by wire will be considered timely delivered to the City upon su bmission of a federal wire reference number by the specified time. Wire transfer instructions will be available from Springsted following the receipt and tabulation of proposals. The successful bidder must send an e-mail including the following information: (i) the federal reference number and time released; (ii) the amount of the wire transfer; and (iii) the issue to which it applies. Once an award has been made, the Deposit received from the Purchaser will be retained by the City and no interest will accrue to the Purchaser. The amount of the Deposit will be deducted at settlement from the purchase price. In the event the Purchaser fails to comply with the accepted proposal, said amount will be retained by the City. AWARD The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis calculated on the proposal prior to any adjustment made by the City. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the City determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION The City has not applied for or pre-approved a commitment for any policy of municipal bond insurance with respect to the Bonds. If the Bonds qualify for municipal bond insurance and a bidder desires to purchase a policy, such indication, the maturities to be insured, and the name of the desired insurer must be set forth on the bidder’s proposal. The City specifically reserves the r ight to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the City. All costs 6.9 - v - associated with the issuance and administration of such policy and associated ratings and expenses (other than any independent rating requested by the City) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Bonds shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Bonds. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the Purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the Purchaser. SETTLEMENT On or about September 14, 2017, the Bonds will be delivered without cost to the Purchaser through DTC in New York, New York. Delivery will be subject to receipt by the Purchaser of an approving legal opinion of Kennedy & Graven, Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation certificate. On the date of settlement, payment for the Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Bonds has been made impossible by action of the City, or its agents, the Purchaser shall be liable to the City for any loss suffered by the City by reason of the Purchaser's non-compliance with said terms for payment. CONTINUING DISCLOSURE In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution awarding sale of the Bonds, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Official Statement. The Purchaser's obligation to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Bonds. OFFICIAL STATEMENT The City has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Bonds, and said Preliminary Official Statement will serve as a near -final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Preliminary Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Municipal Advisor to the City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000. A Final Official Statement (as that term is defined in Rule 15c2 -12) will be prepared, specifying the maturity dates, principal amounts, and interest rates of the Bonds, together with any other information required by law. By awarding the Bonds to the Purchaser, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the Purchaser up to 25 copies of the Final Official Statement. The City designates the Purchaser as its agent for purposes of distributing copies of the Final Official Statement to each syndicate member, if applicable. The Purchaser agrees that if its proposal is accepted by the City, (i) it shall accept designation and (ii) it shall enter into a contractual relationship with its syndicate members for purposes of assuring the receipt of the Final Official Statement by each such syndicate member. Dated July 18, 2017 BY ORDER OF THE CITY COUNCIL /s/ Christina Serres City Clerk 6.9 ____________________________ * Preliminary; subject to change. - 1 - OFFICIAL STATEMENT $4,955,000* CITY OF CRYSTAL, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2017A (BOOK ENTRY ONLY) INTRODUCTORY STATEMENT This Official Statement contains certain information relating to the City of Crystal, Minnesota (the “City”) and its issuance of $4,955,000* General Obligation Improvement Bonds, Series 2017A (the “Bonds”). The Bonds are general obligations of the City for which it pledges its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special assessments against benefited properties for repayment of the Bonds. Inquiries may be directed to the City’s Finance Director/Treasurer, Ms. Jean McGann, by telephoning (952) 715-3059, or by emailing jean.mcgann@aemfinancialsolutions.com. Inquiries may also be made to Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101-2887, by telephoning (651) 223-3000, or by emailing bond_services@springsted.com. CONTINUING DISCLOSURE In order to assist the Underwriters in complying with SEC Rule 15c2-12 promulgated by the Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934, as the same may be amended from time to time, and official interpretations thereof (the “Rule”), pursuant to the resolution awarding the sale of the Bonds (the “Award Resolution”), the City has entered into an undertaking (the “Undertaking”) for the benefit of holders including beneficial owners of the Bonds to provide certain financial information and operating data relating to the City to the Electronic Municipal Market Access system (“EMMA”) annually, and to provide notices of the occurrence of certain events enumerated in the Rule to EMMA or the Municipal Securities Rulemaking Board (“MSRB”). The specific nature of the Undertaking, as well as the information to be contained in the annual report or the notices of material events is set forth in the Continuing Disclosure Certificate to be executed and delivered by the City at the time the Bonds are delivered in substantially the form attached hereto as Appendix II. The City has complied for the past five years in all material respects in accordance with the terms of its previous continuing disclosure undertakings entered into pursuant to the Rule, except as follows: • The AGM insured rating related to the City’s General Obligation Improvement Bonds, Series 2005A; General Obligation Aquatic Center Bonds, Series 2005B; and General Obligation Improvement Bonds, Series 2006A (CUSIP 229345) was downgraded by Moody’s Investors Service from Aa3 to A2 on January 17, 2013. The material event and failure to timely file notices regarding this insurance rating change were filed with EMMA on July 10, 2017. 6.9 - 2 - A failure by the City to comply with the Undertaking will not constitute an event of default on the Bonds (although holders will have any available remedy at law or in equity). Nevertheless, such a failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. THE BONDS General Description The Bonds are dated as of the date of delivery and will mature annually on February 1 as set forth on the front cover of this Official Statement. The Bonds are issued in book entry form. Interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2018. Interest will be payable to the holder (initially Cede & Co.) registered on the books of the Registrar as of the fifteenth day of the calendar month next preceding such interest payment date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Principal of and interest on the Bonds will be paid as described in the section herein entitled “Book Entry System.” U.S. Bank National Association, Saint Paul, Minnesota will serve as Registrar for the Bonds, and the City will pay for registrar services. Redemption Provisions Thirty days’ written notice of redemption shall be given to the registered owner(s) of the Bonds. Failure to give such written notice to any registered owner of the Bonds or any defect therein shall not affect the validity of any proceedings for the redemption of the Bonds. All Bonds or portions thereof called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment. Optional Redemption The City may elect on February 1, 2027, and on any day thereafter, to redeem Bonds due on or after February 1, 2028. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all the Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be redeemed. DTC will determine by lot the amount of each participant’s interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All redemptions shall be at a price of par plus accrued interest. Book Entry System The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity 6.9 - 3 - issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participa nts’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 6.9 - 4 - Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or its agent on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or its agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to City or its agent. Under such circumstances, in the event that a successor depository is not obtained, certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. AUTHORITY AND PURPOSE The Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475. The proceeds of the Bonds, along with available City funds, will be used to finance various street and utility improvement projects within the City. SOURCES AND USES OF FUNDS The composition of the Bonds is estimated to be as follows: Sources of Funds: Principal Amount $4,955,000 Available City Funds 1,000,000 Total Sources of Funds $5,955,000 Uses of Funds: Deposit to Construction Fund $5,859,470 Allowance for Discount Bidding 49,550 Costs of Issuance 45,980 Total Uses of Funds $5,955,000 6.9 - 5 - SECURITY AND FINANCING The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special assessments against benefited properties for repayment of the Bonds. Special assessments in the principal amount of approximately $5,859,470 are expected to be filed on or about October 1, 2017 for first collection in 2018. The City anticipates receiving prepayments of approximately $1,000,000. The remaining assessments in the amount of $4,859,470 will be collected over a term of 15 years with equal annual payments of principal. Interest on the unpaid balance will be charged at an interest rate of 4.00%. Each year’s collection of special assessments, if collected in full, will be sufficient to pay 105% of the debt service due on the Bonds in each year. The City does not anticipate the need to levy taxes for repayment of the Bonds. FUTURE FINANCING The City does not anticipate issuing any additional long-term general obligation debt within the next 90 days. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. LEGALITY The Bonds are subject to approval as to certain matters by Kennedy & Graven, Chartered of Minneapolis, Minnesota, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify any of the financial or statistical statements or data contained in this Official Statement and will express no opinion with respect thereto. A legal opinion in substantially the form set out in Appendix I herein will be delivered at closing. TAX EXEMPTION In the opinion of Kennedy & Graven, Chartered, Bond Counsel, under federal and Minnesota laws, regulations, rulings and decisions in effect on the date of issuance of the Bonds, interest on the Bonds is excludable from gross income for federal income tax purposes, and, to the same extent, from taxable net income of individuals, estates and trusts for Minnesota income tax purposes. Interest on the Bonds is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax. Certain provisions of the Internal Revenue Code of 1986, as amended (the “Code”), however, impose continuing requirements that must be met after the issuance of the Bonds in order for interest thereon to be and remain excludable from federal gross income and, to the same extent, from Minnesota taxable net income. Noncompliance with such requirements by the City may cause the interest 6.9 - 6 - on the Bonds to be includable in gross income for purposes of federal income taxation and, to the same extent, includable in taxable net income for purposes of Minnesota income taxation, retroactive to the date of issuance of the Bonds, irrespective in some cases of the date on which such noncompliance is ascertained. No provision has been made for redemption of Bonds or for an increase in the interest rate on the Bonds in the event that interest on the Bonds becomes includable in federal gross income or Minnesota taxable income. Interest on the Bonds is not an item of tax preference includable in alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum tax applicable to individuals, estates and trusts, but is includable in adjusted current earnings in determining the federal alternative minimum taxable income of corporations for purposes of the federal alternative minimum tax. Interest on the Bonds may be includable in the income of a foreign corporation for purposes of the branch profits tax imposed by Section 884 of the Code and is includable in the net investment income of foreign insurance companies for purposes of Section 842(b) of the Code. In the case of an insurance company subject to the tax imposed by Section 831 of the Code, the amount which otherwise would be taken into account as losses incurred under Section 832(b)(5) of the Code must be reduced by an amount equal to fifteen percent of the interest on the Bonds that is received or accrued during the taxable year. Section 86 of the Code requires recipient s of certain Social Security and railroad retirement benefits to take into account, in determining the taxability of such benefits, receipts or accruals of interest on the Bonds. OTHER FEDERAL TAX CONSIDERATIONS Property and Casualty Insurance Companies Property and casualty insurance companies are required to reduce the amount of their loss reserve deduction by 15% of the amount of tax-exempt interest received or accrued during the taxable year on certain obligations, including interest on the Bonds. Foreign Insurance Companies Foreign companies carrying on an insurance business in the United States are subject to a tax on income which is effectively connected with their conduct of any trade or business in th e United States, including “net investment income.” Net investment income includes tax-exempt interest such as interest on the Bonds. Branch Profits Tax A foreign corporation is subject to a branch profits tax equal to 30% of the “dividend equivalent amount” for the taxable year. The “dividend equivalent amount” is the foreign corporation's “effectively connected earnings and profits” adjusted for increase or decrease in “U.S. net equity.” A branch's earnings and profits may include tax-exempt municipal bond interest, such as interest on the Bonds. Passive Investment Income of S Corporations Passive investment income, including interest on the Bonds, may be subject to federal income taxation under Section 1375 of the Code for an S corporation that has Subchapter C earnings and profits at the close of the taxable year if more than 25% of the gross receipts of such S corporation is passive investment income. 6.9 - 7 - Financial Institutions Prior to the adoption of the Code, financial institutions were generally permitted to deduct 80% of their interest expenses allocable to the ownership of tax-exempt obligations. Under the Code, financial institutions are generally not entitled to a deduction for tax-exempt obligations purchased after August 7, 1986. However, the City will designate the Bonds as qualified tax-exempt obligations pursuant to Section 265(b)(3) of the Code which permits financial institutions to deduct interest expenses allocable to the Bonds to the extent permitted under prior law. Future Tax Legislation The exclusion of interest on the Bonds from gross income from federal income tax purposes and the exclusion of interest on the Bonds from the net taxable income of individuals, estates, and trusts for State income tax purposes is not mandated or guaranteed by the United States Constitution or the Minnesota Constitution. Accordingly, federal laws providing that interest on the obligations of the states and the political subdivisions of the states is not includable in gross income for federal income tax purposes and Minnesota laws providing that interest on the obligations of the State is not includable in the net taxable income of individuals, estates, and trusts for State income tax purposes may be subject to change. In the event federal or Minnesota law is amended in a manner that results in interest on the Bonds becoming subject to federal or Minnesota income taxation, or if federal or Minnesota income tax rates are reduced, the market value of the Bonds may be adversely affected. General The preceding is not a comprehensive list of all federal or State tax consequences which may arise from the receipt or accrual of interest on the Bonds. The receipt or accrual of interest on the Bonds may otherwise affect the federal income tax (or Minnesota income tax or franchise tax) liability of the recipient based on the particular taxes to which the recipient is subject and the particular tax status of other items of income or deductions. All prospective purchasers of the Bonds are advised to consult their own tax advisors as to the tax consequences of, or tax considerations for, purchasing or holding the Bonds. BANK-QUALIFIED TAX-EXEMPT OBLIGATIONS The City will designate the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code, relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. RATING Application for a rating of the Bonds has been made to Moody’s Investors Service (“Moody’s”), 7 World Trade Center, 250 Greenwich Street, 23rd Floor, New York, New York. If a rating is assigned, it will reflect only the opinion of Moody’s. Any explanation of the significance of a rating may be obtained only from Moody’s. 6.9 - 8 - There is no assurance that a rating, if assigned, will continue for any given period of time, or that such rating will not be revised, suspended or withdrawn, if, in the judgment of Moody’s, circumstances so warrant. A revision, suspension or withdrawal of a rating may have an adverse effect on the market price of the Bonds. MUNICIPAL ADVISOR The City has retained Springsted Incorporated, Public Sector Advisors, of Saint Paul, Minnesota (“Springsted”), as municipal advisor in connection with certain aspects of the issuance of the Bonds. In preparing this Official Statement, Springsted has relied upon governmental officials, and other sources, who have access to relevant data to provide accurate information for this Official Statement, and Springsted has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. Springsted is not a public accounting firm and has not been engaged by the City to compile, review, examine or audit any information in this Official Statement in accordance with accounting standards. Springsted is an independent advisory firm, registered as a municipal advisor, and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. Springsted is under common ownership with Springsted Investment Advisors, Inc. (“SIA”), an investment adviser registered in the states where services are provided. SIA may provide investment advisory services to the City from time to time in connection with the investment of proceeds from the Bonds as well as advice with respect to portfolio management and investment policies for the City. SIA pays Springsted, as municipal advisor, a referral fee from the fees paid to SIA by the City. CERTIFICATION The City has authorized the distribution of the Preliminary Official Statement for use in connection with the initial sale of the Bonds and a Final Official Statement following award of the Bonds. The Purchaser will be furnished with a certificate signed by the appropriate officers of the City stating that the City examined each document and that, as of the respective date of each and the date of such certificate, each document did not and does not contain any untrue statement of material fact or omit to state a material fact necessary, in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (The Balance of This Page Has Been Intentionally Left Blank) 6.9 - 9 - CITY PROPERTY VALUES Trend of Values(a) Assessment/ Assessor’s Market Value Adjusted Collection Estimated Sales Economic Homestead Taxable Taxable Net Year Market Value Ratio(b) Market Value(c) Exclusion Market Value Tax Capacity 2016/17 $1,634,906,500 93.2% $1,755,516,917 $146,593,169 $1,482,067,331 $19,760,457 2015/16 1,498,404,000 91.1 1,644,785,633 153,994,496 1,339,237,404 17,835,544 2014/15 1,453,951,700 93.3 1,557,406,354 155,659,387 1,293,693,713 17,570,450 2013/14 1,308,006,500 91.9 1,423,118,921 168,357,448 1,135,611,852 15,961,560 2012/13 1,311,691,400 97.5 1,347,505,588 170,201,504 1,136,761,834 15,865,985 (a) For a description of the Minnesota property tax system, see Appendix III. (b) Sales Ratio Study for the year of assessment as posted by the Minnesota Department of Revenue, http://www.revenue.state.mn.us/propertytax/Pages/statistics-imv.aspx. (c) Economic market values for the year of assessment as posted by the Minnesota Department of Revenue, http://www.revenue.state.mn.us/propertytax/Pages/statistics-imv.aspx. Source: Hennepin County, Minnesota, July 2017, except as otherwise noted. 2016/17 Adjusted Taxable Net Tax Capacity: $19,760,457 Real Estate: Residential Homestead $11,452,855 68.5% Commercial/Industrial and Railroad 3,086,984 18.5 Residential Non-Homestead 1,815,625 10.9 Seasonal Recreational and Other 103,230 0.6 Personal Property 257,699 1.5 2016/17 Net Tax Capacity $16,716,393 100.0% Less: Captured Tax Increment (248,944) Contribution to Fiscal Disparities (1,082,015) Plus: Distribution from Fiscal Disparities 4,375,023 2016/17 Adjusted Taxable Net Tax Capacity $19,760,457 6.9 - 10 - Ten of the Largest Taxpayers in the City 2016/17 Net Taxpayer Type of Property Tax Capacity Crystal Shopping Center Association Shopping center $ 301,250 Minnesota Senior Living LLC Apartments 236,425 Crystal Gallery Development Commercial 215,970 Crystal Village Apartments, LLC Apartments 196,875 Target Corporation Department store 188,250 Crystal Medical Building LLC Commercial 178,910 Calibre Chase Partners LTD Apartments 167,525 Individual Apartments 160,025 SuperValu, Inc. Grocery store 142,050 Crystal Leased Housing Associates Low income housing 141,623 Total $1,928,903* * Represents 9.8% of the City's 2016/17 adjusted taxable net tax capacity. CITY INDEBTEDNESS Legal Debt Limit and Debt Margin* Legal Debt Limit (3% of 2016/17 Estimated Market Value) $49,047,195 Less: Outstanding Debt Subject to Limit -0- Legal Debt Margin as of September 14, 2017 $49,047,195 * The legal debt margin is referred to statutorily as the “Net Debt Limit” and may be increased by debt service funds and current revenues which are applicable to the payment of debt in the current fiscal year. NOTE: Certain types of debt are not subject to the legal debt limit. See Appendix III – Debt Limitations. General Obligation Special Assessment Debt Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 9-14-17 8-1-08 $2,190,000 Improvements 2-1-2024 $ 900,000 8-1-09 3,360,000 Improvements 2-1-2030 2,020,000 8-1-11 1,705,000 Improvements 2-1-2027 1,030,000 8-1-12 2,635,000 Improvements 2-1-2028 1,805,000 8-1-13 3,235,000 Improvements 2-1-2029 2,525,000 7-16-15 2,550,000 Improvements 2-1-2031 2,325,000 8-25-16 3,330,000 Improvements 2-1-2032 3,330,000 9-14-17 4,955,000 Improvements (the Bonds) 2-1-2033 4,955,000 Total $18,890,000 6.9 - 11 - Estimated Calendar Year Debt Service Payments Including the Bonds G.O. Special Assessment Debt Principal Year Principal & Interest(a) 2017 (at 9-14) (Paid) (Paid) 2018 $ 1,340,000 $ 1,798,841 2019 1,745,000 2,180,428 2020 1,605,000 2,002,275 2021 1,570,000 1,928,955 2022 1,525,000 1,845,625 2023 1,495,000 1,777,054 2024 1,465,000 1,707,823 2025 1,320,000 1,525,778 2026 1,285,000 1,456,479 2027 1,250,000 1,387,623 2028 1,140,000 1,245,133 2029 980,000 1,055,081 2030 775,000 824,444 2031 625,000 654,753 2032 480,000 494,853 2033 290,000 294,205 Total $18,890,000(b) $22,179,350 (a) Includes the Bonds at an assumed average annual interest rate of 2.33%. (b) 77.3% of this debt will be retired within ten years. Overlapping Debt 2016/17 Debt Applicable to Adjusted Taxable Est. G.O. Debt Tax Capacity in City Taxing Unit(a) Net Tax Capacity As of 9-14-17(b) Percent Amount Hennepin County $1,718,948,808 $909,395,000 1.2% $10,912,740 I.S.D. No. 281 (Robbinsdale) 99,900,976 190,380,000 19.8 37,695,240 Three Rivers Park District 1,225,469,292 52,530,000 1.6 840,480 Hennepin County Regional Railroad Authority 1,718,948,808 33,145,000 1.2 397,740 Metropolitan Council 3,676,830,699 10,910,000(c) 0.5 54,550 Metropolitan Transit 2,934,208,912 181,455,000 0.7 1,270,185 Total $51,170,935 (a) Only those units with outstanding general obligation debt are shown here. (b) Excludes general obligation tax and aid anticipation certificates and revenue-supported debt. (c) Excludes general obligation debt supported by wastewater revenues and housing rental payments. Includes certificates of participation. 6.9 - 12 - Debt Ratios G.O. G.O. Direct & Direct Debt Overlapping Debt To 2016/17 Estimated Market Value ($1,634,906,500) 1.16% 4.29% Per Capita - (23,028 - 2016 U.S. Census Estimate) $820 $3,042 CITY TAX RATES, LEVIES AND COLLECTIONS Tax Capacity Rates for a Resident in I.S.D No. 281 (Robbinsdale) 2016/17 For 2012/13 2013/14 2014/15 2015/16 Total Debt Only Hennepin County 49.461% 49.959% 46.398% 45.356% 44.087% 5.056% City of Crystal(a) 57.630 56.015 50.498 53.207 50.360 - 0 - I.S.D. No. 281 (Robbinsdale)(b) 32.347 34.777 33.226 33.833 31.612 19.774 Special Districts(c) 10.089 10.561 9.785 9.530 9.319 3.072 Total 149.527% 151.312% 139.907% 141.926% 135.378% 27.902% (a) In addition, the City has a 2016/17 market value tax rate of 0.01 315% spread across the market value of property in support of debt service. (b) In addition, Independent School District No. 281 (Robbinsdale) has a 2016/17 market value tax rate of 0.24959% spread across the market value of property in support of an excess operating levy. (c) Special Districts include Metropolitan Council, Metropolitan Transit District, Metropolitan Mosquito Control, Hennepin County Regional Rail Authority, Hennepin Housing and Redevelopment Authority, Three Rivers Park District, and Hennepin Park Museum. NOTE: This table includes only net tax capacity-based rates. Certain other tax rates are based on market value. See Appendix III. Tax Levies and Collections Collected During Collected and/or Abated Net Collection Year as of 1-1-17 Levy/Collect Levy* Amount Percent Amount Percent 2016/17 $10,288,043 (In Process of Collection) 2015/16 9,575,739 $9,524,488 99.5% $9,524,488 99.5% 2014/15 9,288,837 9,216,857 99.2 9,260,632 99.7 2013/14 9,214,123 9,144,399 99.2 9,187,718 99.7 2012/13 9,158,455 9,090,927 99.3 9,140,486 99.8 * The net levy excludes state aid for property tax relief and fiscal disparities, if applicable. The net levy is the basis for computing tax capacity rates. See Appendix III. 6.9 - 13 - CASH AND INVESTMENTS As of May 31, 2017 Fund Cash and Investments General $ 3,379,063 Special Revenue 5,058,479 Debt Service: G.O. Debt Supported by Taxes 741,412 G.O. Debt Supported by Special Assessments 3,580,999 Capital Projects 16,424,741 Internal Service 671,305 Enterprise 3,098,112 Trust and Agency 1,314,165 Total $34,268,276 City Investments The City may invest idle funds in accordance with its investment policy and as authorized by Minnesota Statutes Chapter 118A, as amended. These securities include: • United States treasury issues; • issues of U.S. government agencies and instrumentalities; • general obligations of state and local governments with taxing powers require “A” or better rating by a national bond rating service; • revenue obligations of state and local governments require “AA” or better rating by a national bond rating service; • certificates of deposits issued by U.S. banks fully insured by the federal deposit insurance company or federal agency; • bankers’ acceptances issued by U.S. banks; • commercial paper issued by U.S. corporations or their Canadian subsidiaries with maturities of 270 days or less with rating in the highest quality category by at least two nationally recognized rating agencies; • money market mutual funds; and • government investment pools, including the 4M Fund, the Liquid Asset Fund, MAGIC Fund, and MN Trust. Management of the investment program is the responsibility of the Finance Director, as described in the City Code. The City's investments are managed to attain an average market rate of return while protecting capital. As of May 31, 2017, the City's investments totaled $33,100,352 and were held in the following mix of investment types: 42.58% certificates of deposit, 29.02% money market funds, 14.34% obligations of government agencies, and 14.05% municipal bonds. 6.9 - 14 - GENERAL INFORMATION CONCERNING THE CITY The City is a northwestern suburb of Minneapolis and is a part of the Minneapolis/Saint Paul metropolitan area. The City lies wholly within Hennepin County and encompasses an area of approximately 5.8 square miles (3,712 acres). Population The City’s population trend is shown below. Percent Population Change 2016 U.S. Census Estimate 23,028 4.0% 2010 U.S. Census 22,151 (2.4) 2000 U.S. Census 22,698 (4.6) 1990 U.S. Census 23,788 (6.9) 1980 U.S. Census 25,543 -- Source: United States Census Bureau, http://www.census.gov/. The City’s population by age group for the past four years is as follows: Data Year/ Report Year 0-17 18-34 35-64 65 and Over 2016/17 5,171 4,931 9,704 3,383 2015/16 5,137 4,968 9,662 3,320 2014/15 5,153 4,998 9,598 3,239 2013/14 5,074 5,010 9,496 3,187 Sources: Environics Analytics, Claritas, Inc., and the Nielsen Company. Transportation Several major Twin Cities transportation routes pass through the City. County Highway 81 (formerly U.S. Highway 52) traverses the northern section of the City and State Highway 100 runs north -south through the southern section. The City is home to the Crystal Airport, owned and operated by the Metropolitan Airports Commission, which accommodates small private and charter aircraft. The Minneapolis/Saint Paul International Airport is approximately 30 minutes from the City. Metropolitan area bus service is provided to City residents by the Metropolitan Transit Commission and Medicine Lake Lines. 6.9 - 15 - Major Employers Approximate Number Employer Product/Service of Employees Centennial Gardens for Nursing and Rehabilitation(a) Skilled nursing care facility 200 Target Discount store 185(b) Cub Foods Grocery store 156(b) City of Crystal City government 101 Kilmer Electric Co., Inc. Electrical contractor 96 Buffalo Wild Wings Restaurant and bar 65(b) Almsted Fresh Market Grocery retailer 60(c) McDonald’s Fast-food restaurant 44(b) Minnesota Grinding Metal coatings, engraving 40 Perkins Restaurant 37 Radius Track Curved cold formed steel framing 32 Standard Water Control Systems Waterproofing 20 (a) Formerly the Volunteers of America - Crystal Care Center. (b) Includes full- and part-time employees. (c) As of May 2015; most recent information available. Source: This does not purport to be a comprehensive list and is based on a July 2017 best efforts telephone survey of individual employers. Some employers do not respond to inquiries. Labor Force Data Annual Average June 2013 2014 2015 2016 2017 Labor Force: City of Crystal 12,580 12,531 12,614 12,745 13,129 Hennepin County 666,093 669,794 671,702 679,285 701,837 Minneapolis-Saint Paul Bloomington MSA 1,899,746 1,909,660 1,916,011 1,938,642 1,999,708 State of Minnesota 2,955,266 2,961,331 2,975,533 3,003,576 3,068,871 Unemployment Rate: City of Crystal 5.1% 4.4% 3.7% 3.7% 3.6% Hennepin County 4.6 3.8 3.3 3.4 3.5 Minneapolis-Saint Paul Bloomington MSA 4.8 4.0 3.5 3.6 3.5 State of Minnesota 5.0 4.2 3.7 3.9 3.7 Source: Minnesota Department of Employment and Economic Development, http://apps.deed.state.mn.us/lmi/laus. 2017 data are preliminary. 6.9 - 16 - Retail Sales and Effective Buying Income (EBI) City of Crystal Data Year/ Total Retail Total Median Report Year Sales ($000) EBI ($000) Household EBI 2016/17 $204,110 $559,657 $51,608 2015/16 228,581 553,953 50,867 2014/15 256,123 550,820 49,143 2013/14 206,466 522,378 48,411 2012/13 242,089 489,708 45,488 Hennepin County Data Year/ Total Retail Total Median Report Year Sales ($000) EBI ($000) Household EBI 2016/17 $33,502,543 $40,956,758 $57,190 2015/16 26,004,910 38,495,033 55,756 2014/15 21,713,206 36,578,500 52,644 2013/14 21,457,980 34,013,568 50,131 2012/13 23,055,735 32,511,238 47,033 The 2016/17 Median Household EBI for the State of Minnesota was $54,485. The 2016/17 Median Household EBI for the United States was $48,043. Sources: Environics Analytics, Claritas, Inc., and the Nielsen Company . Permits Issued by the City New Single New Total Value* Family Residential Commercial/Industrial (All Permits) Year Number Value Number Value 2017 (to 5-31) 7 $1,471,638 0 -0- $ 5,960,452 2016 16 2,955,106 0 -0- 11,412,119 2015 14 2,381,631 1 $ 85,000 10,770,794 2014 9 1,188,986 4 22,943,995 34,608,705 2013 16 2,280,766 0 -0- 9,728,037 2012 9 1,350,369 0 -0- 11,057,866 2011 6 674,192 2 5,771,599 15,890,193 2010 16 2,251,322 0 -0- 10,404,391 * In addition to building permits, the total value includes all other permits issued by the City (i.e. heating, lighting, plumbing, roof replacement, etc.). Source: The City. 6.9 - 17 - Economic Development The City is a fully developed suburb of the City of Minneapolis. As the City is a mature community, a priority of the City Council is to maintain and increase the community’s tax base. Because the City is fully developed, redevelopment of blighted or underutilized sites is generally necessary to increase the community’s tax base. The City’s Economic Development Authority (EDA) has continued its activities to maintain and improve the community’s tax base, both commercial and residential. Specific redevelopment activities include the following: • Single Family Residential – Scattered Site New Home Construction: The EDA is continuing its longstanding practice of buying blighted, structurally substandard or functionally obsolete homes, which are then demolished and the resulting vacant lots are offered for sale to builders for new home construction. In 2016, the EDA sold four lots for new home construction. As of May 31, 2017 the EDA has sold two lots, with additional lot sales pending. • Single Family Residential – Home Improvement Incentive Rebates: In 1998, the City and four other communities partnered with the Greater Metropolitan Housing Corporation (GMHC) to provide an incentive rebate for improvements to owner-occupied homes. Households with incomes of up to 120% of the regional median income are eligible to receive the rebates. Funding for this program initially came from the Minnesota Housing Finance Agency and the Metropolitan Council. After these outside agencies’ funds were exhausted in 2002, the EDA committed its own funds to keep the rebate program going within the City. In 2016, the EDA committed $127,000 to the program, helping 77 homeowners with improvement projects valued at $890,918. • Deferred Home Improvement Loans: Since 1982, the City has used part of its Community Development Block Grant allocation to fund deferred home improvement loans for lower income households. This provides interest-free loans with repayment deferred for 15 years, provided that the recipient owns and occupies the home. During 2016, $30,075 was spent on rehab projects and $171,000 was committed for additional projects. One project has been completed, six new projects have been started, and 16 properties are on the waiting list. Financial Institutions* Banking and financial services in the City are provided by branch offices of TCF National Bank, Associated Bank, Bremer Bank, and Wells Fargo Bank, National Association. * This does not purport to be a comprehensive list. Source: Federal Deposit Insurance Corporation, http://research.fdic.gov/bankfind/. Health Care Services The following is a summary of health care facilities located in or near the City: Facility Location No. of Beds Centennial Gardens for Nursing and Rehabilitation City of Crystal 115 Nursing Home Beds North Memorial Medical Center City of Robbinsdale 518 Hospital Beds 42 Infant Bassinets Source: Minnesota Department of Health, http://www.health.state.mn.us/. 6.9 - 18 - Education Public Education The following district serves the residents of the City: 2016/17 District Location Grades Enrollment I.S.D. No. 281 (Robbinsdale) City of Robbinsdale K-12 12,553 Source: Minnesota Department of Education, www.education.state.mn.us. Non-Public Education City residents are also served by the following private schools, located in the City: 2016/17 School Grades Enrollment St. Raphael Catholic School K-8 147 River Tree School K-12 110 Source: Minnesota Department of Education, www.education.state.mn.us. Post-Secondary Education City residents have access to various colleges and universities located throughout the Minneapolis/Saint Paul metropolitan area. GOVERNMENTAL ORGANIZATION AND SERVICES Organization The City has been a municipal corporation since 1887, a city since 1960, and operates as a Home Rule City, governed by a Home Rule Charter with a City Manager form of government. The City's governing body is the City Council, comprised of the Mayor and six Council Members. The Mayor and Council Members serve overlapping four-year terms of office. The following individuals comprise the current City Council: Expiration of Term Jim Adams Mayor December 31, 2020 John Budziszewski Council Member December 31, 2020 Elizabeth Dahl Council Member December 31, 2018 Julie Deshler Council Member December 31, 2020 Jeff Kolb Council Member December 31, 2018 Nancy LaRoche Council Member December 31, 2020 Olga Parsons Council Member December 31, 2018 6.9 - 19 - Ms. Anne Norris is the City Manager and is responsible for the daily operations of the City and for implementing Council decisions. Prior to being appointed City Manager in January 2000, Ms. Norris was the Community Development Director for the City for nine years. Ms. Christina Serres is the City Clerk. The City’s Finance Director/Treasurer position is currently under a 3 year contract with AEM Financial Solutions, LLC. The contract began on November 29, 2016 with Ms. Jean McGann, CPA and President of AEM Financial Solutions, serving as the City’s Finance Director/Treasurer throughout the length of the contract. The City employs a total of 84 full-time employees, 17 part-time employees, and approximately 70 seasonal employees. Services Law Enforcement services are provided by the City through 33 sworn police officers. The West Metro Fire and Rescue District agreement between the cities of Crystal and New Hope provides for fire protection through 57 paid on-call firefighters servicing three fire stations. The City has a class ISO 3 insurance rating. The City is part of the Golden Valley–Crystal–New Hope Joint Water Commission (the “Commission”), which purchases water for these communities from the City of Minneapolis. The Commission, in turn, bills its underlying entities based on actual usage. The Commission has jurisdiction over the trunk lines within the three cities, while each city is responsible for the construction and maintenance of its own laterals. The City’s water system has a pumping capacity estimated to be 12,000 gallons per minute. The average water demand in the City is approximately 1.5 million gallons per day, although peak demand can reach approximately 6.3 million gallons per day. Approximately 65% of the Commission’s storage capacity is contained in two underground reservoirs in the City, holding 19 million gallons of water. Interceptor sewer lines and wastewater treatment plants in the seven -county metropolitan area are under the jurisdiction of Metropolitan Council Environmental Services (“MCES”). MCES finances its operations through user charges based on volume. The City is responsible for the construction and maintenance of sewer laterals. Non-municipal utilities serving the City include Xcel Energy for electricity, CenterPoint Energy for natural gas, and Comcast and CenturyLink are the major telecommunication companies. Labor Contracts The status of labor contracts in the City is as follows: No. of Expiration Date Bargaining Unit Employees of Current Contract Local #44 Police Officers 23 December 31, 2018 Local #56 Police Supervisors 6 December 31, 2018 Local #49 Public Works 21 December 31, 2018 Subtotal 50 Non-unionized employees 51 Total employees 101 6.9 - 20 - Employee Pensions All full-time employees and certain part-time employees of the City are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing multiple-employer retirement plans. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. The defined retirement benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. All police officers, fire fighters and peace officers who qualify for membership by statute are covered by PEPFF. The City’s contributions to GERF and PEPFF are equal to the contractually required contributions for each year as set by State Statute, and are as follows for the past five years: GERF PEPFF 2016 $323,436 $398,040 2015 315,859 367,112 2014 297,490 333,446 2013 288,445 331,004 2012 280,757 333,909 PEDCP Five Council members of the City are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple-employer deferred compensation plan administered by PERA. The PEDCP is a tax-qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until the time of withdrawal. Plan benefits depend solely on the amounts contributed to the plan plus investment earnings less administrative expenses. An eligible elected official who chooses to participate in the plan contributes 5% of their salary, which is matched by th e elected official’s employer. PERA receives 2% of employer contributions and 0.025% of the assets in each member’s account annually for administering the plan. The City’s contributions to PEDCP for the past five years are as follows: PEDCP 2016 $2,165 2015 2,165 2014 2,982 2013 2,952 2012 1,553 For more information regarding the liability of the City with respect to its employees, please reference “Note 9 – Pension Plans” of the City’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2016, an excerpt of which is included as Appendix IV of this Official Statement. Sources: City’s Comprehensive Annual Financial Reports. GASB 68 The Government Accounting Standards Board (GASB) has issued Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68) and related GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date-an amendment to GASB 68, which revised existing standards for measuring and reporting pension liabilities for pension plans provided to City employees and require recognition of a liability equal to the City’s proportionate share of net pension liability, which is measured as the total pension liability less the amount of the pension plan ’s fiduciary net position. 6.9 - 21 - The City’s proportionate shares of the pension costs and the City’s net pension liability for GERF and PEPFF for the past two years are as follows: GERF PEPFF Proportionate Net Proportionate Net Share of Pension Share of Pension Pension Costs Liability Pension Costs Liability 2016 0.0687% $5,578,099 0.2430% $9,730,143 2015 0.0694 3,596,668 0.2400 2,726,962 For more information regarding GASB 68 with respect to the City, please reference “Note 9 – Pension Plans” of the City’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2016, an excerpt of which is included as Appendix IV of this Official Statement. Additional and detailed information about GERF’s net position is available in a separately-issued PERA financial report, which may be obtained at www.mnpera.org; by writing to PERA at 60 Empire Drive #200, Saint Paul, Minnesota, 55103-2088; or by calling 1-800-652-9026. Sources: City’s Comprehensive Annual Financial Reports. Other Post-Employment Benefits The Governmental Accounting Standards Board (GASB) has issued Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions (GASB 45), which addresses how state and local governments must account for and report their obligations related to post - employment healthcare and other non-pension benefits (referred to as Other Post-Employment Benefits or “OPEB”). The City provides a single-employer defined benefit healthcare plan, including medical coverage, to eligible retirees and their spouses. It is the City’s policy to periodically review its medical coverage and to obtain requests for proposals in order to provide to most favorable benefits and premiums for employees and retirees. Retirees and their spouses contribute to the healthcare plan at the same rate as City employees, which results in retirees receiving an implicit rate subsidy. The implicit rate subsidy is the additional cost of health insurance to current employees and the City as a result of the higher cost of providing health insurance to retirees. As of January 1, 2016, the City had 10 participants receiving health benefits from the City’s plan. The City currently finances the plan on a pay-as-you-go basis and, for the fiscal year ended December 31, 2016, the City expended $28,972 for these benefits. With the advent of GASB Statement 45, the City has engaged actuaries to provide actuarial valuation reports. Under GASB 45 such costs must be accounted for on an accrual basis. The City must report an annual OPEB cost based on actuarially determined amounts that, if paid on an ongoing basis, will provide sufficient resources to pay these benefits. Components of the City’s annual OPEB cost, the amount actually contributed to the plan, and the changes in the City’s net OPEB obligation to the plan for the fiscal year ended December 31, 2016 are as follows: Annual required contribution $106,118 Interest on net OPEB obligation 23,888 Adjustment to annual required contribution (20,723) Annual OPEB cost (expense) $109,283 Contributions made (28,972) Increase in net OPEB obligation $ 80,311 Net OPEB obligation – beginning of year 530,851 Net OPEB obligation (asset) – end of year $611,162 6.9 - 22 - Funded status of the City’s OPEB as reported in the actuarial reports received to-date: Unfunded UAAL as Actuarial Actuarial a percentage Actuarial Actuarial Value Accrued Accrued of Annual Valuation Date of Assets Liability Liability (UAAL) Covered Payroll January 1, 2016 - 0 - $ 927,310 $ 927,310 15% January 1, 2015* - 0 - 1,166,824 1,166,824 19 January 1, 2014 - 0 - 1,071,271 1,071,271 18 January 1, 2013* - 0 - 1,224,995 1,224,995 20 January 1, 2012 - 0 - 1,164,949 1,164,949 20 * Actuarial valuations are performed every two years, in even-numbered years. The liabilities and annual costs are based on the same population as the previous year’s liabilities and annual costs. Required contributions as reported in the actuarial reports received the past five years: Fiscal OPEB Employer % of Annual OPEB OPEB Year Ended Cost Contributions Cost Contributed Obligation December 31, 2016 $109,283 $28,972 27% $611,162 December 31, 2015 124,505 39,403 32 530,851 December 31, 2014 120,248 30,908 26 445,749 December 31, 2013 131,137 74,732 57 356,409 December 31, 2012 128,474 74,316 58 300,004 For more information regarding the liability of the City with respect to its employees, please reference “Note 10 – Post Employment Health Care Plan” of the City’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2016, an excerpt of which is included as Appendix IV of this Official Statement. Sources: City’s Comprehensive Annual Financial Reports. 6.9 - 23 - General Fund Budget Summary 2016 Budget 2016 Actual 2017 Budget Revenues: Property Taxes $ 8,027,940 $ 8,004,390 $ 8,669,000 Special Assessments 109,200 95,652 114,900 Licenses, Permits, and Inspections 842,680 773,479 836,256 Intergovernmental 2,006,309 2,008,525 1,973,909 Charges for Services 791,762 791,838 765,677 Fines and Forfeitures 351,400 322,009 326,000 Investment Earnings 74,800 75,154 60,000 Miscellaneous 60,300 60,050 20,200 Total Revenues $12,264,391 $12,131,097 $12,765,942 Expenditures: General Government $ 2,511,056 $ 2,510,387 $ 2,383,046 Public Safety 6,052,578 6,069,624 6,357,310 Public Works 1,283,553 1,276,590 2,451,239 Parks and Recreation 2,238,301 2,233,897 1,460,008 Community Development 522,189 523,035 559,814 Total Expenditures $12,607,677 $12,613,533 $13,211,417 Excess (Deficiency) of Revenues Over (Under) Expenditures $ (343,286) $ (482,436) $ (445,475) Other Financing Sources (Uses): Transfers In $ 343,286 $ 343,286 $ 445,475 Transfers Out 0 0 0 Total Other Financing Sources (Uses) $ 343,286 $ 343,286 $ 445,475 Net Change in Fund Balance $ 0 $ (139,150) $ 0 Beginning Fund Balance – January 1 $ 7,192,925 $ 7,192,925 $ 7,053,775 Ending Fund Balance – December 31 $ 7,192,925 $ 7,053,775 $ 7,053,775 Sources: The City and the City’s Comprehensive Annual Financial Reports. Major General Fund Revenue Sources Revenue 2012 2013 2014 2015 2016 Property taxes $8,211,693 $8,238,974 $8,238,974 $8,262,652 $8,004,390 Intergovernmental 2,019,368 1,961,163 1,961,163 1,991,430 2,008,525 Charges for services 686,100 769,202 769,202 672,594 791,838 Licenses, permits and inspections 843,741 924,967 924,967 808,695 773,479 Fines and forfeitures 374,684 388,593 388,593 309,358 322,009 Sources: City’s Comprehensive Annual Financial Reports. 6.9 APPENDIX I I-1 PROPOSED FORM OF LEGAL OPINION $__________ City of Crystal, Minnesota General Obligation Improvement Bonds Series 2017A We have acted as bond counsel to the City of Crystal, Minnesota (the “Issuer”) in connection with the issuance by the Issuer of its General Obligation Improvement Bonds, Series 2017A (t he “Bonds”), originally dated September 14, 2017, and issued in the original aggregate principal amount of $________. In such capacity and for the purpose of rendering this opinion we have examined certified copies of certain proceedings, certifications and other documents, and applicable laws as we have deemed necessary. Regarding questions of fact material to this opinion, we have relied on certified proceedings and other certifications of public officials and other documents furnished to us without und ertaking to verify the same by independent investigation. Under existing laws, regulations, rulings and decisions in effect on the date hereof, and based on the foregoing we are of the opinion that: 1. The Bonds have been duly authorized and executed, and are valid and binding general obligations of the Issuer, enforceable in accordance with their terms. 2. The principal of and interest on the Bonds are payable primarily from special assessments levied or to be levied on property specially benefited by local improvements, but if necessary for the payment thereof ad valorem taxes are required by law to be levied on all taxable property of the Issuer, which taxes are not subject to any limitation as to rate or amount. 3. Interest on the Bonds is excludable from gross income of the recipient for federal income tax purposes and, to the same extent, is excludable from taxable net income of individuals, trusts, and estates for Minnesota income tax purposes, and is not a preference item for purposes of the co mputation of the federal alternative minimum tax, or the computation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates. However, such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income. The opinion set forth in this paragraph is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes and from taxable net income for Minnesota income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes and taxable net income for Minnesota income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. 6.9 I-2 4. The rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditor’s rights generally and by equitable principles, whether considered at law or in equity. We have not been asked and have not undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, and accordingly we express no opinion with respect thereto. This opinion is given as of the date hereof and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Dated September 14, 2017 at Minneapolis, Minnesota. 6.9 APPENDIX II II-1 $____________ City of Crystal, Minnesota General Obligation Improvement Bonds Series 2017A CONTINUING DISCLOSURE CERTIFICATE September 14, 2017 This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the City of Crystal, Minnesota (the “Issuer”) in connection with the issuance of its General Obligation Improvement Bonds, Series 2017A (the “Bonds”), in the original aggregate principal amount of $___________. The Bonds are being issued pursuant to resolutions adopted by the City Council of the Issuer (the “Resolutions”). The Bonds are being delivered to _________________ (the “Purchaser”) on the date hereof. Pursuant to the Resolutions, the Issuer has covenanted and agreed to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events. The Issuer hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders (as defined herein) of the Bonds in order to provide for the public availability of such information and assist the Participating Underwriter(s) (as defined herein) in complying with the Rule (as defined herein). This Disclosure Certificate, together with the Resolutions, constitutes the written agreement or contract for the benefit of the Holders of the Bonds that is required by the Rule. Section 2. Definitions. In addition to the defined terms set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: “Annual Report” means any annual report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Audited Financial Statements” means annual financial statements of the Issuer, prepared in accordance with GAAP as prescribed by GASB. “Bonds” means the General Obligation Improvement Bonds, Series 2017A, issued by the Issuer in the original aggregate principal amount of $___________. “Disclosure Certificate” means this Continuing Disclosure Certificate. “EMMA” means the Electronic Municipal Market Access system operated by the MSRB and designated as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. “Final Official Statement” means the deemed Final Official Statement, dated ___________, 2017, which constitutes the final official statement delivered in connection with the Bonds, which is available from the MSRB. “Fiscal Year” means the fiscal year of the Issuer. 6.9 II-2 “GAAP” means generally accepted accounting principles for governmental units as prescribed by GASB. “GASB” means the Governmental Accounting Standards Board. “Holder” means the person in whose name a Bond is registered or a beneficial owner of such a Bond. “Issuer” means the City of Crystal, Minnesota, which is the obligated person with respect to the Bonds. “Material Event” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board located at 1300 I Street NW, Suite 1000, Washington, DC 20005. “Participating Underwriter” means any of the original underwriter(s) of the Bonds (including the Purchaser) required to comply with the Rule in connection with the offering of the Bonds. “Purchaser” means __________________. “Repository” means EMMA, or any successor thereto designated by the SEC. “Rule” means SEC Rule 15c2-12(b)(5) promulgated by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time, and including written interpretations thereof by the SEC. “SEC” means Securities and Exchange Commission, and any successor thereto. Section 3. Provision of Annual Financial Information and Audited Financial Statements. (a) The Issuer shall provide to the Repository, not later than twelve (12) months after the end of the Fiscal Year commencing with the year that ends December 31, 2017, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the Audited Financial Statements of the Issuer may be submitted separately from the balance of the Annual Report. (b) If the Issuer is unable or fails to provide to the Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice of that fact to the Repository and the MSRB. (c) The Issuer shall determine each year prior to the date for providing the Annual Report the name and address of each Repository. Section 4. Content of Annual Reports. The Issuer’s Annual Report shall contain or incorporate by reference the following sections of the Final Official Statement: 1. City Property Values 2. City Indebtedness 3. City Tax Rates, Levies and Collections 6.9 II-3 In addition to the items listed above, the Annual Report shall include Audited Financial Statements submitted in accordance with Section 3 of this Disclosure Certificate. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to the Repository or the SEC. If the document incorporated by reference is a final official statement, it must also be available from the MSRB. The Issuer shall clearly identify each such other document so incorporated by reference. Section 5. Reporting of Material Events. (a) This Section 5 shall govern the giving of notice of the occurrence of any of the following events (“Material Events”) with respect to the Bonds: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701–TEB), or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; 7. Modifications to rights of security holders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities, if material; 11. Rating changes; 12. Bankruptcy, insolvency, receivership or similar event of the obligated person; 13. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. 6.9 II-4 (b) The Issuer shall file a notice of such occurrence with the Repository or with the MSRB within ten (10) business days of the occurrence of the Material Event. (c) Unless otherwise required by law and subject to technical and economic feasibility, the Issuer shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the Issuer’s information. Section 6. EMMA. The SEC has designated EMMA as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. Until the EMMA system is amended or altered by the MSRB and the SEC, the Issuer shall make all filings required under this Disclosure Certificate solely with EMMA. Section 7. Termination of Reporting Obligation. The Issuer’s obligations under the Resolutions and this Disclosure Certificate shall terminate upon the legal defeasance, the redemption in full of all Bonds or payment in full of all Bonds. Section 8. Agent. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under the Resolutions and this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent. Section 9. Amendment; Waiver. Notwithstanding any other provision of the Resolutions or this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not, in and of itself, cause a violation of the Rule. The provisions of the Resolutions requiring continuing disclosure pursuant to the Rule and this Disclosure Certificate, or any provision hereof, shall be null and void in the event that the Issuer delivers to the Repository an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which impose the continuing disclosure requirements of the Resolutions and the execution and delivery of this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply to the Bonds. The provisions of the Resolutions requiring continuing disclosure pursuant to the Rule and this Disclosure Certificate may be amended without the consent of the Holders of the Bonds, but only upon the delivery by the Issuer to the Repository of the proposed amendment and an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance with the Rule. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Holder of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under the Resolutions and this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. 6.9 II-5 Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Participating Underwriters, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity. IN WITNESS WHEREOF, we have executed this Continuing Disclosure Certificate in our official capacities effective as of the date and year first written above. CITY OF CRYSTAL, MINNESOTA Mayor City Manager 6.9 APPENDIX III III-1 SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND MINNESOTA REAL PROPERTY VALUATION Following is a summary of certain statutory provisions relative to tax levy procedures, tax payment and credit procedures, and the mechanics of real property valuation. The summary does not purport to be inclusive of all such provisions or of the specific provisions discussed, and is qualified by reference to the complete text of applicable statutes, rules and regulations of the State of Minnesota. Property Valuations (Chapter 273, Minnesota Statutes) Assessor's Estimated Market Value. Each parcel of real property subject to taxation must, by statute, be appraised at least once every five years as of January 2 of the year of appraisal. With certain exceptions, all property is valued at its market value, which is the value the assessor determines to be the price the property to be fairly worth, and which is referred to as the “Estimated Market Value.” The 2013 Minnesota Legislature established the Estimated Market Value as the value used to calculate a municipality’s legal debt limit. Economic Market Value. The Economic Market Value is the value of locally assessed real property (Assessor’s Estimated Market Value) divided by the sales ratio as provided by the State of Minnesota Department of Revenue plus the estimated market value of personal property, utilities, railroad, and minerals. Taxable Market Value. The Taxable Market Value is the value that Net Tax Capacity is based on, after all reductions, limitations, exemptions and deferrals. Net Tax Capacity. The Net Tax Capacity is the value upon which net taxes are levied, extended and collected. The Net Tax Capacity is computed by applying the class rate percentages specific to each t ype of property classification against the Taxable Market Value. Class rate percentages vary depending on the type of property as shown on the last page of this Appendix. The formulas and class rates for converting Taxable Market Value to Net Tax Capacity represent a basic element of the State's property tax relief system and are subject to annual revisions by the State Legislature. Property taxes are the sum of the amounts determined by (i) multiplying the Net Tax Capacity by the tax capacity rate, and (ii) multiplying the referendum market value by the market value rate. Market Value Homestead Exclusion. In 2011, the Market Value Homestead Exclusion Program (MVHE) was implemented to offset the elimination of the Market Value Homestead Credit Program t hat provided relief to certain homesteads. The MVHE reduces the taxable market value of a homestead with an Assessor’s Estimated Market Value up to $413,800 in an attempt to result in a property tax similar to the effective property tax prior to the elimination of the homestead credit. The MVHE applies to property classified as Class 1a or 1b and Class 2a, and causes a decrease in the City’s aggregate Taxable Market Value, even if the Assessor’s Estimated Market Value on the same properties did not decline. Property Tax Payments and Delinquencies (Chapters 275, 276, 277, 279-282 and 549, Minnesota Statutes) Ad valorem property taxes levied by local governments in Minnesota are extended and collected by the various counties within the State. Each taxing jurisdiction is required to certify the annual tax levy to the county auditor within five (5) working days after December 20 of the year preceding the collection year. A listing of property taxes due is prepared by the county auditor and turned over to the county treasurer on or before the first business day in March. 6.9 III-2 The county treasurer is responsible for collecting all property taxes within the county. Real estate and personal property tax statements are mailed out by March 31. One-half (1/2) of the taxes on real property is due on or before May 15. The remainder is due on or before October 15. Real property taxes not paid by their due date are assessed a penalty on homestead property of 2% until May 31 and increased to 4% on June 1. The penalty on nonhomestead property is assessed at a rate of 4% until May 31 and increased to 8% on June 1. Thereafter, an additional 1% penalty shall accrue each month through October 1 of the collection year for unpaid real property taxes. In the case of the second installment of real property taxes due October 15, a penalty of 2% on homestead property and 4% on nonhomestead property is assessed. The penalty for homestead property increases to 6% on November 1 and again to 8% on December 1. The penalty for nonhomestead property increases to 8% on November 1 and again to 12% on December 1. Personal property taxes remaining unpaid on May 16 are deemed to be delinquent and a penalty of 8% attaches to the unpaid tax. However, personal property that is owned by a tax -exempt entity, but is treated as taxable by virtue of a lease agreement, is subject to the same delinquent property tax penalties as real property. On the first business day of January of the year following collection all delinquencies are subject to an additional 2% penalty, and those delinquencies outstanding as of February 15 are filed for a tax lien judgment with the district court. By March 20 the county auditor files a publication of legal action and a mailing of notice of action to delinquent parties. Those property interests not responding to this notice have judgment entered for the amount of the delinquency and associated penalties. The amount of the judgment is subject to a variable interest determined annually by the Department of Revenue, and equal to the adjusted prime rate charged by banks but in no event is the rate less than 10% or more than 14%. Property owners subject to a tax lien judgment generally have three years (3) to redeem the property. After expiration of the redemption period, unredeemed properties are declared tax forfeit with title held in trust by the State of Minnesota for the respective taxing districts. The county auditor, or equivalent thereof, then sells those properties not claimed for a public purpose at auction. The net proceeds of the sale are first dedicated to the satisfaction of outstanding special assessments on the parcel, with any remaining balance in most cases being divided on the following basis: county - 40%; town or city - 20%; and school district - 40%. Property Tax Credits (Chapter 273, Minnesota Statutes) In addition to adjusting the taxable value for various property types, primary elements of Minnesota's property tax relief system are: property tax levy reduction aids; the homestead credit refund and the renter’s property tax refund, which relate property taxes to income and provide relief on a sliding income scale; and targeted tax relief, which is aimed primarily at easing the effect of significant tax increases. The homestead credit refund, the renter’s property tax refund, and targeted credits are reimbursed to the taxpayer upon application by the taxpayer. Property tax levy reduction aid includes educational aids, local governmental aid, equalization aid, county program aid and disparity reduction aid. Debt Limitations All Minnesota municipalities (counties, cities, towns and school districts) are subject to statutory “net debt” limitations under the provisions of Minnesota Statutes, Section 475.53. Net debt is defined as the amount remaining after deducting from gross debt the amount of current revenues that are applicable within the current fiscal year to the payment of any debt and the aggregate of the principal of the following: 1. Obligations issued for improvements that are payable wholly or partially from the proceeds of special assessments levied upon benefited property. 2. Warrants or orders having no definite or fixed maturity. 3. Obligations payable wholly from the income from revenue producing conveniences. 6.9 III-3 4. Obligations issued to create or maintain a permanent improvement revolving fund. 5. Obligations issued for the acquisition and betterment of public waterworks systems, and public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which revenue is or may be derived. 6. Certain debt service loans and capital loans made to school districts. 7. Certain obligations to repay loans. 8. Obligations specifically excluded under the provisions of law authorizing their issuance. 9. Certain obligations to pay pension fund liabilities. 10. Debt service funds for the payment of principal and interest on obligations other than those described above. 11. Obligations issued to pay judgments against the municipality. Levies for General Obligation Debt (Sections 475.61 and 475.74, Minnesota Statutes) Any municipality that issues general obligation debt must, at the time of issuance, certify levies to the county auditor of the county(ies) within which the municipality is situated. Such levies shall be in an amount that if collected in full will, together with estimates of other revenues pledged for payment of the obligations, produce at least five percent in excess of the amount needed to pay principal and interest when due. Notwithstanding any other limitations upon the ability of a taxing unit to levy taxes, its a bility to levy taxes for a deficiency in prior levies for payment of general obligation indebtedness is without limitation as to rate or amount. Metropolitan Revenue Distribution (Chapter 473F, Minnesota Statutes) “Fiscal Disparities Law” The Charles R. Weaver Metropolitan Revenue Distribution Act, more commonly known as “Fiscal Disparities,” was first implemented for taxes payable in 1975. Forty percent of the increase in commercial-industrial (including public utility and railroad) net tax capacity valuation since 1971 in each assessment district in the Minneapolis/Saint Paul seven-county metropolitan area (Anoka, Carver, Dakota, excluding the City of Northfield, Hennepin, Ramsey, Scott, excluding the City of New Prague, and Washington Counties) is contributed to an area-wide tax base. A distribution index, based on the factors of population and real property market value per capita, is employed in determining what proportion of the net tax capacity value in the area-wide tax base shall be distributed back to each assessment district. 6.9 III-4 STATUTORY FORMULAE: CONVERSION OF TAXABLE MARKET VALUE (TMV) TO NET TAX CAPACITY FOR MAJOR PROPERTY CLASSIFICATIONS Local Tax Payable Local Tax Payable Property Type 2013-2014 2015-2017 Residential Homestead (1a) Up to $500,000 1.00% 1.00% Over $500,000 1.25% 1.25% Residential Non-homestead Single Unit (4bb1) Up to $500,000 1.00% 1.00% Over $500,000 1.25% 1.25% 1-3 unit and undeveloped land (4b1) 1.25% 1.25% Market Rate Apartments Regular (4a) 1.25% 1.25% Low-Income (4d) 0.75% Up to $115,000(c) 0.75% Over $115,000(c) 0.25% Commercial/Industrial/Public Utility (3a) Up to $150,000 1.50%(a) 1.50%(a) Over $150,000 2.00%(a) 2.00%(a) Electric Generation Machinery 2.00% 2.00% Commercial Seasonal Residential Homestead Resorts (1c) Up to $600,000 0.55% 0.50% $600,000 - $2,300,000 1.00% 1.00% Over $2,300,000 1.25%(a) 1.25%(a) Seasonal Resorts (4c) Up to $500,000 1.00%(a) 1.00%(a) Over $500,000 1.25%(a) 1.25%(a) Non-Commercial (4c12) Up to $500,000 1.00%(a)(b) 1.00%(a)(b) Over $500,000 1.25%(a)(b) 1.25%(a)(b) Disabled Homestead (1b) Up to $50,000 0.45% 0.45% Agricultural Land & Buildings Homestead (2a) Up to $500,000 1.00% 1.00% Over $500,000 1.25% 1.25% Remainder of Farm Up to $2,050,000(d) 0.50%(b) 0.50%(b) Over $2,050,000(d) 1.00%(b) 1.00%(b) Non-homestead (2b) 1.00%(b) 1.00%(b) (a) State tax is applicable to these classifications. (b) Exempt from referendum market value based taxes. (c) Legislative increases, payable 2017. Historical valuations are: Payable 2016 - $106,000 and Payable 2015 - $100,000. (d) Legislative increases, payable 2017. Historical valuations are: Payable 2016 - $2,140,000; Payable 2015 - $1,900,000; Payable 2014 - $1,500,000; and Payable 2013 - $1,290,000. 6.9 APPENDIX IV IV -1 EXCERPT OF 2016 COMPREHENSIVE ANNUAL FINANCIAL REPORT Data on the following pages was extracted from the City’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2016. The reader should be aware that the complete financial statements may contain additional information which may interpret, explain or modify the data presented here. The City’s comprehensive annual financial reports for the years ending 1996 through 2015 were awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA). The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. The City has submitted its CAFR for the 2016 fiscal year to GFOA. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report (CAFR), whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. 6.9 IDdependent Auditor's Report Honorable Mayor and Members of the Cicy Council Cicy of Crystal Crystal, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Cicy of Crystal, Minnesota, as of and for the year ended Decem her 31, 2016, and tho related notes to financial s-.nents, which collactively comprise the City's basic financial statements as listed in the Table of Contents. Management's Responsibilicy for the Financial Statements Management is responsible for the pteparation and fair presentation of these financial a-.neots in accordance with accounting principles geoerally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the pteparation and lkir presentation offinancials-.nents that are free from material misstatements. whether due to fraud or en-or. Auditor's ResponsibUity Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the West Metro Fire-Rescue District nor the Golden Valley, Crystal, New Hope Joint Water Commission, joint ventures of the City which are disclosed in the notes to the City's financial statements, and in which the Cicy reports an equity interest of$2,036,218 and $4,045,981, respectively. The financial statements of the District and Commission were audited by other auditors whose reports thereon have been furnished to us and our opinion, insofar as it relates to tlie amount's disclosed for the District and Conunission, is based on the report of the other auditors. We conducted our audit in accordance with aUditing standsrds generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Auditor'• ResponsibUity (Continued) An audit involves performing procedures to obtain audJ't evidence about the amowrts and disclosures in the financial statements. The proceduree selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements. whether due to fraud or error. In making those risk assessments, the auditor oonsiders internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estinlates made by management. as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the ~ve financial position of the goyern:mental activities, the business-type activities, each major fund, and the aggregate remaining fund infonnation of the City of Crystal, Minnescta, as of December 31, 2016, and the respective changes in financial position and whore applicable, cssh flows, thereof, and the respective budgetary comperisons for the General Fund and EDA Special Revenue Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters IIBquired Supplementary Il!fornwtion Accounting principles generally accepted in the United States of America require that the Manogemenes Discussion and Analysis, which follows this report letter, and the Required Supplementaey lnformarien as indicated in the Table of Contents, be presented to supplement the basic financial statements. Such informetion, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board (GASB) who considers it to be an essential part of financial reporting for placing the basic financial statements in en appropriate operstional, economic, or historical context. We have applied certain limited procedures to the Required Supplementary Information in accordance with euditing standsrds generally aocept<:d in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the infonnation for consistency with management's responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Matten (Coatinued) Otlrer biformatlon Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cicy of Ceystal's basic financial statements. The introductmy section, combining and individual fund financial statements, and schedules and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the respollSlDility ofiilllllllgODlent and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such ioformation bas been subjected to the auditing procedures applied in the audit of the basic financial statemeots and certain additional proeedures, including compating and reconciling such informetion directly to the underlying accounting and other records used to prepare the basic financial stalements 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 schednies are lkirly stated, in all meterial respects, in relation to the basic financial statements as a whole. The initoductory section and stetistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and accordingly, we do not express an opinion or provide any assurance on them. J:?~ICDV'~ Minnespolis, Minnesota Mey23,2017 IV-2 6.9 City of Crystal Management's Discnssion and Analysis As management of the City of Crystal (the City), we have provided readers of the City's fiilancial statements with this narrative overvieW and analysis of the financial activities of the City for the fiscal year ended December 31, 2016. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our Letter of Transmittal; located previoUsly in this report. Financial Highlights The assets and deferred outflows of resolirces of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $112,838,7~2. Of this amount, $33,946,513 is considered unrestricted net position and may be used to meet the City's ongoing obligations to citizcins arid creditors. · ' The City's total net position increased by $2,389,220. Goveinm:entaJ. activities eXJWienced a $466,397 increase in net position from operations while business-type activities eiperienced a $1,922,823 increase in net position from operations. At the end of the fiscal year, total fund balance for the General Fund was $7,053,775, or 55.92% of total General Fund expenditures and transfers out. · · The City's total long term debt (excluding net pension liability and net OPEB obligation) increased by $1,080,552 during the fiscal year. The City's Net Pension Liability increased $8,984,612. The City's net OPEB obligation increased by $80,311. Overview of the Financial Statements' Management's Discussion and Analysis is intended to serve as an introduction to the City's basic fiilancial statements, which are comprised of three components: 1) govetnment-wide fiilancial statements; 2) fund flhancial statements; and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. · Government-wide Financial Statements The government-wide financial statements .are designed to provide readers with a broad overview of the City's finances, in a manner similar to private sector business. The.Statement of Net Position presents information on all ofthe,City's assets plus deferred outflows of resources and liabilities plus deferred inflows of resources, with the difference between. the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City's. net position changed during the most recent fiscal year; All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related 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). City of Crystal Management's Dis~ion and Analysis Government-Wide Fin~dal Statements (~ontinued) Both of the government-wide fiilancilu statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business- type activities). The governmental activities of the City include general government, public safety, public works, parks and recreation, and community development. The business-type activities of the City include enterprises for water, sanitary sewer, storm dntinage, street lights, and recycling. The government-wide fiilancial statements include not only the City itself (known as the primary government), but also the Economic Development Authority (ED A). The EDA is a legally separate entity and its governing board is comprised of the City Council members. The City has operational responsibility of the EDA and it functions as a department of the City to provide housing and redevelopment assistance through the administration ofvarlous prognims. Therefore, the EDA has been included as an integral part of the City's fllllincial Statements. 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 fmance-related legal requirements. All of the funds of the City can be divided into three categOries, including governmental funds, proprietary funds, and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in th.e government-wide financial statements. However, unlike the government-wide financial statements,, governmental fund financial statements focus on near term inflows and outflows of spendable reSo1,1l'CCS, as well as balances of spenda])le 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 ~e information presented for governmental funds with similar information presented for governmental activities in the government-wide fiilancial statements. By doing so, readers may better understand the long term impact of the government's near term fmancing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fuild balances pr<Wide il. ieconciliation to faeilitate this comparison between governmental funds and governmental activities. The City maintains twelve individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, EDA, Debt Service, Capital Improvement Revolving, Major Building Replacement, and Street Reconstruction funds, all of which are considered to be major funds. Data from the other six governmental funds are combined into a single aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. I V - 3 6.9 City' of Crystal Management's Discnssion and Analysis Governmental Funds (Continued) The City adoPts an annual appropriated budget for all of its governmental funds. Budget to actual comparisons are provided in this fmancial report for each individual governmental fund for which an annual budget has been adopted. Proprietary Funds The City maintains two different types of proprietary funds. Enteq~rise funds are used to report the same functions presented as business-type activities in the government-wide financial statements .. The City uses enteq>rise funds to account for its water, sanitary sewer, storm drainage, street lights, and recycling operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses an internal service fund to account for its self-insurance activities. Because this activity predominantly benefits governmental rather than business-type functions, it has been included within governmental activities in the government-wide fmancial statements. 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 the water, sanitary sewer, storm drainage, street lights, and recycling operations, all of which are reported as major funds of the City. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to 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. Other Information Required Supplementary Information concerning the City's progress in funding its obligation to provide pension and OPEB benefits to its employees is presented immediately following the notes to the fmancial statements. Combining and individual fund statements and schedules for nonmajor funds are presented immediately following the Required Supplementary Information. Net Position The City has 53.45% of its total net position invested in capital assets (including land, buildings and structures, improvements other than building$, machinery and equipment, office equipment and furnishings, software, vehicles and trailers, and infrastructure), less any related outstanding debt used to acquire those assets. 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. Net Position (Continued) City of Crystal Management's D.iscussion and J\nalysis An additionall6.47% of the City's net position represents resources that are subject to external restrictions on how they may be US.ed. The remaining balance of 30.08% represents unrestricted net position that may be used to meet the government'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 government and business-type activities. The ssme situation held true for the prior fiscal year. A summary of the City's het position follows: NetPo1itioa · Governmental Activities Business-Type Activities Total 2016 2015 2016 2015 2016 2015 --- Current and other assets S Sl.OTI ,302 $ 50,561,578 s 5,414,668 $ 5,879,716 s 57,491,970 s 56,441,294 Equity interest in joint ventuno 2,036,218 2,194,136 4,045,!181 2,534,746 6,082,199 4,728,882 Capital assets 5~465,094 54 917124 19,889,415 19,057,632 76,354~09 73,974,756 Total assets 110,578,614 107,672.838 29,350,064 27,472,094 139,928,678 135,144,932 DefeiTed outflows of ....,..... 9,061,274 1,085,225 337,083 71,868 9,398,357 1,157,093 Long·...,liabi1ities ou~Qnding 30,415,118 20,520,993 968,266 653,387 3I,m.J84 21,174,380 Other liabilities 3,096,853 3,413~85 156~6 281941 ;!JSJ 429 3,695~26 Total liabilities 33,511,971 23,934,278 1,124;842 935,328 34,615,202 24,869,606 DefeiTed inflOWIJ of resources 1,754,342 916,607 97,128 66,280 1,851,470 982,887 Net Position Net investment in capital assets 40,421,924 39,903,269 19,889;415 19,057,632 60,311,339 58,960,901 Restricted 18,580,900 18,102,105 18,580,900 18,102,105 Unrestricted 25oe7Q.7S1 .25,901~ 8~75,762 7,484,722 33,946~13 33,386~26 Total net $ . 84,373,575 s 83,907,178 $ 28,465,1TI s 26,542,354 $112,838,752 $110,449,532 position I V - 4 6.9 City of Crystal Management's Discussion llli.d Analysis Net Position (Continued) A summary of the City's changes in net position and revenues and expenses for 2016 and 2015 follows: Chan~s in Net.Position Governmental Activities Busin.,..Typc Activities Total 2016 2015 2016 2015 201~ 2015 RovcnUCI Program revenues Charges for services $2,015,302 s 1,885,583 s 6,663,647 $6,371,934 $8,678,949 s 8,l57,S17 Operating grants and contributions 728,449 634,881 1,859,532 1,669,332 2,587,981 2,304,213 Capital grants and contributions 7,393,250 5,533,872 7,393,250 5,533,872 General mcnucs .PropertyiBXeS 9,955,391 9,670,252 9,955,391 9,670,252 lntersovernmental 1,712,591 1,712,591 ~ts and contributions not rcstricbld to specific programs 1,701,220 1,701,220 Other 528,09.1 330,969 53,794 66,017 581,885 396,986 Total revenues $22,333,074 SI9,756,m s 8,576,973 n,I07,l83 $30,910,047 527,864,060 Expenses Gcncnd goven,ment 3,l26,l78 2,646,651 3,226,278 2,646,651 Public safiny 7,685,700 6,438,462 7,685,700 6,438,462 Publicworlcs 6,511,486 5,132,260 6,5!1,486 5,132,260 Parks and recreaticm 2,759,211 2,816,220 2,759,211 2,816,220 Community development 1,174,426 1,287,427 1,174,426 1,287,427 Interest on long-term debt 563,308 555,121 563,308 555,121 Wf4Zs 3,047,910 4,131,931 3,047,910 4,131,931 Sanitary sewer 2,169,072 1,995,561 2,169,f)72 1,995,561 Stonndroiruoge 903,884 883,284 903,884 883,284 Stn:etlights IS5,056 151,305 155,056 151,305 Recyciins 324,496 324,393 324,496 324,393 Total""""'"' $21,920,409 $18,876,141 s 6,600,418 __!_?,_486,474 $28,520,827 $26,362,615 Chango in net position Beforelrallsftrs 412,665 880,6l6 1,976,555 620,809 2,389,220 1,501,445 TransJOrs 53,732 (1,577,880) (53,732) 1,577,880 Change in not positioo 466,397 (697,244) 1,922,823 2,198,689 2,410,831 1,501,445 Net position beginning of year 83,907,178 90,107,470 26,542,354 24,845,845 110,449,532 114,953,315 Change in ooccnmting (5,503,048) (502,180) (6,005,228) principle Net position beginning of year 83,907,178 84,604,422 26,542,354 24,343,665 110,449,532 108,948,087 Net position-end ofyear $84,373,575 $83,907,178 s 28,465,177 $26,542,354 $112,838,752 $110,449,532 Governmental Activities City of Crystal l\fanagement's Discussion and Analysis Governmental activities increased the City's governmental-type net position by $466,397, or 0.56%, accounting for 19.52% of the total increase in the City's net position. Business-type Activities Business-type activities increased the City's business-type net position by $1,922,823, or 7 .24%, offsetting for 80.48% of the total increase in the City's net position. Key elements of the net increase include: • Net position of the water, sanitary sewer, and storm drainage funds were all increased by capital contributions related to construction of a new public works facility. • Rate increases The City Council approved a rate increase of 5.05% for the sanitary sewer utility, which increased rates charged from $52.50 per quarter for residential properties in 2016 to $55.15 per quarter in 2016. In addition, the sanitary sewer utility increase the rate per 1,000 gallons from commercials users from $2.32 in 2016 to $2.43 in 2017. The City Council approved a rate increase of 22.22% for the storm drainage utility, which increased rates charged from $3.50 per quarter for residential properties in 2016 to $16.50 per quarter in 2017. In addition, the storm drainage utility rate per residential equivalency factor for commercial users increase by 22,22%, this increase the quarterly factor from $67.50 in 2016 to $82.5 in 2017. The City Council approved a rate increase of 2.04% for the street lights utility, which increased rates charged from $4.90 per quarter for residential properties in 2016 to $5.00 per quarter in 2017. The City Council approved a rate increase of .94% for the recycling, which increased rates charged from $10.65 per quarter for residential properties in 2016 to $10.75 per quarter in 2017. I V - 5 6.9 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 so $7,000,000 $6,000,000 $5,000,000 $4,000,000 City of Crystal Management's Discussion and Analysis 2016 Expenses and Program Revenues-Governmental Activities General Public Safety Public Worlcs Parb md Community intciOSt on Oov<nimcnt Recloation Development Lons-Ttnn Debt. 2015 Expenses and Program Revenues-Governmental Activities $3,000,000 +---- $2,000,000 $1,000,000 $0 Genet.al Public Sarety Public Parks and Community Interest on Government Works RecteatiQn Deve1opmmt Lo!lg-Tenn Debt • Expenses • Revenues •Expenses •Revenues City of Crystal Management's Discussion and Analysis 2016 Revenues by Soun:e -Governmental Activities Grants and Contributions Not Restricted to Specific Programs 0% ..----uperatmg Grants 2015 Revenues by Soun:e -Governmental Activmes Capital Grants and Contributions 2S% Umestricted Inves-.,t Earnings 1% Grants and Contributions Not Restricted to Specific Programs 9% Olarges for Services 10% Operating Grants and Contributions 3% Property T.,.,. 49% I V - 6 6.9 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 City of Crystal Management's Discussion and Analysis 2016 Expenses and Program Revenues -Business '!Ype Activities Water Sanitary Sewer Storm Drainage Street Lights Recycling 2015 Expenses and Program Revenues -Business '!Ype Activities Water Sanitary Sower Storm Drainage Street Lights Recycling •Expenses •Revenues a Expenses • Revenues Investment 0% Unrestricted Investment 1 1% Capital G'ants ContnOutions 0% City of Crystal Management's Discussion and Analysis 2016 Revenues by SoUIXe -Business 1Ype Activities Cllarges for Services 78"A> 2015 Revenues by Source -Business 'IYpe Activities for Services 79% I V - 7 6.9 City of Crystal Managemeut's DiScussion and AnalysiS FINANCIAL ANALYSIS OF THE CITY'S FUNDS Governmental Funds At the end of the fiscal year, the City's governmental funds reported combined endlng fund balances of $34;1157,674, a decrease of$6,161 compared to the ptior year, Approximately 17.85% of the total amount ($6,220,496) constitutes uniiSsigned fund balance, which is available for spending at the government's discretion. The temainder of fund baiattce has been ci&Ssified as nonspendable ($15,519), restricted ($7,566,587), committed ($20,985,957), and assigned ($69,115). The General Fund is the main operating fund of the City. At the end of the fiscal year total fund balance was $7,053,775, Unassigned fund balance was $6,220,496, $817,760 was committed for compensated absences,-and $15,519 was reported as nonspendable to offset inventory. AJJ a measure of the General Fund's liquidity, it may be useful to compare total fund balanee ta total fund expenditures. Total fund balance represents 55.92% of total General Fund experiditures and transfers out. The total fund balance is slightly more thart the balance called for by the City's fund balance policy. Fund balance provides working capital to support operations until the first current-year tax settlement is received in June and July. There was a decrease of $139,150 in the fund balance .of the General Fund during the current fiscal year. Total revenues were $133,294 lower than the tina! budget. Property taxes; special assessments; lieenses, permits -and inspections; charges for sales and/or services; fmes and forfeitures, and interest were lower than budget. Actual expenditures were $5,856 higher than the final budget. The EDA Fund recorded a decrease of $32,520 in its fund balance during the current fiscal year. total revenues. were lower than budget by $30,102. The fund balance of $4,215,316 was committed for economic development projects. - The Debt Service Fund has a total fund balance of $5,750,342, all of which is restricted for the payment of debt service. The net decrease in fund balance during the current fiscal year wlis·$687,J70. For additional transaetion details, refer to the Long Term Debt section located later in this Management's Discussion and Analysis, or to Note 7 in the notes to the fmancial stateiilents. There was a decrease of$148,921 in the fund balance of the CapitallmprovementRevo1ving Fund during the current fiscal year. This was due to planned use of fund balance for capital projects. The fiui.d balance includes $11;357,889 that is committed. The Street Reconstruction Fund recorded an increase of $57,809 in its fund balance during the current fiscal year. This was d~e to planned use of fund balance for street reconstruction projects. Major reconstruction work on Phase 15 ofthe16-phase street tecoilstructiori p~ was comJ,ieteti dilring 2016 and major reconstruction on Phase 16 will take pl.ace in 2017. All of the fund balance of$2,132;454 is committed. · Proprietary Funds The City's proprietary funds provide the same type ofinfonnation found in the government-wide financial statements; bilt iri more detail. City of Crystal Managemeut's ;oiscussi!)n and AnalysiS FINANCIAL ANALYSIS OF THE CITY'S FUNDS (CONTINUED) Proprietary Funds (Continued) Unrestricted net position in the City'!f enterprise funds totaled $8,57 5, 762 at the end of the fiscal year. The water, sanitary sewer, storm drainage, and recycling funds reported incre&Ses in net position from operations of $1,710,371, $l0,087, $311,262 and $4,392, respectively. The sqeet lights fund reported a decrease in net position from operations of$113,289. - The storm drainage fund received a capital contribution of$253,254. B.udget Highlights. As is customary praCtice for the City, its budget was amended several times to reflect the occurrences of items not factored into the original budget. There were minor increases and decreases in the operating budgets of various General Fund operating departments. There were also numerous increases 1111d decreases in the operating budgets of-the remaining funds, although nothing_ out-of-the ordinary. Capital AJJsets The City's net capital assets for itS govetmnental and business-type .activities as of December 31,2016, are $76,354,509. This balance represents a net increase of $2,379,753 from the prior year. Additional details of capital asset activity for the year can be found in Note 6 in the notes to the fmancial statements. Major capital activity during the year include!! the following: • Major work on Phase 15 of the ongoing street reconstruction program was completed during 2016. The project is recorded as construction in progress pending COJ:llpletion in 2017: ' · Long-Term Debt The City's totallongtermdebt increased by $1,080,552, or6.76%, during the ftscal year. Normal required annual payments were made on bonds payable and compensared absences. During 2016, the pty issued G.O. Street Improvement Bonds, Series 2016A, to fmance special assessments relating to Phase 15 street reconstruction. Additional details of long term debt activity for the year can be found in Note 7 in the notes tO the financial statements. The City's-sound financial management and strong financial position, as evidenced by favorable reserves, has earned the City an Aa2 rating from Moody;s Investors .Service on its G.O. debt. Moodyis Irivestors Service last completed a rating review in 20 16 with no change in the rating. The CitY expects to receive the Aa2 rating in the future. .State statutes limit the amount ofG.O. debt a governmental entity may issue to.3% of total taxable market value. The current debt limitation for the City is $40,177,000, which is significantly higher than the City's outstanding G.O. debt of $850,940. I V - 8 6.9 City of Crystal Management's Discussion and Analysis FINANCIAL ANALYSIS OF THE CITY'S FUNDS (CONTINUED) Economic Factors and Next Year's Budgets and Rates Economic factors affect the preparation of annual budgets. The following factors were considered in preparing the City's budget for the 2017 fiscal year: • The 2017 budget includes a 7.26% tax levy increase. This will be supplemented by increases in other revenues to cover an inflationary increase in the operating budget. • The City annually updates a five-year utility rate study reviewing operational and capital needs for each utility. For 2017, water tates remain stable, sewer services for residential customer increased by 5.05%, sewer services for commercial customers increased 4. 74%, storm drainage rates increased 22.22%, street light rates increased 2.04% and recycling rates increased .94% Requests for Information Questions concerning any of the information provided in this report or requests for additional information should be addressed to: City of Crystal Attn: Finance Director 4141 Douglas Drive N. Crystal, MN 55422 IV-9 6.9 City of Crystal Statement of Net Position December 31, 2016 Governmental Business-Type Activities Activities Total Assets Cash and investments (including cash equivalents) $ 36,143,884 $ 3,627,655 $ 39,771,539 Cash with fiscal agent 68,278 68,278 Accrued interest 43,984 4,535 48,519 Accounts receivable 74,783 1,306,174 1,380,957 Delinquent taxes receivable 285,187 285,187 Special assessments receivable 14,857,603 369,086 15,226,689 Due from other governments 86,374 27,869 114,243 Inventory 15,519 78,049 93,568 Prepaid items 1,300 1,300 Land held for resale 469,000 469,000 Notes receivable 32,690 32,690 Equity interest in joint venture 2,036,218 4,045,981 6,082,199 Capital assets (net of accumulated depreciation, where applicable) Land 6,860,536 759,061 7,619,597 Buildings and structures 10,059,085 2,443,370 12,502,455 Improvements other than buildings 2,804,434 7,939 2,812,373 Machinery and equipment 1,587,628 1,878,335 3,465,963 Office equipment and furnishings 440,351 440,351 Software 96,963 85,088 182,051 Vehicles and trailers 1,116,702 313,155 1,429,857 Infrastructure 29,444,085 13,638,425 43,082,510 Construction in progress 4,055,310 764,042 4,819!352 Total assets 110,578,614 29,350,064 139,928,678 Deferred Outflows of Resources Pension-related deferred outflows 9,061,274 337,083 9,398,357 Liabilities Accounts and o.ther current liabilities 1,243,092 126,129 1,369,221 Interest payable 178,699 178,699 Unearned revenue 92,617 92,617 Noncurrent liabilities Due within one year 1,582,445 30,447 1,612,892 Due in more than one year 15,364,425 99,555 15,463,980 Net pension liability 14,496,109 812,133 15,308,242 Net OPEB obligation 554,584 56,578 611,162 Total liabilities 33,511,971 1,124,842 34,636,813 Deferred Inflows of Resources Pension-related deferred inflows 1,754,342 97,128 1,851,470 Net Position Net investment in capital assets 40,421,924 19,889,415 60,311,339 Restricted for TIF projects 1,783,870 1,783,870 Debt service 16,764,655 16,764,655 Special projects 32,375 32,375 Unrestricted 25,370,751 8,575,762 33,946,513 Total net position $ 84,373,575 $ 28,465,177 $ 112,838,752 See notes to financial statements. IV-10 6.9 City of Crystal Statement of Activities Year Ended December 31, 2016 Net (Expense) Revenues Program Revenues and Chan~es in Net Position Operating Capital Grants Charges for Grants and and Governmental Business-Type Functions/ProJ[amS Expenses Services C~mtributions Contributions Activities Activities Total Governmental activities General government $ 3,226,278 $ 320,899 $ 31,372 $ 36,347 $ (2,837,660) $ -$ (2,837,660) Public safety 7,685,700 411,592 596,638 20,000 (6,657,470) -(6,657,470) Public works 6,511,486 -68,537 7,241,251 798,302 -798,302 Parks and recreation 2,759,211 515,056 31,902 -(2,212,253) -(2,212,253) Community development 1,174,426 767,755 -95,652 (311,019) -(311,019) Interest on long-temi debt 563!308 ---(563,308) -~563,308) Total governmental activities 21,920,409 2,015,302 728,449 7,393,250 (11, 783,408} -(11,783,408) Business-type activities Water 3,047,910 3,076,263 1,774,217 --1,802,570 1,802,570 Sanitary sewer 2,169,072 2,193,599 55,039 --79,566 79,566 Storm drainage 903;884 867,598 30,155 - -{6,131) (6,131) Street lights 155,056 191,261 121 --36,326 16,326 Recycling 324,496 334,926 -- -10,430 10,430 Total business-type activities 6,600,418 6,663,647 1,859,532 --1,922,761 1,922,761 Total primary government $ 28,520,827 ==== $ 8,678,949 $ 2,587,981 $ 7,39!,250 (11,783,408) 1,922,761 (9,860,647) General revenues Property taxes 9,955,391 -9,955,391 Intergovernmental 1,712,591 -1,712,591 Unrestricted investment earnings 362,497 47,353 409,850 Other general revenue 82,799 -82,799 Gain of sale of asset 82,795 6,441 89,236 Transfers 53,732 (53,732) Total general revenues and transfers 12,249,805 62 122249,867 Change in net position 466,397 1,922,823 2,389,220 Net position -beginning 83,907,178 . 26,5422354 -110,449,532 Net position -ending $ 84,373,575 $ 28,465,177 $ 112,838,752 See notes to fmancial statements. I V - 1 1 6.9 City of Crystal Balance Sheet-Governmental Funds December 31, 2016 Capital Improvement Street Other Total EDA-Special Revolving-Reconstruction -Governmental Governmental General Fund Revenue Debt Service C~ital Projects Cal!ital Projects Funds Funds Assets Cash and investments $ 7,358,ll7 $ 3,758,615 $ 5,731,734 $ 8,440,754 $ 2,521,416 $ 7,372,699 $ 35,183,335 Temporarily restncted cash 68,278 -- ---68,278 Taxes receivable 195,315 6,639 12,269 - -70,964 285,187 Special assessments receivable 108,694 -ll,192,330 557,ll3 2,661,798 337,668 14,857,603 Accounts receivable 53,812 --5,570 7,491 7,910 74,783 Accrued interest 9,109 4,597 7,021 10,279 3,046 8;755 42,807 Due from other governments 41,579 ---31,231 13,564 86,374 Inventories 15,519 --- - -15,519 Land held for resale -469,000 -. -469,000 Notes receivable --32,690 --32,690 Total assets $ 7,850,423 $ 4,238,851 $ 16,943,354 $ 9,046,406 ~224,982 $ 7,811,560 $ 51,115,576 Liabilities Accounts payable $ ll7,131 $ 13,460 $ -$ 64,446 $ 73,253 $ 20,915 $ 289,205 Due to other governments 70,885 46 -28,803 153,121 2,501 255,356 Salaries and benefits payable 212,179 3,876 ----216,055 Deposits payable 68,278 1,()00 -- --69,278 Contracts payable - --6,945 209,0ll 31,941 247,897 Unesmed revenue 92,617 - ----92,617 Total liabilities 561,090 18,382 -100,194 435,385 55,357 1,170,408 Def11rred Inflows of Resources Unavailable revenue -property taxes 136,424 5,153 10,914 - -70,964 223,455 Unavailable revenue -special !ISSe&sments 99,134 -11,182,098 555,633 2,657,143 337,341 14,831,349 Unavailable revenue -notes receivable - --32,690 --32,690 Total deferred ii!flows of resources 235,558 5,153 11,193,012 588,323 ~657,143 408,305 15,087,494 Fu11d Balances Nonspendable 15,519 -----15,519 Restricted --5,750,342 - -1,816,245 7,566,587 C.ommitted 817,760 4,215,316 8,357,889 2,132,454 5,462,538 20,985,957 Assigned --- -69,115 69,115 Unassigned 6,220,496 ---6,220,496 Total fund balances 7,053,775 4,215,316 5,750,342 8,357,889 __ 2_,132,454 7,347,898 34,857,674 Total liabilities, deferred inflow of resouces, and fund balances $ 7,85Q,4~ $ . 4,238,851 $ 16,943,354 $ 9,046,406 $ 5,224,982 $ 7,811,560 $ 51,115,576 See notes to financial statements. I V - 1 2 6.9 City of Crystal Reconciliation of the Balance Sheet to the Statement of Net Position -Governmental Funds December 31, 2016 Total fund balances-governmental funds Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported as assets in governmental funds. Cost of capital assets Less accumulated depreciation Certain revenues are include in net position but are excluded from fund balances until they are available to liquidate liabilities ofthe current period. Unavailable revenue relating to: Property taxes Special assessments Notes receivable Long-term liabilities are included in net position but are excluded from fund balances until due and payable. Bond principal payable Premium on debt Discount on debt Interest payable Compensated absences payable Net OPEB obligation Governmental funds do not report long-term amounts relating to pensions. Deferred outflows of resources and deferred inflows of resources are created as a result of various differences related to pensions that are not recognized in the governmental funds. Deferred inflows of resources related to pensions Deferred outflows of resources related to pensions Net pension liability An internal service fund is used by management to charge the costs of insurance to individual funds. The assets and liabilities of the Self-Insurance Internal Service Fund are included in governmental activities in the Statement of Net Position. Equity interests in underlying capital assets of joint ventures associated with governmental funds are not reported in such funds because they do not represent financial assets. Equity interest in joint venture-West Metro Fire-Rescue District Total net position -governmental activities See notes to financial statements. $ 34,857,67 4 99,359,429 (42,894,335) 223,455 14,831,349 32,690 (15,900,940) (277,905) 49,735 (178,699) (817,760) (554,584) (1,754,342) 9,061,274 (14,496,109) 796,425 2,036,218 $ 84,373,575 IV-13 6.9 City of crystal Statement of Revennes, Expenditures, and Changes in Fund Balances -Governmental Funds Year Ended December 31,2016 Capital Street Improvement Reconstruction . Other Total EDA -Special Revolving-Capital Governmental Governmental General Fund Revenue Debt Service Cal! ita! Projects Funds Funds Revenues Property taxes $ 8,004,390 $ 283,771 $ 211,132 $ 261,000 $ $ 1,206,685 $ 9,966,978 Special assessments 95,652 2,093,119 153,964 1,520,577 86,769 3,950,081 Licenses and permits 773,479 -773,479 Intergovernmental 2,008,525 246,829 738,099 68,820 3,062,273 Charges for services 791,838 98,151 23,340 -913,329 Fine and forfeitures 322,009 -322,009 Interest 66,061 33,413 50,340 74,198 21,853 245,865 Net increase in fair value of investments 9,093 4,588 7,008 10,258 3,040 25,028 59,015 Miscellaneous 60 050 0 111,018 739 084 136,757 1,046,909 Total revenues 12,131,097 419,923 2,361,599 880,607 3,022,653 1,524,059 20,339,938 Expenditures Current General government 2,510,387 - -7,537 2,517,924 Public safety 6,069,624 -73,856 6,143,480 Public works 1,276,590 701,516 99,370 2,077,476 Culture and recreation 2,233,897 6,305 2,240,202 Economic development 523,035 454,064 --131,821 1,108,920 Debt service Principal 2,385,000 96,027 2,481,027 Interest and other charges 459,823 70,475 61,218 591,516 Capital outlay 179 1,232,902 5,612,117 279,365 7,124,563 Total expenditures 12,613,533 454 243 2,844,823 1,232,902 6,384,108 755,499 24,285,108 Excess of revenues over (under) expenditures (482,436) (34,320) (483,224) (352,295) (3,361 ,455) 768,560 (3,945,170) Other Financing Sources (Uses) Proceeds from sale of capital asset 79,274 43,085 122,359 Bonds issued 3,330,000 3,330,000 Premium on bonds issued -99,664 99,664 TransferS in 343,286 1,800 124,100 203,946 673,132 Transfers out (203,9462 (10,400) (71,800} (286,146} Total other financing sources (uses) 343,286 1,800 (203,946) 203 374 3,419,264 175,231 3,939,009 Net change in fund balances (139,150) (32,520) (687,170) (148,921) 57,809 943,791 (6,161) Fund Balances Beginning of year 7,192,925 4,247,836 6,437,512 8,506,810 2,074,645 6,404,107 34,863,835 End of year $ 7,053,775 _1___j,1J5Jl!6 $ ~,750,~ $ 8,357,889 $ 2,132,454 $ 7,347,898 $ 34,857,674 See notes to financial statements. I V - 1 4 6.9 City of Crystal Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities -Governmental Funds Year Ended December 31, 2016 Net change in fund balances-governmental funds Amounts reported for governmental activities in the Statement of Activities are different because: · Capital outlays are reported in governmental funds as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. Capital outlays Depreciation expense The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to decrease net position. Revenues relating to delinquent taxes, special assessments, and notes receivable are included in the change in net position but are excluded from the net change in fund balances until they are available to liquidate liabilities of the current period. The issuance of long-term debt provides current financial resources to governmental funds, while repayment of the principal oflong-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 deferred and amortized in the Statement of Activities. Proceeds from bonds issued Premium on bonds issued Bond principal payments 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. Amortization of bond premium Amortization of bond discount Accrued interest payable Compensated absences Net OPEB obligation Pension costs in governmental funds are recognized when employer contributions are made. On the Statement of Activities pension costs are recognized on the accrual basis. The difference between actual employer contributions and accrual basis pension costs is reflected in pension expense. Pension expense An internal service fund is used by management to charge the costs of insurance to individual funds. The change in net position of the Self-Insurance Internal Service Fund is included in governmental activities in the Statement of Net Position. Net income (loss) from equity interests is included in the change in net position but is excluded from the change in fund balances. Change in net position -governmental activities See notes to financial statements. $ (6,161) 5,701,483 ( 4,065,987) (87,526) 1,817,885 (3,330,000) (99,664) 2,385,000 20,925 (5,576) 12,859 (35,132) (73,038) (1,552,785) (57,968) (157,918) $ 466,397 IV-15 6.9 qty of Crystal Statement of Revenues, Expenditures; arid Changes in Fund Balances - Budget and Actual -General Fund Year Ended December31, 2016 Budllieted Amounts Variance with Ori!liinal Final Actual Amounts Final Budlliet Revenues Property taxes 8,027,940 $ 8,027,940 $ 8,004,390 $ (23,550) Special assessments 109,200 109,200 95,652 {13,548) Licenses and permits 842,680 842,680 773,479 (69,201) Intergovernmental 1,965,609 2,006,309 2,008,525 2,216 Charges for services 757,162 791,762 791,838 76 Fine and forfeitures 351,400 351,400 322,009 (29,391) Interest 60,000 65,700 66,061 361 Net increase in fair value of investments 9,100 9,093 (7) Miscellaneous revenues 19,600 60,300 60,050 (250) Total revenues 12,133,591 12,264,391 ' 12,131,097 (133,294) Expenditures General government Mayor and council 139,178 149,178 149,261 83 Administration 1,177,779 1,167,279 1,167,215 (64) Human Resources 53,082 46,582 46,519 (63) Assessing 237,122 237,122 238,880 1,758 Legal 97,000 75,000 74,634 (366) Elections 79,539 68,539 66,696 (1,843) Finance 561,279 572,279 572,010 (269) City Buildings 172,077 195,077 195,172 95 Total general government 2,517,056 2,511,056 2,510,387 (669) Public safety Police 4,586,881 4,812,881 4,829,961 17,080 Fire 1,229,697 1,239,697 1,239,663 (34~ Total fire 5,816,578 6,052,578 6,069,624 17,046 Public works Engineering 375,442 375,442 374,945 (497) Street maintenance 970,311 908,111 901,645 (6,4662 Total public works 1,345,753 1,283,553 1,276,590 (6,963) Park and recreation Park maintenance 795,059 722,259 723,136 877 Forestry 56,100 62,400 62,363 (37) Recreation 740,064 805,564 801,156 (4,408) Community Center 410,900 398,300 398,547 247 Waterslide/swimming pool 253,978 249,778 248,695 (1,083) Total parks and recreation 2,256,101 2,238,301 2,233,897 (4,404) IV-16 6.9 Expenditures (Continued) Community Development Planning and code enforcement Building inspection Housing Inspection Health department City of Crystal Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual -General Fund Year Ended December 31,2016 Budgeted Amounts Original Final 91,722 94,922 253,175 236,675 182,849 179,149 13,643 11,443 Total community development 541,389 522,189 Total expenditures 12,476,877 12,607,677 Excess of revenues under expenditures {343,286) (343,286) Other Financing Source Transfers in 343,286 343,286 Net change in fund balances $ $ Fund Balance Beginning of year End of year See notes to financial statements. Actual Amounts 96,230 236,348 179,063 11,394 523,035 12,613,533 . (482,436) 343,286 {139,150) 7,192,925 $ 7,053,775 Variance with Final Budget - 1,308 {327) (86) (49) 846 5,856 (139,150) $ {139,150) IV-17 6.9 City of Crystal Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -EDA-SpeCial Revenue Year Ended December 31, 2016 Bud~eted Amounts Variance with Oricinal Final Actual Amounts Final Bud~et Revenues Property taxes $ 246,200 $ 246,200 $ 283,771 $ 37,571 Charges for services 171,432 171,432 98,151 (73,281) Investment income 32,393 32,393 33,413 1,020 Net increase (decrease) in fair value of investments 4;588 4,588 Total revenues 450,025 450,025 419,923 ~30,1022 Expenditures Current Community Development 347,037 347,037 454,064 107,027 Capital outlay 110,000 110,000 179 ~109,8212 Total expenditures 457,037 457,037 454,243 ~2,7942 Excess of revenues under expenditures (7,012) (7,012) (34,320) (27,308) Other Financing Source Transfers in 1,800 1,800 1,800 Net change in fund balances $ (5,212) $ (5,212) (32,520) $ (27,308) Fund Balance Beginning of year 4,247,836 End of year $ 4,215,316 See notes to financial statements. IV-18 6.9 City of Crystal Statement of Net Position-Proprietary Funds Deeember 31,2.01-6 Governmental Activitie$- Internal Service Business-~ Activities-Ent~se Funds Fund Stann Recycling Water Sewer Dtain!!j!e Street Lishts Utili!l Totals Self Insurance Assets Current assets Cash and investments (including cash equivilants) $ 438,599 $ 2,312,443 $ 379,568 $ 387,731 $ 109,314 $ 3,627,655 $ 960,549 Special assessment receivable 369,086 369,086 Accounts receivable 603,562 440,008 166,430 37,496 58,678 1,306,174 Accrued interest 570 2,816 399 615 135 4,535 1,177 Due from other funds 30,000 30,000 60,000 Due from other governments 1,861 25,887 121 27,869 Inventories 27,236 48,479 2,334 78;049 Prepaid expenses 520 520 260 1 300 Total CWTent assets 1,441,434 2,834,266 574,878 455,963 168,127 5,474,668 961,726 Noncurrent assets Equity interest in joint ventllre 4,045,981 4,045,981 Advan.ce to other funds 210,000 210,000 420,000 Capital assets Land 42,200 716,861 759,061 Infrastructure 3,085,805 8,018,170 12,993,746 627,483 24,725,204 Buildings 1,095,666 805,426 795,412 2,696,504 Office. equipment 16,861 16,861 Software 57,324 23,57:i 23,573 104;470 Equipment 2,230,303 615,001 459,668 3,304,972 Vehicles 312,717 174,342 140,787 627,846 Construction in progress 22,501 46,850 674,691 20,000 764,042 Total capital assets 6,846,516 9,683,362 15,804,738 664,344 32,998,960 Less accumulated depreciation {2,561,800) (4, 787,337) (5,527 ,935) (232,473) (13,109,545) Net capital assets 4,284,716 4,896,025 10,276,803 431,871 19,889,415 Total noncurrent assets 8,330,697 5,106,025 10,276,803 641,871 24,355,396 Deferred Outflows of Resources Pension-related deferred outflows 134,833 134,833 67,417 337,083 Liabilities Current liabilities Accmmts payable $ 2,448 $ 3,821 $ 7,166 $ 10,259 $ $ 23,694 $ 163,811 Contracts payable 17,497 17,497 Salaries and benefits payable 6,067 6,067 3,034 15,168 Due to other funds 60,000 60,000 Due to other governments 67,216 1,703 851 69,770 1,490 Current compensated absences 12179 12179 6,089 30447 Total current liabilities 147,910 41,267 17,140 10,259 216,576 165,301 Noncurrent liabilities Compensated absences 39,822 39,822 19,911 99,555 Due to other funds 420,000 420,000 Net pension liability 324,853 324,853 162,427 812,133 Net OPE.B obligation 22,631 22,631 11,316 56;578 Total noncurrent liabilitie$ 807,306 387,306 193,654 1,388,266 Deferred Inflows of Resources Pension-related deferred inflows 38,851 38,851 19,426 97,128 Net Position Net investment in capital assets 4,284,716 4,896,025 10,276,803 431,871 19;889,415 Unrestrieted 4,628,181 2,711,675 412,075 655,704 168127 &,575,762 796425 Total net position $ 8,912,897 $ 7.6ovoo $ I 016881878 $ 1,0871575 $ i68,127 $ 281465,177 $ 796,425 See notes to fman.cial statements. IV-19 6.9 City of Crystal Statement of Revenuea, ExpeDBes, and Changes in Net Position -Proprietary Funds Year Ended December 31, 2016 Governmental Activities- Internal Service Fund Stann Recycling WatJ:r Sewer Drainage Street Lishts Utili~ Totals Self Insurance Operating revenues Charges for services $3,076,263 $2,193,599 $ 867,598 $ 191,261 $ 334,926 $ 6,663,647 $ 174,681 Other charges 261,717 3,002 3,635 121 268,475 Miscellaneous 82,799 Total operating revenues 3,337,980 ~196,601 871,233 191,382 334,926 6,93~122 257,480 Operating expenses Personal services 395,353 395,354 209,264 999,971 Other services 268,282 157,417 309,588 8,927 171 744,385 Supplies 5(),841 44,866 27,707 123,414 Water p1JI'Cb8ses 2,101,407 2,101,407 Sewage disposal charges 1,406,603 1,406,603 Electric service 113,912 113,912 RecYcling charges 324,325 324,325 Depreciation 221,227 164,040 356,783 32,217 774,267 Insurance 325,105 Total operating expenses 3,037,110 2,16!!,280 903,342 155,056 324,496 6,588,284 325,105 Operating income (loss) 300,870 28,321 (32,109) 36,326 10,430 343,838 (67,625) Nonoperating revenues (expenses) Interest income 4,363 24,842 3,172 10,360 91 42,828 8,483 Interest expense (10,800) (10,800) Net increase (decrease) in fair value of investments 569 2,810 398 613 135 4,525 1,174 Operating grants and contributions 1,265 52,037 26,520 79,822 Gain on disposition of capit!ll assets 2,147 2,147 2,147 6,441 Loss on disposition of capital assets (792) (542) (1,334) Net income (loss) from joint venture 1,511,235 1,511,235 Total nonoperating revenue (expenses) 1,508,779 81,044 31,695 10973 226 1,632,717 9,657 Income before capital contributions and transfers 1,809,649 109,365 (414) 47,299 10,656 1,976,555 (57,968) Capital contributions 40,000 40,000 253,254 333,254 Transfers in 150,000 150,000 Transfers out (139,278) ~139,2782 ~91,578~ ~160,5882 ~6,2642 ~536,98~ Change in net position 1,710,371 10,087 311,262 (113,289) 4,392 1,922,823 (57,968) Net position Beginning of year 7,20~526 7,597,613 10,377,616 1,200,864 163,735 26,542,354 854,393 Endofyear $8,912,897 $71607,700 $ I 0,688,878 $ 1,087,575 $ 16!!1127 $28,4651177 $ 7961425 See notes to financial statements. IV-20 6.9 OIJofCrystol Sta-ent of Cub Flowo-Proprietacy Funds Year Eaded Decem~r 31, %016 Storm Rocycling w-Sewer Drainage StreotLiJI!!ts Utili!l Totals SolfloSili>Dce Cull Flows-Operatiac Activities Receipts fmm -... aod ..... 3,397,144 2,18;!.!90 837,284 !88,933 331,814 6,938,365 257.480 Paymoatato suppliers (2,SI3,712) (1,658,085) (335,559) (119.S00) (324,496) (4,951,352) (297,386) Payments to employees (361,105) (36!,106) (192,139) (914,350) Not Cl8b flows-operating activities 522,927 163,399 309,586 69,433 7,318 1,072,663 ~39,906) Cub Flows-Noacapitol Fiuaciac Actmtios Transfer fmm otberfunds !50,000 150,000 Transfer to otbor timda (139,278) ~139,278l !21 1578l '!60~88l '6~l ,536,286) Not Cl8b llowo -noncapital finaDoing aotivitiel (139,278) (139,278) 58,422 (160~88) (6,264l (386,986) Cub Flows.-Copila1aad Related Fl•aaciDg Activities Cump in ·advance to otbor fimds 30,000 30,000 60,000 aump:in due to other funds (60,000) (60,000) Change in UJOSSmentanceivabte (27,M9) (27,419) -paid on dobt (10,800) (10,800) Prcceods fmm diopollll of oapitalusets 2,147 2,147 2,147 6,441 Grants and contributi011.s 1,265 52,037 26,520 79,822 Aoquisitionofoapitalusets (284,093) (574,296) ~452,802) (1,311,191) Not Cllb flows-capital aod related financing aotivitioa (378,900) (490,112) (424,135) 30,000 (1,263,147) Cull F! ... a. iDvesda& Activities .. _ aod dividends recelwd 6,560 29,660 4,399 10,852 214 51,685 9,646 Not cbanp in cash aod oarh oquivalonts 11,309 (436,331) (5!,728) (50,303) 1,268 (525,785) (30,260) Cash aod oasb oquivaloots, JanuiiiY I 427,290 2,748,774 431,296 438,034 108,046 4,153,440 990,809 Cash aod oasb oquivalellts, December 31 438,599 2,312,443 379~68 $ 38V31 109,314 3,627,655 960,549 Roca.aciliotion ofOperatiog !Dcome (Loa) to Net C•h Flows· Opera1ia& Activities Operating income (loos) 300,870 28,321 (32,109) 36,326 10,430 343,838 (67,625) AdjiiSmODIBto recoacile operatins income (loss) to not cuh flows- opentingactivitioa Dopreoiatinn-221,227 164,040 356,783 32,217 774,267 Accountl receivable 46,608 (14.011) (8,062) (2,440) (3,112) 18,983 Duo flmn otbor governments 13,156 (25,887) (9) (12,740) lnvontoly 803 (44,394) (303) (43,894) Accounts payable (2~00) (4,917) 6,192 3,339 2,114 27,412 Duo tc otber gnvommontal units (90,635) 112 (4,153) (94,676) 307 Satari .. popb!e 1,239 1,239 620 3,D98 Deposits payable (850) (850) OPEB payable 2,909 2,909 1,455 7,273 Pension rclotod activity 23,658 23,658 11,830 59,1% Compaeutsd ahaenoes ~~· 6442 6442 3;go 16104 Total adj~~Smonts 222,057 135,078 341,695 33,107 (3,112) 728,825 27,719 Notoarhflows- operatins ICiivitioa 522,927 163,399 309.586 69,433 7,318 110721663 $ (39.906j Noncuh Copilal and Related Plnaaclnl Activitioa Capitol assets contributed by otbor funds aod dovalopen 40,600 40,000 ZS3a;!4 333,254 $ Net inoome (loss) from joint venture 1~11,235 1,511,235 $ Soo notes to linancialstatem011ts. IV-21 6.9 Assets Cash and investments (including cash equivalents) Accrued interest Total assets Liabilities Accounts payable Due to other governments Total liabilities City of Crystal Statement of Fiduciary Net Position December 31, 2016 See notes to fmancial statements. Hennepin Recycling Group Agency Fund $ $ $ $ 1,704,244 2,088 1,706,332 41,033 1,665,299 1,706,332 IV-22 6.9 City of C~tal Notes to Financial Statements NOTE 1-SUMMAR:Y OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of.Crystal (the City) operatl:s under the Home Rule Charter form of government in accordance with applicable Stan: of Minnesota Statutes. The charter prescnbes a COUlKlil-Manager form of organization. The governing body consists of a seven-member City Council elected at large to serve fout-year staggered terms. The accompanying financial statl:ments present the activities of the government. Certairi organizations have been defmed in accordance with GASB Statl:ment No. 14 and are presentl:d in this report as follows: 1. Blended Component Units . Blended component units, although legally separatl: entltfes, are, in substance, par!: of the govi:mment's operations. The City has one blended component unit whiCh is reported as if it Were part of the City. · The Economic Development Authority (ED A), in and fot the City, Was created by-the City to provide housing and redevelopment assistance through the administration ofVarious programs. It levies taxes to provide funds for redevelopment in the City. Although the EDA is legally separatl: from the City, it is tepOrted·as if it were part of the primary government. Its governing board is comprised of the City Co\1llcil meni.bei'S and the City has operationalresportsibility of the EDA, meaning it manages the EDA's actiVities in essentially the sallie manner in Which it manages its own programs and departments. The EDA is reported as a special revenue fund. It does not issue a separate set of financial statl:ments. 2. Joint Ventures A joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated, or governed by two or mote participants as a separate and specific activity subject to joint control. The participail.ts retain either an ongoing financial interest or an ongoing fmancial responsibility. The City participates in two joint ventures~ the Golden Valley, Crystal, New Hope Joint Water Commission, and the West Metro Fire-Rescue District. Descriptions and other financial information for these organizations are included in the noll: entitled Joint Ventures and Jointly Governed Organizations. 3. JOintly Governed Organizations The City has several agreements with governmental and other entities that provide reduced costs, better serVice, arid additional benefits to participants. The various, ptograms in which the City participates in are described in the noll: entitled Joint Ventures and Jointly Governed Organizations: B. Government-Wide and Fund Financial Statements The government-wide financial statl:ments (i.e. the Statement of Net Position and.the Statement of Activities) report information on all of the non-fiduciary activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intl:rgovernmental revenues, are reported separately from business-type activities, Which rely to a significant extent on charges for sales and/or services and fees. qty of Crystal Notes to Financial Statements NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICmS (CONTimJED) B. Government-Wide and Fund Financial Statements (Continued) Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and ni.ajor individual enterprise .funds are reported as separate columns in the fund financial statl:ments. Aggregated information for the remaining nonmajor govemmental.funds is reported in a single column in the fund fmancial statl:ments. The Statl:ment of Activities demonstratl:s the degree w which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The City does not allocate indirect expenses. Program revenues include 1) charges to customers or applicants Who purchase, use, or directly benefrt from goods, serVices, or privileges provided by a gi"en function or segnient, 2) operating grants and contributions restricted to meeting the operational requirements of a particular function, and 3) capital grants and contributions restricted to meeting the capital requirements of a particular function, including special assessments. Internally. dedicated resources are reported as general revenues rather than as program revenues. Likewise,· ge~;~eral revenues in\)lude all taxes. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statentents. However, charges between the City's enterprise funds and other functions (i.e. interfund services provided and used) are not eliminated, as that would distort the direct costs and program revenues reported in those functions. Depreciation expense is included in the direct expenses of each function. interest on long-term debt is considered an indirect expense and is reported separately under governmental actiVities on the Statement of Activities. C. Measnrement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measureiDent focus and the accrual basis of accounting, as are the proprietary fund fmancial 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 ate recognized as revenues in the year for which they ate levied. Grants and similar itl:ms are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met, Governmental fund financial statl:ments 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 availa:ble. '·'Measurable" means the amount of the transaction can be determined and "avail.a:bte" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers revenues to be availa:ble if they are collected within 60 days after year-end:· Major revenues susceptible to accrual include property taxes, special assessments, intergovernmental revenues; charges for services, and investment earnings. Major revenues not susceptible to accrual include licenses, permits, inspection fees, and miscellaneous revenues. Such revenues are recorded only as received because they are not measurable until collected. Issuance of bonds and proceeds from sale of property and equipment are reported as other financing sources. I V - 2 3 6.9 City of Crystal Notes to Financial Statements NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING pOLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) 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. Proprietary funds distinguish operating revenues and expenses from non-operating 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 enterprise funds and of the government's internal service fund are charges to customers for sales and services. Operating expenses for enterprise funds and the internal service fund 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 non-operating revenues and expenses. The City's fiduciary funds include an agency fund. Agency funds are custodial in nature (assets equal liabilities), do not involve measurement of results of operations, and use accrual accounting. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. Description of Funds: The government reports the following major governmental funds: General Fund-This is the government's primary operating fund. It accounts for all fma:ncial resources of the general government, except those required to be accounted for in another fund. EDA-Special Revenue-This blended component unit is used to account for the City's housing and redevelopment activities. Significant revenue sources include property taxes, intergovernmental revenues, and charges for sales. Debt Service-This fund accounts for resources accumulated, and payments made, for principal and interest on long-term general obligation debt and tax increment revenue notes of governmental funds. Capital Improvement Revolving-Capital Projects-This fund is used to account fur the majority of the City's capital acquisitions and improvements, as they relate to operations of the City. Street Reconstruction -Capital Projects -This fund is used to account fur ongoing Street reconstruction ~ects in the City. The City has been divided into a: total of sixteen reconstruction phases. City of Crystal Notes to Financial Statements NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Con tinned) Description of Funds (Continued): The government reports the following major proprietary funds: Water -.This fund accounts for the provision of water to residents and customers of the City. The cities of Ctysta~ Golden Valley, and New Hope established a joint water commission in 1963 to provide for the creation and maintenance of a joint water supply, storage, and distribution system through which water. purchased from the City of Minneapolis can be supplied to the population of the member cities. Sanitary Sewer-This fund accounts for the collection and pumping of sanitary sewage through a system of sewer lines and lift stations. Sewage is treated by Metropolitan Council Environmental Services (MCES). . StoJ;'lll Drainage-.This fund. accounts for the operation, maintenance, and improvement of the City's storm drainage system. Street Lights-This fund accounts for the operation, maintenance, and improvement of the City's street lights. Recycling-This fund accounts for the provision of recycling services to residents and customers of the City. Recycling serv~s are provided by Hennepin Recycling Group (HRG). Additionally, the government reports the following fund types: An Internal Service Fund is used to account, on a cost-reimbursement basis, for the financing of uninsured risks of loss (self-insurance). Charges are made to various funds of the City to recoup insurance premiums and claims paid. The Agency Fund accounts for the collection, recycling, and disposal of solid waste activities of Hennepin Recycling Group (HRG), a jointly-governed organization in which the City participates. D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity 1. Deposits and Investments The City's cash and. cash equivalents are considered to be change funds, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. I V - 2 4 6.9 City of Crystal Notes to Financial Statements NOTE 1 ~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONt~D) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued) 1. Deposits and Investments (Continued) Cash balances from all funds are combined and invested to the extent available in authorized investments (refer to note entitled Deposits and Investments). Earnings from such investments are allocated to respective funds on the basis of applicable cash balance participation· by each fund. Certain investments for the CitY are reported at fair value as disclosed in Note 2, The City categorizes its fair value measurements within the fair val tie 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. In accordance with GASB Statement No. 79, the Minnesota Municipal Investment Pool securities are valued at amortized cost, which approximates fair value. There are no restrictioli$ 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. Seveh 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. 2. Temporarily Restricted Cash A portion of Cash is reported as temporarily restricted in an amount eqUal to the balance reported in Deposits Payable of the General Fund. The amount represents funds collected as .~urety on site improvements in progress within the City. Once site improvements have been satisfactorily completed in accordance with terms of individual agreements, individual amounts will be released. 3. Receivables All utilitY and miscellaneous accounts receivable are reported gross. Since most uncollectible accounts are able to be certified to Hennepin CountY for collection with property taxes, no allowance for uncollectible accounts has been provided. 4. Property Taxes Property tax levies are set by the CitY Council in December of each year and are certified to Hennepin CountY for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The County spreads all levies over taxable property. Such taxes become a lien on January I. Revenues are accrued and recognized in the year collectible, net of delinquencies. City of Crystal Notes to Financial Statements NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued) 4. Property Taxes (Continued) Real property taxes may be paid by taxpayers in two equal installments by May 15 and October 15 of each year. Personal property taxes may be paid by February 28 and June 30 of each year. The County provides tax settlements to cities and other taxing districts three times a year-in July, December, and January of the following year. In the fund financial statements, taxes that remain unpaid at December 31 are classified as delinquent taxes receivable. They are fully offset by a deferred inflow of resources because they are not known to be available to finance current expenditures. 5. Special Assessments In accordance with state statutes, special assessments are levied against benefited properties for the assessable CO$tS of imprqvement projects. The CitY normally adopts an assessment roll at the time an individual project is stl!rted. Assessments are collectible over a term of years generally consistent with the term of years of the related bond issue. The County handles collection of aniJ.Ual installments, including interest, in the same manner as property taxes. Property owners are allowed to prepay total future installments without interest or prepayment penalties. In the fund financial statements, special assessments receivable include the following components, and are offSet by a deferred iliflow of resources: • Delinquent-amounts billed to property owners but not yet paid • Deferred-installments that will be billed to property owners in future years. 6. Inventories Fuel inventory recorded in the General Fund and parts inventories recorded in the enterprise funds are valued at cost using the first-in/first-out (FIFO) method. The cost of inventories is recorded using the consumption method, where costs are recorded as expenditures/expenses when consumed rather than when purchased. 7. Prepaid Items Prepaid items in the government-wide and fund financial statements reflect costs paid to vendors that are applicable to future accounting periods. The cost of prepaid items is recorded using the consumption method, where costs are recorded as expenditures when consumed rather than when purchased. 8. Land Held for Resale The Crystal EDA acquires properties for redevelopment purposes. Land held for resale is reported as an asset at its net realizable value in the EDA Special Revenue Fund. Any costs incurred that are above a property's net realizable value are reported as expenditures of the current period. I V - 2 5 6.9 City of Crystal Notes to Financial Statements NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (~ONTINUED) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued) · 9. Interfund Receivables and Payables Activities between funds that are representative of lending and borrowing arrangements are referred to at year-end as advances to/from other funds. The current and noncurrent Portions are reported on the Statement of Fund Net Position for the proprietary funds. All other outstanding balances between funds are reported as due to/from other funds. 10. Capital Assets Capital assets, both tangible and intangible, which include land, buildings and structures, improvements other than buildings, machinery and equipment, office eqUipment and furnishings, software, vehicles and trailers, and infrastructure (utility systems, traffic and tranSportation systems, and park systems) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. With the initial capitalization of infrastructure assets of governmental activities, as reqUired by the implementation of GASB Statement No. 34, the City chose to include all such items, regardless of acquisition date. Historical costs were available from an independent, city-wide asset valuation that had been completed in 1992, as well as from contractor invoices for street reconstruction projects completed subsequent to 1992. Tangible and intangible capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of I!SSets or materially extend asset lives are not capitalized. Interest is not befug capitalized on conStruction projects. Tangible and intangible capital assets of the City are depreciated using the straight-line, mid-month convention. In instances in which estimated useful lives have been revised to more closely approximate historical experience, depreciation is calculated by taking the net remafuing value over the remaining life (prospectively). Estimated useful lives are as follows: Classification Buildings and s1ructures Improvements other than buildings Machinery and equipment Office equipment and futnishings Software Vehicles and trailers InfrastructUre Utility systems Traffic and transportation systems Park svstems Years 5-50 5-40 5-30 5-20 s 3-12 25-75 1().,30 15-20 City of Crystal Notes to Financial Statements NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued) 11. Fund Balance Classifications In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. Classifications of fund balance that will be used are as follows: • Nonspendable -These are resources that cannot be spent because they are either not readily convertible to cash or are legally or contractually required to be maintained intact. Examples include money held .in escrow, prepaid amounts, land held for resale, and long-term loans or notes receivable. • Restricted-These are resources whose spending is constrained externally by creditors or by laws and regulations of another government. Examples include grants, intergovernmental revenues, and resources in debt service funds that include a legally enforceable requirement that those resources be spent only for specific purposes. • Committed-These are resources that can only be used for specific purposes established by the City Council. Establishment of these specific purposes must be done by a resolution adopted by the City Council and may only be changed or removed by a resolution adopted by the City CounciL • Assigned-These are resources that the City intends to be used for specific purposes but are neither restricted nor committed. Assigned fund balances are established by a motion of the City Council. The City Council may also delegate this authority to the City Manager, who may act upon recommendation of the Finance Director. • Unassigned-These are resources that are available for any pmpose of the fund. Amounts identified as cash flow resources ate classified as unassigned. Only the General Fund may have a positive unassigned fund balance. A deficit fund balance in any fund must be classified as an unassigned fund balance. When multiple classifications of resources are available for use, it is the City's policy to first use restricted resources if permitted, then committed, assigned, or unassigned resources. It is the City's policy to retain in fund balance resources that have the lowest level of constraints possible. The City Council has formally adopted a policy regarding the minimum unassigned fund balance for the General Fund. The most significant revenue source of the General Fund is property taxes. This revenue source is received in two installments during the year-July and December. As such, it is the City's goal to begin each fiscal year with sufficient cash flow reserves to fund operations between each semi-annual receipt of property taxes. I V - 2 6 6.9 City of Crystal Notes to Financial Statements NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Assets, Liability, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued) 11. Fund Balance Classifications (Continued) The policy states that when fund balance at the end of a year exceeds non-spendable fund balance, restricted fund balance, liability for compensated absences of employees, assigned fund balance, and 45% of the subsequent year's budget, the City Council shall consider transferring at least 25% of the excess fund balance to one of the capital project funds, At any time during the year the City Council may consider transferring any or all of the excess fund balance to any other fund of the City, ~;~s needed. 12. Compensated Absences The City compensates all employees for unused vacation hours upon termination. Eligible:employees are compensated for accrued compensatory hours upon tennination. Employees terminating their employment with the City after ten or more continuous years of service are compensated for 40"/o of their accumulated sick leave hours at their current hue hourly rate of pay. The rrii<IXimum amount of accrued sick leave hours that may be converted is 960. Accumulated or vested vacation, compensatory, and sick time estimated to be payable u termination pay is accrued u incurred in the government-wide imd proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured; for example, as a result of employee resignations and retirements. · 13. Long-Term Obligations In the government-wide fmancial statements and in the proprietary fund types in 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 ofNet Position. Bond premiums and discounts are deferred and amortized over the life of bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Debt issuance costs are recognized u expense in the period incurred. · In the fund fmancial statements, governmental fund types recognize bond premiums, discounts, and 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 u other financing sources while discounts on debt issuances are reported as other :linancillg i:tses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported u debt service expenditures. City of Crystal Notes to Financial Statements NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued) 14. Deferred Outflows of Resources In addition to usets, the statement of fmancial position will sometimes report a separate section for deferred outflows of resources. This separate financiiu statement element represents a consumption of net position that applies to a future period(s) and so will not be recognized u an outflow of resources (expense/expenditure) until that time. The City has one item that qualifies for reporting in this cl<ltegory. Pension•related deferred outflows of resources are reported on the Statement(s) of Net Position. Pension~rell<lted :deferred-outflows of resources result from the net effect. of the change in proportionl<lte share and employer contributions paid to the Public Employees Retirement Association of Minnesota (PERA) subsequent to the measurement date. 15. Deferred Inflows of Resources In addition to liabilities, the statement of financial position and fund financial statements will sometimes report a.separate section for deferred inflows of resources. This separate financial statement eleme!ltrepresents an acquisition of net position that applies to a future period(s) and so will not be recognized u an inflow of resources (revenue) until that time. The City hu two items that qualify for reporting in this category: 1) The City presents deferred inflows of resources on the Governmental Fund Balance Sheet u unavailable revenue. The governmental funds report unavailable revenues from three sources, including property taxes, special usessments, and notes receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 2) The City presents deferred inflows of resources on the statement(s) of net position for pension-related deferred inflows of resources. Pension-related deferred inflows of resources result from the net difference between projected and actUai earnings on plan investments for the Public Employees Retirement Association of Minnesota (PERA). 16. Pensions For purposes of meuuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association of Minnesota (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, phm 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. 17. Statement of Cash Flows For purpose of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an original maturity from the time ofpurchue by the City of three months or less to be cash equivalents. The proprietary fund's equity in the government-wide cub and investment management pool is considered to be cash equivalents. I V - 2 7 6.9 City of Crystal Notes to Financial Statements NOTE 1 -SUMMARY OF SIGNIF1CANT ACCOUNTING POLICIES (CONTINUED) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued) 18. Budgets and Budgetary Accounting The City follows these procedures in establishing the budgetary data reflected in the financial statements: • Prior to each September 15, the City Manager submits to the City Cowicil proposed operating budgets for the fiscal year commencing the following January. The operating budgets include proposed expenditures and the means of financing them. • In November, the County mails individual property tax notices to residents showing the taxes that would result from the proposed budgets of all taxing units within the City. • Prior to proposed budgets being approved, public hearings are conducted to obtain taxpayer comments. • In December, fmal budgets are legally enacted by the City Council through passage of a resolution. • During the budget year, the City Council must authorize any transfer of budgeted amounts between departments within the General Fund. City management may authorize a transfer of budgeted amounts within individual departments without obtaining approval from the City Council. • Supplemental appropriations during the year may only be made by the City Council. These amounts must be fmanced by funds from the contingency reserve set up in the General Fund or by additional revenues. • All budget amounts lapse at the end of the year to the extent they have not been expended. • Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for all governments! funds. The budgets are adopted on a modified accrual basis. • Budgets are adopted on an accrual basis for all enterprise and internal service funds. • Budgetary control is maintained at the department level for the General Fund and at the fund level for all other funds that adopt annual budgets. City management must request approval from the City Council before exceeding budget at the applicable level. City of Crystal Notes to Financial Statements NOTE 1 -SUMMARY OF SIGNIF1CANT ACCOUNTING POLICIES (CONTINUED) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued) 19. Net Position Net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources in the government-wide financial statements. The net investment in capital assets portion of net position. consists of capital assets, net of accumulated depreciation, reduced by the outstailding balance of any long-term debt used to build or acquire the capital assets. Net position are reported as restricted in the government-wide financial statements when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. 20. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United Suites of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenditures/expense during the repcirting period. Actual results could differ from those estimates. NOTE 2-DEPOSITS AND INVESTMENTS A. Deposits In accordance with Minnesota Statutes, the City maintains deposits at national or state banks within the state, as authorized by the City Council. The following is considered to be the most significant risk associated with deposits: Custodial credit risk -In the case of deposits, this is the risk that in the event of a bank failure, the deposits may be lost. Minnesota Statutes require that all City deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The market value of collateral pledged must equalllO% of the deposits not covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated "A" or better; revenue obligations rated "AA" or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the 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 fmancial institution furnishing the collateral. During the year, all deposits and investments were collateralized in accordance with these provisions. The City has no additional deposit policies addressing custodial credit risk for deposits. At year-end, the City's carrying amount of deposits was $1,264,543 and the bank balance was $1,532,040. All of the bank balanc.e was covered by FDIC insurance or collateralized by pledged collateral held in the City's name at the Federal Reserve Bank. I V - 2 8 6.9 City of Crystal Notes to Financial Statenienu NOTE 2-DEPOSITS AND INVESTMENTS (CONTINUED) A. Deposits (Continued) The City's policy is to comply with Minnesota Statutes, which require that all deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The marlcet value of collateral pledged must equalll 0% of the deposits not covered by federal deposit insurance or COrpOrate suretY bonds. Minnesota Statutes requirC that securities pledged as collareral be held in safekeeping by the City TreaSurer or in a financial institution other than that furnishing the collateral. B. Investmenu The City has a.formal investment policy to establish guidelines for the prudent investment of City funds. Funds of the City will be invested in compliance with the provisions of Minnesota Statutes Chapter 118A. Allowable investments include the following: • Bonds, notes, bills, mortgages, and other securities that are direct obligations cir are guaranteed or insured issues of the United States, its agencies, instrumentalities, or organizations created by Congress. • State and local seclirities, including: o any security that is a general obligation of any state or local government with taxing powers and is rated "A" or better by a national bond rating agency o any security that is a revenue obligation of any state or local government with taxing poWers and is rated "AA" or better by a national bond rating agency • Commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and that matures in 270 days or less. • Time deposits that are fully insured by the Federal Depository lnsurance Corporation. • Bankers' acceptances of United States banks. • Money market mutual funds. • Government investment pools, including the Minnesota Municipal Money Marlcet Fund. As of December 31, 2016, the City had the following investments and maturities: Investment Malurities Fair Less than Investment !lEE Value One Year 1-5 Years 6·10Years Brokered certificates of deposit $ 18,661,912 $ 11,037,824 $ 7,624,088 $ Government securities 5,964,155 . 5,964,155 State & local govt bonds 5,296,508 2,793,738 2,502,770 External investment pool 2,875,293 2;m,393 Money marl<et accounts 7,479,807 7,479,807 Total s 40,277,674 $ 24,186,661 $ 16,091,013 $ Grea=rtban 10Years - $ City of Crystal Notes to Financial Statements NOTE 2-DEPOSITS AND INVESTMENTS (CONTINUED) B. lnvestmenu (Continued) *Includes $2,875,293 invested in the Mi,nnesota Municipal Money Market Fund, which is regulated by Minnesota Statutes and the Board of Directors of the League of Minnesota Cities. It is an exterilal investment pool not registered with the Securities and Exchange Commission (S:ec), but that follows the same regulatory rules of the SEC under rule2a7. The fair value of the position in the pool is the same as the value of the pool shares. Interest Rate Risk -This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in interest rates (the longer the period for which an interest rate is fixed, the greater the risk). The City's investment policy states that "the City will minimize Interest Rate Risk by structuring the investment portfolio so that securities mature to meet caSh requirements for ongoing operations." Credit Risk -This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. This risk is addressed by confiDing investments to those securities specifically authorized by state statute and.the City's investment policy. As of December 31, 2016, the City's investments in U.S. Agencies were rated AA+ by Standard and Poor's and Aaa by Moody's Investors Service. The City's investments in G.O. state and local government bonds were rated A2 or better by Moody's and A or better by Standard and Poor's. The City's investments in state and local government revenue bonds were rated Aa3 or better by Moody's and AA-or better by Standard and Poor's. The City's investments in certificates of deposit were covered by FDIC insurance. Custodial Credit Risk-For investments, this is the risk that in the event of a failure of the counterparty to an investment transaction (typically a broker-dealer) the City would not be able to recover the value of its investments that are in the possession of an outside party. The City's investment policy states that the bank or broker is required to have insurance through FDIC and SIPC or transfer the security to a custodian bank. Concentration of Credit Risk -This is the risk associated with investing a significant portion of the City's investments (conSidered to be 5% or more) in the securities of a single issuer. The City's investment policy does not limit investments in any one issuer. At December 31, 2016, no investment exceeded 5% of the City's total investments. The City has the following recurring fair value measurements as of December 31, 2016: • $7,479,807 of investments are valued using calculated net asset value (Levell inputs) • $29,922,575 of investmenis are valued using a matrix pricing model (Level2 inputs) I V - 2 9 6.9 City of Crystal Notes to Financial Statements NOTE 2-DEPOSITS AND INVESTMENTS (CONTINUED) B. Investments (Continued) The following summary reconciles cash and investments to the financial statements: Cashon hand Canying amount of deposits Carrying amount of investments Tolal cash and investments Per Statement ofNet Position - Cash and investments Temporarily restricted cash Per Statement of Changes in Assets and Liabilities - Agency Fund: Hennepin Recycling Group - Cash and investments NOTE 3-INTERF1JND RECEIVABLES AND PAY ABLES Advances to/from Other Funds Balances as of December 31, 2016, are as follows: Original Receivable Fund Payable Fund Amount Sanitary Sewer Water $ 300,000 Street Lights Water 300,000 $ 600,000 Amount Outstanding $ 240,000 240,000 $ 480,000 $ 1,844 1,264,543 40,277,674 $ 41,544,061 $ 39,771,539 68,278 1,704~44 $ 41,544(61 Due Within One Year - $ 30,000 30,000 $ 60,000 Amounts payable to the Sanitary Sewer and Street Lights funds relate to loans made to help pay for the City's share of three new emergency water supply wells. The wells will be owned by the Joint Water Commission (refer to Note 15). The City's share of the total cost will be approximately $1,200,000. The Water Fund has sufficient resources to pay for half of the project and the interfund loans will provide cash for the balance. Interest at the rate of 2% will be paid on the loans over a ten-year period, from 2015-2024. To provide the Water Fund with revenue to replenish its cash reserves and repay the loans, a charge for service of$0.21/thousand gallons of water used has been approved and implemented. City of Crystal Notes to Financial Statements NOTE 4-INTERF1JND TRANSFERS lnterfund transfers for the year ended December 31, 2016, are as follows: TnmslbsOut StrMt reconstruction Debt service Non-maJor~ limds Water Sanitary sewer Storm dminage Streetlishfs Rcoyclin& General 10,400 139,278 139,278 37,478 10,588 6,264 Transfers In Capital Non-major Improvement Governmental EDA ~ ___!!!!!!l! 203,946 1,800 70,000 54,100 Storm ~ 150,000 Total s 343.286 1.800 124.100 ~ s 150000 Total 10,400 203,946 71,800 139,278 139,278 91,578 !60,5&8 6,264 823.132 Transfers are used to 1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to ex~ them, 2) move receipts restricted to debt service from the funds collecting the receipts to the Debt Service Fund as debt service payments become due, and 3) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds, in accordance with budgetary authorizations. I V - 3 0 6.9 City of Crystal City of Crystal Notes to Financial Statements Notes to Financial Statements NOTE S-CAPITAL ASSETS NOTES-CAPITAL ASSETS (CONTINUED) Capital asset activity for the year ended December 31, 2016, was as follows: Capital asset activity for the year ended December 31, 2016, was as follows: Beginning Ending Beginning Ending Balance Increases Decreases Balance Balance Increases Decreases Balance Business-type activities Governmental activities Capital assets not being depreciated Capital assets not beillg depreciated Land $ 759,062 $ $ $ 759,062 Land $ 6,860,536 $ $ $ 6,860,536 Improvements other than buildings 187,246 187,246 Construction in progress 3,980,256 3,797,861 (3, 722,807). 4,055,310 Construction In progress 723,308 729042 (688J08) 764042 Total capital assets Total capital assets not not being depreciated 10,840,792 3,797,861 (3.722..&07) 10,915,846 being depreciated 1,669,616 729042 (688J08) 1,710,350 Capital assets being deprecillled Capital assets being depreciated Buildings and sttuctures 17,:i36,137 153,483 (478,84()) 17,210,780 Buildings and sttuctures 2,696,505 2,696,505 Improvements other than buildings 5,827,648 2()7,149 (96,041) 5,938,756 Improvements other than buildings 16,861 16,861 Machinery and equipment 3,845,325 337,885 (269,516) 3,913,694 Machinery and equipment 3,246,012 73,216 (14,257) 3,304,971 Office equipment and furnishings 799,449 66,786 (74,338) 791,897 Software 33,750 70,720 -104,470 Software 196,701 25,165 (22,827) 199,039 Vehicles and trailers 383,764 281,295 (37,213) 627,846 Vehicles and trailetS 2,500,204 360,846 (265,835) 2,595,215 Utility systems 22,815,542 1,141,419 (46,487) 23,910,474 Traffic and transportation systems 54,778,704 4,475,115 (1,659,984) 57,593,835 Traffic and transportation systems 627 483 627483 Total capital assets Park systems 200,367 2()0,367 being depreciated 29,819,917 1,566,650 (97,951) 31,288,610 Total capital assets being depreciated 85,684,535 5,626,429 ~867,3812 88,443,583 Less accumulated depreciation for Less accumulated depreciation for Buildings and s1ructures (200,093) (53,041) (253,134) Improvements other. than buildings (8,079) (843) (8,922) Buildings and sttuctures (7,084,550) (531,151) 464,006 (7,151,695) Machinery and equipment (1,259,805) (180,297) 13,465 (1,426,637) Improvements other than buildings (3,008,549) (194,131) 68,358 (3,134,322) Software (3,844) (15,538) (19,382) Machinery and equipment (2,355,862) (223,992) 253,788 (2,326,066) Vehicles and trailers (309,463) (42,441) 37,213 (314,691) Office equipment and furnishings (339,567) (81,674) 69,695 (351,546) Utility systems (10,458,440) (450,733) 45,945 (10,863,228) Software (78,362) (38,791) 15,077 (102,076) Traffic and transportation ·systems (19~,J7:zl (31,374) (223,551) Vehicles and trailers (1,467,046) (260,414) 248,947 (1,478,513) Total aocumulated Traffic and transportation systems (27,166,658) (2,725,531) 1,659,984 (28,232,2()5) depreciation ______L!2,431.901) ______lTM,'J.§Jl . ___ 9§,623 (13,109,545) Park systems (107,609l (10,303l (117,912l Total capital assets being Total accumulated depreciated, net 17J88,016 792,383 (1,334) 18,179,065 depreciation (41,608,203l ( 4,065,98:zl 2,779,855 (42,894,33~ Total capital assets being Business-type activities depreciated, net 44,076,332 1,560,442 (87,52~ 45,549,248 capital assets, net. $ 19.057,632 $ 1,521.425 $ (689.642) $ 19.889.415 Goveri:unental activities capital position, net $ 54,917,124 $ 5.358,303 $ (3,810.333) $ 56,465,094 I V - 3 1 6.9 City of crystal Notes to Ymancial Statements NOTE 5-CAPITAL ASSETS (CONTINUED) Depreciation expense was charged to the various functions of the City as follows: Governmental activities General government Public safety Public works Parks and recreation Community development Total depreciation expense -governmental activities Business-type activities Water Sanitary sewer Storm drainage Street Light Total depreciation expense -business-type activities NOTE 6-LONG-TERM DEBT A. General Obligation Bonds $ 171,681 210,051 3,233,311 448,321 2,623 $ 4.065.987 $ 221,227 164,040 356,783 32,217 $ 774.267 The government issues general obligation (G.O.) bonds (including certificates of indebtedness), tax increment bonds, and special assessment bonds to provide funding for the acquisition of capital assets, tax increment projects, and street improvements, respectively. G.O. bonds are direct obligations and pledge the full faith and credit of the government. B. Components of Long-Term Liabilities Issue Jntorest Original Final Balsncc ..2!!L.. RBios Issue ...M!!!!!l!L EndofYear Governmental activities G.O.Bonds G.O. Aquatio Center Bonds, Series 2005B 09/01/05 3.50%-4.00% s 2,395,000 02/01120 $ 765,000 G.O. Stroet R<oonstruction Bonds, Series 2013B 08101/14 0% 395,000 02/01122 85,940 850,940 Special Assessment Bonds G.O. Improvement Bonds, Series 2008A 08/01/08 3.50%-4.35% 2,190,000 02/01124 1,045,000 G.O. Improvement Bonds, Series 2009A 08/01109 2.00%-4.50% 3,360,000 02/01/25 2,200,000 G.O.!Iilprovement Bonds, Series 2011A 08101/11 0.50%-3.55% 1,705,000 02/01127 1,155,000 G.0.1mprovemont Bonds, Series 2012A 08101112 l.S0%-2.13% 2,635,000 02101/28 2,000,000 0.0.1mprovcment Bonds, Series 2013A 08101/13 2.00%-3.50% 3,235,000 02/01129 2,770,000 G.O. Improvement Bonds, Series 2015A 08/01/15 2.50%-3.00% 2,550,000 02/01/31 2,550,000 G.O. Improvement Bonds,. Series 2016A 08125/16 2.00%-2.50% 3,330,000 02/01/32 3~30,000 Subtotal bonds payeble 15,050,000 Total governmental activities $ 15,900,940 City of Crystal Notes to Financial St.atements NOTE 6-LONG-TERM DEBT (CONTINUED) C. Changes in Long-Term Liabilities Interest paid on most of the debt issued by the City is exempt from federal income tax. As a result, purchasers of this debt are willing to accept lower interest rates than they would on taxable debt. The City pools the proceeds of bond issues held in construction funds and the accumulated cash in debt service funds with all other available cash and invests it according to the City's cash management policies and practices. This sometimes produces a higher yield on the investments than is being paid on the related debt. The federal tax code refers to this higher yield as arbitrage. Under certain circumstances the earnings from these higher yields must be rebated to the federal government. F ederallaw requires that arbitrage be calculated and rebated at the end of each fivecyear period that tax exempt debt is outstanding, as well as at maturity. The City does not report arbitrage until the liability is due and payable. Long-term liability activity for the year ended December 31, was as follows: Beginning Ending Due Within Balance Additions Retirements Balance One Year Governmental activities Bonds payable G.O.Bonds Aquatic Cen.,. Bends -2005B $ 935,000 $ $ (170,000) s 765,000 $ 180,000 StroetRcccnstruction Bonds-2013B 85940 85940 1,020,940 (170,000) 850,940 180,000 Bond Discounts (4,689} 992 (J,69:zl Subtotal 1,016,251 (169,008) 847,243 180,000 G.O. Special As_,.ont Bonds with Govemment·~ommitment IInprovemcnt Bonds -200SA 530,000 (530,000) Improvement Bends-2006A 775,000 (775,000) Improvanent Bonds-2008A 1,190,000 (145,000) 1,045,000 145,000 Improvement Bends-2009A 2,385,000 (185,000) 2,200,000 180,000 Improvement Bonds-2011A 1,285,000 (130,000) 1,155,000 125,000 Improvement Bonds-2012A 2,200,000 (200,000) 2,000,000 195,000 Improvement Bonds-2013A 3,020,000 (250,000) 2,770,000 245,000 Improvement Bonds-201SA ~so.ooo ~50,000 225,000 Improvement Bonds -2016A 3,330,000 3J30,000 13,935,000 3,330,000 (2,215,000) 15,050,000 1,115;000 Bond Premiums 199,166 99,664 (20,925) 277,905 Bend Discounts (50,622} 4,584 (46,038} Subtotal 14,083,544 3,429,664 (2,231,341) 15~81,867 1,115,000 Total Bonds Payablo 15,099,795 3,429,664 (2,400,349) 16,129,110 1,295,000 Compensated absences payable ' 782,627 837~74 (!!Qb44ll 817 760 287445 Governmental activity long-term liabilities s 15,!~:1.422 -s 4,26"1,238 $ (3,202, 790) s 16,946,&70 $ 1.582.445 BUBiness.-type activities Compensotcd absences payable _S ..113.898 _$. _62.259 $ __ (,;3.155) .S _130.002 $ 30.447 I V - 3 2 6.9 City of Crystal Notes to Financial Statements NOTE 6-LONG-TERM DEBT (CONTINUED) D. Minimum Debt Payments G.O. aquatic center bonds were issued to finance the reconstruction of the municipal pool and waters !ide. G.O. street reconstruction bonds, Series 2013B, were issued to fmance reConstruction of the portion of Hennepin County Highway 81 that runs through the City. The bonds were sold to Hennepin County at a zero interest rate and had a final maturity in 2014. However, Hennepin County haim'i finalized the · project. The City will owe an additiorial amount to Hennepin County but that amomtt isn't knOwn at this time. G.O. special assessment bond paymel).ts will be fimded by special assessments levied against property owners benefited by street improvements as well as interest earnings. Annual debt service requirements to maturity for G.O. Minimum annual principal and interestpayments required to retirelong~tenn liabilities: Year Ending December 31, 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032-2036 Total $ $ Governmental Activities G.O.Bonds Principal Interest 180,000 185,000 195,000 205,000 765.000 $ 27,000 19,700 12,100 4,100 $ 62.900 G.O. Improvement Bonds Principal Interest $ 1,115,000 1,340,000 1,285,000 1,245,000 1,215,000 5,420,000 3,245,000 185,000 $ 15,050,000 $ 396,822 370,363 337,390 304,428 271,111 870,846 217,467 2,313 $ 2.770.740 Total delinquent special assessments receivable for all fimds for the years ending December31, 2016 and 2015, were $235,489 and $240,006, respectively. Compensated absences are liquidated by the General, EDA, Water, Sanitary Sewer or Storin Drainage fimds, depending upon where employees' time is assigned. . City of Crystal Notes to Financial Statements NOTE 7-TAX INCREMENT FINANCING REVENUE NOTES The City has entered into several private redevelopment agreements regarding certain tax increment properties. Reimbursements for these agreements are in the form of tax increment revenue notes. These notes provide for the payment of principal, equal to the project redevelopment costs, plus interest at various rates. Payments. on the notes will be made at the lesser of the note payment or the actual net tax increment received (or a reduced percentage received in certain cases), as stated in the agreement, Payments are first applied to accrued interest lllld then to principal balances. The notes are cancelled at the end of the agreement term whether or not they have been repaid in full. The outstanding principal balances as of December 31, 2016, are as follows: Tax Increment Revenue Note-1995A Tax Increment Revenue Note -1995B Tax Increment Revenue Note -1996A Tax Increment Revenue Note -2002 Tax Increment Revenue Note-2014 Maturity Dates 1997-2016 1997-2016 1999-2016 2002-2016 2016-2026 Interest Rates 5.50% 8.50 8.50 7.00 5.00 Amount Outstanding $ 323,904 60,180 95,835 328,963 1,044,650 $ 1.853.532 Due to the nature of these notes (in that repayment is required only if sufficient tax increments are received), the outstanding amount is not reported in the accompanying financial statements. The City's position is that these are obligations to assign future and uncertain revenue sources and, as such, is not actual debt in substance. Payments of principal and interest on tax increment revenue notes are paid out of the T1F Districts special revenue fimd. NOTE 8-CONDUIT DEBT OBLIGATIONS From time to time the City has issued revenue bonds to provide financial assistance to private-sector entities for the acquisition and construction of facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. · Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issue. Neither the City or 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. I V - 3 3 6.9 City of Crystal Notes to Financial Statements .NOTE 8-CONDUIT DEBT OBLIGATIONS (CONTINUED) As of December 31, 2016, there were four debt issues outstanding. The aggregate original issue amounts and principal balances outstanding as of December 31,2016, are as follows: Name of Issue Crystal Apts. Multi Family Housing Refunding Bonds Calibre Chase Multi Family Housing Refunding Bonds LOGIS Government Facilities Revenue Bonds Crystal Leased Housing Multi Family Housing Bonds NOTE 9-PENSION PLANS Year 1997 2004 2006 2014 Original Issue $ 5,825,000 2,910,000 6,000,000 14,300,000 $ 29.035.000 Principal BaiiUlce $ 5,825,000 2,910,000 3,737,[)87 14,300,000 $ 26.772.087 The city participates in various pension plans, total pension expense for the year ended December 31, 2016, was $2,379,168. The components of pension expense are noted in the following plan summaries. Public Employees' Retirement Association A. Plan Description The City participates in the following cost-sharing multiple-employer defined benefit pension plans , administered by PERA. PERA's defined benefit pension plans are established and administered in accordance with Miimesota Statutes, Chapters 353 ad 356. PERA's defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code. General Employees Retirement Plan (General Employees Plan (accounted for in the General Employees Fund)) All full-time and certain part-time employees of the City are covered by the General Employees Plan. General Employees Plan members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not The Basic Plan was closed to new members in 1967. All new members must participate in the Coordinated Plan. Public Employees Police and Fire Plan (Police and Fire Plan {accounted for in the police and Fire Fund)) The Police and Fire Plan, originally established for police officers and firefighters not covered by a local reliefassociation, 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. City of Crystal Notes to.Financial Statements NOTE 9-PENSION PLANS (CONTINUED) Public Employees' Retirement Association (Continued) 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. Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Memben; in plans that are at least 90% funded for two consecutive years are given 2.5% increases. Members in plans that have not exceeded 90% funded, or have fallen below 80o/o, are given 1% increases. The benefit provisions stated in the following paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. 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 ilre used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step.rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first ten years of service and 2. 7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first ten years and 1. 7% for each remaining year. Under Method 2, the annuity accrual rate is 2. 7% of average salary for Basic Plan members and I. 7% for Coordinated Plan members for each year of service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at66. Police and Fire Plan Benefits Benefits for the Police and Fire Plan members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50% after five years up to 100% after ten years of credited service. Benefits for Police and Fire Plan members fll'St hired after June 30, 2014, vest on a prorated basis from 50% after ten years up to 100% after twenty years of credited service. The annuity accrual rate is 3% of average salary for each year of service. For Police and Fire Plan who were first hired prior to July 1, 1989, a full annuity is available when,.age plus years of service equal at least 90. ·s I V - 3 4 6.9 City of Crystal Notes to Financial Statements NOTE 9-PENSION PLANS (CONTINUED) Pnblie Employees' Retirement Association (Continued) 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 Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.50o/o, respectively, of their annual covered salary in calendar year 2016. The City was required to contribute I 1.78% ofpay for Basic Plan members and 7.50% for Coordinated Plan members in calendar year 2016. The City's contributions to the General Employees Fund for the year ended December 31, 2016, were $323,436. The City's contributions were equal to the required contributions as set by state statute. Police and Fire Fund Contributions Plan members were required to contribute 1 0.8% of their annual co-xered ~ary in calendar year 2016. The City was required to contribute 16.20% of pay for Police and Fire Fund members in calendar year 2015. The City's contributions to the Police and Fire Fund fotthe year ended Decembei-'31, :iOI6, were $398,040. The City's contributions were equal to the required contributions as set by state statute. D. Pension Costs General Employees Fund Pension CostS At December 31, 2016, the City reported a liability of $5,578,099 forits proportionate share of the General Employees Fund's net pension liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of$6 million to the fund in 2016. The State of Minnesota is considered a non-employer contributing entity and the State's contribution meets the definition ofa special funding situation. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled $72,855. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by ari actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA.',s participating employers. At June 30, 2016, the City's proportion share was 0.0687%, which was a decrease of0.0007% from its proportion 'measured as of June 30, 2015. For the year ended December 31,2016, the City recognized pension expense of$717,218 for its proportionate share of General Employees Plan's pension expense. In addition, the City recognized an additional $21,723 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's contribution of $6 million to the General Employees Fund. City of Crystal Notes to Financial Statements NOTE 9 -PENSION PLANS (CONTINUED) Public Employees' Retirement Association (Co.ntinued) D. Pension Costs (Continued) At December 31, 2016, the City reported its proportionate share of the General Employees Plan's deferred outflows of resources and deferred inflows of resources, and its contributions· subsequent to the measurement date, related to pensions from the following sources: Differences between expected and actual economic experienc,:: Changes in actuarial assumptions Difference between projected and actual investment earnings Changes in proportion Contributions paid to PERA subsequent to the measurement date Deferred Outflows of Resources $ - 1,092,197 1,061,323 161,719 $ 2,315,239 Deferred Inflows of Resources $ 454,358 212,759 -.-- $_ 667,117 $161,719 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31,2016. Other amounts reported as deferred outflows and deferred inflows of' resources related to pepsions will be recognized in pension expense as follows: Year Ending December 31, 2017 20UI 2019 2020 Total Pension Expense Amount $ $ 377,232 377,232 530,452 201,487 1,486,403 I V - 3 5 6.9 City of Crystal Notes to Financial Statements NOTE 9 -PENSION PLANS (CONTINUED) Public Employees' Retirement Association (Continued) D. Pension Costs (Continued) Police and Fire Fund Pension Costs At December 31, 2016, the City reported a liability of$9,730,143 for its proportionate share ofthe Police and Fire Fund's net pension liability. The netpension liability was measured as of June 30, 2016, and the tOtal pension liability used to calculate the net pension liability was detennmed by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July I, 2015, through June 30, 2016, relative to the total employer contributions received from all of PERA's participating employers. At June 30, 2016, the City's proportion was 0.2430 %, which was an increase of 0.003% from its proportion measured as of June 30, 2016. For the year ended December 31, 2016, the City recognized pension expense of $1,659,785 for its proportionate share of the Police and Fire Fund pension expense. The City also recognized $21,870 for the year ended December 31, 2015, as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's on-behalf contributions to the Police and Fire Fund. Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year, starting in fiscal year 2014. At December 31, 2016, the City reported its proportionate share of the Police and Firc;.Pllin's deferred outflows of resources and deferred inflows of resources related to pensions from the sources below. Differences between expected and actual economic experience Changes in actuarial assumptions Difference betwe.en projected and actual investment earnings Ch8nges in proportion Contributions paid to PERA subsequent to the measurement date Deferred Outflows of Resources $ 5,366,961 1,488,230 28,907 199,020 .$ 7,083,ll8 Deferred Inflows of Resources $ 1,118,740 65,615 . $1,184,355 City of Crystal Notes to Fini!Dcial Statements NOTE 9 -PENSION PLANS (CONTINUED) Public Employees' Retirement Association (Continued) D. Pension Costs (Continued) Police and Fire Fund Pension Costs (Continued) $199,020reported as de{erred outflows of resources related to pensions.resultingfrom City contributions subsequent to the m~u.rement date will be recognized as a reduction of the net pension liability in the year ended Decem]ler .31, 2017. Other amounts reported as deferred outflows and.deferred inflows. of· resources related to pensions will be recognized in pension expense as follows: Year Ending 0~31, 2017 2018 2019. 2020 2o:i1 Total E. Actuarial Assumptions Pension Expense Amount $ $ 1,223,233 1,223,233 1,223,239 \,102,968 927,070 5,699,743 The total pension liability in the June 30, 2016, actuarial valuation was detennined using the entry age nonnal actuarial cost method and 1:he following actuarial assumptions: Inflation Active member payroll growth Investment rate of return 2.50 % Per year 3.25 Per year 7.50 Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors, and disabilitants were based on RP-2014 tables for the General Employees Plan and RP-2000 tables for the Police and Fire Plan for males or females, as appropriate, with slight adjustments. Cost of living benefit increases for retirees are assumed to be 1% for all future years for the General Employees Plan and Police and Fire Plan. Actuarial assumptions used in the June 30, 2016, valuation were based on the results of actuarial experience studies. TheJIIOstrecent four-year experience study in the General Employees Plan was completed in 2015. The experience study for Police and Fire Plan was for the period July 1, 2004 through June 30, 2009. I V - 3 6 6.9 City of Crystal Notes to Financial Statements NOTE 9 -PENSION PLANS (CONTINUED) Public Employees' Retirement Association (Continued) E. Actuarial Assumptions (Continued) The following changes irt actuarial assumptions occurred in 2016: General Employees Fund • The assumed post-retirement benefit increase rate was -changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7.5%; The single discount rate was changed from 7.9% to 7.5%. • Other assumptions were changed pursuant to the experience study dated June 30, 2015; The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. Police and Fire Fund • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7 .5%. The single discount rate changed from 7.9% to 5.6%. · • The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation The State Board of Investment, which manages the investments ofPERA, prepares lin analysis of the reasonableness on a regular basis of the long-term expected rate ·of return u8ing 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 stocks International stocks Bonds Alternative assets Cash Total Target Allocation 45% 15 18 20 2 100% Long-Term Expected Real RateofRetum 5.50% 6.00 1.45 6.40 0.50 City of Crystal Notes to,FiDancial Statements NOTE 9 -PENSION PLANS (CONTINUED) Public Employees' Retirement Association (Continued) F. Discount Rate The discount rate used to measure the total pension liability in 20f6 was 7.5%, a reduction from the 7.9% used in 201 S. 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 those assumptions, the fiduciary net position of the General Employees Fund was projected to be available to make all projected future benefit payments of current Plan members. Therefore, the long- term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. In theJ'olice and Fire Fund, the fiduciary net position was projected to be available to make all projected future benefit payments of current plan members through June 30, 2056. Beginning in fiscal years ended June 30, 2057, for the Police and Fire Fund, when projected benefit payments exceed the funds' projected fiduciary net position, benefit payments were discounted at the municipal bond rate of2.85% based .on an index of 2Q-year general obligation bonds with an average AA credit rating at the meas~ent date. An equivalent single discount rate of 5.60% for the Police and Fire Fund was determined that produced approximately the same present value of projected benefits when applied to all years of projected benefits as the present value of projected benefits using 7.50% applied to all years of projected benefits through the point of asset depletion and 2.85% after. G. 'Pension Liability Sensitivity The table on the following page presents the City's proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension liabilitY would be if it were calculated using a discount rate 1 percentage point lower or l percentage point higher than the current discount rate: City's proportionate share of the General Employees Fund net pension liability City's proportionate share of the Police and Fire Fund net pension liability 1% Decrease in Discount Rate (6.5%) $ 7,922,554 1% Decrease in Discount Rate (4.6%) $ 13,629,654 1% Increase in Discount Rate Discount Rate (7.5%) -(8.5%) $ 5,578,099 $ 3,646,907 1% Increase. in Discount Rate Discount Rate (5.6%) (6.6%) $ 9,730,143 $ 6,543,946 I V - 3 7 6.9 City of Crystal Notes to Financial Statements NOTE 9 -PENSION PLANS (CONTINUED) Public Employees' Retirement Association (Continued) H. 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. Public Employees Defined Contribution Plan (Defined Contribution Plan) Number of entity employee's types of entity employees, e.g. council members, school district board members, of the City of Any Town are covered by the Defined Contribution Plan, a multiple-employer deferred compensation plan administered by PERA. The Defined Contribution Plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. The defined contribution plan consists of individual accounts paying a lump-sum benefit; plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses, therefore, there is no future liability to the employer. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5% of salary which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees must be a fixedpercentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts ofthe Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2% of employer contributions and twenty-five hundredths of 1% (.0025) of the assets in each member's account annual1y. Pension expense for the year is equal to contributions made. Total contributions made by the City during fiscal year 2016 were: Contribution Amount Employee Employer $ 2,165 $ 2,165 Percentage of Covered Payroll Employee Employer 5% 5% Required Rate 5% City of Crystal Notes to Financial Statements NOTElO-POSTEMPLOYMENTHEALTHCAREPLAN A. Plan Description The City provides a single-employer defined benefit health care plan to eligible retirees and their spouses. The plan offers medical coverage. Medical coverage is administered by BlueCross BlueShield. It is the City's policy to periodically review its medical coverage and to obtain requests for proposals in order to provide the most favorable benefits and premiums for City employees and retirees. B. Funding Policy Retirees and their spouses contribute to the healthcare plan at the same rate as City employees. This results in retirees receiving an implicit rate subsidy. Contribution requirements are established by the City based on contract terms with BCBS. Required contributions are based on projected pay-as-you-go financing requirements. For fiscal year 2016, the City contributed $28,972 to the plan. As of January 1, 2016, there were ten retirees or dependents receiving health benefits from the City's health plan. C. Annual Other Post Employment Benefits Cost and Net Other Post Employment Benefits Obligation The City's annual other post employment benefits (OPEB) cost (expense) is calculated based on the annual required contribution (ARC) of the City, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over aperiod not to exceed thirty years. The liability is funded by the General, ED A, Water, Sanitary Sewer, and Storm Drainage funds. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation. ARC Interest on net OPEB obligation Adjustment to ARC Annual OPEB cost (expense) Contributions made Increase in net OPEB obligation Net OPEB obligation -beginning of year Net OPEB obligation-end of year $ $ 106,118 23,888 (20,723) 109,283 {28,972) 80,311 530,851 611,162 I V - 3 8 6.9 City of Crystal Notes to Financial Statements NOTE 10-POST EMPLOYMENT HEALTH CARE PLAN (CONTINUED) C. Annual Other Post Employment Benefits Cost and Net Other Post Employment Benefits Obligation (Continued) The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the .net OPEB obligation was as follows: Increase Percentage of (Decrease) in AnnualOPEB Employer Annual OPEB Cost NetOPEB NetOPEB Year Ended Cost Contribution Contributed Obligation Obligation 12/31114 $ 120,248 $ 30,908 26% $ 89,340 $ 445,749 12/31115 124,505 39,403 32% 85,102 530,851 12131/16 109,283 28,972 27% 80,311 611,162 D. Funded Status and Funding Progress As of January 1, 2016, the most recent actuarial valuation date, the City had no assets deposited to fund the pl;m. The actuarial accrued liability for benefits was $927,310 and the actuarial value of plan assets was $0, resulting in an unfunded actuarial accrued liability {VAAL) of $927,310. The estimated covered payroll (annual payroll of active employees covered by the plan) was $6,162,000, and the ratio of the UAAL to coveted payroll was 15%. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. E. Actuarial Methods and Assumptions Projections of benefits for financial reporting pmposes are based on the substantive p)an (the plan as understood by the employer and the plan 111embers) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the long-term perspective of the calculations. In the January 1, 2016, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.5% discount rate, which is based on the investment yield expected to finance benefits. The City currently does not plan to prefund for this benefit. At the actuarial valuation date the annual healthcare cost trend rate was calculated to be 9.00% initially, reduced incrementally to an ultimate rate of 5% after eleven years. Both rates included a 3% inflation assumption. The UAAL is being amortized as a level percentage of projected payroll on a 30-year open period, with a single base at each measurement date eQual to the UAAL. City of Crystal Notes to Financial Statements NOTE 11-FUND BALANCES A. Classifications A summary of governmental fund balance classifications at December 31,2016, is as follows: ~or Funds s,..w -!!!!!!.--£!~!!!! ~eot Funds c.pn.J ·-......., "''" -· -·-"""' !!!!!!.--BDA S«vice hvohri!Jl ~~_____re_ , .... ..,_ -~· -• 15,519 • • • $ s • IS,SI9 ........ HousiD& llld llldevelapmem: ........... 1,783,870 1,783,870 --5,750,342 5,7~42 Dwi-nlatedenfotoemeat, Tnimns.andedocaticm -----_mzL _mzL TO!altestricted 5,7.50,342 1,816.24~ 7,566,581 Commluod ""'-"-817,760 817,760 Howlina: lllld red.wJoprnu -· 4,215,316 4,2JS,316 Cap.outlay-citywkhl 8,357.&89 1)57,889 Cop. ... .,. __ ... renDWtion of citY bJdp. 105,309 105,509 Cop.--- ~on 2.132,454 2,132.454 Cap.oulf.,.-policeoquip. 3,168,331 3~101,3]1 C'ap.outlly-cableTYequip. 7:tS31 72,S31 Cap.outlay-fiteequip. 585,905 ,.,..., Cap.outlay-ll*tu.iat. ----~~ Total committed 817,760 4.215.316 8,357,889 2,132,454 5,462,538 20.98S,.957 -PolioeDept.pulp11881 40,63"1 40,631 Parkandltec. Dept. J'IIIPOHII! 20,129 20,729 """' ........ ----7155 __l.ill,_ Total-..iJMd 69,115 69,115 "'-"""' 6,220,496 6,7;10,496 Totlllflnlblllilaes • 7,053,'715 • 4.ll5,316 • 5,750,342 • 8,357,889 s l.J32454 • 7,347,898 ~ I V - 3 9 6.9 City of Crystal Notes to Financial Statementll NOTE 12-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. As such, the City participates in the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool currently operating as a common risk management and insurance program for cities.that are parties to a joint powers agreement. The LMCIT is self-sustaining through member premiums and reinsures through commercial companies for claims in excess of pre-determined amounts. The LMCIT provides coverage for liability, errors and omissions; worker's compensation, auto, and other miscellaneous types of coverage. The City's Self-Insurance Fund (an internal service fund) is used to account for and finance its uninsured risks of loss. The Self-Insurance Fund provides coverage for up to a maximum of $25,000 for each general liability or property damage claim, up to $75,000 per year. The City purchases commercial insurance for claims in excess of coverage provided by this fund, as well as for all other risks of loss. Settled claims exceeded commercial coverage in 2016. There were no significant reductions in insurance coverage during 2016. All funds of the City contribute to the Self-Insurance Fund based on estimates of the amounts needed to pay prior and current year claims. The claims liability of$151,175 is included in accounts payable of the Self-Insurance Fund at December 31, 2016. The liability amount is based on the requirements of GASB Statement No. I 0, which requires that a liability for claims be reported when information prior to the issuance of the financial ststements indicates that it is probable that a liability has been incurred. as of the date of the financial ststements and the amount of the loss can be reasonably estimated. The estimate of the liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses, regardless of whether allocated to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claims liability estimate. The maximum liability for any one year is $75,000. The total liability may exceed $75,000 if claims are open from more than one year. Changes in claims liability for 2016 and 2015 are as follows: Year 2015 2016 Claims Liability Beginning of Year $ 110,484 144,587 Current Year Claims and Changes in Estimates $ 38,841 113,046 Payments on Claims $ 4,738 106,458 Claims Liability EndofYear $ 144,587 151,175 City of Crystal Notes to Financial Statementll NOTE 13-JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS A. Joiilt Ventures 1. Golden Valley, Crystal, and New Hope Joint Water Commission The City is a member of a joint powers agreement, together with the cities of Golden Valley and New Hope, which estsblished a Joint Water Commission (JWC). The JWC was created in 1963 to provide for the creation and maintenance. of a joint water supply, storage, and distribution system through which water purchased from the City of Minneapolis Cl!ll. be supplied to the population of the member cities. The city council of each member city is entitled to appoint one member to the JWC. Original construction costs were allocated to the member cities based on percentages agreed upon in the joint powers agreement. All property acquired under this agreement is owned by the members in proportion to the amount of construction costs paid by each member city. All subsequent operating and maintenance costs are apportioned to, and paid by, each member city on the basis of water usage. The City's equity interest and its share of the net income (Joss) of the JWC are reported in the City's Water Fund (an Enterprise Fund). The City's equity interest in the JWC at December 31,2016, is $4,045,981. Due to concurrent timing of the City's fiscal year end and audit of the JWC, the City reports its equity interest in the JWC with a one-year lag. The following fmancial information is from the JWC's audited financial ststements for the year ended December 31, 2015: Total assets Total liabilities Net position Net investment in capital assets Restricted for capital improvements Unrestricted Total net position Total program expenses Total program revenues Net program revenue Total general revenues Change in net position Net position Beginning of year Endofyear $ $ $ $ 15,335,319 722,509 9,829,024 3,913,531 870,255 14,612,810 6,408,186 11,680,403 5,272,217 132,646 5,404,863 9,207,947 14,612,810 JWC audited financial ststements are available from the City of Golden Valley, Finance Department, 7800 Golden Valley Road, Golden Valley, MN 55427. I V - 4 0 6.9 City ofCrystal Notes to Fiilancial Statements NOTE 13-JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS (CONTINUED) A. Joint Ventures (Continued) 2. West Metro Fire-Rescue District Effective January 2, 1998, the City entered into a joint powerS agreement with the City of New Hope . for the purpose of consolidating fire departments ofthe.iwci cities. Opei:ations cOm.menced in July 1998 under the name of West Metro Fire-Rescue District (the District). The District is governed by a seven-member board of directors that includes one Crystal City Council member who is appointed by resolution, one public member appointed by the City Council, and the City Manager, who serves ex officio. ·· As required by the agreement, the City transferred fire department equipment to the District, retaining its rights to these assets in the event of the District's dissolution. The eqUipment transferred had a cost value of $1,923,820. The District recorded only the rolling stock received and recorded it at its estimated fair value. Other equipment items were not capitalized.· The City's equity irtterest and its share of the net income (loss) of the District are reported only in the government-wide financial statements. It is not reported in the General Fund because the eqUity interest represents equity primarily in capital assets vs. fmancial resources. The City's eqUity irtterest in the District at December 31, 2015 is $2,036,218~ · Due to ~oncurrent timing of the City's fiscal year end and audit of the District, the City reports its equity interest in the District with a one-year lag. The following financial information is from 'the District's audited financial statements for the year ended December 31, 2015: Total assets $ 4,657,549 Total liabilities 1,362,826 Net Position Net investinent in capital assets 3,196,945 Restricted for donor-approved purposes 4S,876 Unrestricted 198,159 Total net position $ 3,443,980 Total program expenses $ 2,404,340 Total program revenues 2,038~5 Net program revenue (expense) (365,435) Total general revenues 44,m Change in net position (320,658) Net position BegOming of year 4,2311,226 Change in accounting principle (473,588~ Beginning of year, restated 3,764,!!38 End of year $ 3,443.980 City of Crystal Notes to Financial Statements NOTE 13-JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS. (CONTINUED) A. Joint Ventures (Continued) 2. West Metro Fire-Rescue District (Continued) The activities of the District wi11 continue to be funded entirely by the cities of Crystal and NllW Hope, with each city contributing its proportionate share of the annual operating budget in monthly installments. According to a formula in the agreement, the City's share of the District's operating budget is 49.3183%. Audited financial statements are available from West Metro Fire-Rescue District, 4251 Xylon Avenue N., New Hope, MN 55428. B. Jointly Governed Organizations 1. Local Government Information Systems Association (LOGIS) The City is a member ofLOGIS, a consortium of Minnesota government entities that provides computerized data. processing and support services to its members. LOGIS is legally separate from the City, the City does not appoint a voting majority of the Board, and it is fiscally independent of the City. The amount paid to LOGIS for services received iii 2016 was $329,878 which was allocated to various funds based on application usage. 2. LOGIS Insuranre Group Thfs group provides cooperative purchasing of healtli and life insurance benefits for over 40 government entities. The amount paid for 2016 health and life insurance benefits was $1,248,348. 3. P~ts Under Police Security (PUPS) The City is party to a joint powers agreement, together with five other cities, which created an organization to provide for the efficient and economical impoundment of animals in a jointly owned and operated facility. The amount paid to PUPS for services received in 2016 was $19,314. 4. Bassett Creek Watershed Management Commission (BCWMC) The City is party to a joint powers agreement, together with eight other cities, the purpose of which is to provide for cooperative planning, usage, and improvement of the Bassett Creek waterShed. The amount paid to BCWMC in 2016 was $25,771. 5. Shingle Creek Watershed Management Commission (SCWMC) The City is party to a joint powers agreement, together with eight other cities, which was created to protect and manage the water resources of the Shingle Creek watershed. The amount paid to SCWMC in 2016 was $26,831. I V - 4 1 6.9 City of Crystal Notes to Financial Statements NOTE 13-JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS (CONTINUED) B. Jointly Governed Organizations (Continued) 6. llennepin Recycling Group (HRG) The City is party to a joint powers agreement, together with the cities of Brooklyn Center and New Hope, which established HRG. HRG was created to provide for the efficient and·economical collection, recycling, and disposal of solid waste within the cities. HRG contracts for collection 1111d recycling activities and the participating cities are billed for services provided to its residents. The amount paid to HRG for services received in 2016 was $324,324. Accounting services for HRG were provided by the City, which has reported the financial accounts ofHRG in an Agency Fund in these financial statements. NOTE14-CO~NTS In addition, the City is party to a cost-sharing agreement with Hennepin County to reconstruct the portion of Hennepin County Highway 81 which runs through the City. The cost-sharing agreement relates to property acquisition and construction for this multi-year project, which began in 2009 and was completed in 2014. The best estimate of the CitY's total costs at this point in titne is $4 million (including $2,600,000 of existing bonded debt issued to Hennepin County). As of December 31, 2016; $3,896,835 (hicluding $2,514,060 of payments on bonded debt) had been paid under the cost-sharing agreement and the unspecified balance will be paid in subsequent years. NOTE 15-FACILITY USE AGREEMENT On August 24, 2004, the City entered into a licensor-licensee relationship with lSD 28l.Per terms of the agreement, the City contributed $900,000 towards the cost of constructing and equipping a gymnasium. In return, the City is entitled to use the space for public recreation as well as for programs and services for its residents. The agreement is for a term of 40 years, running from September 1, 2005 through August 31, 2045. lSD 281 has title to the property and is responsible for all subsequent operations and maintenance costs. NOTE 16-CONTINGENT LIABILITIES The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's attorney that resolution of these matters will not have a material adverse effect on the financial condition of the City. City of Crystal Notes to Financial Statements NOTE 17-SUBSEQUENT EVENTS Subsequent to December 31, 2016, the City Council approved the following significant contracts: Project Street reconstruction phase 16 Construction· services for phase 16 Materials testing services for phase 16 and 2017 alley reconstruction project 2017 alley reconstruction project Contractor Palda & Sons, Inc. SEH, Inc. ITCO Allied Engineering Co. C.S. McCrossan, Inc. NOTE 18-NEW STANDARDS ISSUED BUT NOT YET IMPLEMENTED Contract Amount $ 7,993,349 399,710 26,361 197,969 $ 8,617,389 GASB has issued GASB Statement 74 relating to postemployment benefit plans other than pension plans administered through trusts. that. meet certain criteria and includes requirements for OPEB plans not administered ~ugh triJ$. This new statement requires additional note disclosures and additional required supplementary information. This statement is effective for financial statements for fiscal years beginning after June 15,2016. We are recommending that a review of your actuarial study be completed with your actuarial firm to ensure compliance with the new standard. GASB has issued GASB statement 75 relating to accounting and financial reporting for postemployment benefits other than pensions. The new statement requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about OPEB liabilities. This statement is·effective for.fmancial statements for fiscal years beginning after June 15, 2017. I V - 4 2 6.9 City of Crystal Retiree Health Plan -Schedule of Funding Progress Actuarial Accrued Uabilicy UAALasa Actuarial (AAL)-Unfunded Percentage of Actuarial Value of Projected Unit AAL Funded Estimated Covered Year Valuation Assets Credit (UAAL) Ratio Covered Payroll ~ Date (a) (b) (b-a) (Bib) Payroll ~·> 12/31114 01101115 $ $ 1,071,271 s 1,071,271 0% s 5,947.037 18% 12/31115* 01/01/16 1,166,824 1,166,824 0% 6,170,051 19% 12/31/16 01/01117 927,310 927,310 0% 6~162,000 15% "Because an actuarial valuation is being performed once every two years (in even years), the liabilities and annual costs are based on the same population as the previous year's liabilities and annual costs. Ci1fl c;\Ys Proportionate 1'ropcl1iaua1o Share Share (Amount) (Pon:onlaao) of oftb>Ntt ForPiJcllYear tbeNetPIIIllion PeoaioniJabllil!' Ended June lO. ~[-l ~ 2016 0.0617% $ 5.51B,099 2015 0,0694% 3,59<5,668 City Name Sc:itedal6oi'City's Pmportioaata Share of Net Peuiaa Liability Geaeral Employees lletlrtmeat Fund WstTeaYa.n City's ~-SbaMoftheNet s ..... F~ionUablilil¥ l'nlportiulm and the State's Sbare(Amount) ~ ...... oftlteNet Share of the Net Pensi.OD.Liabili~ Pensi.onUablility Associaled with Associated with lheCi!l: lheCI!!: s 72,855 s 5,650,954 3,596,668 City's Ca.ered- EmJ!~~I s 4,260,733 4,010,187 ~ Scbedulc~intendedto~1alyartread. Additional yean wiD. be reported as they become available. Ci'l"s Propa<ti<m oftbeNet ForFiscaiY.,.-PcmiCIII.Uabili\y Eoded.JDI1030, [AD«l 2016 0.2430% 2015 0.2400% Sclled•le of City'• Proportioaate Share ofNetPauioa UabDII)r PttbHc Employees Polke and Fire Retirement Fund t.stTcnYoars c;'l"s Proportionate ShareoftheNet Ci'l"s PetalionLiability-Plan Fiduciary Proportioaate (Asset) as a Net Position as a ShareoftheNet Pucartqe of its Percentage of the PensiDDUability-Ci1fl Cowrod-Cownd-Employeo Total Pension [Asaetl EmploYee Paxrdl Poyro)l UaiMU!Y s 9,730,143 s 2,343,136 415.26% 63.88% 2.726,962 2,136,679 127.63% 86.61% Note: SdaechJle.is intended to Bhow tea year lrCDd. Additional years wiD be reported u they become available. c;lfs Propa<tiOIIII> ShareoftlmNet PeasionU!IbJlity Pion Fiduclay (Asset)u.a NetPoaitioo.asa Pen:entapofill P.....,lqo.oftbo Ca.ered-TOIIlPallion Bm2~!:!l!!!ll ~ 130.92% 68.91% 89,69% 78.19% I V - 4 3 6.9 FJSC;al Year Statutorily Ending Required Decembet31, Contribution 2016 $ 323,436 2015 315,859 City Name Schedule of City Coatributioas Goaeral Employeoa Retiremeat Faad Last Ten Years Contributions in Relation to the Statutorily Contribution Required Deficiency Contributions (Excess~ $ 323,436 $ 315,859 Contribu1ions as a Percentage of City's Covered-Covered- Eme•~ P!X!!!n Emelo~P!!!!!!ll $ 4,312,480 7.5% 4,211,453 7.5% Note: Schedule is intended to show ten year trend. Additional years will be reported as they beCome available. Fiscal Year Ending December 31, 2016 $ 2015 Schedule of City Contributions Public Employees Police aild Fire Retiremeat Filad Last Ten Years Contributions in Relation to the Statutorily Statutorily Contribution Required Required Deficiency City's Covered- Contribution Contributions ~cess) Emeto~ P!X!!!ll 398,040 $ 398,040 $ $ 2,457,037 367,112 367,112 2,266,123 Contributions as a Percentage of Covered- .!!!!!J!lo~ P!X!!!ll 16.2% 16.2% Note: Schedule is intended to show ten year trend. Additional years will be reported liS they beCome available. City of Crystal Notes to Required Supplementary Information GENERALE~OYEESFUND 2016 Changes Changes in Actuarial Assumptions • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7 .5%. The single discount rate was changed from 7.9% to 7 .5%. • Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth, the inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. 2015 Changes Changes in Plan Provisions • 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. Changes in Actuarial Assumptions • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2030 and 2.5% per year thereafter to 1.0% per year through 2035 and 2.5% per year thereafter. POLICE AND FIRE FUND 2016 Changes Changes in Actuarial Assumptions • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% thereafter to 1.0% per year for all future years. • The assumed investment~ was changed from 7.9% to 7.5%. The single discount rate changed from 7.9% to 5.6%. • The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. 2015 Changes Changes in Plan Provisions • The post-retirement benefit increase to be paid after attainment of the 90% funding threshold was changed, from inflation up to 2.5%, to a fixed rate of2.5%. Changes in Actuarial Assumptions • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2030 and 2.5% per year thereafter to 1.0% per year through 2037 and 2.5% per year thereafter. I V - 4 4 6.9 PROPOSAL SALE DATE: August 15, 2017 ________________________________ Phone: 651-223-3000 * Preliminary; subject to change. Fax: 651-223-3046 Email: bond_services@springsted.com Website: www.springsted.com City of Crystal, Minnesota $4,955,000* General Obligation Improvement Bonds, Series 2017A For the Bonds of this Issue which shall mature and bear interest at the respective annual rates, as follow, we offer a price of $_________________ (which may not be less than $4,905,450) plus accrued interest, if any, to the date of delivery. Year Interest Rate (%) Yield (%) Dollar Price Year Interest Rate (%) Yield (%) Dollar Price 2019 % % % 2027 % % % 2020 % % % 2028 % % % 2021 % % % 2029 % % % 2022 % % % 2030 % % % 2023 % % % 2031 % % % 2024 % % % 2032 % % % 2025 % % % 2033 % % % 2026 % % % Designation of Term Maturities Years of Term Maturities In making this offer on the sale date of August 15, 2017 we accept all of the terms and conditions of the Terms of Proposal published in the Preliminary Official Statement dated July 25, 2017 including the City’s right to modify the principal amount of the Bonds. (See “Terms of Proposal” herein.) In the event of failure to deliver these Bonds in accordance with said Terms of Proposal, we reserve the right to withdraw our offer, whereupon the deposit accompanying it will be immediately returned. All blank spaces of this of fer are intentional and are not to be construed as an omission. By submitting this proposal, we confirm that we have an established industry reputation for underwriting municipal bonds such as the Bonds. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: $____________________________ TRUE INTEREST RATE: ______________ % The Bidder  will not  will purchase municipal bond insurance from . Account Members ______________________________ Account Manager By: ___________________________ Phone: ________________________ ........................................................................................................................................................................................................................... The foregoing proposal has been accepted by the City. Attest: _______________________________ Date: ________________________________ ........................................................................................................................................................................................................................... 6.9 VjAr Extract of Minutes of Meeting of the City Council of the City of Y� Crystal, Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Crystal, Minnesota, was duly held in the City Hall in said City on Tuesday, August 15, 2017, commencing at 7:00 P.M. The following members were present: and the following were absent: The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City's General Obligation Improvement Bonds, Series 2017A, in the original aggregate principal amount of $4,665,000. The City Manager presented a tabulation of the proposals that had been received in the manner specified in the Terms of Proposal for the Bonds. The proposals were as set forth in EXHIBIT A attached. After due consideration of the proposals, Member then introduced the following written resolution, the reading of which was dispensed with by unanimous consent, and moved its adoption: 503179v2 MNI CR225445 RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2017A, IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $4,665,000; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the City Council of the City of Crystal, Hennepin County, Minnesota (the "City") as follows: Section 1. Sale of Bonds. 1.01. Authorization. Pursuant to a resolution adopted by the City Council of the City on July 18, 2017, the City provided preliminary approval to issue and sell its General Obligation Improvement Bonds, Series 2017A (the "Bonds"), pursuant to Minnesota Statutes, Chapters 429 and 475, as amended (the "Act"), in order to finance certain assessable public improvements designated as the Phase 16 Street Reconstruction Project, including but not limited to gravel base, concrete curb and gutter, boulevard restoration and bituminous surfacing construction, and in some areas drain tile, rain garden and storm sewer construction (collectively, the "Improvements"). 1.02. Award to the Purchaser and Interest Rates. The proposal of Robert W. Baird & Co., Inc., Milwaukee, Wisconsin, as syndicate manager (the "Purchaser"), to purchase the Bonds of the City described in the Terms of Proposal thereof is determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $4,906,608.91 (par amount of $4,665,000.00, plus original issue premium of $273,842.60, less underwriter's discount of $32,233.69), plus accrued interest to date of delivery, if any, for Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2019 2.000% 2027 3.000% 2020 2.000 2028 3.000 2021 2.000 2029 3.000 2022 3.000 2030 3.000 2023 3.000 2031 3.000 2024 3.000 2032 3.000 2025 3.000 2033 3.000 2026 3.000 True interest cost: 2.2039008% 1.03. Purchase Contract. The amount proposed by the Purchaser in excess of the minimum bid shall be credited to the Debt Service Fund hereinafter created or deposited in the Construction Fund hereinafter created, as determined by the Finance Director of the City in consultation with the City's municipal advisor. The Finance Director is directed to deposit the good faith check or deposit of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith deposits of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 503179v2 MNI CR225445 1.04. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Act in the total principal amount of $4,665,000, originally dated September 14, 2017, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: Year Amount Year Amount 2019 $415,000 2027 $300,000 2020 330,000 2028 300,000 2021 325,000 2029 295,000 2022 315,000 2030 290,000 2023 315,000 2031 290,000 2024 310,000 2032 285,000 2025 310,000 2033 280,000 2026 305,000 1.05. Optional Redemption. The City may elect on February 1, 2027, and on any day thereafter to prepay Bonds due on or after February 1, 2028. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in Section 7 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2018, to the registered owners of record as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Re ig ster. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. 503179v2 MNI CR225-445 (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond 503179v2 MNI CR225-445 to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Re isg tray. The City appoints U.S. Bank National Association, St. Paul, Minnesota as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon thirty (30) days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the Finance Director must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in EXHIBIT B attached hereto with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Execution of Bonds. The Bonds will be printed or typewritten in substantially the form attached hereto as EXHIBIT B. 3.02. Approving Legal Opinion. The City Manager is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which will be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. 503179v2 MNI CR225-445 Section 4. Payment; Security; Pledges and Covenants. 4.01. Debt Service Fund. The Bonds are payable from the General Obligation Improvement Bonds, Series 2017A Debt Service Fund (the "Debt Service Fund") hereby created, and the proceeds of special assessments levied or to be levied (the "Assessments") for the Improvements described in Section 1.01 hereof are hereby pledged to the Debt Service Fund. There is hereby appropriated to the Debt Service Fund amounts over the minimum purchase price of the Bonds paid by the Purchaser, to the extent deposited therein, in accordance with Section 1.03 hereof. 4.02. Construction Fund. The proceeds of the Bonds, less the appropriations made in Section 4.01, plus a portion of the amount over the minimum purchase price of the Bonds paid by the Purchaser, together with any other funds appropriated for the Improvements and Assessments collected during the construction of the Improvements, will be deposited in a separate construction fund (the "Construction Fund") to be used solely to defray expenses of the Improvements and the payment of principal of and interest on the Bonds prior to the completion and payment of all costs of the Improvements. Any balance remaining in the Construction Fund after completion of the Improvements may be used to pay the cost in whole or in part of any other improvement instituted under the Act under the direction of the City Council. When the Improvements are completed and the cost thereof paid, the Construction Fund is to be closed and subsequent collections of Assessments for the Improvements are to be deposited in the Debt Service Fund. 4.03. City Covenants. It is hereby determined that the Improvements will directly and indirectly benefit abutting property, and the City hereby covenants with the holders from time to time of the Bonds as follows: (a) The City has caused or will cause the Assessments for the Improvements to be promptly levied so that the first installment will be collectible not later than 2018 and will take all steps necessary to assure prompt collection, and the levy of the Assessments is hereby authorized. The City Council will cause to be taken with due diligence all further actions that are required for the construction of each Improvement financed wholly or partly from the proceeds of the Bonds, and will take all further actions necessary for the final and valid levy of the Assessments and the appropriation of any other funds needed to pay the Bonds and interest thereon when due. (b) In the event of any current or anticipated deficiency in Assessments, the City Council will levy ad valorem taxes in the amount of the current or anticipated deficiency. (c) The City will keep complete and accurate books and records showing receipts and disbursements in connection with the Improvements, Assessments levied therefor and other funds appropriated for their payment, collections thereof and disbursements therefrom, monies on hand and, the balance of unpaid Assessments. (d) The City will cause its books and records to be audited at least annually and will furnish copies of such audit reports to any interested person upon request. (e) One hundred percent (100%) of the cost of the assessable Improvements described herein will be specially assessed against benefited properties. 4.04. General Obligation Pledgee. If a payment of principal of or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the Finance Director will pay the principal or interest from the general fund of the City, and the general fund will be reimbursed for those advances out of the proceeds of Assessments when collected. 503179v2 MNI CR225445 4.05. Debt Service Coverage. It is hereby determined that the estimated collection of Assessments for the payment of principal and interest on the Bonds will produce at least five percent (5%) in excess of the amount needed to meet, when due, the principal and interest payments on the Bonds and that no tax levy is needed at this time. 4.06. Certificate of Taxpayer Services Division Manager as to Registration. The City Clerk is authorized and directed to file a certified copy of this resolution with the Taxpayer Services Division Manager of Hennepin County, Minnesota, and to obtain the certificate required by Section 475.63 of the Act. Section 5. Authentication of Transcript. 5.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 5.02. Certification as to Official Statement. The Mayor, City Manager, and Finance Director are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 5.03. Other Certificates. The Mayor, the City Manager, and the Finance Director are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the City or incumbency of its officers, at the closing the Mayor, the City Manager, and the Finance Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Finance Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds. Section 6. Tax Covenant. 6.01. Tax -Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 6.02. No Rebate Required. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for 503179v2 MNI CR225445 7 investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States, if the Bonds (together with other obligations reasonably expected to be issued in calendar year 2017) exceed the small -issuer exception amount of $5,000,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the City finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code. 6.03. Not Private Activi , Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. Qualified Tax -Exempt Obligations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the City designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds which are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2017 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2017 have been designated for purposes of Section 265(b)(3) of the Code. 6.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 7. Book-EntKy System; Limited Obligation of City. 7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 7.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the "Participants") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any 503179v2 MNI CR225445 other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co." will refer to such new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 7.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Representation Letter") which shall govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 7.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificate, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owner in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 7.05. Payments to Cede & Co. Notwithstanding any other provision of this resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and all notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 8. Continuing Disclosure. 8.01. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 503179v2 MNI CR225445 9 8.02. Ci . Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 9. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. (The remainder of this page is intentionally left blank.) 503179v2 MNI CR225-445 10 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 the same: whereupon said resolution was declared duly passed and adopted. 503179v2 MNI CR225-445 11 EXHIBIT A PROPOSALS 503179v2 MNI CR225-445 A-1 EXHIBIT B No. R- UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF CRYSTAL GENERAL OBLIGATION IMPROVEMENT BOND SERIES 2017A Date of Rate Maturity Original Issue CUSIP % February 1, 20_ September 14, 2017 Registered Owner: Cede & Co. The City of Crystal, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the "City"), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above or registered assigns, the principal sum of $ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above (calculated on the basis of a 360 day year of twelve 30 day months), payable February 1 and August 1 in each year, commencing August 1, 2018, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, St. Paul, Minnesota, as Bond Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1, 2027, and on any day thereafter to prepay Bonds due on or after February 1, 2028. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company ("DTC") of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code") relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. This Bond is one of an issue in the aggregate principal amount of $4,665,000 all of like original issue date and tenor, except as to number, maturity date, redemption privilege, and interest rate, all issued pursuant to a resolution adopted by the City Council on August 15, 2017 (the "Resolution"), for the 503179v2 MNI CR225445 B -I purpose of providing money to defray the expenses incurred and to be incurred in making local improvements, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapters 429 and 475, as amended, and the principal hereof and interest hereon are payable from special assessments against property specially benefited by local improvements, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in special assessments, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota, to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Bond Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Crystal, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. Dated: September 14, 2017 (Facsimile) Mayor 503179v2 MNI CR225-445 B-2 CITY OF CRYSTAL, MINNESOTA (Facsimile) City Manager CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION :A Authorized Representative ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common TEN ENT -- as tenants by entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT Custodian (Cust) (Minor) under Uniform Gifts or Transfers to Minors Act, State of Additional abbreviations may also be used though not in the above list. For value received, the IWIM 1" D1►01 undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. 503179v2 MNI CR225445 B-3 Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion Signatures Program ("MSP") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration Registered Owner Cede & Co. Federal ID #13-2555119 503179v2 MNI CR225-445 Q-4 Signature of Officer of Registrar STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. CITY OF CRYSTAL ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Crystal, Hennepin County, Minnesota (the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on August 15, 2017, with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of the City's General Obligation Improvement Bonds, Series 2017A, in the original aggregate principal amount of $4,665,000. WITNESS My hand officially as such City Clerk and the corporate seal of the City this day of 92017. City Clerk City of Crystal, Minnesota (SEAL) 503179v2 MNI CR225-445 STATE OF MINNESOTA COUNTY OF HENNEPIN CERTIFICATE OF TAXPAYER SERVICES DIVISION MANAGER AS TO REGISTRATION WHERE NO AD VALOREM TAX LEVY I, the undersigned Taxpayer Services Division Manager of Hennepin County, Minnesota, hereby certify that a resolution adopted by the City Council of the City of Crystal, Minnesota (the "City"), on August 15, 2017, relating to the City's General Obligation Improvement Bonds, Series 2017A, dated September 14, 2017, in the original aggregate principal amount of $4,665,000, has been filed in my office and said obligations have been registered on the register of obligations in my office. WITNESS My hand and official seal this day of , 2017. Taxpayer Services Division Manager Hennepin County, Minnesota (SEAL) Deputy County Auditor 503179v2 MNI CR225-445 AGENDA ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL •• •• WORK SESSION •• •• TUESDAY, AUGUST 15, 2017 IMMEDIATELY FOLLOWING THE 7:00 P.M. CITY COUNCIL MEETING CRYSTAL CITY HALL CONFERENCE ROOM A 1. Call to order * 2. Review updated concept plan and discuss design details for Bass Lake Road streetscape project 3. Home improvement program update * 4. 5900 56 th Ave N update * 5. Other business * 6. Adjournment * *Items for which no materials are included in the packet _____________________________________________________________________ FROM: John Sutter, Community Development Director _____________________________________________________________________ DATE: August 10, 2017 TO: Anne Norris, City Manager (for August 15 EDA work session ) SUBJECT: Review updated concept plan and discuss design details for Bass Lake Road streetscape project On June 22, staff and design consultant SEH held a design workshop at the Becker Park building to gather input on the first draft of the Bass Lake Road streetscape concept. At the July 18 work session the City Council reviewed and discussed a second draft of concept. The attached updated concept is intended to be the final concept presented for Council/EDA review before the consultant moves into detailed design. At this time staff and the consultant are proceeding under the following assumptions: • Textured concrete will be the favored approach for making the hardscape attractive while minimizing long-term maintenance costs. This means colored concrete and paver bricks will not be part of the design, or at most will be used sparingly. • If the existing street lights can be retrofitted with LEDs to provide better pedestrian lighting, and if that would be a lower cost alternative to replacement with new pedestrian-scale lighting fixtures, then we will use that approach. • If the existing street light poles will remain, then we intend to use the existing banner arms for placement of a semi-permanent banner based on the city flag design instead of the seasonal banners in use today and common in many cities. If the existing street light poles will be removed, then some sort of fixture for vertically mounting the full-size city flag will be installed in the mini-plaza at the northwest corner of the Elmhurst intersection and also at the southeast corner of the Sherburne intersection. • We will attempt to preserve the existing Honeylocust shade trees to the extent possible along the south side of the two city-owned parking lots. • The planter boxes must be small enough to be moved with a forklift and truck to off-site seasonal storage. Karl Weissenborn from SEH will be present to answer questions on the final concept and seek EDA input on design elements, materials and features. Detailed design will be completed in fall 2017 for winter bidding and spring 2018 construction. EDA STAFF REPORT Bass Lake Road Streetscape Finalize Concept Design CRYSTAL: BASS LAKE ROAD STREETSCAPE preliminary 08/15/17 BASS LAKE RD N 0’ 50’ 25’ 100’ 200’ a new bass lake road STREETSCAPE CONCEPT REDESIGN 22 SPACES future LRT station add 14 on-street parking spaces enhanced sidewalk tree buffer from parking lot minor gateway plaza add 14 on-street parking spaces promenade planter boxes planting bed ADA compatible truncated dome add 6 on-street parking spaces pedestrian crosswalk planted median B O T T I N E A U B L V D BRENTWOOD AVE N S H E R B U R N E A V E E L M H U R S T A V E street trees • pedestrian safety measure • noise, pollution and vision buffer • welcome element, visual cues • paving patterning • bench seating • wayfinding / signage • receptacles • easy to maintain and store • buffer to traffic lane • at end of parking bays • roadway lighting at east end • clumping, salt tolerant perennial and shrub plantings • small ornamental trees • mass planting bed <4’ height • 4’ wide concrete buffer • wide and clear connection to LRT station • open and safe - “eyes-on” • pedestrian lighting • noise, pollution and vision buffer • planting beds • variety / small ornamental trees • save existing canopy trees when possible • convenient front door access • traffic calming for bass lake road • pedestrian lighting • colored and patterned concrete • seating • outlets high on poles for decorative lighting • speakers on poles for music • proposed in conjunction with the LRT Station plan 60 PARKING SPACES BECKER PARK MASTER REDESIGN car door zone metro transit bus shelter Please hand this form to the City Clerk before the meeting begins. To provide ample opportunity for all, speaking time is limited to three minutes and topic discussion is limited to 10 minutes. (Information provided on this form is open to the public) (please print clearly) The topic I wish to address is:C-" .: Name:tJ Address: Zip Code: ��'la `"�, `�� Date: Day Phone (optional): Email (optional) Thank you for your attendance and participation.