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JWC Agenda 08-15-2024AGENDA JOINT WATER COMMISSION August 15, 2024 – 1:30 pm Remote Attendance: Members of the public may attend this meeting via Microsoft Teams by calling 1-872-256-4160 and entering access code 119 801 16#. Questions/Comments: Members of the public who have questions about the commission or any items on the agenda should contact the staff commission liaison – Patrick Sele, Utility Superintendent, City of Crystal, patrick.sele@crystalmn.gov, 763-531-1166. 1.Call to Order—Roll Call 2.Approval of Minutes – June 5, 2024 3.Appoint City of Golden Valley City Manager, Noah Schuchman, to the Commission 4.Appoint Chair, Vice-Chair, and Secretary/Treasurer 5.Approve Robbinsdale Letter of Support 6.Approve & File the 2023 Financial Statements for JWC from MMKR 7.Approve the 2025 CIP Budget 8.Approve the 2025 General Fund Budget 9.TAC Update 10.Adjournment Joint Water Commission, June 5, 2024 Page 1 of 1 JOINT WATER COMMISSION MINUTES Golden Valley - Crystal - New Hope Meeting of June 5, 2024 The Golden Valley - Crystal - New Hope Joint Water Commission (JWC) meeting was called to order at 1:30 pm. Roll Call Present Tim Kieffer, Public Works Director, Golden Valley Adam Bell, City Manager, Crystal Reece Bertholf, City Manager, New Hope Staff Present Dave Lemke, Operations Manager, New Hope Matt Rowedder, Utilities Maintenance Supervisor, New Hope Patrick Sele, Utilities Superintendent, Crystal Analeigh Moser, Accountant, Golden Valley Bernie Weber, Public Works Director, New Hope Jesse Struve, Public Works Director, Crystal Carrie Nelson, Engineering Assistant, City of Golden Valley Approval of Minutes – April 3, 2024 Moved by Bertholf and seconded by Bell to approve the minutes of the April 3, 2024, Joint Water Commission (JWC) Meeting. Upon a roll call vote the following voted in favor: Kieffer, Bell and Bertholf. The following voted against: None. Motion carried. Approve Purchase of Adapters from Thompson Pipe Group Moved by Bertholf and seconded by Bell to authorize the purchase of adapters from Thompson Pipe Group. Upon a roll call vote the following voted in favor: Kieffer, Bell, and Bertholf. The following voted against: None. Motion carried. TAC Update Staff provided an update from the May 30, 2024 TAC meeting. Other Business The next meeting is scheduled for July 3, 2024 Adjournment Chair Kieffer adjourned the meeting at 1:55 pm. ATTEST: Carrie Nelson, Recording Secretary Chair Tim Kieffer Joint Water Commission Memo August 15, 2024 Agenda Item #3 & 4 Agenda Item #3 & 4 Appoint Golden Valley City Manager, Noah Schuchman, to the Joint Water Commission and Appoint Chairperson, Vice Chair and Secretary/Treasurer for remainder of the calendar year 2024. Prepared by Carrie Nelson, Recording Secretary Summary Due to the appointment of Noah Schuchman, Golden Valley City Manager, as Golden Valley’s representative on the Joint Water Commission, a special election should occur appointing Noah Schuchman to the board. As per the Joint Water Commission By-Laws, the Joint Water Commission appoints a chairperson, vice chair and Secretary/Treasurer a.Officers and Officers’ Duties: There shall be appointed on an annual basis on the following officer of the Commission: Chairperson; Vice Chairperson; and Secretary/Treasurer. The Chairperson or, in his or her absence, the Vice Chairperson shall preside at all meetings of the Commission. The Secretary/Treasurer shall act as the Clerk of such meeting, shall give notice thereof and shall be custodian of all books and records of the Commission. The Finance Department on one of the member Cities be the custodian of all moneys received by the Commission, shall keep accounts thereof, shall pay out money on orders signed by the Chairperson, shall submit to the Commission such reports as it may request regarding the financial affairs of the Commission. Budget Considerations No budget considerations. Attachments Resolution 24-010 from the City of Golden Valley appointing Golden Valley’s City Manager, Noah Schuchman, as Golden Valley’s representative on the Golden Valley/Crystal/New Hope Joint Water Commission. Recommended Action Motion to appoint City Manager, Noah Schuchman, Golden Valley, to the board and appoint all Joint Water Commission Officers for the 2024 calendar year. EXECUTIVE SUMMARY City Administration 763-512-2345 / 763-512-2344 (fax) Golden Valley City Council Meeting February 6, 2024 Agenda Item 3C.2. Adopt Resolution No. 24-010 Appointing Representation to the Golden Valley-Crystal-New Hope Joint Water Commission Prepared By Theresa Schyma, City Clerk Summary The Council appointed City Manager Cruikshank to a three year term on the Golden Valley-Crystal- New Hope Joint Water Commission (JWC) on January 17, 2023. Historically these appointments are filled by the City Manager of each representing city; however, with the impending retirement of City Manager Cruikshank, staff believe the best approach moving forward is to update the appointment process. To ensure the City always has voting representation on the JWC, the proposed resolution appoints the role of City Manager instead of appointing a person by name. Furthermore, the City has subject matter experts that attend JWC meetings and are fully equipped to weigh-in on matters from the City's perspective; therefore, the proposed resolution also allows the Public Works Director to represent the City in situations where the City Manager or, in the City Manager’s absence, the staff person filling the role of City Manager, are unable to attend a JWC meeting. Legal Considerations This item did not require legal review. Equity Considerations This item did not require equity review. Recommended Action Motion to adopt Resolution No. 24-010 appointing representation for the City of Golden Valley to the Golden Valley-Crystal-New Hope Joint Water Commission. Supporting Documents Resolution No. 24-010 Appointing JWC Representative 10 RESOLUTION NO. 24-010 RESOLUTION APPOINTING REPRESENTATION ON THE GOLDEN VALLEY-CRYSTAL-NEW HOPE JOINT WATER COMMISSION WHEREAS, the cities of Golden Valley, New Hope and Crystal created a Joint Water Commission (the “JWC”) in 1963 to benefit the three communities; and WHEREAS, pursuant to section 2 of the JWC Joint Powers Agreement, the City Council of each city must appoint a representative to the JWC Commission by resolution; and WHEREAS, it is in the best interest of the City to appoint the City Manager to the Commission for a three year term or until such time as there is a change to the joint powers organization; and WHEREAS, City Manager Timothy J. Cruikshank was last appointed to a three year term as the City’s JWC representative on January 17, 2023; and WHEREAS, the impending retirement of City Manager Timothy J. Cruikshank necessitates an update to representation on the JWC for the remainder of the three year term; and WHEREAS, to ensure the City always has voting representation on the JWC, the best approach moving forward is to appoint representatives by roles rather than individual names; and WHEREAS, the City has subject matter experts, such as the Public Works Director, that attend JWC meetings and are fully equipped to weigh-in on matters from the City's perspective in the absence of the City Manager or, in the City Manager’s absence, the staff person filling the role of City Manager. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota, that the Golden Valley City Manager is hereby appointed to fill the remainder of the three year term that is set to expire on January 31, 2026 as the City of Golden Valley's representative on the Golden Valley-Crystal-New Hope Joint Water Commission. BE IT FURTHER RESOLVED by the City Council of the City of Golden Valley, Minnesota, that in the Golden Valley City Manager’s absence, the staff person filling the role of City Manager or the Public Works Director can act as the City of Golden Valley’s representative on the Golden Valley- Crystal-New Hope Joint Water Commission for the remainder of the three year term that is set to expire on January 31, 2026. Adopted by the City Council of Golden Valley, Minnesota this 6th day of February 2024. ATTEST:Roslyn Harmon, Mayor Theresa Schyma, City Clerk 11 RESOLUTION NO. 24-010 RESOLUTION APPOINTING REPRESENTATION ON THE GOLDEN VALLEY-CRYSTAL-NEW HOPE JOINT WATER COMMISSION WHEREAS, the cities of Golden Valley, New Hope and Crystal created a Joint Water Commission (the “JWC”) in 1963 to benefit the three communities; and WHEREAS, pursuant to section 2 of the JWC Joint Powers Agreement, the City Council of each city must appoint a representative to the JWC Commission by resolution; and WHEREAS, it is in the best interest of the City to appoint the City Manager to the Commission for a three year term or until such time as there is a change to the joint powers organization; and WHEREAS, City Manager Timothy J. Cruikshank was last appointed to a three year term as the City’s JWC representative on January 17, 2023; and WHEREAS, the impending retirement of City Manager Timothy J. Cruikshank necessitates an update to representation on the JWC for the remainder of the three year term; and WHEREAS, to ensure the City always has voting representation on the JWC, the best approach moving forward is to appoint representatives by roles rather than individual names; and WHEREAS, the City has subject matter experts, such as the Public Works Director, that attend JWC meetings and are fully equipped to weigh-in on matters from the City's perspective in the absence of the City Manager or, in the City Manager’s absence, the staff person filling the role of City Manager. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota, that the Golden Valley City Manager is hereby appointed to fill the remainder of the three year term that is set to expire on January 31, 2026 as the City of Golden Valley's representative on the Golden Valley-Crystal-New Hope Joint Water Commission. BE IT FURTHER RESOLVED by the City Council of the City of Golden Valley, Minnesota, that in the Golden Valley City Manager’s absence, the staff person filling the role of City Manager or the Public Works Director can act as the City of Golden Valley’s representative on the Golden Valley- Crystal-New Hope Joint Water Commission for the remainder of the three year term that is set to expire on January 31, 2026. Adopted by the City Council of Golden Valley, Minnesota this 6th day of February 2024. ATTEST: Roslyn Harmon, Mayor Theresa Schyma, City Clerk DocuSign Envelope ID: 90AFFD3E-CD68-49BB-93D0-8886E58E08DB Joint Water Commission Memo August 15, 2024 AGENDA ITEM #5 Agenda Item #5 Letter of Support for the City of Robbinsdale for a Grade Separated Crossing at 42nd Street Prepared by Technical Advisory Committee Summary The City of Robbinsdale presented at a previous Joint Water Commission (JWC) meeting asking for a letter supporting their recommendation for a grade separated crossing at the intersection of the proposed Blue Line Light Rail and 42nd Street. The JWC has a 36-inch watermain that supplies water from Minneapolis to the Crystal reservoir. The watermain is a critical component to the JWC’s water distribution system and extra precautions should be taken to ensure its protection from cathodic corrosion, vibration, and accessibility. Recommended Action Motion to approve letter of support for the City of Robbinsdale for a grade separated crossing at 42nd Street. June 6, 2024 Richard McCoy, Public Works Director / City Engineer City of Robbinsdale 4100 Lakeview Avenue North Robbinsdale, MN 55422 Dear Mr. McCoy, The Joint Water Commission (JWC) is supportive of the recommendation from the City of Robbinsdale to have a grade separated crossing at the intersection of the proposed Blue Line Light Rail and 42nd Street. The JWC has a 36-inch watermain that supplies water from Minneapolis to a reservoir in Crystal. This watermain is a critical component to the JWC’s water distribution system and extra precautions should be taken to ensure its protection from cathodic corrosion, vibration, and accessibility. Sincerely, , JWC Chair C: \\Files\goldval$\Joint Water Commission\JWC Agendas\2024 JWC Agenda\08 - August\5- 8-7-24- Memo for 2023 JWC Financial Reports and Letter.docx Joint Water Commission Memo August 15, 2024 AGENDA ITEM #6 Agenda Item 6 6.Receive and File the 2023 Financial Statement and Management Letter Prepared by Analeigh Moser, Golden Valley Accountant Summary The 2023 JWC Financial Statement and Management Report are attached to this memo. Our auditor MMKR found no material weaknesses, no issues of noncompliance, and no findings. They have approved the final compilation of our 2023 financial statements. Attachments 2023 Financial Statements 2023 Management Report Recommended Action Receive and file the 2023 Financial Statements and 2023 Management Letter. June 13, 2024 To the Board of Commissioners and Management Golden Valley – Crystal – New Hope Joint Water Commission The following is a summary of our audit work, key conclusions, and other information that we consider important or that is required to be communicated to the Board of Commissioners, administration, or those charged with governance of the Golden Valley – Crystal – New Hope Joint Water Commission (the Commission). OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA AND GOVERNMENT AUDITING STANDARDS We have audited the financial statements of the governmental activities and each major fund of the Commission as of and for the year ended December 31, 2023. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information to you verbally and in our audit engagement letter. Professional standards also require that we communicate to you the following information related to our audit. PLANNED SCOPE AND TIMING OF THE AUDIT We performed the audit according to the planned scope previously discussed and coordinated in order to obtain sufficient audit evidence and complete an effective audit. AUDIT OPINION AND FINDINGS Based on our audit of the Commission’s financial statements for the year ended December 31, 2023: •We have issued an unmodified opinion on the Commission’s basic financial statements. The Commission has elected not to present management’s discussion and analysis, which accounting principles generally accepted in the United States of America have determined necessary to supplement, although not required to be a part of, the basic financial statements. Our opinion on the Commission’s basic financial statements is not affected by this missing information. •We reported no deficiencies in the Commission’s internal control over financial reporting that we considered to be material weaknesses. •The results of our testing disclosed no instances of noncompliance required to be reported under Government Auditing Standards. •We reported no findings based on our testing of the Commission’s compliance with Minnesota laws and regulations. C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 Golden Valley – Crystal – New Hope Joint Water Commission Page 2 June 13, 2024 SIGNIFICANT ACCOUNTING POLICIES Management is responsible for the selection and use of appropriate accounting policies . The significant accounting policies used by the Commission are described in Note 1 of the notes to basic financial statements. No new accounting policies were adopted, and the application of existing policies was not changed during the year. We noted no transactions entered into by the Commission during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the financial statements is mana gement’s estimate of depreciation expense based on the estimated useful lives of the assets. We evaluated the key factors and assumptions used by management to develop these estimates in determining that they are reasonable in relation to the basic financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT We encountered no significant difficulties in dealing with management in performing and completing our audit. CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. DISAGREEMENTS WITH MANAGEMENT For purposes of this report, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. MANAGEMENT REPRESENTATIONS We have requested certain representations from management that are included in the management representation letter dated June 13, 2024. Golden Valley – Crystal – New Hope Joint Water Commission Page 3 June 13, 2024 MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations . If a consultation involves application of an accounting principle to the Commission’s financial statements or a determinati on of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no consultations with other accountants. OTHER AUDIT FINDINGS OR ISSUES We generally discuss a variety of matters, including the application of accounting principles and auditing standards with management each year prior to retention as the Commission’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. OTHER MATTERS We were not engaged to report on the introductory section, which accompanies the financial statements, but is not required supplementary information. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. CLOSING We would be pleased to further discuss any of the information contained in this report or any other concerns that you would like us to address. We would also like to express our thanks for the courtesy and assistance extended to us during the course of our audit. The purpose of this report is solely to provide those charged with governance of the Commission, management, and those who have responsibility for oversight of the financial reporting process required communications related to our audit process. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota June 13, 2024 THIS PAGE INTENTIONALLY LEFT BLANK GOLDEN VALLEY – CRYSTAL – NEW HOPE JOINT WATER COMMISSION Financial Statements and Supplemental Information Year Ended December 31, 2023 THIS PAGE INTENTIONALLY LEFT BLANK Page INTRODUCTORY SECTION BOARD OF COMMISSIONERS 1 FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT 2–4 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 5 Statement of Activities 6 Fund Financial Statements Balance Sheet – Governmental Funds 7 Statement of Revenue, Expenditures, and Changes in Fund Balances – Governmental Funds 8 Statement of Revenue, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund 9 Notes to Basic Financial Statements 10–17 OTHER REQUIRED REPORTS Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 18–19 Independent Auditor’s Report on Minnesota Legal Compliance 20 GOLDEN VALLEY – CRYSTAL – NEW HOPE JOINT WATER COMMISSION Table of Contents THIS PAGE INTENTIONALLY LEFT BLANK INTRODUCTORY SECTION THIS PAGE INTENTIONALLY LEFT BLANK -1- Commissioner Position Governmental Unit Tim Cruikshank Chairperson City of Golden Valley Reece Bertholf Vice Chairperson City of New Hope Adam Bell Secretary/Treasurer City of Crystal GOLDEN VALLEY – CRYSTAL – NEW HOPE JOINT WATER COMMISSION Board of Commissioners as of December 31, 2023 THIS PAGE INTENTIONALLY LEFT BLANK FINANCIAL SECTION THIS PAGE INTENTIONALLY LEFT BLANK -2- INDEPENDENT AUDITOR’S REPORT To the Board of Commissioners and Management Golden Valley – Crystal – New Hope Joint Water Commission REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS OPINIONS We have audited the accompanying financial statements of the governmental activities and each major fund of the Golden Valley – Crystal – New Hope Joint Water Commission (the Commission) as of and for the year ended December 31, 2023, and the related notes to the financial statements, which collectively comprise the Commission’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Commission as of December 31, 2023, and the respective changes in financial position thereof and the budgetary comparison for the General Fund for the year then ended, in accordance with accounting principles generally accepted in the United States of America. BASIS FOR OPINIONS We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Commission, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. RESPONSIBILITIES OF MANAGEMENT FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Commission’s ability to continue as a going concern for 12 months beyond the financial statements date, including any currently known information that may raise substantial doubt shortly thereafter. (continued) C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 -3- AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Commission’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Commission’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. REQUIRED SUPPLEMENTARY INFORMATION Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, i s required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. (continued) -4- OTHER INFORMATION Management is responsible for the other information included in the annual report. The other information comprises the introductory section, but does not include the basic financial statements and our auditor ’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. PRIOR YEAR COMPARATIVE INFORMATION We have previously audited the Commission’s 2022 financial statements, and we expressed unmodified audit opinions on the respective financial statements of the governmental activities and each major fund in our report dated August 14, 2023. In our opinion, the partial comparative information presented herein as of and for the year ended December 31, 2022, is consistent, in all material respects, with the audited financial statements from which it has been derived. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated June 13, 2024 on our consideration of the Commission’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Commission’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Commission’s internal control over financial reporting and compliance. Minneapolis, Minnesota June 13, 2024 THIS PAGE INTENTIONALLY LEFT BLANK BASIC FINANCIAL STATEMENTS 2023 2022 Assets Cash and investments 10,894,041$ 8,668,774$ Due from other governmental units 720,234 1,379,859 Leases receivable 748,808 792,921 Prepaids 56,338 44,104 Capital assets Not depreciated 154,596 – Depreciated, net of accumulated depreciation 11,193,022 11,566,913 Total capital assets, net of accumulated depreciation 11,347,618 11,566,913 Total assets 23,767,039$ 22,452,571$ Liabilities Accounts and contracts payable 20,262$ 21,124$ Deposits payable 8,915 8,915 Due to other governmental units 559,191 775,504 Total liabilities 588,368 805,543 Deferred inflows of resources Lease revenue for subsequent years 748,808 792,921 Net position Net investment in capital assets 11,347,618 11,566,913 Restricted for capital improvements 8,042,408 6,452,096 Restricted for emergency water supply 1,700,000 1,700,000 Unrestricted 1,339,837 1,135,098 Total net position 22,429,863 20,854,107 Total liabilities, deferred inflows of resources, and net position 23,767,039$ 22,452,571$ Governmental Activities GOLDEN VALLEY – CRYSTAL – NEW HOPE JOINT WATER COMMISSION Statement of Net Position as of December 31, 2023 (With Partial Comparative Information as of December 31, 2022) See notes to basic financial statements -5- 2023 2022 Program expenses Water distribution Water purchases 8,528,005$ 7,646,915$ Administration and maintenance 606,516 591,468 Depreciation 484,602 500,717 Total program expenses 9,619,123 8,739,100 Program revenues – water distribution Charges for services Member assessments 9,077,510 8,156,727 Other – 16,965 Capital grants and contributions 1,518,128 1,745,580 Total program revenues – water distribution 10,595,638 9,919,272 Net program revenues 976,515 1,180,172 General revenues Investment income 531,181 121,800 Rental income 68,060 121,786 Total general revenues 599,241 243,586 Change in net position 1,575,756 1,423,758 Net position Beginning of year 20,854,107 19,430,349 End of year 22,429,863$ 20,854,107$ (With Partial Comparative Information for the Year Ended December 31, 2022) Governmental Activities GOLDEN VALLEY – CRYSTAL – NEW HOPE JOINT WATER COMMISSION Statement of Activities Year Ended December 31, 2023 See notes to basic financial statements -6- Improvement Capital Projects General Fund Fund 2023 2022 Assets Cash and investments 1,137,993$ 9,756,048$ 10,894,041$ 8,668,774$ Due from other governmental units 710,356 9,878 720,234 1,379,859 Leases receivable 748,808 – 748,808 792,921 Prepaids 56,338 – 56,338 44,104 Total assets 2,653,495$ 9,765,926$ 12,419,421$ 10,885,658$ Liabilities Accounts and contracts payable 17,477$ 2,785$ 20,262$ 21,124$ Deposits payable 8,915 – 8,915 8,915 Due to other governmental units 538,458 20,733 559,191 775,504 Total liabilities 564,850 23,518 588,368 805,543 Deferred inflows of resources Lease revenue for subsequent years 748,808 – 748,808 792,921 Fund balances Nonspendable for prepaids 56,338 – 56,338 44,104 Restricted for capital improvements – 8,042,408 8,042,408 6,452,096 Restricted for emergency water supply – 1,700,000 1,700,000 1,700,000 Unassigned 1,283,499 – 1,283,499 1,090,994 Total fund balances 1,339,837 9,742,408 11,082,245 9,287,194 Total liabilities, deferred inflows of resources, and fund balances 2,653,495$ 9,765,926$ 12,419,421$ 10,885,658$ Fund balances – governmental funds 11,082,245$ 9,287,194$ Cost of capital assets 21,930,515 21,665,208 Less accumulated depreciation (10,582,897) (10,098,295) Net position of governmental activities 22,429,863$ 20,854,107$ Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in governmental funds. GOLDEN VALLEY – CRYSTAL – NEW HOPE JOINT WATER COMMISSION Balance Sheet Governmental Funds Amounts reported for governmental activities in the Statement of Net Position differ because: Total Governmental Funds as of December 31, 2023 (With Partial Comparative Information as of December 31, 2022) See notes to basic financial statements -7- Improvement Capital Projects General Fund Fund 2023 2022 Revenue Member assessments Charges for services 9,067,754$ –$ 9,067,754$ 8,147,350$ Nonoperating surcharge 9,756 – 9,756 9,377 Construction charges – 1,508,250 1,508,250 1,724,500 Other revenue Refunds and reimbursements – 9,878 9,878 38,045 Investment income 190,290 340,891 531,181 121,800 Rental income 68,060 – 68,060 121,786 Total revenue 9,335,860 1,859,019 11,194,879 10,162,858 Expenditures Water purchased 8,528,005 – 8,528,005 7,646,915 Insurance 81,979 – 81,979 57,956 Utilities 243,266 – 243,266 250,839 Labor 45,004 – 45,004 42,490 Maintenance 121,251 3,400 124,651 67,596 Professional services 4,750 – 4,750 14,400 Administrative charges paid to members 38,806 – 38,806 34,071 Miscellaneous – – – 2,330 Rent remitted to members 68,060 – 68,060 121,786 Capital outlay – 265,307 265,307 306,767 Total expenditures 9,131,121 268,707 9,399,828 8,545,150 Net change in fund balances 204,739 1,590,312 1,795,051 1,617,708 Fund balances Beginning of year 1,135,098 8,152,096 9,287,194 7,669,486 End of year 1,339,837$ 9,742,408$ 11,082,245$ 9,287,194$ Amounts reported for governmental activities in the Statement of Activities are different because: Net change in fund balances – governmental funds 1,795,051$ 1,617,708$ Capital outlay 265,307 306,767 Depreciation expense (484,602) (500,717) Change in net position of governmental activities 1,575,756$ 1,423,758$ Capital outlays are reported as expenditures in governmental funds,but are allocated over the estimated useful lives of the capital assets as depreciation expense in the Statement of Activities. Total Governmental Funds GOLDEN VALLEY – CRYSTAL – NEW HOPE (With Partial Comparative Information for the Year Ended December 31, 2022) JOINT WATER COMMISSION Statement of Revenue, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended December 31, 2023 See notes to basic financial statements -8- 2022 Original and Over (Under) Final Budget Actual Final Budget Actual Revenue Charges for services 9,963,315$ 9,067,754$ (895,561)$ 8,147,350$ Nonoperating surcharge – 9,756 9,756 9,377 Other revenue Refunds and reimbursements – – – 16,965 Investment income – 190,290 190,290 38,167 Rental income – 68,060 68,060 121,786 Total revenue 9,963,315 9,335,860 (627,455) 8,333,645 Expenditures Current Water purchased 7,952,715 8,528,005 575,290 7,646,915 Insurance 65,000 81,979 16,979 57,956 Utilities 257,350 243,266 (14,084) 250,839 Labor 120,000 45,004 (74,996) 42,490 Maintenance – 121,251 121,251 60,811 Professional services 15,000 4,750 (10,250) 14,400 Administrative charges paid to members 45,000 38,806 (6,194) 34,071 Miscellaneous – – – 2,330 Rent remitted to members – 68,060 68,060 121,786 Capital outlay 1,508,250 – (1,508,250) – Total expenditures 9,963,315 9,131,121 (832,194) 8,231,598 Net change in fund balances –$ 204,739 204,739$ 102,047 Fund balances Beginning of year 1,135,098 1,033,051 End of year 1,339,837$ 1,135,098$ 2023 General Fund Year Ended December 31, 2023 (With Partial Comparative Information for the Year Ended December 31, 2022) GOLDEN VALLEY – CRYSTAL – NEW HOPE JOINT WATER COMMISSION Statement of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual See notes to basic financial statements -9- GOLDEN VALLEY – CRYSTAL – NEW HOPE JOINT WATER COMMISSION Notes to Basic Financial Statements December 31, 2023 -10- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES A. Organization The Golden Valley – Crystal – New Hope Joint Water Commission (the Commission) was formed under the authority of Minnesota Statutes § 471.59. Its purpose is to provide for the operation and ownership of a water supply system in and for the Commission. The Commission is governed by a Board of Commissioners, which consists of three members, one from each of the participating cities. Original construction costs for the water supply system were allocated to the member cities based on percentages agreed upon in the Joint Powers Agreement. All subsequent operating and maintenance costs are apportioned to each member city based on water usage. All property acquired under this agreement is owned by the member cities in proportion to the amount of construction costs each city pays. The accounting policies of the Commission conform to accounting principles generally accepted in the United States of America as applicable to governmental units. B. Reporting Entity A joint venture is a legal entity resulting from a contractual agreement that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control, in which the participants retain either an ongoing financial interest or an ongoing financial responsibility. The Commission, as described above, is considered a joint venture of the cities of Golden Valley, Crystal, and New Hope, and is included as such in their financial statements. As required by accounting principles generally accepted in the United States of America, these financial statements include the Commission (the primary government) and its component units. Component units are legally separate entities for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component unit includes whether or not the primary government appoints the voting majority of the potential component unit’s board, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. Based on these criteria, there are no component units required to be included in the Commission’s financial statements. C. Government-Wide Financial Statements The government-wide financial statements (Statement of Net Position and Statement of Activities) display information about the reporting government as a whole. These statements include all of the financial activities of the Commission. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; 2) operating grants and contributions; and 3) capital grants and contributions. Other internally directed revenues are reported as general revenues. -11- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue when all eligibility requirements imposed by the provider have been met. Generally, the effect of interfund activity is eliminated from the government-wide financial statements. D. Fund Financial Statement Presentation The accounts of the Commission are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred outflows/inflows of resources, fund equity, revenue, and expenditures. Separate fund financial statements are provided for governmental funds. Major governmental funds are reported as separate columns in the fund financial statements. The resources of the Commission are accounted for in the following two major governmental funds: General Fund – This fund is the Commission’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Improvement Capital Projects Fund – This fund is used to account for financial resources set aside for the construction of infrastructure improvements. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus, only current assets and current liabilities are generally included on the Balance Sheet. Operating statements of this fund present increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in fund balances. Under this basis of accounting, transactions are recorded in the following manner: 1. Revenue Recognition – Revenue is recognized when it becomes measurable and available. “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the Commission considers revenues to be available if collected within 60 days after year-end. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. All significant revenue sources are considered susceptible to accrual. 2. Recording of Expenditures – Expenditures are generally recorded when a liability is incurred; however, expenditures are recorded as prepaid for approved disbursements or liabilities incurred in advance of the year in which the item is to be used. Capital asset acquisitions are reported as capital outlay expenditures in the governmental funds. E. Budget A budget for the General Fund is adopted annually on the modified accrual basis of accounting. Budgetary control is at the fund level. All appropriations lapse at year-end. F. Use of Estimates The preparation of financial statements, in accordance with accounting principles generally accepted in the United States of America, required management to make estimates that affect the amounts reported in the basic financial statements. Actual results could differ from these estimates. -12- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Cash and Investments Cash and temporary investments include balances from all funds that are combined and invested to the extent available in various securities as authorized by state law. Earnings from pooled investments are allocated to the respective funds on the basis of each fund’s respective cash balance participation. Investment income is accrued at the Balance Sheet date. Investments are generally stated at fair value, except for certain external investment pools stated at amortized cost. When applicable, the Commission categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. 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; and Level 3 inputs are significant unobservable inputs. Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. H. Receivables The Commission utilizes an allowance for uncollectible accounts to value its receivables; however, it considers all of its current receivables to be collectible. Receivables not expected to be collected within one year include leases. I. Prepaids Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaids, which are recorded as expenditures/expenses at the time of consumption. J. Capital Assets Capital assets are capitalized at historical cost, or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated acquisition value at the date of donation. The Commission defines capital assets as those with an initial, individual cost of $5,000 or more, which benefit more than one fiscal year. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives is not capitalized. Capital assets are recorded in the government-wide financial statements, but are not reported in the fund financial statements. Capital assets are depreciated using the straight-line method over their estimated useful lives. Since assets are generally sold for an immaterial amount or scrapped when declared as no longer fit or needed by the Commission, no salvage value is taken into consideration for depreciation purposes. Useful lives used range from 5 to 40 years for the distribution system and 10 to 30 years for storage facilities. Construction in progress is not depreciated. K. Deferred Outflows/Inflows of Resources In addition to assets and liabilities, statements of financial position or balance sheets will sometimes report separate sections for deferred outflows or inflows of resources. These separate financial statement elements represent a consumption or acquisition of net assets, respectively, that apply to future periods and so will not be recognized as an outflow of resources (expense/expenditure) or inflow of financial resource (revenue) until then. The Commission reports deferred inflows of resources related to leases. Lessors are required to recognize deferred inflows of resources corresponding to lease receivables, which are reported in both the governmental fund financial statements and the government-wide financial statements. These amounts are deferred and amortized in a systematic and rationale manner over the term of the lease. -13- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Net Position In the government-wide financial statements, net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources . Net position is displayed in three components: • Net Investment in Capital Assets – Consists of capital assets, net of accumulated depreciation, reduced by any outstanding debt attributable to acquire capital assets. • Restricted Net Position – Consists of net position restricted when there are limitations imposed on its use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. • Unrestricted Net Position – All other net position that does not meet the definition of “restricted” or “net investment in capital assets.” The Commission applies restricted resources first when an expense is incurred for which both restricted and unrestricted resources are available. M. 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. These classifications are as follows: • Nonspendable – Consists of amounts that are not in spendable form, such as prepaid items, inventory, and other long-term assets. • Restricted – Consists of amounts related to externally imposed constraints established by creditors, grantors, or contributors; or constraints imposed by state statutory provisions. • Committed – Consists of internally imposed constraints that are established by resolution of the Board of Commissioners. Those committed amounts cannot be used for any other purpose unless the Board of Commissioners removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. • Assigned – Consists of internally imposed constraints. These constraints consist of amounts intended to be used by the Commission for specific purposes, but do not meet the criteria to be classified as restricted or committed. In governmental funds, assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority. • Unassigned – The residual classification for the General Fund, which also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the Commission’s policy to first use restricted resources, and then use unrestricted resources as they are needed. When committed, assigned, or unassigned resources are available for use, it is the Commission’s policy to use resources in the following order: 1) committed, 2) assigned, and 3) unassigned. The Commission’s fund balance policy includes goals for maintaining minimums of $900,000 of unassigned fund balance in the General Fund and $1,000,000 of fund balance restricted for capital projects in the Improvement Capital Projects Fund. -14- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) N. Risk Management The Commission is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets; error and omissions; and natural disasters. The Commission participates in the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool for its general property, casualty, and other miscellaneous insurance coverages. The LMCIT operates as a common risk management and insurance program for a large number of cities in Minnesota. The Commission pays an annual premium to the LMCIT for insurance coverage. The LMCIT agreement provides that the LMCIT will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of certain limits. Settled claims have not exceeded coverage limits in any of the past three years. There were no significant reductions in insurance coverage during the current fiscal year. O. Prior Period Comparative Information The financial statements include partial prior year comparative information. Such information does not include all of the information required or sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Commission’s financial statements for the year ended December 31, 2022, from which such partial information was derived. NOTE 2 – CASH AND INVESTMENTS A. Deposits Cash balances of the Commission may maintain deposits as authorized by Minnesota Statutes. Custodial credit risk is considered the most significant risk associated with deposits, which is the risk that in the event of a bank failure, the Commission’s deposits may be lost. Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety bonds, or collateral. The market value of collateral pledged must equal 110 percent 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 financial institution furnishing the collateral. The Commission has no additional deposit policies addressing custodial credit risk. At year-end, the carrying amount of the Commission’s deposits and the balance on the bank records were both $0. At year-end, all deposits were fully covered by federal deposit insurance. -15- NOTE 2 – CASH AND INVESTMENTS (CONTINUED) B. Investments At year-end, the Commission held investments in the Minnesota Municipal Money Market (4M) Fund of $1,838,283, and in the 4M Plus Fund of $9,055,758. These funds are external investment pools regulated by Minnesota Statutes not registered with the Securities and Exchange Commission (SEC) that follow the regulatory rules of the SEC. The Commission’s investments in these funds are measured at the net asset value per share provided by the pool, which is an amortized cost method that approximates fair value. The 4M Fund has no restrictions on withdrawals; however, the 4M Plus Fund requires funds be invested for a 14-day period prior to withdrawal, subject to a penalty equal to 7 days of interest on funds withdrawn prior to the 14-day restriction period. Investments are subject to various risks, the following of which are considered the most significant: 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 Commission would not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Commission does not have a formal policy addressing this risk, but typically limits its exposure by purchasing insured or registered investments, or by the control of who holds the securities. Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota Statutes limit the Commission’s investments to direct obligations or obligations guaranteed by the United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated “AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less; Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or certain Minnesota securities broker-dealers. The Commission does not have a formal policy that further restricts investing in specific financial instruments. Concentration Risk – This is the risk associated with investing a significant portion of the Commission’s investment (considered 5.0 percent or more) in the securities of a single issuer, excluding U.S. guaranteed investments (such as treasuries), investment pools, and mutual funds. The Commission does not have a formal policy that limits the concentration of investments. 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 Commission does not have a formal policy limiting the duration of investments. -16- NOTE 3 – LEASES RECEIVABLE The Commission has entered into two agreements to lease space for cellular antennas on structures or property owned by the Commission. One agreement requires annual payments due each January 1 for the ensuing year through December 2028, with payments increasing annually by 3.00 percent from the previous year. This agreement includes a renewal option for an additional five-year period with similar terms, that may be cancelled by either party with written notice to terminate at least one year prior to the end of the current lease term. The second agreement requires annual payments due each January 1 for the ensuing year through December 2043, with payments increasing every fifth year by 10.00 percent from the previous five-year period. Both agreements bear an interest rate of 3.02 percent based on the Commission’s incremental borrowing rate. The Commission received total principal and interest payments of $38,060 and $30,000, respectively, on these agreements in 2023. NOTE 4 – CAPITAL ASSETS Capital asset activity for the year ended December 31, 2023 is as follows: Beginning Completed Ending Balance Additions Retirements Construction Balance Capital assets, not depreciated Construction in progress –$ 265,307$ –$ (110,711)$ 154,596$ Capital assets, depreciated Distribution system 18,450,248 – – 110,711 18,560,959 Storage facilities 3,214,960 – – – 3,214,960 Total capital assets, depreciated 21,665,208 – – 110,711 21,775,919 Less accumulated depreciation on Distribution system (7,173,104) (462,816) – – (7,635,920) Storage facilities (2,925,191) (21,786) – – (2,946,977) Total accumulated depreciation (10,098,295) (484,602) – – (10,582,897) Net capital assets, depreciated 11,566,913 (484,602) – 110,711 11,193,022 Total capital assets, net 11,566,913$ (219,295)$ –$ –$ 11,347,618$ Depreciation expense is included in the water distribution program in the government-wide financial statements. -17- NOTE 5 – RELATED PARTY TRANSACTIONS The Commission transacts business with the three member cities affiliated through common ownership of the joint venture. A. Revenue and Related Receivables The Commission charges the member cities for water costs, system maintenance and improvement, administrative expenditures generated in the ordinary course of business, and a nonoperating surcharge. Revenue from charges to the member cities in 2023, along with any remaining receivable, is as follows: Improvement General Fund Capital Projects Receivable at Revenue Fund Revenue December 31, 2023 City of Golden Valley 3,531,151$ 574,191$ 300,581$ City of Crystal 2,459,098 413,562 269,821 City of New Hope 3,087,261 520,497 149,832 9,077,510$ 1,508,250$ 720,234$ B. Expenditures and Related Payables The member cities charge the Commission for expenditures incurred or services performed on the Commission’s behalf, as well as an administrative charge. In addition, the Commission remits revenue received on antenna leases to the member cities. Expenditures made to the member cities and rental revenues passed through to the member cities during the year, along with any liabilities remaining at year-end, are as follows: Lease Included in Revenues Payables at Expenditures Remitted December 31, 2023 City of Golden Valley 247,952$ 22,686$ 6,290$ City of Crystal 368,062 22,687 23,294 City of New Hope 128,029 22,687 3,244 744,043$ 68,060$ 32,829$ OTHER REQUIRED REPORTS THIS PAGE INTENTIONALLY LEFT BLANK -18- INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Commissioners and Management Golden Valley – Crystal – New Hope Joint Water Commission We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, t he financial statements of the governmental activities and each major fund of the Golden Valley – Crystal – New Hope Joint Water Commission (the Commission) as of and for the year ended December 31, 2023, and the related notes to the financial statements, which collectively comprise the Commission’s basic financial statements, and have issued our report thereon dated June 13, 2024. REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the Commission’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Commission’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Commission’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigne d functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Commission’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. (continued) C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 -19- REPORT ON COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the Commission’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Commission’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Commission’s internal control and compliance. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota June 13, 2024 -20- INDEPENDENT AUDITOR’S REPORT ON MINNESOTA LEGAL COMPLIANCE To the Board of Commissioners and Management Golden Valley – Crystal – New Hope Joint Water Commission We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of the Golden Valley – Crystal – New Hope Joint Water Commission (the Commission) as of and for the year ended December 31, 2023, and the related notes to the financial statements, which collectively comprise the Commission’s basic financial statements, and have issued our report thereon dated June 13, 2024. MINNESOTA LEGAL COMPLIANCE In connection with our audit, nothing came to our attention that caused us to believe that the Commission failed to comply with the provisions of the contracting – bid laws, depositories of public funds and public investments, conflicts of interest, claims and disbursements, and miscellaneous provisions sections of the Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota Statutes § 6.65, insofar as they relate to accounting matters. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the Commission’s noncompliance with the above referenced provisions, insofar as they relate to accounting matters. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. Accordingly, this report is not suitable for any other purpose. Minneapolis, Minnesota June 13, 2024 C E R T I F I E D A C C O U N T A N T S P UBLIC PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA Malloy, Montague, Karnowski, Radosevich & Co., P.A. 5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1 THIS PAGE INTENTIONALLY LEFT BLANK Joint Water Commission Memo August 15, 2024 AGENDA ITEM #7 Agenda Item #7 7.Approve 2025 Capital Improvement Program (CIP) Resolution #24-XX Prepared by Analeigh Moser, Golden Valley Accountant Lyle Hodges, Golden Valley Finance Director Summary At this meeting, the Joint Water Commission will consider the resolution adopting the 2025 CIP budget. This budget has been reviewed and approved by TAC. Attachments Resolution #24-XX for 2025 Proposed CIP (1 Page) CIP project listings and subsequent budgets (1 Page) Recommended Action Motion to approve the 2025 CIP Budget, Resolution #24-XX 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 B C D K L M N O P Q R S T Projects Location CIP # 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Replace Trunk Valve ($70,000/valve)GV, Crys, & NH 14-027 214,500 212,000 200,000 210,000 210,000 210,000 210,000 220,000 220,000 220,000 SCADA Updates GV, Crys, & NH 14-029 35,000 35,000 Security for All Towers, and Pump Stations (Fiber) GV, Crys & NH 14-037 30,000 Effluent Meters in Reservoir Golden Valley 19-002 Replace Swamp coolers Crystal 19-001 Install 48" Gate Valve at GV Reservoir (2023?)Golden Valley 15-006 Pumps/Controls/Piping/Valves at Pump Station (2022)Golden Valley 16-001 Inspect and Clean Reservoirs (Crys 2023, GV 2024)Crystal /Golden Valley 16-006 50,000 30,000 50,000 30,000 Water Supply Plan GV, Cry, & NH New 75,000 75,000 JWC Trunk Main Testing/PCCP Pipe Rehab GV, Cry, & NH 17-004/18-001 60,500 63,000 67,000 Pumps/Controls/Piping/Valves at Pump Station (2022)Crystal 17-003 Replace flow meters All 21-002 45,000 45,000 Reservoir Repairs (2024 Crystal)All x 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 Valve Exerciser All 24-001 125,000 Pump Houses All 23-005 200,000 200,000 200,000 200,000 200,000 200,000 Pipes and Valves All 23-002 400,000 400,000 400,000 400,000 Golden Valley Road (CSAH 66) Project All x TH 55 and Douglas Drive (CSAH 102)23-006 MCC Control Update 23-007 1,400,000 42nd Avenue (CSAH 9) Project- 2027 constuction Crystal 24-002 400,000 Meter Pit Improvements (NEW)GV x TOWERS: Tower Inspections NH - GV 19-004 50,000 50,000 New Hope 16-004/18-002 2,000,000 New Tower (1.5 MG) Hillsboro- South Tower New Hope 19-003-NHS New Tower Golden Valley 19-003-GV 600,000 500,000 600,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 New Tower- North Tower- Boone New Hope 19-003-NHN TOTAL 4,430,000 1,575,000 1,152,000 1,485,000 865,000 1,480,000 1,005,000 1,530,000 1,095,000 1,475,000 Joint Water Commission CIP for Years 2024-2034 Interior & Exterior structure repairs to Elevated Tower (South Tower) Blast and Repaint (2023 or 2024) Resolution 24-xx August 7th, 2024 Member Moser introduced the following resolution and moved its adoption: RESOLUTION APPROVING 2025-2034 CAPITAL IMPROVEMENT PROGRAM WHEREAS, the Technical Advisory Committee reviewed the proposed 2025-2034 Capital Improvement Program; and WHEREAS, the Golden Valley - Crystal – New Hope Joint Water Commission has reviewed the 2025-2034 Capital Improvement Program at the August 7, 2024 meeting; and WHEREAS, financing for projects outlined in the 2025-2034 Capital Improvement Program will be reviewed each year and provided for by current approved budget. NOW, THEREFORE, BE IT RESOLVED that the Golden Valley - Crystal – New Hope Joint Water Commission approves the 2025-2034 Capital Improvement Program. _____________________________ Joint Water Commission Chair ATTEST: _____________________________ Joint Water Commission Vice Chair Joint Water Commission Memo August 15, 2024 AGENDA ITEM #8 Agenda Item #8 8.Approve 2025 General Fund Budget Resolution #24-XX Prepared by Analeigh Moser, Golden Valley Accountant Lyle Hodges, Golden Valley Finance Director Summary At this meeting, the Joint Water Commission will consider the resolution adopting the 2025 Budget. Staff has included actual numbers for 2022 and 2023 along with the adopted and estimated budget for 2024. Attachments Resolution #24-XX 2025 Proposed Budget (1 Page) Recommended Action Motion to approve the 2025 General Fund Budget, Resolution #24-XX Resolution 24-XX RESOLUTION OF THE JOINT WATER COMMISSION ADOPTING THE 2025 OPERATING & WORKING CAPITAL BUDGET BE IT RESOLVED by the Joint Water Commission that the appropriations for the General Fund & Capital Improvement Expenditures for the calendar year 2025 as follows: 2022 2023 2024 2024 2025 Actual Actual ADOPTED Estimated Proposed Notes: GENERAL FUND Expenditures Water Purchased: 7,646,915 8,528,006 8,350,353 8,350,353 8,767,873 5.00% 2022-3.50/1000 price (3%) 2023-3.61/1000 price (3%) 2024-3.72/1000 price (3.13%) 2025- 3.76/1000 price (5.31%) .02/consumption 37,522 38,807 45,000 45,000 45,000 0.00% Insurance: 75,607 96,579 79,000 100,000 105,000 5.00% Utilities Electricity 246,720 239,100 250,000 250,000 250,000 0.00% Phone 4,120 4,165 7,350 7,350 7,350 Labor/Maintenance 125,123 146,178 120,000 120,000 126,000 5.00% Professional Services: Professional Services 16,730 4,750 15,000 15,000 15,000 0.00% Rent remitted to members 0 329,665 72,202 Capital Improvement Projects listed in CIP 513,468 321,047 3,283,000 2,209,455 4,430,000 100.50% 8,666,205 9,708,296 $12,149,703 $11,169,360 $13,746,223 13.14% CIP ACTUAL BILLED 1,724,500 1,508,250 2,209,455 10,390,705 11,216,546 9,940,248 BE IT FURTHER RESOLVED by the Joint Water Commission that the sources of financing the sums appropriated shall be: GENERAL FUND & CAPITAL IMPROVEMENT Revenue 2022 Actual 2023 Actual City of Golden Valley 3,684,710 37.29% 4,029,999 38.07% $4,726,234 38.90% $4,344,881 38.90% $5,347,281 38.90% City of Crystal 2,747,969 27.81% 2,902,615 27.42% $3,291,355 27.09% $3,025,779 27.09% $3,723,852 27.09% City of New Hope 3,448,548 34.90% 3,653,146 34.51% $4,132,114 34.01% $3,798,699 34.01% $4,675,090 34.01% $9,881,227 $10,585,760 $12,149,703 $11,169,360 $13,746,223 BE IT FURTHER RESOLVED, that the Joint Water Commission declares its intent to take all necessary actions legally permissible to the submission and approval of the Joint Water Commissions budget final. ATTEST: Joint Water Chair Joint Water Commission TAC Meeting Thursday,July 25, 2024 10:00 AM 1. Towers a. MLR tower i. Move construction to 2025. Updated budget to 3 million for construction and engineering. This will include a new altitude valve and hydrant at tower location within the fenced in area. ii. Security improvements 1. Camera’s, door fobs, no climb fence around the perimeter with new gate. NOTE: This will be a separate project after construction has been completed. iii. Parts storage 1. Connex containers will be needed for storage of existing parts during construction. b. Tower replacement i. GV tower to get replaced 2028/2029. c. GV tower i. Lightning strike July 21, 2024 and July 31, 2024 1. Electrical equipment damaged a. Damaged equipment has been repaired i. We are keeping track of expenses for insurance 2. Projects a. MCC / motor, pump, VFD replacement at both pump houses i. GV construction 2024/2025 (pump #4) 1. HVAC a. Installed 2. Switch Gear / Transfer Switch a. Consulting engineer is following up on lead times for equipment at the GV station. ii. Crystal construction 2025/2026 (pump #3) 1. HVAC a. Installed b. Effluent Meters i. GV 1. Access the condition of the existing structures when time allows. ii. Crystal construction 2026/2027 tentative 1. After the MCC project is complete, the effluent meters along with 3 valves will be replaced. 2. Have meters on site. c. Reservoirs i. Golden Valley 1. MPLS will be installing a 48” valve in September of this year to isolate intake 1 and 2 in case of emergency. a. This changed to spring of 2025 for construction ii. Crystal 1. KLM completed the robotic inspection in 2023. Working with KLM to review inspection. d. Fiber i. Golden Valley 1. Fiber is completed. a. Working with Total Control to implement after the MCC project is completed. e. SCADA i. Met with Total Control 1. Total Control recommended security upgrades at all JWC properties which included cameras, door fobs, etc. Will be done after the MCC project. f. Valve replacement. i. GV 1. 18” @ Olympia and Louisiana Ave ii. New Hope 1. 16” 42nd Ave between R&R bridge and Winnetka iii. Crystal 1. 30” 45th Ave and Douglas Dr 2. Quotes a. PCCP adapters i. Ordered 6.24.24 b. Pipe parts i. Ordered 6.28.24 c. Valves i. Ordered 6.28.24 3. Labor a. Waiting on quotes from contractors 3. Miscellaneous a. Finance i. 2025 CIP in review ii. Reviewed 6.27.24 b. Wells i. GV 1. Currently under review with the TAC and legal ii. Crystal 1. Run both wells, and test water in September of 2024 a. 6.25.23 well 1 893 GPM b. 6.25.23 well 2 1335 GPM iii. New Hope 1. Run well and test water in 2024. a. 900 GPM 2023 iv. JWC winter January average last 3 years 1. 146,605,333 gallons billed by MPLS a. January monthly average 4,886,844 per day b. JWC well production 4,504,320 per day c. Lead Service inventory. i. Due August 15, 2024. 1. Each city is being proactively doing their own inventory and submittal. d. Generators i. GV generator serviced in 2024 ii. Crystal generator serviced July 2024