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01-06-2014 JWC Agenda PacketAGENDA JOINT WATER COMMISSION January 6, 2014 - 1:30 p.m. Council Conference Room Golden Valley City Hall 1. Call to Order 2. Approval of Minutes— December 4, 2013 3. Approve Audit Contract (Virnig) 4. Review January 9, 2014 Tri -City Council Meeting Agenda 5. Update on Emergency Backup Water Supply Project Design and Location of Third Well (Mathisen) 6. Update on County Road 9 Project and Approve Contract with Hennepin County (Mathisen) 7. Update on Crystal Pump Station Generator Project (Mathisen) 8. Update on Crystal Reservoir Backfill Project (Mathisen) 9. Other Business 10. Adjournment This document is available in alternate formats upon a 72 -hour request. Please call 763-593-8006 (TTY: 763-593-3968) to make a request. Examples of alternate formats may include large print, electronic, Braille, audiocassette, etc. JOINT WATER COMMISSION MINUTES Golden Valley - Crystal - New Hope Meeting of December 4, 2013 The Golden Valley — Crystal — New Hope Joint Water Commission meeting was called to order at 1:36 p.m. in the City of Golden Valley Council Conference Room. Commissioners Present Tom Burt, City Manager, Golden Valley Kirk McDonald, City Manager, New Hope Anne Norris, City Manager, Crystal Staff Present Tom Mathisen, City Engineer, Crystal Randy Kloepper, Utilities Superintendent, Crystal Bob Paschke, Director of Public Works, New Hope Bernie Weber, Utilities Supervisor, New Hope Sue Virnig, Finance Director, Golden Valley Jeannine Clancy, Director of Public Works, Golden Valley Bert Tracy, Public Works Utility Manager, Golden Valley Kelley Janes, Utilities Supervisor, Golden Valley Pat Schutrop, Administrative Assistant, Golden Valley Others Present Steve Nelson, Bolton & Menk, Inc. Minutes of November 6, 2013 Meeting MOVED by McDonald and seconded by Norris to approve the minutes of the November 6, 2013 meeting as presented. Motion carried. Capital Improvements Program Update The TAC revised and prioritized projects on the 2014-2018 CIP to include the emergency backup water supply wells and the Crystal reservoir emergency generator. The JWC discussed bonding for all projects. The JWC can bond for $4.5 million; however, that would leave no margin for any type of emergency. The bond would cover the wells and the emergency generator at Crystal, but other projects will be prioritized by the TAC. After discussion, the JWC recommended moving the 54th Avenue watermain project ($720,000) to 2016 and adding $55,000 for replacement of SCADA computers and software upgrades in 2018. Security for the Golden Valley water tower was discussed. Golden Valley is working with Pro -Tec to secure the tower. There is a problem securing the reservoir due to a lack of fiber available along Golden Valley Road. MOVED by Norris and seconded by McDonald to approve the amended 2014-2018 CIP. Motion carried. I:\Joint Water Commission\JWC Minutes\2013 JWC Minutes\12-04-13 JWC Minutes.doc Joint Water Commission December 4, 2013 Page 2 of 3 Emergency Backup Water Supply Plan Steve Nelson, Bolton & Menk (B&M), updated the JWC on progress being made regarding the wells. B&M have identified two well locations in Golden Valley and one in Crystal. The proposed Golden Valley well site #1 is at the reservoir by Wirth Parkway near Hidden Lakes. Clancy will give the MPRB contact information to Steve so he can discuss any concerns with them. Site #2 proposed will be an open trench and trenchless through the golf course. This site will need a survey done. Access would be through the meter vault/pump station. The MPRB will not issue any easements and B&M will need to talk to the golf course staff about doing the trenching and any interruptions construction might cause. The well proposed in Crystal is located west of Douglas D B&M talked with residents and the church located in that location. They will need to a equality of the water at this site. Using the proposed Crystal well and selectin EM B&M does not expect the costs to reach $4 m determine the best location of the wells, a water conversations with the electrical cuAomer needs ract for E Construction Mathisen presented an engineering services the Crystal pump st purchased from Cat Zi Sct for pr eand con The is a lu ir and M isen the of the two propos More surveying wor lity ev tion, and IIs in Golden Valley, Veeed to help cdting id documents ca'F#e prepared. .6ergencv Generator Design and s wit •- I, Limited to provide erge`hcy backup generator for II' amoun °$12,500. The generator will be Cat was part of the HGAC bidding consortium. Mathisen wo like °" r the ge ator by the end of the month and have the generato arch he f the erator will be about $450,000 to $500,0 a pump n pa broken a c st about $960 to be replaced MOVED rris and seco by nald to approve the contract with EDI, Limited for engineering ices for a lum um am t of $12,500 and to direct the City of Crystal to purchase the g ator and pa otion carried. Contract with PureT@QLSmartV Testing of 36" Pipeline Mathisen presented the with Pure Technologies U.S., Inc. in the amount not to exceed $53,300. The JWC approveWe quote amount of $53,300 at the November meeting. As a result of the Pure -Tech inspection, no leaks were found. Mathisen added that even though due diligence was done and no leaks were found, that does not suggest the pipes are not compromised in some other way (such as rotting around the pipe). When pipes are compromised, it is usually a surface leak or at a joint. Clancy asked how often leak testing should be done. Mathisen thought if magnetic testing was done next year, another inspection would not be necessary for 10 years or so. I:\Joint Water Commission\1WC Minutes\2013 JWC Minutes\12-04-131WC Minutes.doc Joint Water Commission December 4, 2013 Page 3 of 3 MOVED by Norris and seconded by McDonald to approve the contract with Pure Technologies U.S., Inc. for the amount not to exceed $53,300. Motion carried. Update on County Road 9 and JWC Pipeline Project The project is moving forward. The final bid package will be assembled in January 2014. Mathisen is waiting for cost information from Stantec for the parts that need to be ordered. He will bring the costs to the JWC in January for approval of the purchase. January 9, 2014 Tri -City Council Meeting The three city councils will meet at 6:30 p.m. on January 9, 20 he City of Golden Valley. Bonnie Morey, SEH, Inc., will attend to facilitate the discuss' tall will put together background information on the emergency backup water supply plan ewly appointed city council members. Steve Nelson, Bolton & Menk, will also give a presenta . The final design and financing plan will be discussed and the revised 2014-2018 CIP will be presen Other Business None. Next Meeting The January 2014 meeting falls on New Year's Day. The JWC wants to meet prior to the January Stn Tri -City Council meeting therefore all decided on Monday, January 6, at 1:30 pm as the first JWC meeting in 2014. Adjournment Chair Burt adjou (:\Joint Water Commission\JWC Minutes\2013 JWC Minutes\12-04-13 JWC Minutes.doc omas D. Burt, Chair PRINCIPALS Thomas M. Montague, CPA fhom.0 A. Karnowski, CPA Paul A. Radosevich, CPA CLRTIFIED PUBLIC William J. Lauer, CPA ACCOUNTANTS James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA December 11, 2013 To the Board of Commissioners and Management of the Golden Valley — Crystal — New Hope Joint Water Commission 7800 Golden Valley Road Golden Valley, MN 55427 Dear Board of Commissioners and Management: We are pleased to confirm our understanding of the services we are to provide for the Golden Valley — Crystal — New Hope Joint Water Commission (the Commission) for the year ended December 31, 2013. We will audit the financial statements of the governmental activities, each major fund, and the budgetary comparison for the General Fund, including the related notes to the financial statements, which collectively comprise the Commission's basic financial statements as of and for the year ended December 31, 2013. Accounting standards generally accepted in the United States of America provide for certain required supplementary information (RSI), such as Management's Discussion and Analysis (MD&A), to supplement the Commission's basic financial statements. Such information, 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 an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the Commission's RSI in accordance with auditing standards generally accepted in the United States of America. These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will 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. The MD&A is required by accounting principles generally accepted in the United States of America and, if presented, will be subjected to certain limited procedures, but will not be audited. We will perform the required State Legal Compliance Audit conducted in accordance with auditing standards generally accepted in the United States of America and the provisions of the Legal Compliance Audit Guide, promulgated by the State Auditor pursuant to Minnesota Statute § 6.65, and will include such tests of the accounting records and other procedures we consider necessary to enable us to conclude that, for the items tested, the Commission has complied with the material terms and conditions of applicable legal provisions. Our services will not include an audit in accordance with the Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget Circular A-133, which would only be required if the Commission expended $500,000 or more in federal assistance funds during the year. If the Commission is required to have a Single Audit of federal assistance funds, this engagement letter would need to be modified. Malloy, Montague, Karnowski, Radosevich & Co., P.A. 535.3 Wayzata Boulevard • Suite 410 • Minneapolis. MN 55416 • Telephone: 952-545-0424 • Telefax: 952-545-0569 � svww.mtnkr.com Golden Valley — Crystal — New Hope Joint Water Commission December 11, 2013 Page 2 Audit Objectives The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America and the standards for financial audits contained in Government Auditing Standards, issued bythe Comptroller General of the United States, and will include tests of the accounting records of the Commission and other procedures we consider necessary to enable us to express such opinions. We cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is necessary for us to modify our opinions or add emphasis -of -matter or other -matter paragraphs. If our opinions on the financial statements are other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or arc unable to form or have not formed opinions, we may decline to express opinions or to issue a report as a result of this engagement. We will also provide a report (that does not include an opinion) on intemal control related to the financial statements and compliance with the provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. The reports on internal control and compliance will each include a paragraph that states that the purpose of the report is solely to describe the scope of testing of internal control over financial reporting and compliance, and the result of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance, and that the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering internal control over financial reporting and compliance. The paragraph will also state that the report is not suitable for any other purpose. If during our audit we become aware that the Commission is subject to an audit requirement that is not encompassed in the terms of this engagement, we will communicate to management and those charged with governance that an audit in accordance with auditing standards generally accepted in the United States of America and the standards for financial audits contained in Government Auditing Standards may not satisfy the relevant legal, regulatory, or contractual requirements. Management Responsibilities Management is responsible for the basic financial statements and all accompanying information as well as all representations contained therein. As part of the audit, we will assist with preparation of your financial statements and related notes. You will be required to acknowledge in the management representation letter our assistance with preparation of the financial statements and that you have reviewed and approved the financial statements and related notes prior to their issuance and have accepted responsibility for them. You agree to assume all management responsibilities for any nonaudit services we provide, oversee the services by designating an individual, preferably from senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services, and accept responsibility for them. Management is responsible for establishing and maintaining effective internal controls, including evaluating and monitoring ongoing activities, to help ensure that appropriate goals and objectives are met; for the selection and application of accounting principles; and for the preparation and fair presentation of the financial statements in conformity with accounting principles generally accepted in the United States of America. Golden Valley — Crystal — New Hope Joint Water Commission December 11, 2013 Page 3 Management is also responsible for making all financial records and related information available to us and for ensuring that management and financial information is reliable and properly recorded. You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the preparation and fair presentation of the financial statements, (2) additional information that we may request for the purpose of the audit, and (3) unrestricted access to persons within the Commission from whom we determine it necessary to obtain audit evidence. Your responsibilities include adjusting the financial statements to correct material misstatements and for confirming to us in the written representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the Commission involving (1) management, (2) employees who have significant roles in internal control, and (3) others where the fraud could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the Cormnission received in communications from employees, former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the Commission complies with applicable laws, regulations, contracts, agreements, and grants for taking timely and appropriate steps to remedy any fraud, violations of contracts or grant agreements, or abuse that we may report. You are responsible for the preparation of the supplementary information in conformity with accounting principles generally accepted in the United States of America. You agree to include our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary information that includes our report thereon OR make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon. Your responsibilities include acknowledging to us in the written representation letter that (1) you are responsible for presentation of the supplementary information in accordance with accounting principles generally accepted in the United States of America; (2) that you believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America; (3) that the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information. Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations. Management is also responsible for identifying for us previous financial audits, attestation engagements, performance audits or other studies related to the objectives discussed in the Audit Objectives section of this letter. "this responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting from those audits, attestation engagements, performance audits, or other studies. You are also responsible for providing management's views on our current findings, conclusions, and recommendations, as well as your planned corrective actions, for the report, and for the timing and format for providing that information. Golden Valley — Crystal -- New Hope Joint Water Commission December 11, 2013 Page 4 Audit Procedures — General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the Commission or to acts by management or employees acting on behalf of the Commission. Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse. Because of the inherent limitations of an audit, combined with the inherent limitations of internal control, and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us, even though the audit is properly planned and performed in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform the appropriate level of management of any material errors, any fraudulent financial reporting, or misappropriation of assets that come to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to later periods for which we are not engaged as auditors. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about the financial statements and related matters. Audit Procedures — Internal Controls Our audit will include obtaining an understanding of the Commission and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards. An audit is not designed to provide assurance on internal control or to identify significant deftciencie�s or material weaknesses. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards and Government Auditing Standards. Golden Valley —Crystal _ New I lope Joint Water Commission Page 5 December 1 l , 2013 Audit Procedures — Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the Commission's compliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards. Engagement Administration, Fees, and Other We understand that your employees will prepare all cash or other confirmations we request and will locate any documents selected by us for testing. The assistance to be supplied by your personnel, including the preparation of schedules and analysis of accounts, typing all cash or other confirmations we request, and locating any invoices selected by us for testing, will be discussed and coordinated with you. We will provide copies of our reports to the Commission; however, management is responsible for distribution of the reports and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential information, copies of our reports are to be made available for public inspection. The audit documentation for this engagement is the property of Malloy, Montague, Kamowski, Radosevich & Co., P.A. (MMKR) and constitutes confidential information. However, pursuant to authority given by law or regulation, we may be requested to make certain audit documentation available to a regulatory agency or its designee, a federal agency providing direct or indirect funding, or the U.S. Government Accountability Office for purposes of a quality review of the audit, to resolve audit findings, or to carryout oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of MMKR personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. "These parties may intend, or decide, to distribute the copies or information contained therein to others, including other governmental agencies. The audit documentation for this engagement will be retained for a minimum of five years after the report release date or for any additional period requested by the regulatory agency. if we are aware that a federal awarding agency or auditee is contesting an audit finding, we will contact the party(ies) contesting the audit finding for guidance prior to destroying the audit documentation. William J. Lauer, CPA is the engagement partner and is responsible for supervising the engagement and signing the report. Our fees for these services will be based on the actual time spent at our standard hourly rates. We will also bill you for travel and other out-of-pocket costs such as report production, typing, postage, etc. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work progresses and are payable upon presentation. Unless additional work is requested or circumstances require additional work, we estimate the basic audit fees to be $8,800. Golden Valley — Crystal — New Hope Joint Water Commission Page 6 December 11, 2013 These fees are based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If we find that additional audit procedures are required, or if additional services are requested by the Commission, those services will be billed at our standard hourly rates. Additional audit procedures might be required for certain accounting issues or events, such as new contractual agreements, transactions and legal requirements of new bond issues, new funds, major capital projects, new tax increment districts, if there is an indication of misappropriation or misuse of public funds, or if significant difficulties are encountered due to the lack of accounting records, incomplete records, or turnover in the Commission's staff. With regard to the electronic dissemination of audited financial statements, including financial statements published electronically on your website, you understand that electronic sites are a means to distribute information and, therefore, we are not required to read the information contained in these sites or to consider the consistency of other information in the electronic site with the original document. If you intend to publish or otherwise reproduce the financial statements, such as in a bond statement, and make reference to our firm name, you agree to provide us with printers' proofs or masters for our review and approval before printing. You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed. When requested, Government Auditing Standards require that we provide you with a copy of our most recent external peer review report and any letter of comment, and any subsequent peer review reports and letters of comment received during the period of the contract. Our most recent peer review report accompanies this letter. We appreciate the opportunity to be of service to the Commission and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know, if you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Sincerely, MALLOY, MONfAGUE, KARNOWSKI, RADOSEVICH & CO., P.A. J, zya,� William J. Lauer, CPA Principal WJL:kch Response: This letter correctly sets forth the understanding of the Golden Valley — Crystal — New Hope Joint Water Commission. By: Title: Date: 4 mN CRY of h, CRYSTAL city of holden valley JOINT CITY COUNCIL WORK SESSION (Crystal, Golden Valley, and New Hope City Councils) AGENDA SUMMARY JANUARY 9, 2014 6:30 P.M. City of Golden Valley (Council Chambers) 7800 Golden Valley Road Open for public observation Light refreshments will be provided 1. Call to Order and Introductions (Mayor Shep Harris) 2. Attendance (list of attendees on back of agenda) 3. Emergency Water Supply Plan a. Review of Past Studies and Actions (Tom Burt) b. Final Design Presentation (Steve Nelson) c. Financing Plan Presentation (David MacGillivray, Springsted, Inc.) Resolution Ordering Construction of Emergency Water Supply 4. Crystal Pump Station Emergency Generator Update (Tom Mathisen) 5. Revised 2014-2018 Capital Improvement Plan (Tom Burt) 6. Other Business 7. Adjournment Participants may include the following: CRYSTAL COUNCIL: Jim Adams, Mayor Laura Libby, Council Member Julie Deshler, Council Member Joe Selton, Council Member Mark Hoffmann, Council Member John Budziszewski, Council Member Casey Peak, Council Member CRYSTAL STAFF: Anne Norris, City Manager Tom Mathisen, Director of Public Works Charlie Hanson, Finance Director Randy Kloepper, Water Superintendent NEW HOPE COUNCIL: Kathi Hemken, Mayor John Elder, Council Member Eric Lammle, Council Member Dan Stauner, Council Member Andy Hoffe, Council Member NEW HOPE STAFF: Kirk McDonald, City Manager Bob Paschke, Director of Public Works Chris Long, City Engineer, Stantec Bernie Weber, Utilities Supervisor GOLDEN VALLEY COUNCIL: Shep Harris, Mayor Steve Schmidgall, Council Member Joanie Clausen, Council Member Larry Fonnest, Council Member Andy Snope, Council Member GOLDEN VALLEY STAFF: Tom Burt, City Manager Jeannine Clancy, Director of Public Works Sue Virnig, Finance Director Bert Tracy, Public Works Maintenance Manager Kelley Janes, Utilities Supervisor Pat Schutrop, Recording Secretary OTHERS: Steve Nelson, Bolton & Menk, Inc. Bonnie Morey, SEH, Inc. Glen Gerads, Director, Water Treatment and Distribution Services, City of Minneapolis Steve Kotke, Director of Public Works, City of Minneapolis David MacGillivray, Springsted, Inc.