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05-18-15 JWC Agenda Packet Goiden Valley•Crystal•New Hope AGENDA JOINT WATER COMMISSION May 18, 2015—2 pm Council Conference Room Golden Valley City Hall 1. Call to Order 2. Approval of Minutes— May 6, 2015 3. Award 36-inch PCCP Watermain Rehabilitation Project (Kakach) 4. Receive and File Audit Report (Virnig) 5. Other Business 6. 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. 101NT WATER COMMISSION MINUTES Golden Valley-Crystal - New Hope Meeting of May 6, 2015 The Golden Valley—Crystal—New Hope loint Water Commission (JWC) meeting was called to order at 1:30 pm in the City of Golden Valley Council Conference Room. Commissioners Present Tom Burt, City Manager, Golden Valley Anne Norris, City Manager, Crystal Kirk McDonald, City Manager, New Hope Staff Present Mark Ray, Director of Public Works/City Engineer, Crystal Sue Virnig, Finance Director, Golden Valley Bert Tracy, Public Works Maintenance Manager, Golden Valley Randy Kloepper,Water Superintendent, Crystal Bernie Weber, Operations Manager, New Hope Dave Lemke, Utilities Supervisor, New Hope R.J. Kakach, Utility Engineer, Golden Valley Lisa Wittman,Administrative Assistant,C;olden Valley Minutes of March 31, 2015,and April 2. 2Q15, M�etin� MOVED by McDonald and seconded by Norris to approve the minutes of the March 31, 2015, and April 2, 2015, meetings as submitted. Motion carried. Approval of Professional Services Agreement with Bolton & Menk. Inc. Kakach referred to the new agreement prepared by Bolton & Menk which covers design and construction services for the rehabilit�tion of the 36-inch PCCP line through the City of Robbinsdale. He stated that there will have to bean amendment in the future because the project schedule has changed from a three month construction to a four manth construction which will be approximately$80,000 to $90,000.The design work with Robbinsdale's sanitary sewer will be an additional $30,000 to$40,000 which Robbinsdale will be participating in,. More information including the increased costs will be available at the next 1WC meeting; He stated that staff has been working with the City of Robbinsdale, the railroad and the County regarding the 81 intersection. MOVED by McDonald and seconded by Norris to approve the professional services agreement with Bolton & Menk of$512,975 for the design and construction of repair/replacement of the JWC 36-inch PCCP project. Motion carried. 36-Inch Watermain Emer�encv Repair Update, Emer�encv Backup Water Supply Pro]ect Update, and Countv Road 9 Proiect Update Mark Ray and Randy Kloepper gave an update on the 36-Inch Watermain Emergency Repair, the Emergency Backup Water Supply Project Update, and an update on the County Road 9 Project. Removals have begun at County Road 9 and Xerxes and pipe is being laid at the Minneapolis end. There will be 100 feet in by May 15. On the portion from the original project, pipe is being laid from France to Indiana and will be completed on May 7. MDI will start work inside the well station early next week. a. Resolution 15-02 Supporting Improvements to the 36-inch pipe. Joint Water Commission May 6, 2015 Page 2 of 2 Commissioner Norris introduced the following resolution and moved its adoption: RESOLUTION 15-02 RESOLUTION SUPPORTING MAKING IMPROVEMENTS TO THE 36-INCH PIPE FOR WATER SERVICE FOR THE 101NT WATER COMMISSION CITIES The motion for the adoption of the foregoing resolution was seconded by Commissioner McDonald and upon a vote being taken thereon, the following voted in favor thereof: Burt, Norris and McDonald; and the following voted against the same: none; whereupon said resolution was declared duly passed and adopted, signed by the Chair and his signature attested by the Vice Chair. Review 2015-2020 CIP This item was delayed due to the upcoming bids. Other Business A special meeting will be scheduled on May 18 to open the bids for the 36" pipe rehabilitation project. Burt asked if there is a single point person regarding communication about the improvements to the 36- inch watermain repair project.The hope is that the TAC will have one spokesperson working with the consulting engineer and with each City. Next Meeting The next meeting is scheduled for Wednesday,`June 2, 2015, at 1:30 pm. AdlournmQnt Chair Burt adjourned the meeting`at 2 pm. Thomas D. Burt, Chair ATTEST: Lisa Wittman, Recording Secretary ; C"t��r d��r �� • ; ` �� .; � � � � �� Ph sical Develo ment De artment �� Y P P 763-593-8030/763-593-3988(fax} Date: May 18, 2015 To: Joint Water Commission From: Jeff Oliver, PE, City Engineer Subject: 36-inch PCCP Rehabilitation Project Award The Joint Water Commission Technical Advisory Committee opened bids for the 36-inch PCCP Rehabilitation Project on May 14, 2015. One bid was received from Geislinger& Sons, Inc. in the amount of$3,758,039.00. The Technical Advisory Committee has evaluated the bid and found it to be in order, and below the most recent engineer's estimate. Recommended Action Award the 36-inch PCCP rehabilitation project to the lowest responsible bidder, Geislinger & Sons, Inc. in the amount of$3,758,039.00 per the recommendation letter from Bolton & Menk dated May 15, 2015 G:\JWC\36_inch Repair_Replacement\36_inchPCCP Rehabilitation Project Award Memo.docx • � B+C�t_TC�N c� M � N K , I N C a . Consulting Engineers & Surveyars " � 7533 Sunwood Drive NW•Ramsey, MN 55303 Phone(763)433-2851 • Fax(763}427-0$33 www.bolton-menk.com May 15, 2015 Jeff Oliver, P.E. Joint Water Commission 7800 Golden Valley Road Golden Valley, MN 55427-4588 RF,: JWC 36" PCCP Replacement/Repair Golden Valley, MN Bid Evaluation BMI Project Number: R22.109358 Dear Jeff: Bids were received at Golden Valley City Hall at 10:30 a.m. on Thursday May 14'h, 2015 and are summarized below: BID '� ` TOTAL C4NTRACTOR BOND AT3��NDUM ' AMOUNT'BID 5% GEISLINGER& SONS, INC. X X $ 3,758,039.00 It is our opinion that the bid received was competitive and responsive, and the contractor with the lowest bid is a responsible contractor in accordance with Minnesota guidelines. The one bid received is also below the Engineer's Estimate of approximately$5,000,00. Geislinger and Sons Inc. is the lowest responsive and responsible bidder,with a bid of$ 3,758,039.00 The one addendum was received and acknowledged by the contractor and a Bid Bond for 5%of the bid was included with their bid. We recommend that the contract be awarded to Geislinger and Sons Inc. Sincerely, BOLTON& MENK, INC. � ��i. � � �i '.� . Steve Nelson, P.E. Project Manager cc: Mark Ray, City Engineer,Crystal Bob Paschke, Director of Public Works,New Hope H UWC__PR\R22109358\00_High Service Pump\6_Plans-Specs\B_Bid Tabulation\Aid F.valuation Letter R22109358_Extra GV_.HSP.doc DES1GtViNG FOR A BE77ER IOMORROW Bulton& �Menk is an cqu��l c�ppurtunity cmplciycr TABULATION OF BIDS JOINT WATER COMMISSION - GOLDEN VALLEY, MN 36" LINE REPAIR/REPLACEMENT BID DATE: MAY 14,2015 - 10:30 AM CONTRACTOR TOTAL AMOUNT $iD GEISLINGER&SONS $3,758,039.00 H:\JWC_PR\R22109358\6_Plans-Specs\B_Bid Tabulation1109358 Bid Tab.xls 1 rKirvc�rnis l'homas�1.\1c�niaguc.(:PA fhum:�s A. Karnowski.(:I'A P.au11�. �Z2�c�sc'�'iil�.CP�1 \l"illiam 1. I au�•r.CI'A C E R'I' I F ! F, l) P U 13 L I C l:t�„�.Et. t:��u��.c:�� A C C t) U N �1�� ,A N "I' S ,�:,«�,).tv��i«�,.ci�,� \'iauria L.Hulinka.CPA Apri121,2015 Board of Commissioners and Management Golden Valley—Crystal—New Hope Joint Water Commission The following is a suminary of our audit work, key conclusions, and other infonnation that we consider iinportant 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 GOVERNMENTAUDITING ST,9NDARDS 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, 2014, and tbe related notes to the financial statements. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America and Go��ernment Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such infonnation to you verbally and in our audit engagement letter. Professional standards also require that we communicate to you the following infonnation related to our audit. PLANNED SCOPE AND TIMING OF THE AUDIT We perfonned the audit according to the planned scope and timing previously discussed and coordinated in order to obtain sufficient audit evidence and complete an effective audit. AUDIT OPINION AND FINDINCS Based on our audit of the Commission's financial statements for the year ended December 31,2014: • 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 detennined 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 infonnation. • 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. �1allo��. �lontagur. R:�rnuN-ski, Radc�scvich. Ll' Co.. P.r�. St,i AC�ac�a�,i Hunlrc�rJ • .ufi� ��lu • Atinn.�:E,<�li.. �U\ i .�IG • lrlcph�,n�: Ji}iii-nat� • �l�clrl.�r�, �51.i.�5.u:G9� ��uw_mmAr..um Golden Valley—Crystal—New Hope Joint Water Commission Page 2 Apri121,2015 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. CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Where applicable, management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by inanagement, when applicable, were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole. ACCOUNTING ESTIMATES AND MANAGEMENT JUDCMENTS 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 estiinates 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 sensirive estimates affecting the financial statements is management's estimate of depreciation expenses based on the estimated useful lives of the assets. We evaluated the key factors and assumptions used to develop these accounting estimates in detennining 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 PERFORMINC THE AUDIT We encountered no significant difficulties in dealing witb management in performing and completing our audit. DISAGREEMENTS WITH MANACEMENT For purposes of this report, professional standards define a disagreement with management as a financial accounting, reporting, or auditing inatter, whether ar 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 disagreeinents arose during the course of our audit. MANAGEMENT CONSULTATIONS W1TH OTHER INDEPENDENT ACCOUNTANTS ln 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 determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to detennine that the consultant has all the relevant facts. To our knowledge,there were no consultations with other accountants. Golden Valley—Crystal—New Hope Joint Water Commission Page 3 Apri121,2015 MANAGEMENT REPRESENTATIONS We have requested certain representations from management that are included in the �nanagement representation letter dated Apri121,2015. 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. We did not audit or perfonn other procedures on this other information and 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. i��, �1��, K,��, /�..�.^.�c.. ' ca., P. ,� . Minneapolis,Minnesota Apri121,2015 THIS PAGE INTENTIONALLY LEFT BLANK GOLDEN VALLEY—CRYSTAL—NEW HOPE JOINT WATER COMMISSION Financial Statements and Supplemental Information Year F.nded December 31, 2014 'I'1iIS PAGE IN"f'F;NTIONAI_LY LF.F'I' k3LnNK GOLDEN VAI_LEY-CRYS"T�AL -NF.W HOPE JOINT WA'TF,R COMMISSION Table of Contents Page INTRODUCTORY SECTION BOARD OF COMMISSIONERS 1 FINANCIAL SECTION INDEPENDF,NT AUDITOR'S REPORT 2-3 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 4 Statement of Activities 5 Fund Financial Statements Balance Sheet-Governmental Funds 6 Statement of Revenue, Expenditures, and Changes in Fund Balances- Governmental Funds 7 Statement of Revenue, Expenditures, and Changes in F�md Balances- Budget and Actual-General Fund 8 Notes to Basic Financial Statements 9�-14 OTHER REQUIRED REPORTS Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of i�inancial Statements Performed in Accordance With Government Auditrng Standards 15-16 Independent Auditor's Report on Minnesota Legal Compliance 17 THIS PAGE INTENTIONALLY LEFT BLANK INTRODUCTORY SEC"TION GOLDEN VALLEY -CRYS'I'AL—NEW HOPE JOINT WATER COMMISSION Board of Commissioners Year Ended December 31, 2014 Commissioner Position Governmental Unit Tom Burt Chairperson City of Golden Valley Anne Norris Vice Chairperson City of Crystal Kirk McUonald Secretary/"1'reasurer City of New Hope -1- FINANCIAL SE�CT�ION "1�tIlS PAGF; IN"fEN"T10NALLY LEFT BI,ANK PKiti(:ll'.AI_1 _._._._...............----- l�I7e��r�as \1. ;�1��;ir.it,u.�.t�I'�\ I�hnm.�s A. l�.irnu+o,�..l.i.( I'�i P;aul r\. R:oJo��:'ri�'hi.t:l',� \�'illi.��n j. I.aucr.('I'�l C: (_: It.�. 1 I� I 1�°. t) 1'C;E31.I C; i:��„��r�r E�.;<<�:,��.t��c-� A (: C: C) U Iv' �' A � "1� S �.,�„�, I. ��i.«��,.�.�i�� \�'ii.t„ri.i I. I��lulinka.c:l'+1 INDEPENDENT AUDITOR'S REPORT Board of Commissioners and Management Golden Valley Crystal New }�ope Joint Water Commission REPOR"f ON'1'Ht: FIN:INCIAL S"1'A"TF;MF.N"1'S We have audited the financial statements of the governmental activities and each major fund of thc Golden Valley — Crystal —New Hope Joint Water Commission (the Commission) as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements as listed in the table of contents. M,�1NAGF.MF.NT'S RESPONSIBILI7�1'FOR TFIE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these basic financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. AI�DI"fOR'S RESPONSIBILI"I'Y Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government AuditinK Standards, issued by the Comptroller General of the United States. "l�hose standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidcnce about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including thc assessment of the risks of material misstatement of the financial statements, whether due to f'raud or crror. In making those risk assessments, the auditor considers internal control relevant to the Commission's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Commission's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. (continued) � -�- ��.,n< ��,�;�,s��t�<. �:.,,�,,,,,.�. i: �,�� ....,, ,, , „ �ti. OPINIONS In our opinion, the financial statements referred to on the previous page present fairly, in all material respects, the respective financial position of the governmental activities and each major f�und of thc Commission as of December 31, 2014, 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. 01'HER MATTERS 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, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Commission's basic financial statements. The introductory section, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Prior Year Comparative Information We have previously audited the Commission's financial statements for the year ended December 31, 2013, and we expressed unmodified audit opinions on the respective financial statements of the governmental activities and each major fund in our report dated May 19, 2014. In our opinion, the partial comparative information presented herein as of and for the year ended December 31, 2013 is consistent, in all materia( respects, with the audited financial statements from which it has been derived. OTHF.R REPORTING REQUIRED BY GOVERNMENTAUDIT/NGST,4NDARDS In accordance with GovernmentAuditing Standards, we have also issued our report dated April 21, 2015 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 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 internal control over financial reporting or on compliance. "I�ha1 repori is an integral pari of an audit performed in accordance with Government Auditrn,�� ,Standurd,+ in considering the Commission's internal control over financial reporting and compliance. i�a�, '�a��, ��oc�.h�; l:u..�,..�.,u-� � eo., P. A . Minneapolis, Minnesota April 21, 2015 , -�- BAS1C FINANCIAI_ S"TA"TEMENTS GOI.DEN VALLEY—CRYSTAL NF.W I IOPE JOINT WATER COMMISSION Statement of Net Position as o1�December 31.2014 (With Partial Comparative Information as of December 31.2013) Governmental netivities 201a 2013 Assets Cash and investments $ 817,278 $ 2,020,176 Due from other governmental units 4,939,556 444,395 Nrepaids 22,217 20,102 Capital assets Not depreciated 3.091.675 l.I 12.017 Depreciated,net of accumulated depreciation l.1�3.164 l.I 27,759 Total capital assets,net ol�accumulated depreciation d.244,839 2.239,77E, "I�otai assets $ 10,023,890 $ 4,724,449 l,iabilitics AccounCs and contracts payable $ 161,288 $ 36,911 Deposits payable 8.515 8,515 Due to other governmental units 574,839 532,617 Unearned revenue 71,301 68,461 '1'otalliabilities 815.943 646,504 Net position Net investment in capital assets 4,244.839 2.239.776 Restricted forcapital improvements a.113.659 1,001,552 Unrestricted 8�49,449 836,617 Total net position 9.207,947 4,077.945 Total liabilities and net position $ 10,023,890 $ 4,724,449 See notes to basic financial statements -4- GOLDGN VAI,LI;Y -CKYS'I nL NL;W fiON}: .IOINT WATER COMMISSION Statement of Activitics Year f;nded December 3 l.2014 (With Partial Comparative Information for the Year}:nded Deccmber 31,2013) Governmental Activities 2014 2013 Program expenses Water distribution Water purchases $ 5,698.600 $ 6.319.979 Administration and maintenance 798,603 984,844 Depreciation 101,830 90,826 "Ibtal program expenses 6.599,033 7,395,649 Program revenues- water dititribution Charges for services Member assessments 6,296,614 6,735,686 Maintenance charges - 29,7�6 'I�otal chargcs ti�r scrvices 6.296.614 6,765.392 CapiCal granis and contributions �.3O5.000 l.?37.91f� Total program revenues—water distribution 1 1,601,614 8,003.308 Net program rcvenue 5,002,�81 607,659 General revenues Rental income 127,421 112,971 Change in net position �,130,002 720,630 Net position Beginning of year 4,077.945 3,357,315 t;nd of vear $ 9?07.947 $ 4.077.945 See notes to basic financial statements -5- GOI,DEN VALLF,Y—CRYS"fAl,—NF.W I IONF. JOIN"I' WA"f'F?R COMMISSION F3alance Shcet Governmental f'unds as af Dccembcr 31,2014 (With Nartial Comparativc In�i�rmation as of December 31,2013) Improvcmcnt Capital Projccts �i�otal Govcrnmcntal I�unds General Fund Fund 2014 2013 Assets Cash and investments $ 603,825 $ 213,4�3 $ 817,278 $ 2,020,176 Due Yrom other governmental units 884,693 4,054,863 4,939,556 444,395 Nrepaids 22,217 — 22,217 20,102 Total assets $ 1,510,735 $ 4,268,316 $ 5,779,051 $ 2,484,673 l.iabilities Accounts and contracts payable $ 33.096 $ 128.192 $ 161.288 $ 36,91 1 I)eposits payable 8,51� � 8.515 8,�15 Duc to othcr�;overnmcntal units 548,374 26.465 �74.A39 532,617 llnearned revenue 71,301 71.301 6R,a61 fotalliabilitics 661.286 I��l.h�7 81�.943 646,�Od Fund balances Nonspendable for prepaids 22.217 - 22,217 20,102 Restricted ti�r capital improvements 4.113,6�9 4,113.659 1,001,552 Unassigned 827.232 — 827,232 $16.�1� Total fund balances 849,449 4,I 13.659 4.9(i3,108 1.838.169 Total liabilities and fund balances $ 1,510,735 $ 4.268,316 $ 5.779,051 $ 2,484.673 Amounts reported for governmental activities in the Statement of Net Position dif'fer because: }�und balances—governmental funds $ 4,963,108 $ 1,838,169 Capital assets used in governmental activities are not tinancial resources and,therefore,are not reported as assets in governmental funds. Cost ofcapital assets 11,292,196 9.18�,303 Less accumulated depreciation (7,047,357) (6,945,�27) Net position of governmental activities $ 9,207,947 $ 4,077,94� See notes to basic �inancial statcmcnts -6- GOLDF.N VALLf�Y-CRYST'AL NEW HOPE .IOINT WATGR COMM[SSION Statement of Revenue,Expenditures,and Changes in Fund Balances Governmental Funds Year Ended December 3 I,2014 (With Partial Comparative Information for the Year Ended December 31,2013) Improvement ('apital Prqjects Total Governmemal Funds General!'und f�und 2014 2013 Revenue Member assessments Chargcs for serviccs $ 62R7.075 $ � $ 6.287.075 $ 7.097,923 Nonoperating surcharge 9.539 9,534 1 O.SA I Construction charges 5.305.000 5,305.000 R5p.000 Intergovemmental - 3K�� Other revenue Rental income 127,421 - 127,421 I 12.971 Maintenance charges - - � �y•�� Total revenue 6,424,035 5,305,000 I I J29,035 A,489,057 Expenditures Current Waterpurchased 5,698,600 - 5,698,600 6,319,979 Insurance 31,723 - 31,723 28,043 Utilities 209,287 - 209,287 209,324 Labor 27,376 - 27,376 2R,697 Maintenance 265,917 - 265.917 109.912 Nrofcssioi�al services 12,724 - 12.724 35,546 ndministrative charges paid to members 38,I55 38,155 42,16�� Rent remitted to members 127,421 127.421 I I 2,971 Capital outlay 2.192,89; 2.192.893 1.4d0,280 "fotal expenditures 6,411,203 2,192.893 R,604,096 8,326,916 Net change in fund balances 12,832 3.1 12.107 3,124,939 162,I41 t und balances Beginning of'year 836.617 1.001.552 1,838,169 1,676,028 End of year $ 849,449 $ 4,I 13.659 $ 4,963,108 $ 1,838,I fi9 Amounts reported for govcrnmental activities in the Statement of Activities are diflcrent hecausc Net change in fund balances-governmental funds '6 3,I 24,939 � I G'.I d I Capital outlays are reportcd as expenditures in governmental funds,but are allocated over the estirnatcd useful lives of the capital assets as depreciation expense in the Statement oi�nctivities. Capital outlay 2,106,893 1,022,093 Depreciationexpense (101,830) (90,826) Certain revenues included in net position aze excluded from fund balances until they are available to liquidate liabilities ofthe current period. - (372,778) Change in net position of govemmental activities $ 5,130,002 $ 720,630 See notes to basic financial statements -7- GOLDI�?N VAI.L{'.Y CRYS"I'AL -NEW HOPE JOIN"f WA"I�L�.R COMMISSION Statemcnt of Revenue. F;xpenditures,and Changes in 1=und Balanccs Budget and Actual General F�und Year 6'ndcd December 31,2014 (With Partial Comparative Information t��r the Year F.nded December 31,2013) 2014 2013 Original and Over(Under) Final E3udget Actua) Final Budget Actual Revenue C:harges for yervices $ 8,46Q671 $ 6,287.075 $ (2,173,596) $ 7.097.923 Nonoperating tiurcharge 9.539 9.539 10,541 Otherrevenuc Rental income 127.�321 127.421 112,971 Maintenance charges �� y•��b I'otal revenue 8.460.671 6,424.035 (2,036,636) 7.251,141 t:xpcnditures Current Water purehased 6,719,671 5,698,600 (1.021.071) 6.3 I 9.979 Insurance 35,000 31,723 (3.277) 28.043 Utilities 240,000 209,287 (30.713) 2O9.32a Labor 46,000 27.376 (18.624) 28.6y7 Maintenance -- 26�,917 265,917 109.912 Professional s�rvices 115.000 12.724 (102.276) 35,�46 ndministrative charges paid to members - 38,155 38,155 42,164 Kent remitted to members - ]27,42] 127,421 112,971 Capital ouUay 1,305,000 - (1,305,000) - 'I'otal expenditures 8,460,671 6,41],203 (2,049,468) 6,886,636 Net change in fund balances $ - 12,832 $ 12,832 364,505 Fund balances [3eginning ofyear 836.617 472,112 F,nd of year $ 849,449 $ 836,617 See notes to basic tinancial statements -8- GOLDEN VALLEY —CRYSTAL—NEW HOPE JOINT WATER COMMISSION Notes to Rasic I�inancial Statements Uecember 31, 2014 NOTE 1 —SIGNIFICANT ACCOUNTING POLICIF.S A. Organization "The Golden Valley —Crystal —New Hope Joint Water Commission (the Commission) was formed under the authority ofi Minnesota Statute § 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. T'he 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 scparate and specific activity subject to joint control, in which the participants retain either an ongoing financial intcrest 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 statement�s (Statement of Net Position and Statement of� Activitics) display information about the reporting government as a wholc. 'l�hese 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 dircctly 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. -9- NOTE l —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 Financiai Statement Presentation The acc;ounts of the Commission are organired 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, f�und 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 Nrojects 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. W ith 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. All significant revenue sources arc considered susceptible to accrual. 2. Recording of F.xpenditures - 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 reporied 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 contro) 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 rcported. Actual results could alter from these estimates. -10- NOTE 1 —SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) G. Receivables "I'he Commission utilizes an allowance for uncollectible accounts to value its receivables; however, it considers all of its current receivables to be collectible. H. Prepaids Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaids. Prepaids are recorded as expenditures/expenses at the time of consumption. 1. 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 fair market 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 stat�ements. 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 1��r depreciati�m 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. J. Risk Management "I'he 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. LMCIT operates as a common risk management and insurance program for a targe number of cities in Minnesota. The Commission pays an annual premium to LMCIT for insurance coverage. The LMCIT agreement provides that 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 this commercial coverage in any of the past three years. There were no significant reductions in insurance coverage in 2014. -11- NOTE 1 —SIGNIFICANT ACCOUNTING POLICIES(CONTINUF.D) K. Net Position In the government-wide financial statements, net position represents the difference between assets, deferred outflows of resources (if any), liabilitics, and deferred inflows of resources (if any). 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 imposcd 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. L. Fund Balance Classifications In the fund financial statements, governmental fiunds report fund balance in classifications that disclose constraints for which amounts in thosc funds can be spent.These classifications are as follows: • Nonspendable - Consists of� amounts that are not in spcndable form, such as prepaid items, inventory, and other long-term assets. • Restricted - Consists oi� 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 negativc residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the Commission's policy to tirst 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, ?) assigned, and 3) unassigned. -12- NOTE 2—CASH Cash balances of the Commission are maintained in deposits as authorized by Minnesota Statutes. Custodial credit risk is considered the most significant risk associated with deposits. In the case of deposits,this 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 1 10 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 �ederal 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 and balance on the bank records of the Commission"s deposits were both $817,278. At December 31, 2014, all deposits were fully covered by federal depository insurance or collateral held by the Commission's agent in the Commission's name. NOTE 3—CAPITAL ASSETS Capital asset activity for the year ended December 31,2014 is as follows: Beginning Completed t;nding Balance Additions Retirements Construction Balance Capital assets,not depreciated Construction in progress $ 1,112,017 $ 2,084.499 $ $ (104,R41) $ 3,ON1,675 Capital assets,depreciated Distributionsystem 5,026,171 22,394 � 52,786 5,101,351 Storage facilities 3,047,I I S - 52,055 3,099,170 I�otal capital assets,depreciated 8,073.286 22.39d 104,841 8,200,�21 I.ess ac�umulated depreciation on Distribution system (4,204,83�) (R3,903) �— — (4,288,738) Storage facilities (2,740,692) (17,927) — — (2,758,619) Total accumulated depreciation (6,945,527) (101,830) — — (7,047,3�7) Netcapitalassets,depreciated 1,127,759 (79,436) - 104,8a1 1,153,164 Total capital assets,net $ 2,239,776 $ 2,005,063 $ - � $ `�•z`�`;�K-;y Depreciation expense is included in the water distribution program in the government-wide financial statements. -13- NOTE 4—RELATED PARTY TRANSACTIONS The Commission transacts business with the three member cities affiliated through common ownership of� thejoint venture. A. Revenue and Related Receivables T'he 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 2014,along with any remaining receivable, is as follows: Improvement General Fund Capital Projects Receivable at Revenue Fund Revenue December 31,2014 Gity of Golden Valley $ 2,665,986 $ 2.288.850 $ 2.079,765 City of Crystal 1,737.866 1,436.395 1,251,763 City of New 1{ope 1,892,762 1,�79.7» 1,553,165 $ 6,296.614 $ 5.305,000 $ 4,884,693 B. Expenditures and Related Nayables T'he member cities charge the Commission for expenditures incurred or services perfi>rmed on the Commission's behalf, as well as an administrative charge. In addition, the Commission remits ceriain rental revenues received to the member cities. Expenditures made to the member cities in 2014, along with any liability remaining at year-end, are as follo�vs: Included in Rental Payables at Expenditures Revenues Remitted December 31,2014 City of Golden Valley $ 47,059 $ 42,473 $ 8,362 City of Crystal 980,010 42.474 136,534 City of New Hope 18,158 42,474 772 $ 1,045,227 $ 127,421 $ 145,(68 NOTE 5—COMMI'TMENTS At December 31, 2014, the Commission is committed to various contracts for capital improvements. The Commission's remaining commitment under these contracts is approximately $1,216,000. -14- OTf IF,R RI:QUIRF,D REPORTS THIS PAGE INTENTIONALLY LEFT BLANK T'Ft(tiC:li'AI.S l�ha�rr�,�ti �1. �1��r.i��ut�.i�I'•1 I h,�rrt.a. �1 h.,r�,n��•.,I.i.( ��1 I'.u:i \. h.�J�,.��.:;!�, C C\ �V�ill�.ur, I. I.�:ir:_[ I'�l C F R"[ 1 F I I' D I't't�I.EC; ��",,�, �� ,�� t �� ,� f' t_: U l' \ I' .1 N �_ � ��,,�,�, � .;�i.,��,.� i�� V��.�„r�.� ( il„i��l..�. c�i'�\ 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 AUDIT'ING STANDARDS 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 basic financial statements of the govcrnmental 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, 2014, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements, and have issued our rcport thereon dated April 21, 2015. IN"I�ERNAL CON'I'ROL O1'ER FINANCIAL RF,POR"1'ING In planning and performing our audit of the frnancial statements, we considered the Commission's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the basic 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 perfonning their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Commission's basic tinancial statements will not bc 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) -15- \�talE��,y�. A-1onrag�3c. 1G.�ra�o��.ki. R.id",c��i.h. A (�� . f' 1 „ `,ll. . . ,., �. �?F3 lii,.., il �.. .!�, ' ..• i_ .� ' . ....t . . . .. . . �. , �,. . . , .... . . COMPLI.4NCE AND O'CHER MA"I'TF,RS As part of obtaining reasonable assurance about whether the Commission's basic financial statements are free of material misstatement, wc perf��riY�ed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreemcnts, noncompliance with which could have a direct and material effect on the determination of tinancial statement amounts. 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. i��:l�, ?Ll��, K��.h�; �..�..-� � �., P. A . Minneapolis, Minnesota April 21, 2015 -16- PTtI NC�i l'AIS �I'horit:�ti 1I. t��lonr.+giae•.CI'A �T�h«xnas t\.F:arExrnv�kL CI'i\ IT;aii{A. Ratk��icvich.<:I';� � 14"'illiar'n). l.aurr.(�I'A C; 1��: R"t' 1 i� 1 E. 1) P U B 1.i C t.#„��, r f.►�;�i,��,.��i�-� A f' (:: O U N T RV �I� S ��.��, � v��i.��,.��i°�� V�i<t��ria l f i�,li,i�..� �J'•\ INDEPENDI�:NT AUDITOR'S REPOR"I' ON MINNESOTA I.EGAL COMPLtANCE 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 Auddting Standa��ds. issued by the Comptroller General of the United States,the basic financial statements of the governmental activities and each major fund of the Ciolden Valley - Crystal - New Hope Joint Water Commission (the Commission) as of and for the year ended Uecember 31, 2014, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements, and have issued our report thereon dated April 21,2015. MINNESOTA LEGAL COMPLIANCE "The Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the Office of the State Auditor pursuant to Minnesota Statute § 6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our audit considered all of the listed categories, except that we did not test for compliance in tax increment financing, because the Commission does not utilize tax increment tinancing. [n 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 Mrnnesota Gegal Compliance Audit Guide for Political Subdrvisions. 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. PL!RPOSE OF TIIIS RF.PORT 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. ;�a�, �o��r� �a�,�.ocu,o,ir.�; /�'�L.. � Co., P. A • 0 Minneapolis, Minnesota April 21, 2015 -17- ll.ali<rc. Ai„nt,a;,uc, h.�,.��,�v.l.; I;,��ln,r��h. � (:��.. P. l. �, , � �, , �� , , TH1S PAGE INT�ENTIONALLY LEFT BLANK