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JWC Packet 05-05-21AGENDA JOINT WATER COMMISSION May 5, 2021-1:30 pm Presiding Officer Statement Regarding Holding Meetings via Telephone or Other Electronic Means As Chair of the Golden Valley, Crystal, New Hope Joint Water Commission (the "JWC"), I find as follows: a. The spread of COVID-19 within the United States has raised serious public health concerns and resulted in a great deal of uncertainty since much remains unknown about the virus and how it spreads. b. On March 11, 2020, the World Health Organization determined the outbreak constitutes a pandemic. On March 13, 2020, President Trump declared a national state of emergency as a result of the pandemic. c. On March 13, 2020, Governor Tim Walz declared a state of peacetime emergency to address the coronavirus pandemic in the State of Minnesota. The Governor's declaration triggered activation of the member Cities' emergency management plans and enabled the cities to exercise their emergency powers as needed to respond to the emergency. d. The Minnesota Department of Health has provided specific guidance encouraging the limiting of events that do not allow social distancing of six feet per person, which is not practical to achieve in the JWC's meeting room. e. Minnesota Statutes, section 13D.021 authorizes cities to meet by telephone or other electronic means in the case of a health pandemic or when an emergency has been 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. 's declared if the presiding officer, chief legal counsel, or chief administrative officer determines meeting in person is not practical or prudent. The statute also allows these officers to determine it is not feasible to require any Board members or staff to be present in the meeting room during a meeting. f. Given the uncertainties associated with COVID-19 and its spread, conducting in -person JWC Board meetings is not practical or prudent, and it is not feasible to require any Board member or staff to be present in the meeting room during the meetings. The JWC's goal is to slow the spread of COVID-19 within the District and holding meetings via telephone and electronic means allows the Commission to accomplish this goal while still conducting the Commission's business. Based on the above findings, I hereby determine and state as follows: 1. Until this statement is terminated due to the end of the pandemic or the Governor's emergency declaration, JWC Board Meetings shall be conducted by telephone or other electronic means in a manner satisfying the requirements of Minnesota Statutes, section 13D.021. 2. The meeting rooms will not be open to the public to attend the meetings. 3. Members, the chief legal counsel, the chief administrative officer, and staff are not required to be present in the meeting room during meetings. 4. Before each meeting, notice will be provided regarding how the public may listen to or view meetings as they are being conducted. 5. All votes occurring at the meetings shall be conducted by roll call. Dated this 24th day of April, 2020. DocuSigned by: QVty , I M-S 1AR'iSQIFARPFd87 Anne Norris, Chair 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. 's DocuSign Envelope ID: 24810FOD-B1BC-48C1-96A3-25ACB9041A14 Golden Valley • Crystal • New Hope AGENDA JOINT WATER COMMISSION May 5, 2021-1:30 pm This meeting will be held via Webex in accordance with the local emergency declaration made by the City under Minn. Stat.12.37. The public may monitor this meeting by calling 1-312-595-8110 and entering the meeting code 133 743 1183. Additional information about monitoring electronic meetings is available on the City website at www.goldenvalleymn.gov. For technical assistance, please contact the City at 763-593- 8300 or webexsupprt(a,)goldenvalleymn.gov. If you incur costs to call into the meeting, you may submit the costs to the City of reimbursement consideration. 1. Call to Order —Roll Call 2. Approval of Minutes — March 3, 2021 April 6, 2021 Meeting Cancelled Due to Lack of Agenda 3. Receive and File the 2020 Financial Statement and Management (Virnig) 4. Update on North Water Tower Project Including Approval of Stantec's Request for Additional Funds (Weber) 5. TAC Update (Kakach) 6. Other Business Next Scheduled Meeting June 1, 2021 7. Adjournment 1This 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 J may include large print, electronic, Braille, audiocassette, etc. JOINT WATER COMMISSION MINUTES Golden Valley - Crystal - New Hope Meeting of March 3, 2021 The Golden Valley — Crystal — New Hope Joint Water Commission (JWC) meeting was called to order at 1:30 pm. Roll Call Present Anne Norris, City Manager, Crystal Kirk McDonald, City Manager, New Hope Tim Cruikshank, City Manager, Golden Valley Staff Present Joe Hansen, Utilities Supervisor, Golden Valley Dave Lemke, Operations Manager, New Hope Matt Rowedder, Utilities Maintenance Supervisor, New Hope Patrick Sele, Utilities Supervisor, Crystal Tim Kieffer, Public Works Maintenance Supervisor, Golden Valley Sue Virnig, Finance Director, Golden Valley Bernie Weber, Public Works Director, New Hope Derek Goddard, Golden Valley Mark Ray, Director of Public Works/City Engineer, Crystal R.J. Kakach, Assistant Engineer, Golden Valley Carrie Nelson, City of Golden Valley Approval of Minutes — March 3, 2021 Joint Water Commission Meeting scheduled for February 3, 2021 cancelled due to lack of agenda. Moved by McDonald seconded by Cruikshank to approve the minutes of the March 3, 2021 Joint Water Commission (JWC) Meeting. Upon a roll call vote the following voted in favor: Norris, McDonald, and Cruikshank. The following voted against: None. Motion carried. Joint Water Commission Golden Valley Tank Coating Repair Project #19-19 Staff reported bids for the Golden Valley Tank Coating Repair Project were opened on February 4, 2021. Seven bids were received. Staff reviewed the bids and found them to be accurate and in order, with the exception of MW Cole Construction which did not meet minimum general contractor requirements as outlined in the specifications. The project was awarded to Viking Painting, LLC in the amount of $142,500 by the Golden Valley City Council on February 16, 2021. The $142,500 bid amount and the $46,700 KLM Engineering Services contract are within the $300,000 CIP budget item for this project. Staff along with the TAC recommends approval of the agreement. Joint Water Commission March 3, 2021 Page 2 of 2 Moved by Cruikshank seconded by McDonald to approve the Golden Valley Tank Coating Repair Project #19-19 with Viking Painting, LLC in the amount of $142,500. Upon a roll call vote the following voted in favor: Norris, McDonald, and Cruikshank. The following voted against: None. Motion carried. TAC Update Staff provided an update on the February 25, 2021 TAC meeting. Other Business The next Joint Water Commission meeting is scheduled for April 7, 2021 Adjournment Moved by McDonald seconded by Norris to adjourn meeting. Motion carried. Chair Norris adjourned the meeting at 2:30 pm. Chair Anne Norris ATTEST: Sue Schwalbe, Recording Secretary Joint Water Commission -f May 4, 2021 l AGENDA ITEM #3 Agenda Item #3 3. Receive and File the 2020 Financial Statement and Management Letter Prepared by Sue Virnig, Golden Valley Finance Director Summary Virnig will review and answer any questions regarding the 2020 Financial Statements and 2020 Management Letter. Attachments 2020 Financial Statements 2020 Management Report Recommended Action Receive and file the 2020 Financial Statements and 2020 Management Letter. lAJoint Water Commission\JWC Agendas\2021 JWC Agenda\05-05-21\3 - Memo for Financial Reports and Letter.docx GOLDEN VALLEY — CRYSTAL — NEW HOPE JOINT WATER COMMISSION Financial Statements and Supplemental Information Year Ended December 31, 2020 THIS PAGE INTENTIONALLY LEFT BLANK GOLDEN VALLEY — CRYSTAL — NEW HOPE JOINT WATER COMMISSION Table of Contents INTRODUCTORY SECTION Page BOARD OF COMMISSIONERS 1 FINANCIAL SECTION INDEPENDENT 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 Fund Balances — Budget and Actual — General Fund 8 Notes to Basic Financial Statements 9-15 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 16-17 Independent Auditor's Report on Minnesota Legal Compliance 18 THIS PAGE INTENTIONALLY LEFT BLANK INTRODUCTORY SECTION THIS PAGE INTENTIONALLY LEFT BLANK Commissioner Anne Norris Kirk McDonald Tim Cruikshank GOLDEN VALLEY — CRYSTAL — NEW HOPE JOINT WATER COMMISSION Board of Commissioners Year Ended December 31, 2020 Position Chairperson Vice Chairperson Secretary/Treasurer Governmental Unit City of Crystal City of New Hope City of Golden Valley -1- THIS PAGE INTENTIONALLY LEFT BLANK FINANCIAL SECTION THIS PAGE INTENTIONALLY LEFT BLANK M 6KR CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT To the Board of Commissioners and Management Golden Valley — Crystal — New Hope Joint Water Commission REPORT ON THE FINANCIAL STATEMENTS 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 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, 2020, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements as listed in the table of contents. MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. AUDITOR'S RESPONSIBILITY 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 Auditing Standards, issued by the Comptroller General of the United States. Those 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 evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor 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) -2- 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 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 fund of the Commission as of December 31, 2020, 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. OTHER 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, 2019, and we expressed unmodified audit opinions on the respective financial statements of the governmental activities and each major fund in our report dated April 27, 2020. In our opinion, the partial comparative information presented herein as of and for the year ended December 31, 2019 is consistent, in all material respects, with the audited financial statements from which it has been derived. OTHER REPORTING REQUIRED BY GOVERNMENTAUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated March 19, 2021 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 March 19, 2021 IN BASIC FINANCIAL STATEMENTS GOLDEN VALLEY — CRYSTAL — NEW HOPE JOINT WATER COMMISSION Statement of Net Position as of December 31, 2020 (With Partial Comparative Information as of December 31, 2019) Assets Cash and investments Due from other governmental units Prepaids Capital assets Not depreciated Depreciated, net of accumulated depreciation Total capital assets, net of accumulated depreciation Total assets Liabilities Accounts and contracts payable Deposits payable Due to other governmental units Unearned revenue Total liabilities Net position Net investment in capital assets Restricted for capital improvements Restricted for emergency water supply Unrestricted Total net position Total liabilities and net position Governmental Activities 2020 2019 $ 7,066,593 839,111 31,471 828,167 11,023,341 11,851,508 $ 6,637,887 600,206 30,048 1,796,368 9,106,130 10,902,498 $ 19,788,683 $ 18,170,639 $ 45,908 8,915 1,229,498 73,944 1,358,265 11,851,508 3,889,252 1,700,000 989,658 18,430,418 $ 19,788,683 $ 65,866 8,915 454,679 38,192 567,652 10,902,498 4,027,733 1,700,000 972,756 17,602,987 $ 18,170,639 See notes to basic financial statements -4- GOLDEN VALLEY — CRYSTAL — NEW HOPE JOINT WATER COMMISSION Statement of Activities Year Ended December 31, 2020 (With Partial Comparative Information for the Year Ended December 31, 2019) Program expenses Water distribution Water purchases Administration and maintenance Depreciation Total program expenses Program revenues — water distribution Charges for services Member assessments Capital grants and contributions Total program revenues — water distribution Net program revenue General revenues Investment income Rental income Total general revenues Change in net position Net position Beginning of year End of year Governmental Activities 2020 2019 $ 7,333,013 $ 6,426,964 520,082 502,689 474,548 398,480 8,327,643 7,328,133 7,731,191 6,804,496 1,256,527 1,117,000 8,987,718 7,921,496 660,075 593,363 30,736 136,339 136,620 133,515 167,356 269,854 827,431 863,217 17,602,987 16,739,770 $ 18,430,418 $ 17,602,987 See notes to basic financial statements -5- GOLDEN VALLEY — CRYSTAL — NEW HOPE JOINT WATER COMMISSION Balance Sheet Governmental Funds as of December 31, 2020 (With Partial Comparative Information as of December 31, 2019) Assets Cash and investments Due from other governmental units Prepaids Total assets Liabilities Accounts and contracts payable Deposits payable Due to other governmental units Unearned revenue Total liabilities Fund balances Improvement Capital Projects General Fund Fund Total Governmental Funds 2020 2019 $ 709,784 $ 6,356,809 $ 7,066,593 $ 6,637,887 839,111 — 839,111 600,206 31,471 — 31,471 30,048 $ 1,580,366 $ 6,356,809 $ 7,937,175 $ 7,268,141 $ 14,675 $ 31,233 $ 45,908 $ 65,866 8,915 — 8,915 8,915 493,174 736,324 1,229,498 454,679 73,944 — 73,944 38,192 590,708 767,557 1,358,265 567,652 Nonspendable for prepaids 31,471 — 31,471 30,048 Restricted for capital improvements — 3,889,252 3,889,252 4,027,733 Restricted for emergency water supply — 1,700,000 1,700,000 1,700,000 Unassigned 958,187 — 958,187 942,708 Total fund balances 989,658 5,589,252 6,578,910 6,700,489 Total liabilities and fund balances $ 1,580,366 $ 6,356,809 $ 7,937,175 $ 7,268,141 Amounts reported for governmental activities in the Statement of Net Position differ because: Fund balances — governmental funds $ 6,578,910 $ 6,700,489 Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in governmental funds. Cost of capital assets 21,042,197 19,618,639 Less accumulated depreciation (9,190,689) (8,716,141) Net position of governmental activities $ 18,430,418 $ 17,602,987 See notes to basic financial statements -6- GOLDEN VALLEY - CRYSTAL - NEW HOPE JOINT WATER COMMISSION Statement of Revenue, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended December 31, 2020 (With Partial Comparative Information for the Year Ended December 31, 2019) Revenue Member assessments Charges for services Nonoperating surcharge Construction charges Otherrevenue Refunds and reimbursements Investment income Rental income Total revenue Expenditures Current Water purchased Insurance Utilities Labor Maintenance Professional services Administrative charges paid to members Miscellaneous Rent remitted to members Capital outlay Total expenditures Net change in fund balances Fund balances Beginning of year End of year General Fund - $ 7,721,935 9,256 2,186 136,620 7,869,997 Improvement Capital Projects Fund Total Governmental Funds 2020 2019 $ - $ 7,721,935 $ 6,795,779 9,256 8,717 1,207,000 1,207,000 1,117,000 49,527 28,550 1,285,077 49,527 - 30,736 136,339 136,620 133,515 9,155,074 8,191,350 7,333,013 - 7,333,013 6,426,964 48,491 - 48,491 50,130 188,876 - 188,876 175,262 44,615 - 44,615 38,739 50,965 - 50,965 57,753 13,049 - 13,049 12,420 37,425 - 37,425 34,870 41 - 41 - 136,620 - 136,620 133,515 - 1,423,558 1,423,558 736,831 7,853,095 1,423,558 9,276,653 7,666,484 16,902 (138,481) (121,579) 524,866 972,756 5,727,733 6,700,489 6,175,623 $ 989,658 $ 5,589,252 $ 6,578,910 $ 6,700,489 Amounts reported for governmental activities in the Statement of Activities are different because: Net change in fund balances - governmental funds $ (121,579) $ 524,866 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. Capital outlay Depreciation expense Change in net position of governmental activities 1,423,558 736,831 (474,548) (398,480) $ 827,431 $ 863,217 See notes to basic financial statements -7- GOLDEN VALLEY - CRYSTAL - NEW HOPE JOINT WATER COMMISSION Statement of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual General Fund Year Ended December 31, 2020 (With Partial Comparative Information for the Year Ended December 31, 2019) Revenue Charges for services Nonoperating surcharge Other revenue Investment income Rental income Total revenue Expenditures Current Water purchased Insurance Utilities Labor Maintenance Professional services Administrative charges paid to members Miscellaneous Rent remitted to members Capital outlay Total expenditures Net change in fund balances Fund balances Beginning of year End of year 2020 2019 Original and Over (Under) Final Budget Actual Final Budget Actual $ 8,907,595 $ 7,721,935 $ (1,185,660) $ 6,795,779 - 9,256 9,256 8,717 2,186 2,186 9,492 136,620 136,620 133,515 8,907,595 7,869,997 (1,037,598) 6,947,503 7,139,235 7,333,013 193,778 6,426,964 60,000 48,491 (11,509) 50,130 239,000 188,876 (50,124) 175,262 100,000 44,615 (55,385) 38,739 - 50,965 50,965 57,753 120,000 13,049 (106,951) 12,420 42,360 37,425 (4,935) 34,870 - 41 41 - - 136,620 136,620 133,515 1,207,000 - (1,207,000) - 8,907,595 7,853,095 (1,054,500) 6,929,653 $ - 16,902 $ 16,902 17,850 972,756 $ 989,658 954,906 $ 972,756 See notes to basic financial statements -8- GOLDEN VALLEY — CRYSTAL — NEW HOPE JOINT WATER COMMISSION Notes to Basic Financial Statements December 31, 2020 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. 10 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, 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. K12 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. Investments are generally stated at fair value, except for certain external investment pools stated at amortized cost. Investment income is accrued at the Balance Sheet date. 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. 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. 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. -11- 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 (if any), liabilities, 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 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. -12- NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) N. 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, 2019, 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 December 31, 2020, all deposits were fully covered by federal deposit insurance. B. Investments At year-end, the Commission held investments in the Minnesota Municipal Money Market (4M) Fund of $1,437,311, and in the 4M Plus Fund of $5,629,282. 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 parry. 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. -13- NOTE 2 — CASH AND INVESTMENTS (CONTINUED) 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. NOTE 3 — CAPITAL ASSETS Capital asset activity for the year ended December 31, 2020 is as follows: Beginning Completed Ending Balance Additions Retirements Construction Balance Capital assets, not depreciated Construction in progress $ 1,796,368 $ 1,423,558 $ — $ (2,391,759) $ 828,167 Capital assets, depreciated Distribution system 14,607,311 2,391,759 16,999,070 Storage facilities 3,214,960 — — — 3,214,960 Total capital assets, depreciated 17,822,271 2,391,759 20,214,030 Less accumulated depreciation on Distribution system (5,843,888) (469,220) (6,313,108) Storage facilities (2,872,253) (5,328) (2,877,581) Total accumulated depreciation (8,716,141) (474,548) (9,190,689) Net capital assets, depreciated 9,106,130 (474,548) — 2,391,759 11,023,341 Total capital assets, net $ 10,902,498 $ 949,010 $ — $ — $ 11,851,508 Depreciation expense is included in the water distribution program in the government -wide financial statements. -14- NOTE 4 — 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 2020, along with any remaining receivable, is as follows: General Fund Revenue Improvement Capital Projects Fund Revenue Receivable at December 31, 2020 City of Golden Valley $ 2,882,961 $ 481,110 $ 7,427 City of Crystal 2,150,044 333,977 302,059 City of New Hope 2,698,186 391,913 529,625 $ 7,731,191 $ 1,207,000 $ 839,111 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 certain rental revenues received to the member cities. Expenditures made to the member cities in 2020, along with any liability remaining at year-end, are as follows: City of Golden Valley City of Crystal City of New Hope NOTE 5 — COMMITMENTS Rental Included in Revenues Payables at Expenditures Remitted December 31, 2020 $ 107,931 $ 45,540 $ 6,334 1,164,662 45,540 739,776 89,450 45,540 874 $ 1,362,043 $ 136,620 $ 746,984 At December 31, 2020, the Commission is committed to various contracts for capital improvements. The Commission's remaining commitment under these contracts is $139,468. -15- THIS PAGE INTENTIONALLY LEFT BLANK OTHER REQUIRED REPORTS THIS PAGE INTENTIONALLY LEFT BLANK PRINCIPALS Thomas A. Karnowski, CPA Paul A. Radosevich, CPA 6KRWilliam J. Lauer, CPA James H. Eichten, CPA C E R T I F I E D PUBLIC Aaron J. Nielsen, CPA ACCOUNTANTS Victoria L. Holinka, CPA/CMA Jaclyn M. Huegel, CPA Kalen T. Karnowski, CPA INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OV 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, 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, 2020, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements, and have issued our report thereon dated March 19, 2021. 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 assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the 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) -16- 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 COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under 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 March 19, 2021 -17- M 6KR CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT ON MINNESOTA LEGAL COMPLIANCE To the Board of Commissioners and Management Golden Valley — Crystal — New Hope Joint Water Commission 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 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, 2020, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements, and have issued our report thereon dated March 19, 2021. 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 and bidding, deposits and 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 March 19, 2021 -18- 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 THIS PAGE INTENTIONALLY LEFT BLANK M 6KR CERTIFIED PUBLIC ACCOUNTANTS March 19, 2021 To the Board of Commissioners and Management Golden Valley — Crystal — New Hope Joint Water Commission 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 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 GOVERNMENTAUDITING 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, 2020. 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 and timing 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, 2020: • 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. 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 Golden Valley — Crystal — New Hope Joint Water Commission Page 2 March 19, 2021 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 management'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. 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. There were no misstatements detected as a result of audit procedures that were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole. DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT We encountered no significant difficulties in dealing with management in performing and completing our audit. 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 March 19, 2021. Golden Valley — Crystal — New Hope Joint Water Commission Page 3 March 19, 2021 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 determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no 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. Wa&07 -, Wcx4;�`,� "aO6�,, oO. .4 Minneapolis, Minnesota March 19, 2021 THIS PAGE INTENTIONALLY LEFT BLANK Joint Water Commission -f May 4, 2021 l AGENDA ITEM #4 Agenda Item #4 4. Update on North Water Tower Project including approval of Stantec's request for additional funds. Prepared by Bernie Weber, Director of Public Works Summary Staff is requesting the Commission approve additional costs for Stantec to coordinate quotes on driveway repair, inspections, and closeout after November 2019. The driveway and restoration work was originally part of the New Hope North Water Tower Bypass Project. Attachments KLM/Stantec Additional Costs dated April 15, 2021 Recommended Action Motion to approve the increase the Stantec Agreement for the 500,000 Gallon Water Elevated Tank Rehabilitation Project in the amount of $5,445.24 I:\Joint Water Commission\JWC Agendas\2021 JWC Agenda\05-05-21\4 - Update on North Water Tower Project.docx Li Stantec Consulting Services Inc. 5 Stantec 733 Marquette Avenue Suite 1000, Minneapolis MN 55402-2309 April 15, 2021 File: 193804156 Attention: Bernie Weber, Director of Public Works City of New Hope, 4401 Xylon Avenue North New Hope, MN 55428 Dear Bernie, Reference: KLM/Stantec Additional Costs - 500,000 Gallon Water Elevated Tank Rehabilitation City Project No. 1008 Bernie - as discussed previously, the above referenced project required additional time for both KLM and Stantec. The contractor, The Osseo Construction Co. LLC, has completed the work on the project. However, the contract completion date was November 1, 2018, and the contractor did not complete the major work on the elevated tank until 2019. These delays resulted in additional costs to the City. Site work improvements related to driveway and restoration work were needed at the elevated tank. This site work was originally included with the 2018 North Water Tower Bypass Project (City Project No. 1009). Because of the delays associated with the painting of the elevated tank, the site work improvements were deleted from the Bypass Project and added to the Elevated Tank Rehabilitation Project. Quotes were received to complete that site work in 2019, and the work was completed in 2020 by Omann Brothers, Inc. The additional time and costs are related to: ■ delays associated with Osseo Construction Co. LLC. (Original completion date of November 1, 2018. Project closeout in February 2021). • Removing the driveway repair and restoration work from the North Water Tower Bypass Project and including that with this contractor. This involved additional work for quote packet preparation, coordination, and construction administration. Omann Brothers was the low quote contractor for the driveway and restoration work. The City reduced the final payment to Osseo Construction Co, LLC. by $50,132.50 to cover additional costs associated with KLM, Stantec, and the Omann Brothers, Inc. driveway and restoration costs. A summary of the additional KLM/Stantec costs reviewed in November 2019 and January/February 2021 are shown in the tables on the next page. Design with con,munily In mind April 15, 2021 Bernie Weber, Director of Public Works Page 2 of 2 Reference: KLMIStantec Additional Costs November 2019 Review Company Original Budget Cost Increases (1) Total Costs (2 KLM $77,055.00 $19,740.00 $96,795.00 Stantec $22,945.00 $12,838.00 $35,783.00 Totals $100,000.00 $32,578.00 $132,578.00 Notes : (1) New Hope retained funds from tower contractor payment request to cover these costs. (2) Total costs were as of 1 1-22-2019. January/February 2021 Review Company Original Budget Cost Increases_ 1 Total Costs 2 KLM $77,055.00 $19,740.00 $96,795.00 Stantec $22,945.00 $18,283.24 $41,228.24 Totals 100,000.00 $38,023.24 $138,023.24 Notes : (1) Additional time for Stantec to coordinate quotes on driveway repair, inspections, and closeout after November 2019. The driveway and restoration work was originally part of the New Hope North Water Tower Bypass Project. (2) Total costs per final billing. So, the additional KLM/Stantec costs from what was reviewed in November 2019 is $38,023.24 - $32,578.00 = $5,445.24. If you have any questions or require further information, please call me at (612) 712-2021. Regards, Stantec Consulting Services Inc. Dare D. 13oyunn, P.E. City Engineer Phone: 612 712 2021 dan.boyum@stantec. com Joint Water Commission TAC Meeting f Thursday, April 30, 20219:00 AM ITEM #5 1. Towers - Golden Valley • GV Tower work to take place summer of 2021. Exact start date TBD. 2. Pumps 2. No pump work occurring at this time. 1. Valves • New Hope - valve replacement near 42nd & Louisiana. Scope of work has increased to include more pipe and two bends. • Crystal — valve replacement around pump house was moved to summer of 2021 to finalize scope of work and logistics. Wait until GV tower is done. Keep projects separate. • Costs have increased — Crystal working to price out parts and labor and obtaining quotes for this work. 2. SCADA • No SCADA updates at this time. 3. Miscellaneous A. Medicine Lake Tower Parts Storage • Tenants currently using MLR Tower for storage are beginning to move items out to create space for JWC part storage. B. Emergency Action Plan - Map critical zones and valves (GV). Zones will be broken down by 12 inch AND larger mains (distribution mains). GV working on updated maps broken down by larger mains. C. Fiber • TAC agreed running fiber to all facilities is a long-term goal. o Existing Fiber - both emergency wells in Crystal, GV Tower, North Tower, and Crystal reservoir. o Proposed Fiber — MLR Tower (2021) — in the works, and GV reservoir (2022). D. Golden Valley Meter Pit Issues • Golden Valley experiencing issues with butterfly valves in meter pit. Valve on east influent line was removed due to excessive vibration. TAC working with Minneapolis to determine flow needs and long term solution for vibrations caused by dissipater plates hitting butterfly valves. I:\Joint Water Commission\JWC Agendas\2021 JWC Agenda\05-05-21\5 - TAC Meeting Minutes_2.25.21.docx