2018-05-02 Golden Valley•Crystal•New Hope
AGENDA
JOINT WATER COMMISSION
May 2, 2018—1:30 pm
Council Conference Room
Golden Valley City Hall
1. Call to Order
2. Approval of Revised Minutes—April 4, 2018 (Approved 3-0)
3. Approve Repairs to Gate Valve Manhole (Lemke) (Approved 3-0)
4. Receive and File 2017 Financial Report and Management Letter (Approved 3-0)
5. Review 2019-2023 Capital improvement Program
6. Approve Resolution #18-03 2019 General Fund Budget (Approved 3-0)
7. TAC Update (Kakach)
8. Other Business
Next Scheduled Meeting June 6, 2018
9. Adjournment (Approved 3-0)
This document is available in alternate formats upon a 72-hour request. Please call
763-593-8006(TTY: 763-593-3968)to make a request. Examples of alternate formats
may include large print,electronic, Braille, audiocassette,etc.
JOINT WATER COMMISSION MINUTES
' Golden Valley-Crystal - New Hope
Meeting of April 4, 2018
The Golden Valley—Crystal—New Hope Joint Water Commission (JWC) meeting was called to order at
1:00 pm in the City of Golden Valley Council Chambers.
Commissioners 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
Randy Kloepper, Utilities Superintendent, Crystal
Dave Lemke, Operations Manager, New Hope
Jim Muellner, Utilities Maintenance Supervisor, New Hope
Marc Nevinski, Physical Development Director,Golden Valley
Jeff Oliver, City Engineer, Golden Valley
Mark Ray, Director of Public Works/City Engineer, Crystal
Sue Virnig, Finance Director, Golden Valley
Bernie Weber, Public Works Director, New Hope
Approval of Revised Minutes—February 7,2018
Moved by Norris seconded by McDonald to approve the revised minutes of the February 7, 2018 Joint
Water Commission Meeting. Motion carried.
Approve Invoices from Valley Rich, Inc. Repairs of the Gate Valve Structure on 42"d Avenue North
Staff reported on the emergency repairs to the gate valve structure on 42"d Avenue North.Valley Rich
installed a temporary patch and should have the permanent patch installed within 30 days. Staff is
requesting payment of$4,400 to Valley Rich, Inc.
Moved by Norris seconded by McDonald to approve payment to Valley Rich Inc. in the amount of
$4,400. Motion carried.
Approve Gate Valve Structure Repairs on 42"d Avenue North
Staff reported on the February 2, 2018 emergency repairs to the Gate Valve Structure at 42"d Avenue
North. Staff has not received all the repair invoices from Valley Rich, Inc. at the time of the meeting;
however will bring to the April 4, 2018 meeting. Staff also explained the Joint Water Commission has
budgeted $100,000 for miscellaneous emergency repairs and as per the Joint Water Commission bylaws,
the Commission has the authority to approve $20,000 per occurrence for emergency repairs.
Moved by McDonald seconded by Cruikshank to approve up to $10,000 for the Gate Valve Structure
Repairs on 42"d Avenue North. Motion carried.
Capital Improvement Projects—10 Years
Staff(finance and TAC) provided the Commission with a spread sheet running from 2017 through 2048.
This spreadsheet provided a breakdown of the Capital Improvement Projects.Also indicated the buildup
of funds for the construction of water towers while indicating any increases will be reasonable and level.
TAC Update
Staff reported on the following projects:
0 10 Year Capital Improvement Projects.
Joint Water Commission
April 4,2018
Page 2 of 2
Other Business
Staff provided the Commission with an update on the DeCola Ponds Project.
Next Meeting May 2, 2018.
Adiournment
Moved by Cruikshank seconded by McDonald to adjourn meeting. Motion carried.
Chair Norris adjourned the meeting at 2:30 pm.
Chair/
hair nne Norris
ATTEST:
Sue Schwalbe, Recording Secretary
Schwalbe, Sue
From: Virnig, Sue
Sent: Saturday, April 28, 2018 11:19 AM
To: Schwalbe, Sue
Subject: Joint Water Commission Agenda Items for May 2
Attachments: JWC 2019 Budget-Proposed.xls; 60612017 Golden Valley Crystal New Hope JWC Fin
Stmts.pdf; 6061 2017 Golden Valley Crystal New Hope JWC Mgmt Ltr.pdf;
SKM_C284el8042811220.pdf; 2018 JWC 18-XX Resolution Adopting 2019-2023 Capital
Improvement Program.doc
The following items will be on the next JWC agenda.
• Receive and File 2017 Financial Report and Management Letter.
• Review 2019-2023 Capital Improvement Program
• Approve Resolution#18-XX 2019 General Fund Budget
Thanks,
Sue V
1
Resolution 18-03 Corrected 4/16/2018
RESOLUTION OF THE JOINT WATER COMMISSION ADOPTING THE 2019
GENERAL FUND BUDGET
BE IT RESOLVED by the Joint Water Commission that the appropriations
for the General Fund Program for the calendar year 2019 as follows:
GENERALFUND
Expenditures Original Budget
Water Purchased: $6,864,650
avg 2,086,516,666 gallons
assumes a 3.29/1000 price (4%)
.02/consumption $41,730
Insurance: $60,000
Utilities $240,000
Electricity 230,000
Phone 10,000
Labor $100,000
Professional Services: $100,000
Consumer Confidence Report -
Total Control, Corr Pro, Audit 20,000
Professional Services 80,000
Capital Improvement $1,117,000
Funded by reserves
$8,523,380
4.08 Joint Water cost/1000 gallons
BE IT FURTHER RESOLVED by the Joint Water Commission that the sources
of financing the sums appropriated shall be:
GENERAL FUND %from 2018
Revenue
City of Golden Valley $3,498,847 1.90%
City of Crystal $2,383,989 5.07%
City of New Hope $2,640,543 2.30%
3.96% $8,523,380
— m� , � ,,, '4 �
Joint Water hair
- ATTEST:
Kirk McDonald, Vice Chair
Resolution 18-03 May 2, 2018
Commissioner McDonald introduced the following resolution and moved its adoption:
RESOLUTION ADOPTING THE 2019-2023 CAPITAL PROJECTS FOR THE
GOLDEN VALLEY-CRYSTAL- NEW HOPE JOINT WATER COMMISSION
BE IT RESOLVED by the Joint Water Commission of the Cities of Golden Valley,
Crystal, and New Hope that the Capital Projects for the year 2019 thru 2023 shall be as
listed on attached Schedule A.
BE IT FURTHER RESOLVED by the Joint Water Commission of the Cities of
Golden Valley, Crystal, and New Hope that the sources of financing shall come from each
of the cities based on the current year consumption percentage.
Ann fins, Chair
ATTEST:
Kirk McDonald, Vice Chair
The motion for the adoption of the foregoing resolution was seconded by McDonald and
upon a vote being taken thereon, the following voted in favor thereof: Norris, McDonald,
Cruikshank and the following voted against the same:none; whereupon said resolution was
declared duly passed and adopted, signed by the Chair and her signature attested by the
Commissioner.
City of Golden Valley, Minnesota
Capital Plan
2019 tluu 2023
PROJECTS BY FUNDING SOURCE
Source Project# 2019 2020 2021 2022 2023 Total
Joint Water Commission r
Replace Trunk Valves-GV,CRY,NH 14-027 180,000 180,000 180,000 180,000 191,750 911,750
SCADA Updates 14-029 35,000 40,000 75,000
Elevated Water Towers-New Hope 14-036 278,250 356,000 356,D00 78,250 1,068,500
Security for d towers 14-037 100,000 100,000
Elevated Tower Inspection-Golden Valley 15-M 334,000 300,000 634,000
Replacements at Pump Station-Golden Valley 18-001 60,000 60,000 60,000 60,000 240,000
Inspect and(lean Reservoir-Crystal;Golden Valley 16-006 300,000 45,000 300,000 845,000
Replacements at Pump Station-Crystal 17-003 58,000 58,000 58,000 58,000 23ZWD
Trunk Main Testing 18-001 10,000 10,000 50,000 52,500 55,000 177,50D
Replace Swampcoolers 19-001 40,000 40,000
Effluent Meters at Reservoir f 9-002 75,000 76,000
Water Tower Replacements 19-003 100,000 273,750 421,000 358,500 525.000 1,678.250
Inspect Water Towers 19-M 50,000 50,000
Emergency Well-Golden Valley 21-M 600,000 600,000
Replace Flow Meters 21.002 30,000 30,000
Joint Water Commission Total 1,117,000 1,P00,000 1,300,000 1,40Q000 1,540,000 4537,000
GRAND TOTAL, 1,117,000 1,MAQ0 1,300,000 1A00A00 1,340AN 4114709
Page 1
Project# 14-027 Department Joint Water Commission
Contact
Project Name Replace Trunk Valves-GV,CRY,NH Type Unassigned
Useful Me
Category Water Mrastructure
Descdption ---
Replace trunk valves that do not operate and/or close completely in the three cities.
LOCATION:Golden Valley,Crystal,New Hope
JaatitiCBtiQII __ __ _.
Replace trunk valves that are not fully operational or operated properly so that the portions of the JWC watermain system can be shut down for repair.Replace three
valves every year pnoritizod based on the PCCP Analysis GIS Date to better isolate main lines with highest critically.
Expenditures 2019 2020 2021 2022 2023 Total
Infrastructure Improvements 180,000 180,000 190,000 1801000 191,750 911,750
Total 180M 180,000 180,000 IMM 191,750 9111730
Funding Sources 2019 2020 2021 2022 2023 Total
Jdnt Water Commission 180,000 180,000 1801000 180,000 1911750 911,750
Total 1801000 180,000 180p00 IN 099 121,730 911,750
Project# 14-029 Department Joint Water Commiss'00
Contact
Project Name SCADA Updates Type Unassigned
Useful Life
Category Water In&asttucture
j Descdpdon
;Replace Supervisory Control and Data Acquisition(SCADA)Computers and Software Upgrades,
iintification
;The SCADA System is five years old and needs to be updated.This system monitors the flows and infrastructure systems needed for a drinking water supply system,
Expenditures 2019 2020 2021 2022 2023 Total
In*aatructure Improvements 35,000 40,000 75,000
Total 35,000 40,000-- 75,000
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 35,000 40,006 75,000
Total 35,000 4000 7500
Page 2
Project# 14-036
Department Joint Water Commission
Contact
Project Name EIevated Water Towers-New Hope Type Unassigned
Useful Llfe
Category Water Infiastructure
Description
FInspect both elevated towers and complete painting specifications.
'Notch`lower-Aquila Avenue
South'rower-Medicine Lake Road will be done in 2022 and completed in 2023.
Justiflcstion -- i
This inspection is to understand the scope and the timeline for required improvements.
Expenditures 2019 2020 2021 2022 2023 Total
Infrastructure Improvements 900,250 78,250 1,068,500
Total 7800 1A68M
Funding Sources 2019 2020 MI 2022 2023 Total
Jdnt WaterCornmission 278.250 356,000 356A00 78,250 a 1.068,500
Total 278,M) MIM 35UN 7812i0 1A6MM
Project# 14-037 Department Joint Water Commission
Contact
Project Name Security for all towers Type Unassigned
Usefai Life
Category Water htfrastructure
Description
Andriication
Expenditures 2019 2020 2021 2022 2023 Total
Irtireatructure Improvements _ 100,000 100,000
Total 100,000 100A00
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 100.000 10Q,000
Total ---- MAN -- -- 100A00
Page 3
Project# 15-002 Department Joint Water Commission
Contact
Project Name Elevated Tower Inspection-Golden Valley Type Unsigned
Useful Life
Category Water Infrastructure
LDeSCl'lplion J
Inspe5 the Joint Water Commission-Golden Valley water tower.Jn 2020,a complete rehabilation will be done.$319,000 was reserved in 2018.
Jtts"Ication
.Inspect the condition of the interior wet"paint and exterior coating of the JWC Golden Valley water tower.In 2020.a complete rehabilitation will be done.
Expenditures 2019 2020 2021 2022 2023 Total
lnfrast wwm Improvements 953,000 953,000
Total O&M MAN
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 334,000 300,000� 634,000
Toal 334,00 300MO _ 654,000
Project# 16-001 Department Joint Water Commission
Contact
Project Name Replacements at Pump Station-Golden Valley Type Unassigned
Useful Life
Category Unassigned
Description
---------_---.._
Lepiaee two pumps motors and motor stags at Joint Water Commission-Golden Valley pump station
Justifcation
Continue with pump,motor,and motor starter upgrades at the Joint Water Commission-Golden Valley pump station.Two of the four remaining pumps are 50 years
old and need to be upgraded.
Expenditures 2019 2020 2021 2022 2023 Total
Infrasttueture Improvements 120,000 120,000 240M
Total 120A00 120,100 240000
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 60,000 00,000 00,000 00,000 240.000
Total NIGH 00m MAN 60,000 24GA00
Page 4
Project# 16-006 Department Joint Water Commission
Contact
Project Name Inspect and Clean Reservoir-Crystal; Golden Valley Type Unassigned
Useful Life
Category Water lnfiastracturc
Description
Clean and inspect reservoirs at Crystal(2017)and Golden Valley(2021),Needed repairs are scheduled in 2019 and 2022.
�rlcation
Periodically concrete reservoirs require structural inspection,cleaning and repaired,
Expenditures 2019 2020 2021 2022 2023 Total
Irdrasbucture Improvements 300M 345,000 0451000
Total CAM 345A00 645,000
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 300,000 45,000 300,000 545,000
Total =1000 45,000 300,000 64UN
Project# 17-003 Department Joint Water Commission
Contact
Project Name Replacements at Pump Station-Crystal Type Unassigned
Useful Life
Category Water Infrastructure
Description --- ----- i
Replacement of the 300 hp motor,pump and motor starter for Pump#3 at the Crystal Pump Station with a new energy efficient motor,pump and"soft start"starter.
LOCATION: Crystal
Actual replacement will be in 2019 and 2023.$58,000 was reserved in 2018. -- _—
JWtification
The current motor and pump were installed in 1963.They will be replaced with an energy efficient motor to reduce electrical demand at the station and the j
linstallation of a"soft start"starter will allow the motor to ramp up to fun operating speed decreasing stress on the motor.
Expenditures 2019 2020 Mi 2022 2023 Total
Infrastructure Improvements 174,000 174,000 348,000
Total 174,000 ---— -- — — 174,000 348,000
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 58,000 58,000 56,000 58,000 232,000
Total 58,000 -- 58A00 58A00 58,000 23ZM
Page 5
Project# 18-001 Department Joint Water Commission
Contact
Project Name Trunk Main Testing Type Unassigned
Useful Life
Category Unassigned
Description
Based on the 2016 Study and Analysis of the Joint Water cities PCCP condition assessment certain projects will be need to be periodically tested on all mains.
i Justification
Testing of the pipes will allow staff to plan for large replacement projects based on the results of the testing
Expenditures 2019 2020 2021 2022 2023 Total
Infrastructure Improvements 10,000 10,000 50,000 52,500 55,000 177M
Total 10,000 10,000 50,000 _— 52,500 55,000 177,500
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 10,000 10,000 _50AM 52,500 55,000 177,500
Total 10,000 _ 10,000 50,000 52AN 55,000 177,500
Project# 19-001 Department Joint Water Commission
Contact
Project Name Replace Swampcoolers Type Unassigned
Useful Life
Category Unassigned
Description a
Replace swamp coolers at the Crystal pump station,
�JuStlfiCatiOII � _.
The swam coolers at the Crystal um station
p "'ry pump provit'e the cooling of the interior of the pump room and were installed in 1462 and are reae6iag the er,d of their life
c !AIe.
Expenditures 2019 2020 2021 2022 2023 Total
IMrestructure Improvements 40,000 40,000
Total 40,000 40,000
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 40,000 40,000
Total 40JO 40M
Page 6
Project# 19-002
Department Joint Water Commission
Contact
Project Name Effluent Meters at Reservoir Type Unass;gnad
Useful Life
Category Unassigned
Description
Install meters on the effluent pipes leaving the Golden Valley Reservoir.
iWa ficadon
'Currently,there is no way to monitor how much water is leaving the reservoir,other than by estimating the draw down on the tank levels.Effluent valves would
,allow for accurate readings that could be tied into the SCAVA system.
Expenditures 2019 2020 2021 2022 2023 Total
Infrastructure Improvements 75,000 75,000
Total M1100 75,000
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 75,000 75,000
Total 75M 75,000
Project# 19-003 Department Joint Water Commission
Contact
Project Name Water Tower Replacements Type Unassigned
Useful Life
Category Unassigned
Description
!The Joint Water Commission needs to start financing the replacement of the three water towers located in New Hope(2)and Golden Valley. The tower replacements
I
am planned for the following years;
12035-New Hope
12041-Golden Valley
(2048-New Hope
Justification
The replacement of a water tower is very expensive.The Joint Water Commission will reserve thiese monies for future replacements in 2035,2041,and 2048.
Expenditures 2019 2020 2021 2022 2023 Total
Infrastructure Improvements 100,000 273,750 421,000 358,500 525,000 11678,250
Total 100,000 273,750 421,000 35800 525,000 IIA781250
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 100,000 273,750 421,000 358,500 525,000 11878,250
Total 100.000 2731750 421,000 358,300 525,000 1;878, II
Page 7
Project# 19-004 Department Joint Water Commission
Contact
Project Name Inspect Water Towers Type unassigned
Useful Life
Category Unassigned
Description
Justification
Expenditures 2019 2020 2021 2022 2023 Total
Infrastruchure Improvements 50,000 50,000
Total 5010" 58,000
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 50,000 50,000
Total 50A00 50MG
Project# 21-001 Department Joint Water Commission
Contact
Project Name Emergency Well-Golden Valley Type Unassigned
Useful Life
Category Unassigned
Description
Justification
The emergency well was delayed in 2015 due to unexpected expenses to replace the 36 inch watermain from Minneapolis to Crystal reservoir.Well will help meet
[water demand under an emergency water shortage. _ _ .---.------- —_--. _}
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission W0,000 00Q000
Total _ 6"1000 600,000
Page 8
Project# 21-002 Department Joint Water Commission
Contact
Project Name Replace Flow Meters Type Unassigned
Useful Life
Category Unassigned
Desctiptio❑
Justification
Fapenditares 2019 2020 2021 2022 2023 Total
EquiplVehlcles/Fumishings 30,00D 30,000
Total 30,W 30,000
Funding Sources 2019 2020 2021 2022 2023 Total
Joint Water Commission 30AD 30,000
Total -- --A000- _ 30,000
Page 9
GOLDEN VALLEY—CRYSTAL—NEW HOPE
JOINT WATER COMMISSION
Financial Statements
and Supplemental Information
Year Ended
December 31,2017
THIS PAGE INTENTIONALLY LEFT BLANK
GOLDEN VALLEY—CRYSTAL—NEW HOPE
JOINT WATER COMMISSION
Table of Contents
Page
INTRODUCTORY SECTION
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 9-14
OTHER REQUIRED REPORTS
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance With Government Auditing Standards 15-16
Independent Auditor's Report on Minnesota Legal Compliance 17
THIS PAGE INTENTIONALLY LEFT BLANK
INTRODUCTORY SECTION
THIS PAGE INTENTIONALLY LEFT BLANK
GOLDEN VALLEY—CRYSTAL—NEW HOPE
JOINT WATER COMMISSION
Board of Commissioners
Year Ended December 31, 2017
Commissioner Position Governmental Unit
Anne Norris Chairperson City of Crystal
Kirk McDonald Vice Chairperson City of New Hope
Tim Cruikshank Secretary/Treasurer City of Golden Valley
-1-
THIS PAGE INTENTIONALLY LEFT BLANK
FINANCIAL SECTION
THIS PAGE INTENTIONALLY LEFT BLANK
PRINCIPALS
Thomas A.Karnowski,CPA
Paul A.Radosevich,CPA KWilliam J.Lauer,CPA
7PUBLIC
James H.Eichten,CPA
E R T I F I E D Aaron J.Nielsen,CPA
. 0 0 0 U N T A N T S Victoria L.Holinka,CPA/CMA
INDEPENDENT AUDITOR'S REPORT
To the Board of Commissioners and Management
Golden Valley—Crystal—New Hope Joint Water Commission
REPORT ON THE FINANCIAL STATEMENTS
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, 2017, 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, 2017, 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,
2016, and we expressed unmodified audit opinions on the respective financial statements of the
governmental activities and each major fund in our report dated April 21, 2017. In our opinion, the partial
comparative information presented herein as of and for the year ended December 31, 2016 is consistent,
in all material respects,with the audited financial statements from which it has been derived.
OTHER REPORTING REQUIRED BY Go VERNMENTA UDITING STANDARDs
In accordance with Government Auditing Standards, we have also issued our report dated April 24, 2018
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.
W^&*7, W , Kam; / .. ., P. A .
Minneapolis,Minnesota
April 24,2018
-3-
BASIC FINANCIAL STATEMENTS
GOLDEN VALLEY—CRYSTAL—NEW HOPE
JOINT WATER COMMISSION
Statement of Net Position
as of December 31,2017
(With Partial Comparative Information as of December 31,2016)
Governmental Activities
2017 2016
Assets
Cash and investments $ 5,074,672 $ 5,450,553
Due from other governmental units 896,598 736,756
Prepaids 31,896 34,522
Capital assets
Not depreciated 1,031,477 3,542,104
Depreciated,net of accumulated depreciation 9,632,739 6,399,042
Total capital assets,net of accumulated depreciation 10,664,216 9,941,146
Total assets $ 16,667,382 $ 16,162,977
Liabilities
Accounts and contracts payable $ 26,528 $ 85,405
Deposits payable 8,915 12,515
Due to other governmental units 500,681 400,818
Unearned revenue 36,000 45,485
Total liabilities 572,124 544,223
Net position
Net investment in capital assets 10,664,216 9,941,146
Restricted for capital improvements 2,762,426 4,772,785
Restricted for emergency water supply 1,700,000 —
Unrestricted 968,616 904,823
Total net position 16,095,258 15,618,754
Total liabilities and net position $ 16,667,382 $ 16,162,977
See notes to basic financial statements -4-
GOLDEN VALLEY—CRYSTAL—NEW HOPE
JOINT WATER COMMISSION
Statement of Activities
Year Ended December 31,2017
(With Partial Comparative Information for the Year Ended December 31,2016)
Governmental Activities
2017 2016
Program expenses
Water distribution
Water purchases $ 6,382,395 $ 5,927,293
Administration and maintenance 645,095 499,426
Depreciation 389,541 297,995
Total program expenses 7,417,031 6,724,714
Program revenues—water distribution
Charges for services
Member assessments 6,826,748 6,302,332
Maintenance charges and refunds — 228
Total charges for services 6,826,748 6,302,560
Capital grants and contributions 923,000 1,290,000
Total program revenues—water distribution 7,749,748 7,592,560
Net program revenue 332,717 867,846
General revenues
Rental income 143,787 138,098
Change in net position 476,504 1,005,944
Net position
Beginning of year 15,618,754 14,612,810
End of year $ 16,095,258 $ 15,618,754
See notes to basic financial statements -5-
GOLDEN VALLEY-CRYSTAL-NEW HOPE
JOINT WATER COMMISSION
Balance Sheet
Governmental Funds
as of December 31,2017
(With Partial Comparative Information as of December 31,2016)
Improvement
Capital Projects Total Governmental Funds
General Fund Fund 2017 2016
Assets
Cash and investments $ 580,912 $ 4,493,760 $ 5,074,672 $ 5,450,553
Due from other governmental units 896,598 - 896,598 736,756
Prepaids 31,896 - 31,896 34,522
Total assets $ 1,509,406 $ 4,493,760 $ 6,003,166 $ 6,221,831
Liabilities
Accounts and contracts payable $ 25,522 $ 1,006 $ 26,528 $ 85,405
Deposits payable 8,915 - 8,915 12,515
Due to other governmental units 470,353 30,328 500,681 400,818
Unearned revenue 36,000 - 36,000 45,485
Total liabilities 540,790 31,334 572,124 544,223
Fund balances
Nonspendable for prepaids 31,896 - 31,896 34,522
Restricted for capital improvements - 2,762,426 2,762,426 4,772,785
Restricted for emergency water supply - 1,700,000 1,700,000 -
Unassigned 936,720 - 936,720 870,301
Total fund balances 968,616 4,462,426 5,431,042 5,677,608
Total liabilities and
fund balances $ 1,509,406 $ 4,493,760 $ 6,003,166 $ 6,221,831
Amounts reported for governmental activities in the Statement of Net Position differ because:
Fund balances-governmental funds $ 5,431,042 $ 5,677,608
Capital assets used in governmental activities are not financial resources and,
therefore,are not reported as assets in governmental funds.
Cost of capital assets 18,588,029 17,475,418
Less accumulated depreciation (7,923,813) (7,534,272)
Net position of governmental activities $ 16,095,258 $ 15,618,754
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 31,2017
(With Partial Comparative Information for the Year Ended December 31,2016)
Improvement
Capital Projects Total Governmental Funds
General Fund Fund 2017 2016
Revenue
Member assessments
Charges for services $ 6,817,269 $ - $ 6,817,269 $ 6,293,060
Nonoperating surcharge 9,479 - 9,479 9,272
Construction charges - 923,000 923,000 1,290,000
Other revenue
Rental income 143,787 - 143,787 138,098
Maintenance charges and refunds - - - 228
Total revenue 6,970,535 923,000 7,893,535 7,730,658
Expenditures
Current
Water purchased 6,382,395 - 6,382,395 5,927,293
Insurance 53,709 - 53,709 35,612
Utilities 183,926 - 183,926 189,045
Labor 38,034 - 38,034 32,086
Maintenance 54,862 - 54,862 34,095
Professional services 12,112 - 12,112 11,685
Administrative charges paid to members 37,917 - 37,917 37,087
Rent remitted to members 143,787 - 143,787 138,098
Miscellaneous - - - 1,089
Capital outlay - 1,233,359 1,233,359 430,746
Total expenditures 6,906,742 1,233,359 8,140,101 6,836,836
Net change in fund balances 63,793 (310,359) (246,566) 893,822
Fund balances
Beginning of year 904,823 4,772,785 5,677,608 4,783,786
End of year $ 968,616 $ 4,462,426 $ 5,431,042 $ 5,677,608
Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances-governmental funds $ (246,566) $ 893,822
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 1,112,611 410,117
Depreciation expense (389,541) (297,995)
Change in net position of governmental activities $ 476,504 $ 1,005,944
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 31,2017
(With Partial Comparative Information for the Year Ended December 31,2016)
2017 2016
Original and Over(Under)
Final Budget Actual Final Budget Actual
Revenue
Charges for services $ 8,157,405 $ 6,817,269 $ (1,340,136) $ 6,293,060
Nonoperating surcharge - 9,479 9,479 9,272
Other revenue
Rental income - 143,787 143,787 138,098
Maintenance charges and refunds - - - 228
Total revenue 8,157,405 6,970,535 (1,186,870) 6,440,658
Expenditures
Current
Water purchased 6,715,280 6,382,395 (332,885) 5,927,293
Insurance 35,000 53,709 18,709 35,612
Utilities 240,000 183,926 (56,074) 189,045
Labor 100,000 38,034 (61,966) 32,086
Maintenance - 54,862 54,862 34,095
Professional services 100,000 12,112 (87,888) 11,685
Administrative charges paid to members 44,125 37,917 (6,208) 37,087
Rent remitted to members - 143,787 143,787 138,098
Miscellaneous - - - 1,089
Capital outlay 923,000 - (923,000) -
Total expenditures 8,157,405 6,906,742 (1,250,663) 6,406,090
Net change in fund balances $ - 63,793 $ 63,793 34,568
Fund balances
Beginning of year 904,823 870,255
End of year $ 968,616 $ 904,823
See notes to basic financial statements -8-
GOLDEN VALLEY—CRYSTAL—NEW HOPE
JOINT WATER COMMISSION
Notes to Basic Financial Statements
December 31, 2017
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.
-9-
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. 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.
-10-
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
G. Receivables
The 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,which are recorded as expenditures/expenses at the time of consumption.
I. 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.
J. 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 this commercial coverage 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)
K. 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 defmition 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 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)
M. 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 31,2016, from which such partial information was derived.
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 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 $5,074,672. At December 31, 2017, 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 31,2017 is as follows:
Beginning Completed Ending
Balance Additions Retirements Construction Balance
Capital assets,not depreciated
Construction in progress $ 3,542,104 $ 1,112,611 $ — $ (3,623,238) $ 1,031,477
Capital assets,depreciated
Distribution system 10,834,144 — — 3,507,448 14,341,592
Storage facilities 3,099,170 — — 115,790 3,214,960
Total capital assets,depreciated 13,933,314 — — 3,623,238 17,556,552
Less accumulated depreciation on
Distribution system (4,736,694) (364,650) — — (5,101,344)
Storage facilities (2,797,578) (24,891) — — (2,822,469)
Total accumulated depreciation (7,534,272) (389,541) — — (7,923,813)
Net capital assets,depreciated 6,399,042 (389,541) — 3,623,238 9,632,739
Total capital assets,net $ 9,941,146 $ 723,070 $ — $ — $ 10,664,216
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
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 2017,along with any remaining receivable,is as follows:
Improvement
General Fund Capital Projects Receivable at
Revenue Fund Revenue December 31,2017
City of Golden Valley $ 2,886,719 $ 382,583 $ 491,380
City of Crystal 1,833,265 252,810 250,433
City of New Hope 2,106,764 287,607 154,785
$ 6,826,748 $ 923,000 $ 896,598
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 2017, along
with any liability remaining at year-end, are as follows:
Rental Included in
Revenues Payables at
Expenditures Remitted December 31,2017
City of Golden Valley $ 190,939 $ 47,929 $ 11,742
City of Crystal 116,407 47,929 25,588
City of New Hope 16,574 47,929 881
$ 323,920 $ 143,787 $ 38,211
NOTE 5—COMMITMENTS
At December 31, 2017, the Commission is committed to various contracts for capital improvements. The
Commission's remaining commitment under these contracts is $119,954.
-14-
OTHER REQUIRED REPORTS
THIS PAGE INTENTIONALLY LEFT BLANK
PRINCIPALS
Thomas A.Karnowski,CPA
Paul A.Radosevich,CPA
MMKRWilliam J.Lauer,CPA
James H.Eichten,CPA
E R T IFIED PUBLIC Aaron J.Nielsen,CPA
, C C O U N T A N T S Victoria L.Holinka,CPA/CMA
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Commissioners and Management
Golden Valley—Crystal—New Hope Joint Water Commission
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States,the basic 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, 2017, 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 24, 2018.
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) to determine the 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)
-15-
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 Commission's financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and material
effect on the determination of financial 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.
W4&07., WVX40�7�.,� 44,0�� A
Minneapolis, Minnesota
April 24, 2018
-16-
PRINCIPALS
Thomas A.Karnowski,CPA
Paul A.Radosevich,CPA
MMKRWilliam J.Lauer,CPA
-, James H.Eichten,CPA
7 E R T I F I E D PUBLIC Aaron J.Nielsen,CPA
. 0 0 0 U N T A N T S Victoria L.Holinka,CPA/CMA
INDEPENDENT AUDITOR'S REPORT
ON MINNESOTA LEGAL COMPLIANCE
To the Board of Commissioners and Management
Golden Valley—Crystal—New Hope Joint Water Commission
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities and each major fund of the Golden Valley—Crystal—New Hope Joint Water Commission (the
Commission) as of and for the year ended December 31, 2017, 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 24, 2018.
MINNESOTA LEGAL COMPLIANCE
The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to
Minnesota Statutes § 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 (TIF). Our audit considered all of the listed
categories, except that we did not test for compliance in public indebtedness and TIF, because the
Commission has issued no public indebtedness and does not utilize TIF.
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 Minnesota Legal Compliance Audit Guide for Cities.
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.
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.
a .
Minneapolis,Minnesota
April 24, 2018
-17-
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
April 24, 2018
To the Board of Commissioners and Management
Golden Valley—Crystal—New Hope Joint Water Commission
The following is a summary of our audit work, key conclusions, and other information that we consider
important or that is required to be communicated to the Board of Commissioners, administration, or those
charged with governance of the Golden Valley — Crystal — New Hope Joint Water Commission (the
Commission).
OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED
STATES OF AMERICA AND GOVERNMENTAUDITINGSTANDARDs
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, 2017, and the 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 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, 2017:
• 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.
Golden Valley—Crystal—New Hope Joint Water Commission Page 2
April 24, 2018
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 management, 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 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 accounting estimates
in determining that they are reasonable in relation to the basic financial statements taken as a whole.
The financial statement disclosures are neutral,consistent, and clear.
DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
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.
Golden Valley—Crystal—New Hope Joint Water Commission Page 3
April 24, 2018
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.
MANAGEMENT REPRESENTATIONS
We have requested certain representations from management that are included in the management
representation letter dated April 24,2018.
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 perform 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.
4&07 � R,.�' f t�.gh,�,t p�, ,�?{� I d..►tw tx�,a.v�.,. c o . / .
Minneapolis,Minnesota
April 24, 2018