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04-FinancingCITY OF GOLDEN VALLEY, MINNESOTA 2020 - 2029 CAPITAL IMPROVEMENT PROGRAM FINANCING The 2020-2029 Capital Improvement Program (CIP), which is detailed on the following pages, is financed from a variety of sources. The purpose of this section is to describe and analyze these sources, in as much detail as possible, so that the users of this CIP can be certain that the program as outlined can be financed from available financing sources. General Fund The General Fund is the main operating fund of the City, and as such contains most of the City's operating divisions. The main revenue source for this fund is property taxes revenues. Large, non-recurring capital outlay expenditures are usually made from one of the City's capital project funds. Level annual transfers from the General Fund to these funds help to even out the annual budgeting process. The General Fund fund balance as of December 31, 2018 was $13,059,502. Exhibit I lists the General Fund transfers to Funds for projects in the CIP. Water& Sewer Utility Fund The Water & Sewer Utility Fund is an enterprise fund, which is involved in the operation and renewal & replacement of the City's water and sanitary sewer systems. The main sources of revenue for this fund are the user charges to those residential and commercial/industrial customers connected to the systems and franchise fees to help with infrastructure improvements. Per City policy, new lateral water and sewer system projects are assessed at 100% of cost unless there are unusual circumstances involved, in which case the City would pay for the difference from the reserve account. Since the City is essentially fully developed, there should be fewer and fewer of these projects in future years. These lateral water and sewer system projects are usually requested by property owners, so it is very hard to project when they might occur and the total cost. The trunk water system is owned and operated under a joint powers agreement with the cities of Golden Valley, New Hope and Crystal. This organization is known as the Joint Water Commission. The operating and capital improvement expenditures of the trunk water system are shared by the three cities. In 2014, an Emergency Water Supply was approved. Financing was through an interfund loan with an additional fee on water consumption. In 2015, another interfund loan was used to finance the break on the water main that carries water from Minneapolis to Crystal through Robbinsdale. The trunk sanitary sewer system is owned by Metropolitan Council Environmental Services to which the City makes monthly payments for the operation of and the capital improvements to the trunk system. The fund balance or net position that is unrestricted at 12/31/18 was $7,208,341. The financial position of this fund is extremely important because the City is facing large expenditures in future years for the renewal and replacement of aging water and sewer lines. Exhibit II is a list of projects in the program financed by the Water & Sewer Utility Fund. Brookview Golf Course Fund The Brookview Golf Course Fund is an enterprise fund, which is involved in the operation and improvement of the City's golf course and newly developed Lawn Bowling Course in 2018. The main revenue source is green fees paid by the golfers. The golf course consists of an 18 hole regulation course, a 9 hole par 3 course and a driving range. Other revenue sources come from the lawn bowling course, pro shop and Three- One-Six Restaurant. Many of the improvements to the course are part of regular course maintenance, but where specific projects can be defined and costs estimated, they are included in the program. Major pieces of equipment used by the golf course are also included in the program. In December 2017, Brookview opened its new facility which included the restaurant, golf pro shop and par 3 building. In 2020, curling will be offered for winter activity. The net position in this fund as of December 31, 2018 was $731,878. This was slightly lower than the previous year due to the purchase of 60 golf carts. Exhibit III is a list of the major course improvements and equipment included in the program and the projected working capital balances of this fund. Storm Sewer Utility Fund The Storm Sewer Utility Fund is an enterprise fund, which is involved in the maintenance and improvement of the City's storm water system including storm sewers and holding ponds. The fund is financed from charges to all the property in the City based on the level of estimated storm water runoff from a given class of property. Projects funded are those related to the Pavement Management Program, the City's adopted Storm Water Management Plan and projects constructed in conjunction with the other cities that are members of the Bassett Creek Water Management Commission. Exhibit VII is an analysis of the projected revenue, expenditures and cash balances in this fund. In 2016, bonds were sold and will be paid back with tax increment received from The Liberty development. The net position in this fund as of December 31, 2018 was $7,803, 352. Equipment Replacement Fund This capital project fund is used to finance major vehicle and equipment purchases for General Fund divisions. In 2019, the main source of revenue is a transfer from the General Fund. In the past, certificates of Indebtedness were sold and will remain outstanding until 2021. Exhibit IV is an analysis of the projected revenue, expenditures and cash balances in this fund. Existing debt service payments on the certificates of indebtedness issued are detailed in Exhibit XI. Building Fund This capital project fund is used to finance major improvements to buildings used by the General Fund divisions. A comprehensive building study will take place in 2020. It will evaluate all public buildings with an emphasis on the Public Safety needs. A major source of financing in this fund is a transfer from the General Fund. Exhibit V is an analysis of the projected revenue, expenditures and cash balances of this fund. Cablecasting Fund This capital project fund was separately designated in 2014 to account for the franchise fees collected for cablecasting. These monies are designated for any future improvements for the council chambers to provide cablecasting of public meetings. CCX Media Television/ Northwest Community Television provides service and programing for the city. The council chambers will be remodeled and new audio visual equipment will be purchased in 2020. Park Improvement Fund This capital project fund is used to finance park and open space improvements. One of the revenue sources in this fund is an annual transfer from the General Fund along with park dedication fees. Exhibit VI is an analysis of the projected revenue, expenditures and cash balances of this fund. Municipal State Aid (MSA) Fund This fund is used to account for monies held in account both by the City and the State of Minnesota for use in the maintenance and improvement of municipal state aid streets located in the City. Streets are designated as municipal state aid based on criteria established by the State. Each city is allowed a maximum number of miles of these designated streets. Every improvement project involving these streets must first be approved by the State. If approved, a certain portion of the projected cost is advanced to the City from its MSA account at the State, with the balance being paid upon completion. The monies that finance the City's MSA account at the State come from the State gasoline tax. The City's MSA account at the State is essentially the City's money and the amount in the account at any one time is included as an asset of this fund. The State also participates directly in various street and storm sewer improvement projects with the City, when the particular project benefits or involves State highways and rights of way. On the worksheets for street and storm sewer projects, the designation under the financing analysis of MSA refers to the City's MSA account at the State, and State of Minnesota refers to direct State participation. Exhibit VIII is an analysis of the projected revenue, expenditures and cash balances of the Municipal State Aid Fund. Capital Improvement Fund Revenues for this fund will primarily come from a portion of the franchise fees that are not designated for payment of debt service from the Douglas Drive project. Monies in this fund finance infrastructure improvements. Exhibit IX is an analysis of the projected revenue, expenditures and cash balances of this fund. Street Reconstruction Capital Improvement Fund Revenues for this fund will primarily come from a bond sale that will finance the yearly pavement management program (PMP) planned through 2023 and the infrastructure renewal program (IRP) starting in 2024. This fund will receive a general fund transfer to pay for the overlays that are planned to maintain the streets that have been reconstructed. Exhibit X is an analysis of the projected revenue, expenditures and cash balances of this fund. General Obligation Bonds To finance certain projects the City must borrow funds externally by issuing general obligation municipal bonds. The method(s) of financing the repayment of these bonds differentiates the various types of bonds used in the program. Tax Increment Bonds The proceeds of these bond issues are used to pay for public improvements in specially designated tax increment districts. The debt service on the bonds is repaid from property taxes on the increased value in the district over a base year's value. The property taxes on the increased value (increment) are not distributed to the various taxing jurisdictions, but are retained by the City to pay off the debt service on the bonds. The increased value in the district comes from the increased commercial/industrial/residential development or made possible by the public improvements financed by the bonds. The City has four tax increment districts. Two districts have used bonds for improvements: Highway 55 West and Winnetka/Medicine Lake Road. Special Assessment Bonds Per State Statute, if at least 20% of the bond principal for a public improvement is financed by special assessments against benefited properties, the balance can be financed from tax levies against all the property in the City without the need of a bond referendum. On the project worksheets, if special assessment bond financing is involved, we have indicated the amount of bonds to be repaid from special assessments and tax levies. The pavement management program and the future infrastructure renewal program use special assessment bonds for financing along with assessments from benefiting properties. These street projects will extend over a longer period than is included in the 2020-2029 CIP and will be financed by annual special assessment bond issues. On the project worksheet for the pavement management program, the method of financing is indicated as just Special Assessment Bonds. Certificates of Indebtedness Certificates of Indebtedness were used to help finance capital equipment that is outlined in the Equipment Replacement Fund. These are short-term general obligation debt instruments issued for a term of four years and repaid from annual tax levies. Current legislation has allowed cities to extend the term of these certificates up to ten years if the life of the asset is that in length. We may extend the term for those certificates that will finance fire pumper replacements. This financing has been replaced with a general fund transfer. Municipal State Aid (MSA) Revenue Bonds MSA bonds were sold in 2007 for the first time for the City of Golden Valley. The project was Golden Valley Road and Bridge replacement. The debt service payments will be repaid over twenty years with State Aid Allotments used to improve and maintain Municipal State Aid roads. Street Reconstruction Bonds Douglas Drive street improvements were paid for from street reconstruction bonds sold in 2016. The payment of debt service will be from franchise fees. Exhibit XI is an analysis of the current general obligation bonded debt of the City of Golden Valley. CITY OF GOLDEN VALLEY 2020-2029 CIP GENERAL FUND(FUND 1000) EXHIBIT I EXPENDITURES PROJECT (1) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Transfer to Building Fund(2) 535,000 $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 Transfer to Equipment Fund 1,032,580 1,082,580 1,100,000 1,100,000 1,100,000 1,150,000 1,200,000 1,250,000 1,300,000 1,350,000 Transfer to Storm Water Fund 50,000 50,000 Transfer to Park Improvement Fund 350,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 Transfer to Street Reconstruction 600,000 650,000 700,000 750,000 800,000 850,000 900,000 950,000 1,000,000 1,000,000 Overlays Totals 2,567,580 $2,682,580 $2,700,000 $2,750,000 $2,800,000 $2,900,000 $3,000,000 $3,100,000 $3,200,000 $3,250,000 Notes: 1)Each transfer will be outlined in the respective funds. 2)Transfer includes$35,000 for the comprehensive building study. 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O LOO LM LOO U 7 N m Eflrn 0 00 1- o o n O O N M O O Cl) V OOON O O N O O ( O h O O 1- N O a) a) N O LT O N M O N w to t— O N O O O O O LO O 00 " O O V N 0000 O O O O W Cl) NNLOcarCO O O N ( M ' IT O ( 0 t` 00 CA N N N N N N N N N N O O O O O O O O O O N N N N N N N N N N C7LL@ M 0)C N N N mC_ N U 0 C ` 0 N U m LL f0 N 3 0) ( 0 t0m C y Q C W ca C C @ c Li 0' F 0 W F Li CITY OF GOLDEN VALLEY 2020-2029 CIP CABLECASTING FUND (FUND 5500) EXHIBITV 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Fund Balance@ 1/1 $322,150 $157,760 $192,549 $227,512 $262,649 $297,963 $333,452 $369,120 $404,965 $440,990 Revenue: Franchise Fees 34,000 34,000 34,000 34,000 34,000 34,000 34,000 34,000 34,000 34,000 Interest Earnings 1,611 789 963 1,138 1,313 1,490 1,667 1,846 2,025 2,205 Total Available 357,760 192,549 227,512 262,649 297,963 333,452 369,120 404,965 440,990 477,195 Expenditures: 2020 (200,000) 2021 0 2022 0 2023 0 0 0 0 0 0 0 2024 2025 2026 2027 2028 2028 Total Expenditures (200,000) 0 0 0 0 0 0 0 0 0 Fund Balance@ 12/31 $157,760 $192,549 $227,512 $262,649 $297,963 $333,452 $369,120 $404,965 $440,990 $477,195 to O M 00 O O 00 O 0 r- O O ti O O 0 00 0 O 0 00 N - 00 M 0 00 00 00 N LO V LO O It LO O O Lo 00 O Cl) — O O co O 0 O O O O N — O M In 0 O LO O — O O O N CA 14, 669 CO 0 LO — O O I,- O O OD O O 0 ti M O 0 O O N r- O eM O O O O 0 O 0 N 61> 0) v 6099 O LO O O O co O O O M M O O M N O O N — O O O N 6 r- 04N N LO Cl) O OD O O q t O O LO O O LO O Il- O c) O O O 0 O O O N O OT 6O CO O N O Cl) O O cM LO t00 le "; O N O O ti N In O N n O O r- G N Cl) CM W Z Efl Efl J JU.a Z CD O In N O O N Cl) O 0 O 0 WLL > cn cf LL F. 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LLI N N WJ 11J J a 0 00 O O 00 U O O LO V a K n O O P- Ln C O LO Wc`') r` ( D 0 V CN O C) N 04 LO O J m C) V Cl N ON Q = N Cl) Lf) M Cl) t= X N a W LL O Q O N U 0 C) C) C) CD C) C) co F O N Cl) o o Cl) r- I o C) rl- V V No rn 0) rn N V3 M M wHU)O CD CD C) 00 a) C:) C) 0) V o O O rn rn O O rn ul co 0 0 1- ClS C) C) Cl L°)) v co r'D C) rn N W 7 cli Lr V WwH M C) O M ( D O O ( D r- C) O V O O LO O O V O O O O O 00 O O D O O ( D N V M ( D N O0 LO M LO ( M M 611 Vi U)To o Q C m O N M LO ( 0 r` 00 O lT N N N N N N N N N N N 0) O O O O O O O O O O Q m O N N N N N N N N N N LL X M ( 0 ( o Ccoa c X M D . 0 EnQ w( n O) coo 6 1 N C O O aa,, VO E2 LU c N a omo . o m a m C c c c m m m c oN c LL d' W , LL EXHIBIT XI General Obligation Bonded Debt Totals Balance at 12/31/2019 Special Assessment Bonds (PMP) B2799 3037 GO Improvement Bonds Series 2005C (ends 2025) 2012C 5,055,000.00 B2892 3038 GO Improvement Bonds Series 2006B (ends 2026) 2013B 5,435,000.00 B2221 3039 GO Improvement Bonds Series 2007C (ends 2027) 2014C 3,805,000.00 B2289 3040 GO Improvement Bonds Series 2008A (ends 2028) 2015C 6,295,000.00 B2536 3041 GO Improvement Bonds Series 2009A (ends 2029) 2017A 4,100,000.00 B2623 3042 GO Improvement Bonds Series 2010A (ends 2030)1,125,000.00 B2730 3043 GO Improvement Bonds Series 2011A (ends 2031)1,150,000.00 B2798 3044 GO Improvement Bonds Series 2012A (ends 2032) 970,000.00 B2891 3045 GO Improvement Bonds Series 2013A (ends 2033)1,140,000.00 B2956 3046 GO Improvement Bonds Series 2014A (ends 2035)2,125,000.00 B3040 3047 GO Improvement Bonds Series 2015A(ends 2036)1,465,000.00 B3116 3048 GO Improvement Bonds Series 2016A(ends 2037)1,085,000.00 B3196 3049 GO Improvement Bonds Series 2017A (ends 2038)2,440,000.00 B3197 3053 GO Improvement Bonds Series 2017A (ends 2028) 685,000.00 B3249 3054 GO Improvement Bonds Series 2018A (ends 2038)2,820,000.00 B2828 3055 GO Improvement Bonds Series 2019A (ends 2039)1,770,000.00 41,465,000.00 Equipment Certificates B3115 3010 GO Equipment Cert Bonds-Series 2016B 270,000.00 B3196 3010 GO Equipment Cert Bonds-Series 2017A 550,000.00 820,000.00 Tax Increment Bonds B3197 3053 GO Tax Increment Bonds of 2017B 1,170,000.00 Street Reconstruction Bonds B3114 3052 Street Reconstruction Bonds Series 2016 C(Douglas) 5,180,000.00 Housing and Redevelopment Lease Revenue Bonds 3051 Brookview Lease Revenue Bonds 16,285,000.00 State Aid Bonds 5100 State Aid Bonds of 2007A 1,265,000.00 GO Revenue Bonds 7300 Storm Revenue Bonds of 2016D 2,580,000.00 Total Bonds Outstanding 68,765,000.00