HomeMy WebLinkAbout2014 $3,775,000 GO Bonds of 2014
Moody's Investors Service, Inc.
7WTC AT 250 GREENWICH STREET
NEW YORK, NY 10007
USA
AMY STECKELBERG
NORTHLAND SECURITIES, INC.
45 SOUTH 7TH STREET, SUITE 2000
MINNEAPOLIS, MN 55402
Invoice
Recipient
Invoice No.:P0114148
Customer No.:9000001697
NORTHLAND SECURITIES, INC.
Invoice Date:April 23, 2014
45 SOUTH 7TH STREET, SUITE 2000
MINNEAPOLIS, MN 55402
For Professional Services:
Total Net Value:USD10,500.00
State and Local Taxes:USD0.00
Invoice Amount:USD10,500.00
Inquiries Contact
Raymond Pedicone
Phone:212-553-1766Fax:
Email:raymond.pedicone@moodys.com
Moody's Investors Service, Inc. Taxpayer ID#: 13-1959883
Please do not contact your Analytic Team regarding this or any other fee-related matter.
Return This Portion With Your Payment
Invoice No.:P0114148
Invoice Amount:USD10,500.00
Invoice Payable in USD
Moodys Ref No.:P0114148
Customer No.:9000001697
Invoice Date:April 23, 2014
Wire Payment with Invoice Number toMail Payment with Invoice Stub To
SunTrust Bank
Moody's Investors Service, Inc.
Transit Routing #061000104
P.O. BOX 102597
ACH #061000104
ATLANTA, GEORGIA 30368-0597
Moody's Account #8801939847
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For Customers wiring outside the U.S.: Swift Code:SNTRUS3A
PAYMENT DUE UPON RECEIPT
Moody's Investors Service, Inc.
7WTC AT 250 GREENWICH STREET
NEW YORK, NY 10007
USA
Invoice No.:P0114148
Invoice Date:April 23, 2014
Invoice Supporting Detail
For Professional Services:
Local Governments, Initial Fee:USD10,500
USD 3,755,000 OAK PARK HEIGHTS (CITY OF) MN-City of Oak Park Heights MN, OAK USD10,500
PARK HEIGHTS (CITY OF) MN-City of Oak Park Heights MN, General Obligation Bonds,
Series 2014A
Total:USD10,500
Page 2 of 2
Invoice
DateInvoice #
5/21/2014439
6400 Flying Cloud Drive
Suite 212
Minneapolis, MN 55344
Client Name
Northland Securities
45 South 7th Street, Suite 2000
Minneapolis, MN 55402
Due Date
5/21/2014
ItemDescriptionAmount
Pricing OpinionCity of Oak Park Heights, MN - GO Bonds, Series 2014A2,750.00
If funds are to be wired or ACH use the following instructions:
Total
$2,750.00
Routing Number - 091017060
Crown Bank, 6600 France Avenue S., Suite 125, Edina, MN 55435
Credit to Blue Rose Capital Advisors Accnt #1116607 * Please reference invoice number
Payments/Credits
$0.00
If paying by check use the following instructions:
Pay to the order of:
Blue Rose Capital Advisors, Inc.
6400 Flying Cloud Drive, Suite 212
Minneapolis, MN 55344
Balance Due
$2,750.00
Tax ID: 45-2385747
Questions concerning this invoice? Call: Lori Collier @ 952-746-6050
Final
CityofOakParkHeights,Minneosta
$3,775,000GeneralObligationBonds,Series2014A
TotalIssueSourcesAndUses
Dated06/01/2014|Delivered06/05/2014
StreetUtilityIssue
ImprovementsImrpovementsSummary
SourcesOfFunds
ParAmountofBonds$2,375,000.00$1,400,000.00$3,775,000.00
ReofferingPremium70,275.9041,412.70111,688.60
AccruedInterestfrom06/01/2014to06/05/2014595.00350.56945.56
TotalSources$2,445,870.90$1,441,763.26$3,887,634.16
UsesOfFunds
DeposittoProjectConstructionFund2,340,042.001,376,762.003,716,804.00
DeposittoCapitalizedInterest(CIF)Fund54,789.9832,264.4687,054.44
TotalUnderwriter'sDiscount(1.450%)34,437.5020,300.0054,737.50
CostsofIssuance15,914.079,380.9325,295.00
RoundingAmount92.352,705.312,797.66
DeposittoDebtServiceFund595.00350.56945.56
TotalUses$2,445,870.90$1,441,763.26$3,887,634.16
2014A|IssueSummary|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
$3,775,000GeneralObligationBonds,Series2014A
DebtServiceSchedule
DatePrincipalCouponInterestTotalP+IFiscalTotal
06/05/2014-----
12/15/2014--45,859.4445,859.4445,859.44
06/15/2015--42,550.0042,550.00-
12/15/2015165,000.002.000%42,550.00207,550.00250,100.00
06/15/2016--40,900.0040,900.00-
12/15/2016400,000.002.000%40,900.00440,900.00481,800.00
06/15/2017--36,900.0036,900.00-
12/15/2017400,000.002.000%36,900.00436,900.00473,800.00
06/15/2018--32,900.0032,900.00-
12/15/2018400,000.002.000%32,900.00432,900.00465,800.00
06/15/2019--28,900.0028,900.00-
12/15/2019375,000.002.000%28,900.00403,900.00432,800.00
06/15/2020--25,150.0025,150.00-
12/15/2020375,000.002.000%25,150.00400,150.00425,300.00
06/15/2021--21,400.0021,400.00-
12/15/2021350,000.002.000%21,400.00371,400.00392,800.00
06/15/2022--17,900.0017,900.00-
12/15/2022350,000.002.000%17,900.00367,900.00385,800.00
06/15/2023--14,400.0014,400.00-
12/15/2023325,000.003.000%14,400.00339,400.00353,800.00
06/15/2024--9,525.009,525.00-
12/15/2024325,000.003.000%9,525.00334,525.00344,050.00
06/15/2025--4,650.004,650.00-
12/15/2025310,000.003.000%4,650.00314,650.00319,300.00
Total$3,775,000.00-$596,209.44$4,371,209.44-
DateAndTermStructure
Dated6/01/2014
DeliveryDate6/05/2014
FirstCouponDate12/15/2014
Firstavailablecalldate12/15/2021
CallPrice100.0000000%
AccruedInterestfrom06/01/2014to06/05/2014945.56
YieldStatistics
BondYearDollars$24,717.36
AverageLife6.548Years
AverageCoupon2.4121080%
NetInterestCost(NIC)2.1816987%
TrueInterestCost(TIC)2.1453032%
AllInclusiveCost(AIC)2.2558723%
IRSForm8038
NetInterestCost1.9002463%
WeightedAverageMaturity6.547Years
BondYieldforArbitragePurposes1.7840095%
2014A|IssueSummary|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
$3,775,000GeneralObligationBonds,Series2014A
NetDebtServiceSchedule
Fiscal
DatePrincipalCouponInterestTotalP+ICIFNetNewD/STotal
06/05/2014-------
12/15/2014--45,859.4445,859.44(45,859.44)(0.00)(0.00)
06/15/2015--42,550.0042,550.00(42,140.56)409.44-
12/15/2015165,000.002.000%42,550.00207,550.00-207,550.00207,959.44
06/15/2016--40,900.0040,900.00-40,900.00-
12/15/2016400,000.002.000%40,900.00440,900.00-440,900.00481,800.00
06/15/2017--36,900.0036,900.00-36,900.00-
12/15/2017400,000.002.000%36,900.00436,900.00-436,900.00473,800.00
06/15/2018--32,900.0032,900.00-32,900.00-
12/15/2018400,000.002.000%32,900.00432,900.00-432,900.00465,800.00
06/15/2019--28,900.0028,900.00-28,900.00-
12/15/2019375,000.002.000%28,900.00403,900.00-403,900.00432,800.00
06/15/2020--25,150.0025,150.00-25,150.00-
12/15/2020375,000.002.000%25,150.00400,150.00-400,150.00425,300.00
06/15/2021--21,400.0021,400.00-21,400.00-
12/15/2021350,000.002.000%21,400.00371,400.00-371,400.00392,800.00
06/15/2022--17,900.0017,900.00-17,900.00-
12/15/2022350,000.002.000%17,900.00367,900.00-367,900.00385,800.00
06/15/2023--14,400.0014,400.00-14,400.00-
12/15/2023325,000.003.000%14,400.00339,400.00-339,400.00353,800.00
06/15/2024--9,525.009,525.00-9,525.00-
12/15/2024325,000.003.000%9,525.00334,525.00-334,525.00344,050.00
06/15/2025--4,650.004,650.00-4,650.00-
12/15/2025310,000.003.000%4,650.00314,650.00-314,650.00319,300.00
Total$3,775,000.00-$596,209.44$4,371,209.44(88,000.00)$4,283,209.44-
2014A|IssueSummary|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
$3,775,000GeneralObligationBonds,Series2014A
PricingSummary
Maturity
MaturityTypeofBondCouponYieldValuePriceDollarPrice
12/15/2015SerialCoupon2.000%0.500%165,000.00102.280%168,762.00
12/15/2016SerialCoupon2.000%0.700%400,000.00103.251%413,004.00
12/15/2017SerialCoupon2.000%0.900%400,000.00103.811%415,244.00
12/15/2018SerialCoupon2.000%1.200%400,000.00103.515%414,060.00
12/15/2019SerialCoupon2.000%1.400%375,000.00103.180%386,925.00
12/15/2020SerialCoupon2.000%1.600%375,000.00102.469%384,258.75
12/15/2021SerialCoupon2.000%1.850%350,000.00101.049%353,671.50
12/15/2022SerialCoupon2.000%2.000%350,000.00100.000%c350,000.00
12/15/2023SerialCoupon3.000%2.150%325,000.00105.878%c344,103.50
12/15/2025Term1Coupon3.000%2.500%635,000.00103.411%c656,659.85
Total---$3,775,000.00--$3,886,688.60
BidInformation
ParAmountofBonds$3,775,000.00
ReofferingPremiumor(Discount)111,688.60
GrossProduction$3,886,688.60
TotalUnderwriter'sDiscount(1.450%)$(54,737.50)
Bid(101.509%)3,831,951.10
AccruedInterestfrom06/01/2014to06/05/2014945.56
TotalPurchasePrice$3,832,896.66
BondYearDollars$24,717.36
AverageLife6.548Years
AverageCoupon2.4121080%
NetInterestCost(NIC)2.1816987%
TrueInterestCost(TIC)2.1453032%
2014A|IssueSummary|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
$3,775,000GeneralObligationBonds,Series2014A
ProofofPremiumBondSelectionofCallDates/Prices
PVat
MaturityCallDateCallPriceBondYieldLowest?
12/15/2023--359,592.41No
12/15/202312/15/2021100.000%352,829.13Yes
12/15/2025--712,106.85No
12/15/202512/15/2021100.000%689,373.83Yes
2014A|IssueSummary|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
$3,775,000GeneralObligationBonds,Series2014A
ProofofD/SforArbitragePurposes
DatePrincipalInterestTotal
06/05/2014---
12/15/2014-45,859.4445,859.44
06/15/2015-42,550.0042,550.00
12/15/2015165,000.0042,550.00207,550.00
06/15/2016-40,900.0040,900.00
12/15/2016400,000.0040,900.00440,900.00
06/15/2017-36,900.0036,900.00
12/15/2017400,000.0036,900.00436,900.00
06/15/2018-32,900.0032,900.00
12/15/2018400,000.0032,900.00432,900.00
06/15/2019-28,900.0028,900.00
12/15/2019375,000.0028,900.00403,900.00
06/15/2020-25,150.0025,150.00
12/15/2020375,000.0025,150.00400,150.00
06/15/2021-21,400.0021,400.00
12/15/20211,310,000.0021,400.001,331,400.00
06/15/2022-3,500.003,500.00
12/15/2022350,000.003,500.00353,500.00
Total$3,775,000.00$510,259.44$4,285,259.44
2014A|IssueSummary|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
$3,775,000GeneralObligationBonds,Series2014A
ProofOfBondYield@1.7840095%
Cumulative
DateCashflowPVFactorPresentValuePV
06/05/2014-1.0000000x--
12/15/201445,859.440.9906699x45,431.5745,431.57
06/15/201542,550.000.9819112x41,780.3287,211.89
12/15/2015207,550.000.9732300x201,993.88289,205.78
06/15/201640,900.000.9646255x39,453.18328,658.96
12/15/2016440,900.000.9560971x421,543.19750,202.15
06/15/201736,900.000.9476440x34,968.06785,170.21
12/15/2017436,900.000.9392657x410,365.201,195,535.41
06/15/201832,900.000.9309615x30,628.631,226,164.04
12/15/2018432,900.000.9227307x399,450.121,625,614.16
06/15/201928,900.000.9145727x26,431.151,652,045.31
12/15/2019403,900.000.9064868x366,130.012,018,175.32
06/15/202025,150.000.8984724x22,596.582,040,771.90
12/15/2020400,150.000.8905288x356,345.102,397,116.99
06/15/202121,400.000.8826555x18,888.832,416,005.82
12/15/20211,331,400.000.8748517x1,164,777.613,580,783.43
06/15/20223,500.000.8671170x3,034.913,583,818.34
12/15/2022353,500.000.8594507x303,815.823,887,634.16
Total$4,285,259.44-$3,887,634.16-
DerivationOfTargetAmount
ParAmountofBonds$3,775,000.00
ReofferingPremiumor(Discount)111,688.60
AccruedInterestfrom06/01/2014to06/05/2014945.56
OriginalIssueProceeds$3,887,634.16
2014A|IssueSummary|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
$3,775,000GeneralObligationBonds,Series2014A
DerivationOfForm8038YieldStatistics
IssuanceIssuance
MaturityValuePricePRICEExponentBondYears
06/05/2014-----
12/15/2015165,000.00102.280%168,762.001.5277778x257,830.83
12/15/2016400,000.00103.251%413,004.002.5277778x1,043,982.33
12/15/2017400,000.00103.811%415,244.003.5277778x1,464,888.56
12/15/2018400,000.00103.515%414,060.004.5277778x1,874,771.67
12/15/2019375,000.00103.180%386,925.005.5277778x2,138,835.42
12/15/2020375,000.00102.469%384,258.756.5277778x2,508,355.73
12/15/2021350,000.00101.049%353,671.507.5277778x2,662,360.46
12/15/2022350,000.00100.000%350,000.008.5277778x2,984,722.22
12/15/2023325,000.00105.878%344,103.509.5277778x3,278,541.68
12/15/2024325,000.00103.411%336,085.7510.5277778x3,538,236.09
12/15/2025310,000.00103.411%320,574.1011.5277778x3,695,506.99
Total$3,775,000.00-$3,886,688.60-$25,448,031.97
IRSForm8038
WeightedAverageMaturity=BondYears/IssuePrice6.547Years
TotalInterestfromDebtService596,209.44
AccruedInterestfrom06/01/2014to06/05/2014(945.56)
Reoffering(Premium)orDiscount(111,688.60)
TotalInterest483,575.28
NIC=Interest/(IssuePrice*AverageMaturity)1.9002463%
BondYieldforArbitragePurposes1.7840095%
2014A|IssueSummary|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
$3,775,000GeneralObligationBonds,Series2014A
DetailCostsOfIssuance
Dated06/01/2014|Delivered06/05/2014
COSTSOFISSUANCEDETAIL
BondCounsel$7,500.00
RatingAgencyFee$10,000.00
Miscellaneous$185.00
PayingAgent/Registrar$4,860.00
PricingOpinion$2,750.00
TOTAL$25,295.00
2014A|IssueSummary|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
GeneralObligationBonds,Series2014A-StreetImprovementPortion
DebtServiceSchedule
DatePrincipalCouponInterestTotalP+IFiscalTotal
06/05/2014-----
12/15/2014--28,857.5028,857.5028,857.50
06/15/2015--26,775.0026,775.00-
12/15/2015105,000.002.000%26,775.00131,775.00158,550.00
06/15/2016--25,725.0025,725.00-
12/15/2016255,000.002.000%25,725.00280,725.00306,450.00
06/15/2017--23,175.0023,175.00-
12/15/2017250,000.002.000%23,175.00273,175.00296,350.00
06/15/2018--20,675.0020,675.00-
12/15/2018250,000.002.000%20,675.00270,675.00291,350.00
06/15/2019--18,175.0018,175.00-
12/15/2019235,000.002.000%18,175.00253,175.00271,350.00
06/15/2020--15,825.0015,825.00-
12/15/2020235,000.002.000%15,825.00250,825.00266,650.00
06/15/2021--13,475.0013,475.00-
12/15/2021220,000.002.000%13,475.00233,475.00246,950.00
06/15/2022--11,275.0011,275.00-
12/15/2022220,000.002.000%11,275.00231,275.00242,550.00
06/15/2023--9,075.009,075.00-
12/15/2023205,000.003.000%9,075.00214,075.00223,150.00
06/15/2024--6,000.006,000.00-
12/15/2024205,000.003.000%6,000.00211,000.00217,000.00
06/15/2025--2,925.002,925.00-
12/15/2025195,000.003.000%2,925.00197,925.00200,850.00
Total$2,375,000.00-$375,057.50$2,750,057.50-
DateAndTermStructure
Dated6/01/2014
DeliveryDate6/05/2014
FirstCouponDate12/15/2014
Firstavailablecalldate12/15/2021
CallPrice100.0000000%
AccruedInterestfrom06/01/2014to06/05/2014595.00
YieldStatistics
BondYearDollars$15,543.47
AverageLife6.545Years
AverageCoupon2.4129583%
NetInterestCost(NIC)2.1823895%
TrueInterestCost(TIC)2.1459506%
AllInclusiveCost(AIC)2.2565749%
IRSForm8038
NetInterestCost1.9007930%
WeightedAverageMaturity6.545Years
BondYieldforArbitragePurposes1.7840095%
2014A|StreetImprovements|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
Final
CityofOakParkHeights,Minneosta
GeneralObligationBonds,Series2014A-UtilityImprovementPortion
DebtServiceSchedule
DatePrincipalCouponInterestTotalP+IFiscalTotal
06/05/2014-----
12/15/2014--17,001.9417,001.9417,001.94
06/15/2015--15,775.0015,775.00-
12/15/201560,000.002.000%15,775.0075,775.0091,550.00
06/15/2016--15,175.0015,175.00-
12/15/2016145,000.002.000%15,175.00160,175.00175,350.00
06/15/2017--13,725.0013,725.00-
12/15/2017150,000.002.000%13,725.00163,725.00177,450.00
06/15/2018--12,225.0012,225.00-
12/15/2018150,000.002.000%12,225.00162,225.00174,450.00
06/15/2019--10,725.0010,725.00-
12/15/2019140,000.002.000%10,725.00150,725.00161,450.00
06/15/2020--9,325.009,325.00-
12/15/2020140,000.002.000%9,325.00149,325.00158,650.00
06/15/2021--7,925.007,925.00-
12/15/2021130,000.002.000%7,925.00137,925.00145,850.00
06/15/2022--6,625.006,625.00-
12/15/2022130,000.002.000%6,625.00136,625.00143,250.00
06/15/2023--5,325.005,325.00-
12/15/2023120,000.003.000%5,325.00125,325.00130,650.00
06/15/2024--3,525.003,525.00-
12/15/2024120,000.003.000%3,525.00123,525.00127,050.00
06/15/2025--1,725.001,725.00-
12/15/2025115,000.003.000%1,725.00116,725.00118,450.00
Total$1,400,000.00-$221,151.94$1,621,151.94-
DateAndTermStructure
Dated6/01/2014
DeliveryDate6/05/2014
FirstCouponDate12/15/2014
Firstavailablecalldate12/15/2021
CallPrice100.0000000%
AccruedInterestfrom06/01/2014to06/05/2014350.56
YieldStatistics
BondYearDollars$9,173.89
AverageLife6.553Years
AverageCoupon2.4106673%
NetInterestCost(NIC)2.1805283%
TrueInterestCost(TIC)2.1442062%
AllInclusiveCost(AIC)2.2546818%
IRSForm8038
NetInterestCost1.8993199%
WeightedAverageMaturity6.553Years
BondYieldforArbitragePurposes1.7840095%
2014A|UtilityImrpovements|4/22/2014|2:51PM
NorthlandSecuritiesInc.
PublicFinance
FINAL OFFICIAL STATEMENT DATED APRIL 28, 2014
NIBEO
EW SSUEOOK NTRY NLY
BQMURAa3
ANK UALIFIEDOODYS NDERLYING ATING
With respect to the $3,775,000 General Obligation Bonds, Series 2014A, dated June 1, 2014 (the Bonds or the Issue) in the opinion of Eckberg,
Lammers, Briggs, Wolff & Vierling, PLLP, Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decisions, at the time of
their issuance and delivery to the original purchaser, and assuming compliance with certain covenants, interest on the Bonds is excluded from gross income
for purposes of United States income tax and, to the same extent, from taxable net income of individuals, estates and trusts for purposes of State of
Minnesota income tax (other than Minnesota franchise taxes measured by income and imposed on corporations and financial institutions). Interest is not an
item of tax preference for purposes of the alternative minimum tax imposed on individuals and corporations; however, interest on the Bonds is taken into
account in determining adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on corporations. No opinion will
be expressed by Bond Counsel regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Bonds or arising with
respect to ownership of the Bonds. See Tax Exemption herein for additional information.
CITY OF OAK PARK HEIGHTS, MINNESOTA
$3,775,000
General Obligation Bonds, Series 2014A
Dated Date: June 1, 2014 Interest Due: Each June 15 and December 15
Commencing December 15, 2014
Amount Rate Maturity Yield Price Amount Rate Maturity Yield Price
$165,000 2.00% 12/15/15 .50% 102.280 $375,000 2.00% 12/15/20 1.60% 102.469
400,000 2.00 12/15/16 .70 103.251 350,000 2.00 12/15/21 1.85 101.049
400,000 2.00 12/15/17 .90 103.811 350,000 2.00 12/15/22 2.00 100.000
*
105.878
400,000 2.00 12/15/18 1.20 103.515 325,000 3.00 12/15/23 2.15
*
12/15/25 103.411
375,000 2.00 12/15/19 1.40 103.180 635,000 3.00 2.50
The General Obligation Bonds, Series 2014A (the Bonds or the Issue) are being issued by the City of Oak Park Heights, Minnesota
(the City or the Issuer) pursuant to Minnesota Statutes, Chapters 429, 444 and 475, as amended. Proceeds of the Bonds will be used to
finance street and utility improvements and to pay costs associated with issuance of the Bonds. See Authority and Purpose herein for
additional information.
The Bonds are valid and binding general obligations of the City and are payable from special assessments against benefited properties and
net revenues of the water utility system. The full faith and credit of the City is also pledged to their payment. In the event of any deficiency
in the Debt Service Account established for this Issue, the City has validly obligated itself to levy additional ad valorem taxes upon all of
the taxable property within the City, without limitation of amount. See Security/Sources and Uses of Funds herein for additional
information.
The Bonds maturing on December 15, 2022 and thereafter are subject to redemption, in whole or in part, on December 15, 2021 and on any
date thereafter at a price of par plus accrued interest.
Principal due with respect to the Bonds is payable annually on December 15, commencing December 15, 2015. Interest due with respect to
the Bonds is payable semiannually on June 15 and December 15, commencing December 15, 2014. The Bonds will be registered in the
name of Cede & Co., as nominee of The Depository Trust Company, New York, New York. Individual purchases will be made in book-
entry form only, in the principal amount of $5,000 or any whole multiple thereof. Purchasers will not receive physical delivery of Bonds.
See Book-Entry System in Description of the Bonds herein for additional information. The Paying Agent/Registrar will be Northland
.
Trust Services Inc., Minneapolis, Minnesota
*
Bonds priced to par call.
Refer to the Mandatory Redemption section within the Description of Bonds on page 7 of this Official Statement.
DEBT SERVICE AND CUSIP NUMBERS
City of Oak Park Heights, Minnesota
$3,775,000
General Obligation Bonds, Series 2014A
Cusip
Base
DatePrincipalCouponInterestTotal P+IFiscal Total671562
06/05/2014
12/15/201445,859.4445,859.4445,859.44
06/15/201542,550.0042,550.00
12/15/2015165,000.002.000%42,550.00207,550.00250,100.00HV1
06/15/201640,900.0040,900.00
12/15/2016400,000.002.000%40,900.00440,900.00481,800.00HW9
06/15/201736,900.0036,900.00
12/15/2017400,000.002.000%36,900.00436,900.00473,800.00HX7
06/15/201832,900.0032,900.00
12/15/2018400,000.002.000%32,900.00432,900.00465,800.00HY5
06/15/201928,900.0028,900.00
12/15/2019375,000.002.000%28,900.00403,900.00432,800.00HZ2
06/15/202025,150.0025,150.00
12/15/2020375,000.002.000%25,150.00400,150.00425,300.00JA5
06/15/202121,400.0021,400.00
12/15/2021350,000.002.000%21,400.00371,400.00392,800.00JB3
06/15/202217,900.0017,900.00
12/15/2022350,000.002.000%17,900.00367,900.00385,800.00JC1
06/15/202314,400.0014,400.00
12/15/2023325,000.003.000%14,400.00339,400.00353,800.00JD9
06/15/20249,525.009,525.00
12/15/2024325,000.003.000%9,525.00334,525.00344,050.00
06/15/20254,650.004,650.00
12/15/2025310,000.003.000%4,650.00314,650.00319,300.00JF4
Total$3,775,000.00$596,209.44$4,371,209.44
Dated6/01/2014
Delivery Date6/05/2014
First Coupon Date12/15/2014
First available call date12/15/2021
Net Interest Cost (NIC)2.1816987%
True Interest Cost (TIC)2.1453032%
TABLE OF CONTENTS
Page
SUMMARY OF OFFERING .....................................................................................................................................3
PRINCIPAL CITY OFFICIALS ................................................................................................................................4
AUTHORITY AND PURPOSE .................................................................................................................................5
SECURITY/SOURCES AND USES OF FUNDS .....................................................................................................5
DESCRIPTION OF THE BONDS .............................................................................................................................6
ORIGINAL ISSUE PREMIUM .................................................................................................................................8
FULL CONTINUING DISCLOSURE ......................................................................................................................9
UNDERWRITING .....................................................................................................................................................9
FUTURE FINANCING..............................................................................................................................................9
LITIGATION .............................................................................................................................................................9
CERTIFICATION ......................................................................................................................................................9
LEGALITY ..............................................................................................................................................................10
TAX EXEMPTION ..................................................................................................................................................10
GENERAL INFORMATION ..................................................................................................................................12
MINNESOTA VALUATIONS; PROPERTY TAX CLASSIFICATIONS .............................................................19
ECONOMIC AND FINANCIAL INFORMATION ................................................................................................23
SUMMARY OF DEBT AND DEBT STATISTICS ................................................................................................26
APPENDIX A PROPOSED FORM OF LEGAL OPINION
APPENDIX B PROPOSED FORM OF CONTINUING DISCLOSURE UNDERTAKING
APPENDIX C CITYS FINANCIAL STATEMENT
THE BONDS ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF ACCEPTED BY THE
UNDERWRITER(S) NAMED ON THE FRONT COVER OF THIS OFFICIAL STATEMENT AND SUBJECT TO AN
OPINION AS TO VALIDITY OF THE BONDS BY BOND COUNSEL. SUBJECT TO APPLICABLE SECURITIES
LAWS AND PREVAILING MARKET CONDITIONS, THE UNDERWRITER(S) INTENDS BUT IS NOT OBLIGATED,
TO AFFECT SECONDARY MARKET TRADING FOR THE BONDS. CLOSING DATE IS JUNE 5, 2014.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERS
MADE HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CITY OR THE UNDERWRITER(S). NEITHER THE
DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE CITY SINCE THE DATE HEREOF. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR
IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE INFORMATION SET
FORTH HEREIN HAS BEEN OBTAINED FROM THE CITY AND OTHER SOURCES WHICH ARE BELIEVED TO
BE RELIABLE, BUT IT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS BY, AND IS NOT TO BE
CONSTRUED AS A REPRESENTATION BY, THE UNDERWRITER(S).
2
SUMMARY OF OFFERING
City of Oak Park Heights, Minnesota
$3,775,000
General Obligation Bonds, Series 2014A
(Book-Entry Only)
AMOUNT - $3,775,000
ISSUER - City of Oak Park Heights, Minnesota (the City or the Issuer)
AWARD DATE - Tuesday, April 22, 2014
UNDERWRITER - Northland Securities, Inc. (the Underwriter), 45 South 7th Street, Suite 2000, Minneapolis, Minnesota 55402,
telephone: 612- 851-5900 or 800-851-2920
TYPE OF ISSUE - General Obligation Bonds, Series 2014A (the Bonds or the Issue)
AUTHORITY, PURPOSE
& SECURITY - The General Obligation Bonds, Series 2014A (the Bonds) are being issued by the City of Oak Park Heights,
Minnesota (the City) pursuant to Minnesota Statutes, Chapters 429, 444 and 475, as amended. Proceeds of the
Bonds will be used to finance street and utility improvements and pay costs associated with issuance of the Bonds.
The Bonds are valid and binding general obligations of the City and are payable from special assessments against
benefited properties and net revenues of the water utility system. The full faith and credit of the City is also pledged
to their payment. In the event of any deficiency in the Debt Service Account established for this Issue, the City has
validly obligated itself to levy additional ad valorem taxes upon all of the taxable property within the City, without
limitation of amount. See Authority and Purpose as well as Security/Sources and Uses of Funds herein for additional
information.
DATE OF ISSUE - June 1, 2014
INTEREST PAID - Semiannually on each June 15 and December 15, commencing December 15, 2014, to registered owners of the Bonds
appearing of record in the bond register as of the close of business on the first day (whether or not a business day) of
the calendar month next preceding such interest payment date (the Record Date).
MATURITIES -
12/15/15 $165,000 12/15/18$400,000 12/15/21$350,000 12/15/23 $325,000
12/15/16 400,000 12/15/19375,000 12/15/22350,000 635,000
12/15/25
12/15/17 400,000 12/15/20375,000
REDEMPTION - The Bonds maturing on December 15, 2022 and thereafter are subject to redemption, in whole or in part, on
December 15, 2021 and on any date thereafter at a price of par plus accrued interest. See Description of the Bonds
herein for additional information.
BOOK-ENTRY - The Bonds will be issued as fully registered and, when issued, will be registered in the name of Cede & Co., as
nominee of The Depository Trust Company, New York, New York, to which principal and interest payments will be
made. Individual purchases will be made in book-entry form only, in the principal amount of $5,000 or any whole
multiple thereof. Purchasers will not receive physical delivery of the Bonds.
PAYING AGENT/REGISTRAR - Northland Trust Services Inc., Minneapolis, Minnesota
TAX DESIGNATIONS - NOT Private Activity Bonds - The Bonds are not private activity bonds as defined in Section 141 of the Internal
Revenue Code of 1986, as amended (the Code).
Bank Qualified Tax-Exempt Obligations - The City will designate the Bonds as qualified tax-exempt obligations
for purposes of Section 265(b)(3) of the Code.
LEGAL OPINION - Eckberg, Lammers, Briggs, Wolff & Vierling, P.L.L.P., Stillwater, Minnesota (Bond Counsel)
BOND RATING - The City received an underlying rating of Aa3 from Moodys Investors Service (Moodys).
CLOSING - June 5, 2014
PRIMARY CONTACTS - Eric Johnson, City Administrator, City of Oak Park Heights, Minnesota 651-439-4439
Steven Mattson, Executive Vice President, Northland Securities, Inc., 612-851-5919
Refer to the Mandatory Redemption section within the Description of Bonds on page 7 of this Official Statement.
3
CITY OF OAK PARK HEIGHTS, MINNESOTA
PRINCIPAL CITY OFFICIALS
City Council
Elected Officials
NamePositionTerm Expires
Mary McComber Mayor 12/31/16
Mike Liljegren Council Member 12/31/14
Chuck Dougherty Council Member 12/31/16
Mike Runk Council Member 12/31/16
Mark Swenson Council Member 12/31/14
Primary Contacts
Eric A. Johnson City Administrator
Betty Caruso City Finance Director
Mark Vierling Eckberg Lammers Briggs Wolff & Vierling Attorney
BOND COUNSEL
Eckberg, Lammers, Briggs, Wolff & Vierling, P.L.L.P.
Stillwater, Minnesota
UNDERWRITER
Northland Securities, Inc.
Minneapolis, Minnesota
4
AUTHORITY AND PURPOSE
The General Obligation Bonds, Series 2014A (the Bonds or the Issue) are being issued by the City of Oak
Park Heights, Minnesota (the City) pursuant to Minnesota Statutes, Chapters 429, 444 and 475, as amended.
Proceeds from issuance of the Bonds will be used to finance street and utility improvements and pay costs
associated with issuance of the Bonds.
SECURITY/SOURCES AND USES OF FUNDS
Security
The Bonds are valid and binding general obligations of the City and are payable from special assessments against
benefited properties and net revenues of the water utility system. The full faith and credit of the City is also
pledged to their payment. In the event of any deficiency in the Debt Service Account established for this Issue, the
City has validly obligated itself to levy additional ad valorem taxes upon all of the taxable property within the
City, without limitation of amount.
Sources and Uses of Funds
Following are the sources and uses of funds in connection with the issuance of the Bonds.
Sources of Funds
Par Amount of Bonds $3,775,000
Reoffering Premium 111,689
*
Accrued Interest 946
Total Sources of Funds: $3,887,635
Uses of Funds
Deposit to Project Construction Fund $3,716,804
Capitalized Interest 87,054
Costs of Issuance/Underwriters Discount 80,033
Rounding Amount 2,798
946
Total Uses of Funds: $3,887,635
(Remainder of page intentionally left blank)
*
Final closing date is June 5, 2014.
5
DESCRIPTION OF THE BONDS
Details of Certain Terms
The Bonds will be dated, as originally issued, as of June 1, 2014, and will be issued as fully registered Bonds in
the denominations of $5,000 or any integral multiple thereof. Principal, including mandatory redemptions on the
Bonds, will be payable annually on each December 15, commencing December 15, 2015. Interest on the Bond will
be payable semiannually on each June 15 and December 15, commencing December 15, 2014. The Bonds when
issued, will be registered in the name of Cede & Co. (the Registered Holder), as nominee of The Depository
Trust Company, New York, New York (DTC), the initial custodian for the Bonds, to which principal and
interest payments on the Bonds will be made so long as Cede & Co. is the Registered Holder of the Bonds. See
Book-Entry System in Description of the Bonds herein for additional information. So long as the Book-Entry
Only System is used, individual purchases of the Bonds will be made in book-entry form only, in the principal
amount of $5,000 or any integral multiple thereof (Authorized Denominations). Individual purchasers
(Beneficial Owners) of the Bonds will not receive physical delivery of bond certificates, and registration,
exchange, transfer, tender and redemption of the Bonds with respect to Beneficial Owners shall be governed by
the Book-Entry Only System.
So long as the Book-Entry Only System is used, payments from Cede & Co., as the Record Holder, to the
Beneficial Owners shall be governed by the Book-Entry Only System. If the Book-Entry Only System is
discontinued, the principal of and premium, if any, on the Bonds will be payable upon presentation and surrender
at the offices of the Paying Agent and Bond Registrar or a duly appointed successor. Interest on the Bonds will be
paid by check or draft mailed by the Bond Registrar to the registered holders thereof as such appear on the
registration books maintained by the Bond Registrar as of the close of business on the first day (whether or not a
business day) of the calendar month next preceding such interest payment date (the Record Date).
Registration, Transfer and Exchange
So long as the Book-Entry Only System is used, payments from Cede & Co., as the Record Holder, to the
Beneficial Owners shall be governed by the Book-Entry Only System. If the Book-Entry Only System is
discontinued, the Bonds may be transferred upon surrender of the Bonds at the principal office of the Bond
Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or
his or her attorney duly authorized in writing. The Bonds, upon surrender thereof at the principal office of the
Bond Registrar may also be exchanged for other Bonds of the same series, of any authorized denominations
having the same form, terms, interest rates and maturities as the Bonds being exchanged. The Bond Registrar will
require the payment by the Bond holder requesting such exchange or transfer of any tax or governmental charge
required to be paid with respect to such exchange or transfer. The Bond Registrar is not required to (i) issue,
transfer or exchange any Bond during a period beginning at the opening of business fifteen days before any
selection of Bonds of a particular stated maturity for redemption in accordance with the provisions of the Bond
Indenture and ending on the day of the first mailing of the relevant notice of redemption or (ii) to transfer any
Bonds or portion thereof selected for redemption.
Redemption
Optional Redemption
The Bonds maturing on December 15, 2022 and thereafter are subject to redemption, in whole or in part, on
December 15, 2021 and on any date thereafter at a price of par plus accrued interest. If redemption is in part, the
selection of the amounts and maturities of the Bonds to be prepaid shall be at the discretion of the City. Notice of
redemption shall be given by written notice to the registered owner of the Bonds not less than 30 days prior to
such redemption date.
6
Mandatory Redemption
Bonds maturing in the year 2025 shall be redeemed by lot on December 15 at their principal amount, without
premium, plus accrued interest thereon to such redemption date in the following years and principal amounts or, if
less than such amount is then outstanding, an amount equal to the aggregate principal amount of the Bonds then
outstanding.
Term Bond Maturing in 2025
Sinking Fund Aggregate
Payment DatePrincipal Amount
2024$325,000
2025(Maturity)310,000
Book-Entry System
The Depository Trust Company (DTC), New York, NY, will act as securities depository for the Bonds
(the Bonds). The Bonds will be issued as fully-registered securities registered in the name of Cede & Co.
(DTCs partnership nominee) or such other name as may be requested by an authorized representative of DTC.
One fully-registered certificate will be issued for the Bonds, in the aggregate principal amount of such issue, and
will be deposited with DTC.
DTC, the worlds largest securities depository, is a limited-purpose trust company organized under the New York
Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial
Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity
issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTCs
participants (Direct Participants) deposit with DTC. DTC also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in deposited securities, through electronic computerized
book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical
movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation (DTCC). DTCC is the holding company for DTC,
National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered
clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also
available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and
clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly (Indirect Participants). DTC has a Standard & Poors rating of AA+. The DTC Rules
applicable to its Participants are on file with the Securities and Exchange Commission. More information about
DTC can be found at www.dtcc.com and www.dtcc.org.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a
credit for the Bonds on DTCs records. The ownership interest of each actual purchaser of each Bonds
(Beneficial Owner) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners
will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to
receive written confirmations providing details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers
of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is
discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name
of DTCs partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual
7
Beneficial Owners of the Bonds; DTCs records reflect only the identity of the Direct Participants to whose
accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to
time.
Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTCs
practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless
authorized by a Direct Participant in accordance with DTCs MMI Procedures. Under its usual procedures, DTC
mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede &
Co.s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such
other nominee as may be requested by an authorized representative of DTC. DTCs practice is to credit Direct
Participants accounts upon DTCs receipt of funds and corresponding detail information from the City or Agent,
on payable date in accordance with their respective holdings shown on DTCs records. Payments by Participants
to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with Bonds
held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of
such Participant and not of DTC, Agent, or the City, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co.
(or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the
City or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice to the City or Agent. Under such circumstances, in the event that a successor depository is not
obtained, certificates for the Bonds are required to be printed and delivered.
The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor
securities depository). In that event, certificates for the Bonds will be printed and delivered to DTC.
The information in this section concerning DTC and DTCs book-entry system has been obtained from sources
that the City believes to be reliable, but the City of Oak Park Heights takes no responsibility for the accuracy
thereof.
ORIGINAL ISSUE PREMIUM
Bonds maturing in certain years are being issued at a premium to the principal amount payable at maturity. Except
in the case of dealers, which are subject to special rules, Bondholders who acquire Bonds at a premium must,
from time to time, reduce their federal tax bases for the Bonds for purposes of determining gain or loss on the sale
or payment of such Bonds. Premium generally is amortized for federal income and franchise tax purposes on the
basis of a Bondholders constant yield to maturity or to certain call dates with semiannual compounding.
Bondholders who acquire Bonds at a premium might recognize taxable gain upon sale of the Bonds, even if such
Bonds are sold for an amount equal to or less than their original cost. Amortized premium is not deductible for
federal income tax purposes. Bondholders who acquire Bonds at a premium should consult their tax advisors
concerning the calculation of Bond premium and the timing and rate of premium amortization, as well as the state
and local tax consequences of owning and selling Bonds acquired at a premium.
8
FULL CONTINUING DISCLOSURE
In order to assist the Underwriter(s) in complying with SEC Rule 15c2-12 (the Rule), pursuant to a resolution
awarding the Issue and a Continuing Disclosure Certificate (the Certificate) to be executed on behalf of the City
on or before Bond Closing, the City has and will covenant for the benefit of holders of the Bonds to annually
provide certain financial and operating data, relating to the City to the Municipal Securities Rulemaking Board
(MSRB) in an electronic format prescribed by the MSRB, and to provide notices of the occurrence of certain
events enumerated in the Rule to the MSRB. The specific nature of the Certificate, as well as the information to
be contained in the annual report or the notices of material events is set forth in the Continuing Disclosure
Certificate in substantially the form attached hereto as Appendix B. The City has never failed to comply in all
material respects with any previous undertakings under the Rule to provide annual reports or notices of material
events. A failure by the City to comply with the Certificate will not constitute an event of default on the Bonds
(although holders will have an enforceable right to specific performance). Nevertheless, such a failure must be
reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer
before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure
may adversely affect the transferability and liquidity of the Bonds and their market price. Please see Appendix B
Continuing Disclosure Certificate herein for additional information.
UNDERWRITING
The Bonds are being purchased from the City by (the Underwriter). The Underwriter will receive total
compensation of $54,737.50 in connection with the purchase of the Bonds assuming all Bonds are sold at the rates
and yields set forth on the cover page of this Official Statement, which compensation is 1.45% of the par value.
The obligation to make such purchase is subject to certain terms and conditions, the approval of certain legal
matters by counsel and certain other conditions.
FUTURE FINANCING
The City does not anticipate the need to finance any additional general obligation debt within the next twelve
months.
BOND RATING
The City received an underlying rating of Aa3 from Moodys Investors Service (Moodys). No application
was made to any other rating agency for the purpose of obtaining an additional rating on the Bonds. This rating
reflects only the opinion of Moodys and any explanation of the significance of this rating may be obtained only
from Moodys. There is no assurance that a rating will continue for any given period of time, or that such rating
will not be revised or withdrawn, if in the judgment of Moodys, circumstances so warrant. A revision or
withdrawal of the rating may have an adverse affect on the market price of the Bonds. This rating is not a
recommendation to buy, sell or hold the Bonds, and such rating may be subject to revision or withdrawal at any
time by the rating agency.
LITIGATION
As of March 28, 2014 the City is not aware of any threatened or pending litigation that questions the organization
or boundaries of the City or the right of any of its officers to their respective offices or in any manner questioning
their rights and power to execute and deliver the Bonds or otherwise questioning the validity of the Bonds.
CERTIFICATION
The City will furnish a statement to the effect that this Official Statement to the best of their knowledge and
belief, as of the date of sale and the date of delivery, is true and correct in all material respects, and does not
contain any untrue statements of a material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were made, not misleading.
The City has always promptly met all payments of principal and interest on its indebtedness when due.
9
LEGALITY
Legal matters incident to the authorization and issuance of the Bonds are subject to the approving opinion of
Eckberg, Lammers, Briggs, Wolff & Vierling, P.L.L.P., Stillwater, Minnesota as to validity and tax exemption. A
copy of such opinion will be available at the time of the delivery of the Bonds. See Appendix A Proposed Form
of Legal Opinion.
Bond Counsel has not participated in the preparation of this Official Statement and is not passing upon its
accuracy, completeness or sufficiency. Bond Counsel has not examined, nor attempted to examine, or verify, any
of the financial or statistical statements or data contained in this Official Statement, and will express no opinion
with respect thereto.
TAX EXEMPTION
General
In the opinion of Bond Counsel, under federal and Minnesota laws, regulations, rulings and decisions in effect on
the date of issuance of the Bonds, interest on the Bonds is excluded from gross income for federal income tax
purposes and, to the same extent, from taxable net income of individuals, estates and trusts for Minnesota income
tax purposes. Interest on the Bonds is included in taxable income of corporations and financial institutions for
purposes of the Minnesota franchise tax. Certain provisions of the Internal Revenue Code of 1986, as amended
(the Code), however, impose continuing requirements that must be met after the issuance of the Bonds in order
for interest thereon to be and remain excludable from federal gross income and from Minnesota taxable net
income. Noncompliance with such requirements by the City may cause the interest on the Bonds to be includable
in gross income for purposes of federal income taxation and in taxable net income for purposes of Minnesota
income taxation, retroactive to the date of issuance of the Bonds, irrespective in some cases of the date on which
such noncompliance is ascertained. No provision has been made for redemption of or for an increase in the
interest rate on the Bonds in the event that interest on the Bonds becomes includable in federal gross income or
Minnesota taxable income.
Interest on the Bonds is not an item of tax preference includable in alternative minimum taxable income for
purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum
tax applicable to individuals, estates and trusts, but is includable in adjusted current earnings in determining the
federal alternative minimum taxable income of corporations for purposes of the federal alternative minimum tax.
Interest on the Bonds may be includable in the income of a foreign corporation for purposes of the branch profits
tax imposed by Section 884 of the Code and is includable in the net investment income of foreign insurance
companies for purposes of Section 842(b) of the Code. In the case of an insurance company subject to the tax
imposed by Section 831 of the Code, the amount which otherwise would be taken into account as losses incurred
under Section 832(b)(5) of the Code must be reduced by an amount equal to fifteen percent of the interest on the
Bonds that is received or accrued during the taxable year. Section 86 of the Code requires recipients of certain
Social Security and railroad retirement benefits to take into account, in determining the taxability of such benefits,
receipts or accruals of interest on the Bonds.
Passive Investment Income of S Corporations
Passive investment income, including interest on the Bonds, may be subject to federal income taxation under
Section 1375 of the Code for a Subchapter S corporation that has Subchapter C earnings and profits at the close of
the taxable year if greater than twenty-five percent of the gross receipts of such Subchapter S corporation is
passive investment income. Section 265 of the Code denies a deduction for interest on indebtedness incurred or
continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of the holders
interest expense allocated to interest on the Bonds, except with respect to certain financial institutions (within the
meaning of Section 265(b) of the Code).
10
Proposed Changes in Federal and State Tax Law
From time to time, there are Presidential proposals, proposals of various federal committees, and legislative
proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters
referred to herein or adversely affect the marketability or market value of the Bonds or otherwise prevent holders
of the Bonds from realizing the full benefit of the tax exemption of interest on the Bonds. Further, such proposals
may impact the marketability or market value of the Bonds simply by being proposed. No prediction is made
whether such provisions will be enacted as proposed or concerning other future legislation affecting the tax
treatment of interest on the Bonds. In addition, regulatory actions are from time to time announced or proposed
and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could
adversely affect the market value, marketability or tax status of the Bonds. It cannot be predicted whether any
such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or
whether the Bonds would be impacted thereby.
The above is not a comprehensive list of all federal tax consequences that may arise from the receipt of interest on
the Bonds. The receipt of interest on the Bonds may otherwise affect the federal or State of Minnesota income tax
liability of the recipient based on the particular taxes to which the recipient is subject and the particular tax status
of other items or deductions. Bond Counsel expresses no opinion regarding any such consequences. All
prospective purchasers of the Bonds are advised to consult their own tax advisors as to the tax consequences of, or
tax considerations for, purchasing or holding the Bonds.
Qualified Tax-Exempt Obligations
The City will designate the Bonds as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the
Code relating to the ability of financial institutions to deduct from income for federal income tax purposes,
interest expense that is allocable to carrying and acquiring tax-exempt obligations. Qualified tax-exempt
obligations are treated as acquired by a financial institution before August 8, 1986. Interest allocable to such
obligations remains subject to the 20% disallowance under prior law.
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11
CITY OF OAK PARK HEIGHTS, MINNESOTA
GENERAL INFORMATION
Access and Transportation
Oak Park Heights, situated in Washington County, is located in the east central portion of Minnesota. The
City lies within the Seven County Metropolitan Area and is situated approximately 20 miles northeast of the
Twin Cities Metropolitan Area. Access is provided via State Highways 36 and 95 as well as County Roads
5 and 21.
Area
1,958.4 Acres
(3.06 Square Miles)
Population
1970 Census 1,238 2000 Census 3,959
1980 Census 2,591 2010 Census 4,339
*
1990 Census 3,700 4,654
2014 Estimate
Labor Force Data
Comparative average labor force and unemployment rate figures for year-end 2013 and year-end 2012 from the
Minnesota Department of Economic Security, Research and Statistics Office, are listed below. Figures are not
seasonally adjusted and numbers of people are estimated by place of residence.
2013 2012
Civilian Unemployment Civilian Unemployment
Labor ForceRateLabor ForceRate
Washington County 134,931 4.6% 133,730 5.3%
Minneapolis/St. Paul MSA 1,876,212 4.9 1,857,426 5.5
Minnesota 2,977,602 5.1 2,969,366 5.7
1
Income Data
Comparative income levels are listed below for the City of Oak Park Heights, the State of Minnesota and the
United States.
Oak Park Heights State of Minnesota United States
Median Family Income $78,068 $74,032 $64,585
Per Capita Income 27,967 30,656 28,051
City Government
Oak Park Heights is a Minnesota Statutory City with an Optional Plan A form of government. It has a mayor
elected at large for a four-year term and four council members also elected at large for four-year terms. The
professional staff is appointed and consists of an administrator-treasurer, deputy clerk, finance director, attorney,
and engineer.
*
Source: Metropolitan Council.
1
Source: 2008-2012 American Community Survey, U.S. Census Bureau (www.factfinder2.census.gov.com).
12
Municipal Enterprise Services
The Water Utility System has approximately 1,274 municipal connections and one private well. The water
system is served by two elevated storage facilities with a combined 750,000 gallons as well as several wells
that have the capacity to pump 1,850 gallons per minute or 2,664,000 gallons per day. Average demand is
626,000 gallons per day while peak demand reaches 1,454,000 gallons per day.
The 2013 audited net revenues were $406,644 (with depreciation adjustment). The water base rate is $30.70
quarterly for the first 15,000 gallons; $2.55 for 15,001 to 50,000 gallons; $3.05 for 50,001 to 99,000 gallons;
$3.92 for 99,001 to 200,000 and $4.74 per thousand gallons thereafter.
The Sewer Utility System has approximately 1,280 municipal connections and 12 private septic systems. The
sewer system consists of five lift stations and is treated by the Metropolitan Council Waste Treatment Facility.
The 2013 audited net revenues were $219,431 (with depreciation adjustment). The sewage use base charge is
$66.00 quarterly for the first 15,000 gallons; $4.80 for 15,001 to 50,000 gallons; and $5.20 per thousand gallons
thereafter.
The Storm Sewer Utility System had 2013 audited net revenues of $29,842 (with depreciation adjustment).
Bargaining Units/Labor Contracts
The labor unions representing certain City employee groups are shown below.
Employee GroupContract Expiration Date
AFSCME December 31, 2016
Law Enforcement Labor Services December 31, 2016
Minnesota Teamsters #320 December 31, 2016
Employee Pension Programs
The City has 22 full-time and 10 part-time employees. The pension plan currently covers all eligible
employees.
The City participates in contributory pension plans through the Public Employees Retirement Association (PERA)
under Minnesota Statutes, Chapters 353 and 356, which cover all full-time and certain part-time employees.
PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire
Fund (PEPFF), which are cost sharing, multiple-employer retirement plans. Benefits are established by State
Statute and vest after three years of credited service. State Statute requires the City to fund current service pension
cost as it accrues. Defined retirement benefits are based on a members highest average salary for any five
successive years of allowable service, age, and years of credit at termination of service.
PERA issues a publicly available financial report that includes financial statements and required supplementary
information for GERF (formerly PERF) and PEPFF. That report may be obtained at www.mnpera.org, or by
writing to PERA at 60 Empire Drive, #200, St. Paul, MN 55103-2088 or by calling (651) 296-7460 or 1-800-652-
9026.
The City makes annual contributions to the pension plans equal to the amount required by state statutes. GERF
Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.25%, respectively, of
their annual covered salary in 2013. PEPFF members were required to contribute 9.4% of their annual covered
salary in 2013. Effective January1, 2013, State statute requires the City to contribute the following percentages of
annual covered payroll: 11.78% for Basic Plan GERF members, 7.25% for Coordinated Plan GERF members, and
14.4% for PEPFF members.
Audited City contributions to PERA for the past ten years have been as follows:
13
Year Amount Year Amount
2013 $169,212 2008 $136,694
2012 161,070 2007 118,755
2011 158,509 2006 109,520
2010 150,381 2005 94,223
2009 142,076 2004 89,909
Other Postemployment Benefits (OPEB)
In 2009, the City implemented the requirements of GASB Statement No. 45, Accounting and Financial Reporting
by Employers for Postemployment Benefits Other Than Pensions. The City makes available to eligible retirees
and their spouses a single-employer defined benefit healthcare plan. The plan offers medical coverage. The City
does not provide healthcare coverage for retired employees. Rather, it allows employees who separate from City
employment due to retirement or disability, access to the coverage; however, that coverage is paid for at the
former employees expense.
The Citys annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual
required contribution of the employer (ARC), an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis,
is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess)
over a period not to exceed thirty years. The following table shows the Citys OPEB cost, the amount contributed
and the Citys net obligation:
Fiscal Annual Employer Percentage Net OPEB
Year EndedOPEB CostContributionCost ContributedObligation
2013 $32,375 $10,618 32.8% $164,705
2012 31,683 9,742 30.7 142,948
2011 58,548 23,177 39.6 121,007
2010 59,301 17,071 28.8 85,636
As of January 1, 2012, the actuarial accrued liability for benefits was $290,381, all of which was unfunded. The
covered payroll (annual payroll of active employees covered by the plan) was $1,648,748, and the ratio of
unfunded actuarial accrued liability to the covered payroll was 17.6%.
Additional information regarding the Citys OPEB obligations is provided in the Citys Comprehensive Annual
Financial Report, excerpts of which are provided in Appendix C of this Official Statement, with particular
reference to Note 8.
14
Estimated Cash and Investment Balances as of February 28, 2014(unaudited)
Fund Name
General Fund $ 3,166,576
Special Revenue Fund 49,450
Capital Projects Fund 13,211,488
Debt Service Fund 131,552
Enterprise Fund 1,286,478
Agency Fund 241,214
Total Estimated Cash and Investment Balances $ 18,086,758
General Fund Budget Summary
2013 2014
Adopted Adopted
11
Budget2013 Actual Budget $ Change %Change
Revenues:
General Property Taxes $4,603,693$4,433,202 $4,851,896 $248,2035.39%
Intergovernmental Aid 74,04096,587 75,040 1,0001.35
License & Permits 49,85590,910 51,475 1,6203.25
Fines & Forfeits 50,50051,360 45,000 (5,500)(10.89)
Charges for Services 8,680304,403 43,748 35,068404.01
Misc. 106,650111,882 110,650 4,0003.75
Total Revenues $4,893,418$5,088,344 $5,177,809 $284,3915.81%
2013 2014
Amended Adopted
11
Final Budget2013 ActualBudget $ Change %Change
Expenditures:
General Government $1,333,309$1,279,394$1,484,065$150,75611.31%
Public Safety 1,577,7841,437,1411,646,44068,6564.35
Public Works 593,754606,680549,075(44,679)(7.52)
Parks and Rec 153,708135,756154,3566480.42
Trans to other funds 1,868,1601,868,1601,343,873(524,287)(28.06)
Total Expenditures $5,526,713$5,327,131$5,177,809($348,906)(19.51)%
1
Change from 2013 Adopted Budget to 2014 Adopted Budget.
15
Residential Development
There are approximately 835 single-family homes and 1,597 multifamily units located within the City. There was
one single-family dwelling and 62 multifamily units constructed within the past twelve months.
Residential subdivisions constructed within the last three years are as follows:
Total Number of Remaining
Number Lots/Units Lots/Units
Subdivision Nameof Lots/UnitsCompletedAvailable
Carriage House Co-op & Assisted Living 62 62 0
Industrial Park(s)
The City currently does not have an industrial park.
Commercial/Industrial Development
Building construction and commercial/industrial development completed within the past three years have been as
follows:
Description
Name Product/Serviceof Construction
White Castle Fast Food New Construction
Aldi Grocery New Construction
Tire Pros Automotive Service New Construction
Autozone Automotive Retail New Construction
Thomas Grace Construction Construction Services New Construction
McDonalds Fast Food Demolition-Rebuild
Building Permits
Building permits issued for the past ten years and a portion of the current year have been as follows:
Commercial/ Residential Total Total
Industrial Number Number Number Permit
Yearof Permitsof Permitsof PermitsValuation
2014
(as of 02/28/14) 3 2 5 $ 388,500
2013 19 27 46 4,781,710
2012 17 29 46 10,286,247
2011 22 25 47 4,349,066
2010 26 25 51 24,602,625
2009 13 28 41 8,246,979
2008 21 28 49 21,252,879
2007 11 22 33 6,625,764
2006 20 30 50 37,798,231
2005 13 2 15 12,732,475
2004 11 48 59 18,043,522
16
Banking/Financial Institutions
Banking and financial services are provided within the City by the following:
Reported
1
Deposits/Assets
Bank Name
Citizens Community Federal $11,099,000
First State Bank and Trust 58,639,000
TCF National Bank 52,701,000
Education
The City is served by Independent School District No. 834, Stillwater, which operates nine elementary schools,
grades kindergarten through six; one magnet elementary school, grades five and six; two junior high schools,
grades seven through nine; and one senior high school, grades ten through twelve, one alternative learning
center, and one location that provides early childhood special education and family education. Stillwater Area
High School is accredited by the North Central Association. Combined enrollment for the 2013/2014 school year
is approximately 8,337.
Major/Leading Employers
Following are the major/leading employers within the City according to the City:
2
Commercial/Industrial Product/Service
Employees
Andersen Corporation Window Manufacturer 523
VSSABoutwells Landing/McKean Square Senior Community Housing 485
State of Minnesota Correctional Facility Government Correctional Institution 355
Wal-Mart Stores Inc. Retail 261
3
ISD No. 834, Stillwater Public Education 180
Menards Inc. Retail Lumber/Hardware 124
Lowes Retail Lumber/Hardware 110
Xcel Energy Electric Utility 106
Kowalskis Grocery Store 95
Stillwater Motors Auto Dealership/Service Repair 92
Total Estimated Top Employers 2,331
1
Reported deposits for banks are as of June 30, 2013, as obtained from the Federal Deposit Insurance Corporation (FDIC) website at
www2.fdic.gov.
2
Includes full-time, part-time and seasonal employees.
3
Includes only employees in Oak Park Heights. Total employment at ISD 834 is 1,039.
17
Largest Taxpayers
Following are the ten largest taxpayers within the City as reported by Washington County:
2013/2014 Percent to
Total Tax
Taxable 2013/2014
Capacity
Market Tax
1
NameServiceValueCapacity($10,261,262)
Xcel Energy Utility $207,639,000 $ 4,149,138 40.43%
VSSA Boutwells Landing LLC Residential 44,032,800 550,409 5.36
Walmart Commercial 14,776,500 294,780 2.87
Northmarq Residential 12,484,200 248,934 2.43
Menards Commercial 10,335,600 205,962 2.01
Lowes Commercial 9,453,000 188,310 1.84
OP Stillwater LLC Commercial 8,779,800 174,846 1.70
St. Croix Mall LLC Commercial 8,000,000 159,250 1.55
W A T E Enterprises Inc. Commercial 6,318,000 125,610 1.22
Raduenz Dealership LLC Commercial 5,179,500 102,840
1.00
$6,200,079 60.42%
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1
Before tax increment and fiscal disparity adjustments.
18
MINNESOTA VALUATIONS; PROPERTY TAX CLASSIFICATIONS
Market Value
State Law defines the market value of real property as the usual selling price at the place where the property to
which the term is applied shall be at the time of assessment; being the price which could be obtained at a private
sale or an auction sale, if it is determined by the assessor that the price from the auction sale represents an arm's-
length transaction. The assessor uses sales and market value income trends to estimate the value of property in an
open market transaction. This value is also called estimated market value. This value is set on January 2 of each
year. Property taxes levied each year are based on the value of property on January 2 of the preceding year.
According to Minnesota Statutes, Chapter 273, all real property subject to taxation is to be appraised at maximum
intervals of five years.
Taxable Market Value
The taxable market value is the amount used for calculating property taxes. The taxable market value may differ
from the estimated market value due to the application of special programs that exclude value from taxation.
These programs currently include, but are not limited to, Homestead Market Value Exclusion and Green Acres.
Market Value Exclusion
In 2011, the State Legislature eliminated the Homestead Market Value Credit. The Credit was an amount paid by
the State to local taxing jurisdictions to reduce taxes paid by homesteaded property. The Credit has been replaced
by a Homestead Market Value Exclusion. The Exclusion reduces the taxable market value (beginning with taxes
payable 2012) of a jurisdiction by excluding a portion of the value of homesteaded property from taxation. For a
homestead valued at $76,000 or less, the exclusion is 40 percent of market value, yielding a maximum exclusion
of $30,400 at $76,000 of market value. For a homestead valued between $76,000 and $413,800, the exclusion is
$30,400 minus nine percent of the valuation over $76,000. For a homestead valued at $413,800 or more, there is
no valuation exclusion.
Sales Ratio
The Minnesota Department of Revenue conducts the Assessment Sales Ratio Study to compare real estate sales
prices to local assessor valuations. The State uses the study results to ensure consistency in property assessments
across the state. There are three different sales ratio studies that cover three distinct time periods. The 12-month
study includes sales that occur from October 1st of a given year to September 30th of the following year and are
compared to market values used for property taxation. The median ratio from the 12-month study is the sales ratio
used to calculate indicated and economic market values.
Economic and Indicated Market Value
Economic market value and indicated market value reflect adjustments made to account for the effects of the
sales ratio. The economic market value is determined by dividing the estimated market value of the jurisdiction by
the sales ratio. Economic market value provides an estimation of the full value of property if it were valued at
100% of its value in the marketplace (prior to the application of legislatively mandated exclusions). The indicated
market value is determined by dividing the taxable market value of the jurisdiction by the sales ratio. This value
represents an estimation of the full value of property for taxation, after the deduction of legislative exclusions.
Net Tax Capacity
Property taxes are calculated on the basis of the net tax capacity value. Net tax capacity is calculated by
multiplying the taxable market value of a parcel by the statutory class rate for the use classification of the
property. These class rates are subject to revisions by the State Legislature. The table following this section
contains current and historical class rates for primary property classifications.
19
Tax Cycle
Minnesota local government ad valorem property taxes are extended and collected by the various counties within
the state. The process begins in the fall of every year with the certification, to the county auditor, of all local
taxing districts property tax levies. Local tax rates are calculated by dividing each taxing districts levy by its net
tax capacity. One percentage point of local tax rate represents one dollar of tax per $100 net tax capacity. A list of
taxes due is then prepared by the county auditor and turned over to the county treasurer on or before the first
Monday in January.
The county treasurer is responsible for collecting all property taxes within the county. Real estate and personal
property tax statements (excluding manufactured homes) are to be mailed out no later than March 31, and
manufactured home property tax statements no later than July 15. The due dates for payment of real and personal
property taxes (excluding manufactured homes) are one-half on or before May 15 (May 31 for resorts) and one-
half on or before October 15 (November 15 for farm property). Personal property taxes for manufactured homes
become due one-half on or before August 31 and one-half on or before November 15. Delinquent property taxes
are penalized at various rates depending on the type of property and the length of delinquency.
Tax Levies for General Obligation Bonds (Minnesota Statutes, Section 475.61)
State Law requires the governing body of any municipality issuing general obligations, prior to delivery of the
obligations, to levy by resolution a direct general ad valorem tax upon all taxable property in the municipality to
be spread upon the tax rolls for each year of the term of the obligations. The tax levies for all years shall be
specified and such that if collected in full will, together with estimated collections of special assessments and
other revenues pledged for the payment of said obligations, produce at least five percent in excess of the amount
needed to meet the principal and interest payments on the obligations when due.
Such resolution shall irrevocably appropriate the taxes so levied and any special assessments or other revenues so
pledged to the municipalitys debt service fund or a special debt service fund or account created for the payment
of one or more issues of obligations.
The governing body may, at its discretion, at any time after the obligations have been authorized, adopt a
resolution levying only a portion of such taxes, to be filed, assessed, extended, collected and remitted, and the
amount therein levied shall be credited against the tax required to be levied prior to delivery of the obligations.
The recording officer of the municipality shall file in the office of the county auditor of each county in which any
part of the municipality is located a certified copy of the resolution, together with full information regarding the
obligations for which the tax is levied. No further action by the municipality is required to authorize the
extension, assessment and collection of the tax, but the municipalitys liability on the obligations is not limited
thereto and its governing body shall levy and cause to be extended, assessed and collected any additional taxes
found necessary for full payment of the principal and interest. The auditor shall annually assess and extend upon
the tax rolls the amount specified for such year in the resolution, unless the amount has been reduced as
authorized below or, if the municipality is located in more than one county, the portion thereof that bears the same
ratio to the whole amount as the tax capacity value of taxable property in that part of the municipality located in
the county bears to the tax capacity value of all taxable property in the municipality.
Tax levies so made and filed shall be irrevocable, except that if the governing body in any year makes an
irrevocable appropriation to the debt service fund of moneys actually on hand or if there is on hand any excess
amount in the debt service fund, the recording officer may certify to the county auditor the fact and amount
thereof and the auditor shall reduce by the amount so certified the amount otherwise to be included in the rolls
next thereafter prepared.
All such taxes shall be collected and remitted to the municipality by the county treasurer as other taxes are
collected and remitted, and shall be used only for payment of the obligations on account of that levied or to repay
advances from other funds used for such payments, except that any surplus remaining in the debt service fund
when the obligations and interest thereon are paid may be appropriated to any other general purpose by the
municipality.
20
Levy Limits
The State Legislature periodically enacts limitations on the ability of cities and counties to levy property taxes.
Levy limits were reenacted in 2013 and applied to all counties with a population over 5,000 and all cities with a
population over 2,500 for taxes payable in 2014 only. Levies to pay the costs of the principal and interest on
bonded indebtedness and to provide for the bonded indebtedness portion of payments made to another political
subdivision of the State of Minnesota are designated special levies and can be levied in addition to the amount
allowed by levy limitations.
(Remainder of page intentionally left blank)
21
The following is a partial summary of these factors:
Property Tax Classifications
Class Rate Schedule
2009/ 2010/ 2011/ 2012/ 2013/
Class Type of Property20102011201220132014
1a Residential Homestead: First $500,000 1.00% 1.00% 1.00% 1.00% 1.00%
Over $500,000 1.25 1.25 1.25 1.25 1.25
1c Commercial seasonal-residential recreational-
under 250 days and includes homestead
First $600,000 .50 .50 .50 .50 .50
$600,000-2,300,000 1.00 1.00 1.00 1.00 1.00
1.25 1.25 1.25 1.25 1.25
Over $2,300,000
2a Agricultural Homestead House, Garage, One Acre: (HGA)
First $500,000 1.00 1.00 1.00 1.00 1.00
Over $500,000 1.25 1.25 1.25 1.25 1.25
*
.50
Remainder of Farm First $1,010,000
1.00
Over $1,010,000
.50
First $1,140,000
1.00
Over $1,140,000
.50
First $1,210,000
1.00
Over $1,210,000
.50
First $1,290,000
1.00
Over $1,290,000
First $1,500,000
.50
Over $1,500,000
1.00
1
Agricultural Homestead Land
1.00 1.00 1.00 1.00 1.00
*
2a 1.00 1.00 1.00 1.00 1.00
Non-Homestead Agricultural Productive Land
2
2b
1.00 1.00 1.00 1.00 1.00
Non-Homestead Rural Vacant Land
3a Commercial/Industrial and Public Utility
First $150,000 1.50 1.50 1.50 1.50 1.50
Over $150,000 2.00 2.00 2.00 2.00 2.00
4a Apartment (4+ units, incl. private for-profit hospitals) 1.25 1.25 1.25 1.25 1.25
4b(4) Unimproved Residential 1.25 1.25 1.25 1.25 1.25
Residential Non-Homestead (Single Unit)
1.00 1.00 1.00
4bb(1) First $500,000 1.00 1.00
1.25 1.25 1.25 1.25
Over $500,000 1.25
4bb(2)Ag Non-Homestead (Single unit, garage & 1 acre):
1.00 1.00 1.00 1.00
First $500,000 1.00
1.25 1.25 1.25 1.25
Over $500,000 1.25
4c(1)
Seasonal Residential
Recreational/Commercial
1.00 1.00 1.00 1.00 1.00
(Resort): First $500,000
1.25 1.25 1.25 1.25 1.25
Over $500,000
4c(2) Qualifying golf courses 1.25 1.25 1.25 1.25 1.25
4c(12)
Seasonal ResidentialRecreational
3
*
1.00 1.00 1.00
Non-Commercial (Cabin): First $76,000
1.00 1.00 1.00
*
$76,000-$500,000
1.25 1.25 1.25
*
Over $500,000
4d Qualifying Low-Income Rental Housing .75 .75 .75 .75 .75
Subject to the state general property tax.
*
Exempt from referendum market value based taxes.
1
Homestead remainder & non-homestead; includes structures.
2
Homestead remainder & non-homestead; includes minor ancillary structures.
3
Note: For purposes of the state general property tax only, non-commercial class 4c(1) seasonal residential recreational property has the
following class rate structure: First $76,000 0.40%, $76,001-$500,000 1.00% and over $500,000 1.25%.
22
CITY OF OAK PARK HEIGHTS, MINNESOTA
1
ECONOMIC AND FINANCIAL INFORMATION
Valuations
Estimated Net Tax
Market Value Capacity
2013/20142013/2014
Real Property $ 661,557,400 $ 10,165,672
Personal Property 4,842,000 95,590
Less Tax Increment Deduction - - - ( 126,677)
2
- - -
Fiscal Disparities
(Contribution to Pool) - - - ( 2,467,230)
Distribution from Pool - - - 386,218
Total Adjusted Valuation $ 666,399,400 $ 8,053,573
Economic Market Value
Economic market value (described in detail under MINNESOTA VALUATIONS, PROPERTY TAX
CLASSIFICATIONS herein) has been calculated as shown below, and is also used in the Summary of Debt and
Debt Statistics.
$ 661,557,400 Estimated Market Value of real property (as of January 2, 2013 for
taxes payable in 2014)
3
· 100.5% Minnesota Department of Revenue 2012 Sales Assessment Ratio
= $ 658,266,070 Economic Market Value of real property
+ 4,842,000 Estimated Market Value of personal property
= $ 663,108,070 Economic Market Value of real and personal property used in
Summary of Debt and Debt Statistics
4
Sales Ratios
Sales ratios over the past eight years have been as follows:
Year Ratio Year Ratio
2012 100.5% 2008 96.5%
2011 99.9 2007 92.5
2010 100.1 2006 92.6
2009 97.3 2005 89.6
1
Property valuations, tax rates, and tax levies and collections are provided by Washington County.
2
Fiscal Disparities Law
The 1971 Legislature enacted a fiscal disparities law which allows all the Twin City Metropolitan Area Municipalities to share in
commercial/industrial growth, regardless of where the growth occurred geographically. Forty percent (40%) of every metropolitan
municipalitys growth in commercial/industrial assessed valuation is pooled then redistributed to all municipalities on the basis of
population and per capita valuation after the tax increment and fiscal disparity adjustments.
3
The 2012 Sales Ratio of 100.5% means the Estimated Market Value of all real propertyis 100.5% of the probable selling price of the
property.
4
The Sales Ratios for 2004-2010 are based on the Taxable Market Value (rather than Estimated Market Value) of all real property in
relation to the probable selling price of the property.
23
Valuation Trends (Real and Personal Property)
In 2011, the State Legislature eliminated the Homestead Market Value Credit for homestead residential property
and replaced it with Homestead Market Value Exclusion (see MINNESOTA VALUATIONS; PROPERTY TAX
CLASSIFICATIONS herein). Beginning with taxes payable in 2012, this results in a reduction in the Taxable
Market Value of residential homestead property and, consequently, also in the Indicated Market Value.
Valuation trends over the past eight years have been as follows:
Tax Tax
Levy Year/ Capacity Capacity
Estimated
Before Tax After Tax
Collection Economic Indicated Taxable
Market Value
12
Year
Market ValueMarket ValueMarket ValueIncrementsIncrements
2013/2014 $663,108,070N/A$666,399,400$640,880,100$10,261,262$8,053,573
2012/2013 $665,440,390N/A667,934,300641,169,00010,352,3078,289,290
2011/2012 N/A$644,252,553N/A643,608,30010,186,4798,228,961
2010/2011 N/A669,269,431N/A669,938,70010,427,3008,818,342
2009/2010 N/A701,687,667N/A682,742,10010,572,8748,627,356
2008/2009 N/A744,822,176N/A718,753,40011,099,0389,451,402
2007/2008 N/A728,184,432N/A673,570,60010,250,7659,274,811
2006/2007 N/A625,336,955N/A579,089,8008,471,7387,801,875
Breakdown of Valuations
2013/2014 Tax Capacity, Real and Personal Property (before tax increment and fiscal disparity adjustments):
Residential Homestead $ 1,660,302 16.18%
Agricultural 1,069 .01
Commercial & Industrial 3,418,902 33.32
Public Utility 3,904,920 38.05
Railroad 5,966 .06
Residential Non-Homestead 1,173,278 11.43
Seasonal/Recreational Residential 1,235 .01
Personal Property 95,590 .93
Totals: $ 10,261,262 100.00%
1
Also before Fiscal Disparity Adjustments.
2
Also after Fiscal Disparity Adjustments.
24
Tax Capacity Rates
Tax capacity rates for a City resident within ISD No. 834, Stillwater, for the past five-assessable/collection years
have been as follows:
2009/10 2010/11 2011/12 2012/13 2013/14
Tax Tax Tax Tax Tax
Levy Year/ Capacity Capacity Capacity Capacity Capacity
Collection YearRatesRatesRatesRatesRates
Washington County 27.775%29.772% 31.939%34.225%32.811%
City of Oak Park Heights 43.845 45.028 51.710 54.898 59.641
ISD No. 834, Stillwater 19.734 20.300 22.333 22.018 23.150
Washington County HRA 1.071 1.143 1.224 1.311 1.290
Metro Council .818 .832 .937 1.043 1.050
Metro Mosquito Control .477 .494 .536 .583 .553
Browns Creek Watershed District 4.153 4.276 4.906 5.307 5.066
Regional Rail Authority .193 .196 .211 .226 .233
Totals: 98.066% 102.041% 113.796% 119.611% 123.794%
1
Tax Levies and Collections
Levy Year/ 2009/ 2010/ 2011/ 2012/
Collection Year2010201120122013
Original Gross Tax Levy $ 3,754,703 $ 3,964,704 $4,229,924 $ 4,549,431
2
Property Tax Credits ( 92,249) ( 93,934) ( 0) ( 0)
Levy Adjustments ( 904) ( 2,319) ( 8,420) ( 57,316)
Net Tax Levy $ 3,661,550 $ 3,868,451 $ 4,221,504 $ 4,492,115
Amount Collected during Collection
Year $ 3,584,027 $ 3,819,220 $ 4,176,125 $ 4,457,886
Percent of Net Tax Levy Collected 97.88% 98.73% 99.93% 99.24%
Amount Delinquent at end of
Collection Year $ 77,523 $ 49,231 $ 45,379 $ 34,229
Delinquencies Collected
as of 12/31/13 ( 32,833) ( 57,886) ( 56,015) ( 0)
Delinquencies Abated or Cancelled
as of 12/31/13 ( 22,645) 26,852 33,798 ( 0)
Total Delinquencies Outstanding
as of 12/31/13 $ 22,045 $ 18,198 $ 23,163 $ 34,229
Percent of Net Tax Levy Collected 99.40% 99.53% 99.45% 99.24%
Note: 2013/2014 Net Tax Levy $4,803,959
1
2013/2014 property taxes are currently in the process of collection/reporting and updated figures are not yet available from Washington
County.
2
Property tax credits are aids provided by the State of Minnesota and paid directly to the City.
25
SUMMARY OF DEBT AND DEBT STATISTICS
1
Statutory Debt Limit
Minnesota Statutes, Section 475.53 states that a city or county may not incur or be subject to a net debt in excess
of three percent (3%) of its estimated market value. Net debt is, with limited exceptions, debt paid solely from ad
valorem taxes.
Computation of Legal Debt Margin as of March 2, 2014:
2013/2014 Estimated Market Value $ 666,399,400
Multiplied by 3% x .03
Statutory Debt Limit $ 19,991,982
$6,300,000 G.O. Capital Improvement Plan Bonds, Series 2008A $645,000
$1,195,000 G.O. Capital Improvement Plan Bonds, Series 2009A 780,000
$5,140,000 G.O. Capital Improvement Plan Crossover Refunding Bonds, Series 2012A 5,140,000
Less outstanding debt applicable to debt limit: ($ 6,565,000)
Legal debt margin $ 13,426,982
(Remainder of page intentionally left blank)
1
Effective June 2, 1997 and pursuant to Minnesota Statutes 465.71, any lease revenue or public project revenue bond issues/agreements of
$1,000,000 or more are subject to the statutory debt limit. Lease revenue or public project revenue bond issues/agreements less than
$1,000,000 are not subject to the statutory debt limit.
26
CITY OF OAK PARK HEIGHTS, MINNESOTA
GENERAL OBLIGATION DEBT PAYABLE FROM SPECIAL ASSESSMENTS
(As of March 2, 2014, Plus Portion of This Issue)
Portion of
This Issue
G.O.
Purpose:
Bonds,
Series
2014A
Dated:
06/01/14
Original Amount:$2,375,000
TOTALTOTAL
Maturity:15-Dec
Interest Rates:PRINCIPAL:PRIN & INT:
2.00-3.00%
2014$0$0$28,8582014
2015105,000105,000158,5502015
2016255,000255,000306,4502016
2017250,000250,000296,3502017
2018250,000250,000291,3502018
2019235,000235,000271,3502019
2020235,000235,000266,6502020
2021220,000220,000246,9502021
2022220,000220,000242,5502022
2023205,000205,000223,1502023
2024205,000205,000217,0002024
2025195,000195,000200,8502025
$2,375,000$2,375,000$2,750,058
(1)
NOTE: 83% OF GENERAL OBLIGATION DEBT PAYABLE FROM SPECIAL ASSESSMENTS WILL BE RETIRED WITHIN TEN YEARS.
(1)This schedule represents a portion of the $3,775,000 General Obligation Bonds, Series 2014A, dated June 15, 2014, consisting of $2,375,000 backed by
special assessments and $1,400,000 backed by net revenues of the municipal water utility system.
27
CITY OF OAK PARK HEIGHTS, MINNESOTA
GENERAL OBLIGATION DEBT PAYABLE FROM REVENUES
(As of March 2, 2014, Plus Portion of This Issue)
Portion of
This Issue
G.O.
Purpose:
Bonds,
Series
2014A
Dated:06/01/14
Original Amount:
$1,400,000
Maturity:TOTALTOTAL
15-Dec
PRINCIPAL:PRIN & INT:
Interest Rates:2.00-3.00%
2014$0$0$17,0022014
201560,00060,00091,5502015
2016145,000145,000175,3502016
2017150,000150,000177,4502017
2018150,000150,000174,4502018
2019140,000140,000161,4502019
2020140,000140,000158,6502020
2021130,000130,000145,8502021
2022130,000130,000143,2502022
2023120,000120,000130,6502023
2024120,000120,000127,0502024
2025115,000115,000118,4502025
$1,400,000$1,400,000$1,621,152
(1) (2)
NOTE: 83% OF GENERAL OBLIGATION DEBT PAYABLE FROM REVENUES WILL BE RETIRED WITHIN TEN YEARS.
(1)These bonds are payable primarily from net revenues of the municipal water utility system and additionally secured by ad valorem taxes on all
taxable property within the City and without limitation of amount.
(2)This schedule represents a portion of the $3,775,000 General Obligation Bonds, Series 2014A, dated June 15, 2014, consisting of $2,375,000 backed by
special assessments and $1,400,000 backed by net revenues of the municipal water utility system.
28
CITY OF OAK PARK HEIGHTS, MINNESOTA
GENERAL OBLIGATION DEBT PAYABLE FROM TAXES
(As of March 2, 2014)
G.O.G.O.G.O.
Purpose:
CapitalCapitalCapital Imp-
ImprovementImprovementrovement Plan
Plan Bonds,Plan Bonds,Crossover Re-
SeriesSeriesfunding Bonds,
2008A2009ASeries 2012A
Dated:06/15/08 09/15/09 12/01/12
Original Amount:
$6,300,000$1,195,000$5,140,000
Maturity:TOTALTOTAL
15-Dec 15-Dec 15-Dec
PRINCIPAL:PRIN & INT:
Interest Rates:2.50-4.40% 1.20-3.55%2.00-2.15%
2014$200,000$115,000$0$315,000$560,5782014
2015215,000120,0000335,000571,2752015
2016230,000125,0000355,000580,6782016
20170130,000305,000435,000553,8732017
20180140,000320,000460,000568,7432018
20190150,000340,000490,000587,5832019
202000360,000360,000445,4582020
202100380,000380,000458,2582021
202200400,000400,000470,6582022
202300430,000430,000492,6582023
202400455,000455,000509,0582024
202500495,000495,000539,9582025
202600525,000525,000560,0582026
202700545,000545,000569,2952027
202800585,000585,000597,5782028
$645,000$780,000$5,140,000$6,565,000$8,065,703
(1) (2) (3) (4)
NOTE: 60% OF GENERAL OBLIGATION DEBT PAYABLE FROM TAXES WILL BE RETIRED WITHIN TEN YEARS.
(1)These bonds are payable solely from ad valorem taxes on all taxable property within the City and without limitation of amount. In addition, the bonds ARE
subject to the statutory debt limit since the City's population is above the 2,500 limit established by Section 475.521. The 2006 estimate provided by the
City is 4,676.
(2)These bonds are payable solely from ad valorem taxes on all taxable property within the City and without limitation of amount. In addition, the bonds ARE
subject to the statutory debt limit since the City's population is above the 2,500 limit established by Section 475.521. The 2008 estimate provided by the
Metropolitan Council is 4,708.
(3)These bonds are payable solely from ad valorem taxes on all taxable property within the City and without limitation of amount. In addition, the bonds ARE
subject to the statutory debt limit since the City's population is above the 2,500 limit established by Section 475.521. The 2012 City estimate provided by the
City is 4,593.
(4)These bonds will crossover refund $4,860,000 of the $6,300,000 General Obligation Capital Improvement Plan Bonds, Series 2008A, dated June 15, 2008.
Maturities 2017 through 2028, inclusive, will be called for redemption on December 15, 2016, at a price of par plus accrued interest.
29
**
**
Indirect Debt
2013/2014
2013/2014 Tax Outstanding
Tax Capacity Percentage General Taxpayers
Capacity Value Applicable Obligation Share
IssuerValuein Cityin CityDebtof Debt
(1)(1)(2)
(3)
Washington County
$ 233,305,624$8,053,5733.45% $140,330,000 $ 4,841,385
(4)
ISD No. 834, Stillwater
79,195,415 8,053,573 10.17 40,345,0004,103,087
(5)
Metropolitan Council 2,566,890,637 8,053,573 .31
2,113,6746,552
(6)
Metro Transit 2,371,125,078 8,053,573 .34
306,885,092 1,043,409
Total Indirect Debt: $ 9,994,433
(Remainder of page intentionally left blank)
*
Only those taxing jurisdictions with general obligation debt outstanding are included. Debt figures do not include non-general
obligation debt, short-term general obligation debt, or general obligation tax/aid anticipation certificates of indebtedness.
(1)
Tax capacity values are after tax increment and fiscal disparity contribution and distribution adjustments.
(2)
As of December 31, 2013, as reported by the County, unless noted otherwise.
(3)
Washington County has bond indebtedness of $181,363,987 as of March 2, 2014. $41,033,987 issued by the Washington County
Housing and Redevelopment Authority has been excluded as it is payable solely from housing revenues.
(4)
ISD # 834 has bond indebtedness of $40,345,000 as of March 2, 2014.
(5)
Deductions: (A) $1,168,899,601 Metropolitan Waste Control Commission Debt as of March 20, 2014.
Note 1: Debt Service on (A) above is 100% self supported from revenues of the Metro Sanitary Sewer System, although the bonds
are full faith and credit bonds.
Note 2: The only tax supported bond indebtedness is $12,470,000 as of March 20, 2014, less non-escrowed funds for debt of
$10,356,326 as of December 31, 2012.
(6)
Metro Transit has bond indebtedness of $370,135,000 as of March 20, 2014, less non-escrowed funds for debt service of $63,249,908
as of December 31, 2012. This debt is issued by the Metropolitan Council for all public transit operations in the transit district, of which
Metro Transit is the largest public transit provider, and is payable from ad valorem taxes levied on all taxable property within the
Metropolitan Transit District.
30
General Obligation Debt
Bonds secured by special assessments (includes a portion of this issue) $ 2,375,000
Bonds secured by water revenues (includes a portion of this issue) 1,400,000
Bonds secured by taxes 6,565,000
Subtotal $ 10,340,000
Less bonds secured by water/sewer revenues ( 1,400,000)
Direct General Obligation Debt 8,940,000
Add taxpayers share of indirect debt 9,994,433
Direct and Indirect Debt$ 18,934,433
Facts for Ratio Computations
2013/2014 Economic Market Value (real and personal property) $663,108,070
Population (2014 estimate) 4,654
Debt Ratios Including Revenue-Supported Debt
Direct Indirect Direct and
DebtDebtIndirect Debt
To Economic Market Value 1.56% 1.51% 3.07%
Per Capita $2,222 $2,147 $4,369
Debt Ratios Excluding Revenue-Supported Debt
Direct Indirect Direct and
DebtDebtIndirect Debt
To Economic Market Value 1.35% 1.51% 2.86%
Per Capita $1,921 $2,147 $4,068
31
APPENDIX A
Proposed Form of Legal Opinion
$3,775,000
General Obligation Bonds
Series 2014A
City of Oak Park Heights, Minnesota
We have acted as bond counsel to the City of Oak Park Heights, Minnesota (the Issuer) in connection with
the issuance by the Issuer of its General Obligation Bonds, Series 2014A (the Bonds), originally dated as of June 1,
2014, and issued in the original aggregate principal amount of $3,775,000. In such capacity and for the purpose of
rendering this opinion we have examined certified copies of certain proceedings, certifications and other documents,
and applicable laws as we have deemed necessary. Regarding questions of fact material to this opinion, we have relied
on certified proceedings and other certifications of public officials and other documents furnished to us without
undertaking to verify the same by independent investigation. Under existing laws, regulations, rulings and decisions,
and based on the foregoing we are of the opinion that:
1.The Bonds have been duly authorized and executed, and are valid and binding general obligations of
the Issuer, enforceable in accordance with their terms.
2.The principal of and interest on the Bonds are payable from net revenues of the water system of the
Issuer, special assessments levied or to be levied on property specially benefited by local improvements. and ad
valorem taxes, but, if necessary for the payment thereof, additional ad valorem taxes are required by law to be levied on
all taxable property located in the Issuer, which taxes are not subject to any limitation as to rate or amount.
3.Interest on the Bonds is excludable from gross income of the recipient for federal income tax purposes
and, to the same extent, from taxable net income of individuals, trusts, and estates for State of Minnesota income tax
purposes, and is not a preference item for purposes of the computation of the federal alternative minimum tax, or the
computation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates. However, such
interest is taken into account in determining adjusted current earnings for the purpose of computing the federal
alternative minimum tax imposed on certain corporations and is subject to Minnesota franchise taxes on corporations
(including financial institutions) measured by income. The opinions set forth in this paragraph are subject to the
condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be
satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from
gross income for federal income tax purposes and, to the same extent, from taxable net income for State of Minnesota
income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain
of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes
and taxable net income for State of Minnesota income tax purposes retroactively to the date of issuance of the Bonds.
We express no opinion regarding federal or state tax consequences arising with respect to the Bonds other than as
expressly set forth herein.
4.The rights of the owners of the Bonds and the enforceability of the Bonds may be limited by
bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors rights generally and by
equitable principles, whether considered at law or in equity.
We have not been asked and have not undertaken to review the accuracy, completeness or sufficiency of the
Official Statement or other offering material relating to the Bonds, and accordingly we express no opinion with respect
thereto.
This opinion is given as of the date hereof and we assume no obligation to update, revise, or supplement this
opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may
hereafter occur.
Dated June 5, 2014 at Stillwater, Minnesota.
APPENDIX B
Proposed Form of Continuing Disclosure Undertaking
$3,775,000
City of Oak Park Heights, Minnesota
General Obligation Bonds
Series 2014A
CONTINUING DISCLOSURE CERTIFICATE
June 15, 2014
This Continuing Disclosure Certificate (the Disclosure Certificate) is executed and delivered by the
City of Oak Park Heights, Minnesota (the Issuer) in connection with the issuance of its General Obligation
Bonds, Series 2014A, in the original aggregate principal amount of $3,775,000 (the Bonds). The Bonds
are being issued pursuant to Resolution No. _____, adopted by the City Council of the Issuer on April 22,
2014 (the Award Resolution). The Bonds are being delivered to Northland Securities, Inc. (the
Purchaser) on the date hereof. Pursuant to the Award Resolution, the Issuer has covenanted and agreed to
provide continuing disclosure of certain financial information and operating data and timely notices of the
occurrence of certain events, as further described in this Disclosure Certificate.
Section 1. Definitions
. In addition to the defined terms set forth in the Award Resolution,
which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
Annual Report means any annual report provided by the Issuer pursuant to, and as described in,
Sections 3 and 4 of this Disclosure Certificate.
Audited Financial Statements means the Issuers annual financial statements, prepared in
accordance with generally accepted accounting principles (GAAP) for governmental units, as prescribed by
the Governmental Accounting Standards Board (GASB).
Bonds means the General Obligation Bonds, Series 2014A, issued by the Issuer in the original
aggregate principal amount of $3,775,000.
Disclosure Certificate means this Continuing Disclosure Certificate, executed and delivered by the
Issuer.
EMMA means the Electronic Municipal Market Access system, operated by the MSRB.
Final Official Statement means the Final Official Statement, dated April 28, 2014, which
constitutes the final official statement delivered in connection with the Bonds and is available from the
MSRB.
Fiscal Year means the fiscal year of the Issuer.
Holder means the person in whose name a Bond is registered or a beneficial owner of such a Bond.
Issuer means the City of Oak Park Heights, Minnesota, which is the obligated person with respect
to the Bonds.
Material Event means any of the events listed in Section 5(a) of this Disclosure Certificate.
MSRB means the Municipal Securities Rulemaking Board, located at 1900 Duke Street, Suite 600,
Alexandria, VA 22314.
Participating Underwriter means any of the original underwriter(s) of the Bonds (including the
Purchaser) required to comply with the Rule in connection with the offering of the Bonds.
Purchaser means Northland Securities, Inc.
Repository means EMMA, or any successor thereto designated by the SEC.
Rule means SEC Rule 15c2-12(b)(5), promulgated by the SEC under the Securities Exchange Act
of 1934, as the same may be amended from time to time, and including written interpretations thereof by the
SEC.
SEC means the Securities and Exchange Commission.
Section 2. Purpose of the Disclosure Certificate
. This Disclosure Certificate is being executed
and delivered by the Issuer for the benefit of the Holders of the Bonds in order to assist the Participating
Underwriter(s) in complying with the Rule. This Disclosure Certificate, together with the Award Resolution,
constitutes the written agreement or contract for the benefit of the Holders of the Bonds that is required by the
Rule.
Section 3. Provision of Annual Financial Information and Audited Financial Statements. The
Issuer shall provide to the Repository, as soon as available, but not later than 12 months after the end of the
Fiscal Year commencing with the year that ends December 31, 2014, an Annual Report which is consistent
with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a
single document or as separate documents comprising a package, and may cross-reference other information
as provided in Section 4 of this Disclosure Certificate; provided that the Audited Financial Statements of the
Issuer may be submitted separately from the balance of the Annual Report and will be submitted as soon as
available.
If the Issuer fails to provide the Repository with an Annual Report by the date required in this
Section, the Issuer shall send a notice of that fact to the Repository and the MSRB.
Section 4. Content of Annual Reports. The Issuers Annual Report shall contain or incorporate
by reference the following sections of the Final Official Statement:
1.Economic and Financial Information
2.Summary of Debt and Debt Statistics
3.General Information Major Employers
In addition to the items listed above, the Annual Report shall include Audited Financial Statements
submitted in accordance with Section 3 of this Disclosure Certificate.
Any or all of the items listed above may be incorporated by reference from other documents,
including official statements of debt issues of the Issuer or related public entities, which have been submitted
to the Repository or the SEC. If the document incorporated by reference is a final official statement, it must
also be available from the MSRB. The Issuer shall clearly identify each such other document so incorporated
by reference.
2
Section 5. Reporting of Material Events.
(a) This Section shall govern the giving of notice of the occurrence of any of the following
events (the Material Events) with respect to the Bonds:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701
TEB) or other material notices or determinations with respect to the tax status of the
Bonds, or other material events affecting the tax status of the Bonds;
7. Modifications to the rights of the Holders, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution or sale of property securing repayment of the Bonds, if
material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the Issuer;
13. The consummation of a merger, consolidation, or acquisition involving the Issuer or
the sale of all or substantially all of the assets of the Issuer, other than in the
ordinary course of business, the entry into a definitive agreement to undertake such
an action or the termination of a definitive agreement relating to any such actions,
other than pursuant to its terms, if material; and
14. Appointment of a successor or additional trustee or the change of name of a trustee,
if material.
(b) The Issuer shall file a notice of the occurrence of a Material Event with the Repository or the
MSRB within ten (10) business days of such occurrence.
(c) Unless otherwise required by law and subject to technical and economic feasibility, the
Issuer shall employ such methods of information transmission as shall be requested or recommended by the
designated recipients of the Issuers information.
Section 6. EMMA. The SEC has designated EMMA as a nationally recognized municipal
securities information repository and the exclusive portal for complying with the continuing disclosure
3
requirements of the Rule. Until the EMMA system is amended or altered by the MSRB and the SEC, the
Issuer shall make all filings required under this Disclosure Certificate solely with EMMA.
Section 7. Termination of Reporting Obligation. The Issuers obligations under the Award
Resolution and this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or
payment in full of all the Bonds.
Section 8. Agent. The Issuer may, from time to time, appoint or engage a dissemination agent
to assist it in carrying out its obligations under the Award Resolution and this Disclosure Certificate, and may
discharge any such agent, with or without appointing a successor dissemination agent.
Section 9. Amendment; Waiver. Notwithstanding any other provision of the Award
Resolution and this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any
provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an
opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not cause a
violation of the Rule. The provisions of the Award Resolution requiring continuing disclosure pursuant to the
Rule and this Disclosure Certificate, or any provision thereof or hereof, shall be null and void in the event that
the Issuer delivers to the Repository an opinion of nationally recognized bond counsel to the effect that those
portions of the Rule which impose the continuing disclosure requirements of the Award Resolution and this
Disclosure Certificate are invalid, have been repealed retroactively, or otherwise do not apply to the Bonds.
The provisions of the Award Resolution requiring continuing disclosure pursuant to the Rule and this
Disclosure Certificate may be amended without the consent of the Holders of the Bonds, but only upon the
delivery by the Issuer to the Repository of the proposed amendment and an opinion of nationally recognized
bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the
compliance by the Issuer with the Rule.
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to
prevent the Issuer from disseminating any other information, using the means of dissemination set forth in
this Disclosure Certificate or any other means of communication, or including any other information in any
Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this
Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of
occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate,
the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in
any future Annual Report or notice of occurrence of a Material Event.
Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this
Disclosure Certificate, any Holder of the Bonds may take such actions as may be necessary and appropriate,
including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its
continuing disclosure obligations under the Award Resolution and this Disclosure Certificate. A default
under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds and the
sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this
Disclosure Certificate shall be an action to compel performance.
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the
Issuer, the Participating Underwriter(s), and the Holders from time to time of the Bonds, and shall create no
rights in any other person or entity.
4
IN WITNESS WHEREOF, we have executed this Disclosure Certificate in our official capacities
effective as of the date and year first written above.
CITY OF OAK PARK HEIGHTS,
MINNESOTA
Mayor
City Administrator
(Signature page to the Continuing Disclosure Certificate for the Series 2014A Bonds)
S-1
APPENDIX C
Citys Financial Statement
The following financial statements are excerpts from the annual financial report for the year ended December 31,
2013. The complete financial report for the year 2013 and the prior two years are available for inspection at the
City Offices and the office of Northland Securities, Inc. The reader of this Official Statement should be aware
that the complete financial report may have further data relating to the excerpts presented in the appendix which
may provide additional explanation, interpretation or modification of the excerpts.
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Oak Park Heights, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the
City of Oak Park Heights, Minnesota, as of and for the year ended December 31, 2013, and the
related notes to the financial statements, which collectively comprise City of Oak Park Heights,
Minnesotas 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 auditors
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 entitys 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 entitys 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.
4810 White Bear Parkway White Bear Lake, MN 55110 651.426.7000 651.426.5004 fax www.hlbtr.com
Equal Opportunity Employer 100-Percent Employee-Owned
HLB Tautges Redpath is a member of HLB International, a world-wide network of independent accounting firms and business advisors.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City of Oak Park Heights,
Minnesota, as of December 31, 2013, and the respective changes in financial position, and,
where applicable, cash flows thereof for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Emphasis of Matter
As described in Note 18 to the financial statements, in 2013 the City of Oak Park Heights,
Minnesota adopted new accounting guidance, GASB Statement No. 65, Items Previously
Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter.
Report on Summarized Comparative Information
We have previously audited the City of Oak Park Heights, Minnesotas 2012 financial
statements, and we expressed an unmodified audit opinion on the respective financial statements
of the governmental activities, the business-type activities, each major fund and the aggregate
remaining fund information in our report dated April 15, 2013. In our opinion, the summarized
comparative information presented herein as of and for the year ended December 31, 2012 is
consistent, in all material respects, with the audited financial statements from which it has been
derived.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
managements discussion and analysis, the budgetary comparison information and the schedule
of funding progress, as listed in the table of contents, be presented to supplement the basic
financial statements. Such 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. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with managements
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Oak Park Heights, Minnesotas basic financial statements. The
introductory section, combining and individual nonmajor fund financial statements, and
statistical section, are presented for purposes of additional analysis and are not a required part of
the basic financial statements.
The combining and individual nonmajor fund financial statements are the responsibility of
management and were derived from and relate directly to the underlying accounting and other
records used to prepare the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the
basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the
combining and individual nonmajor fund financial statements are fairly stated in all material
respects in relation to the basic financial statements as a whole.
The introductory and statistical sections have 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 them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
March 31, 2014, on our consideration of the City of Oak Park Heights, Minnesotas internal
control over financial reporting and on our tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements and other matters. The purpose of that report
is to describe the scope of our testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the City of Oak Park Heights, Minnesotas
internal control over financial reporting and compliance.
HLB TAUTGES REDPATH, LTD.
March 31, 2014
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1
MANAGEMENTS DISCUSSION AND ANALYSIS
As management of the City of Oak Park Heights, Minnesota (the City) we offer readers of
the Citys financial statements this narrative overview and analysis of the financial activities
of the City for the fiscal year ended December 31, 2013.
Financial Highlights
The assets of the City exceeded its liabilities at the close of the most recent fiscal year by
$36,571,285 (net position). Of this amount, $17,275,115 (unrestricted net position) may be
used to meet the governments ongoing obligations to citizens and creditors in accordance
with the City's fund designations and fiscal policies.
The Citys total net position increased by $1,041,975.
As of the close of the current fiscal year, the Citys governmental funds reported combined
ending fund balances of $21,680,702, an increase of $60,692. The increase is due to a
combination of increased revenues, decreased operating expenditures, fund transfers and
capital outlays.
At the end of the current fiscal year the general fund balance was $3,514,371, of which
$5,201 is nonspendable, $173,000 is assigned, and $2,902,000 of unassigned fund balance is
meant to fund cash flow and contingencies during 2013.
The General Fund balance decreased by $236,787 as a result of an approved transfer of prior
years fund balance overage in accordance with the Citys Fund Balance Policy. The City
transferred $536,000 to fund expenditures in the Capital Revolving Fund. The net increase in
the General Fund prior to the fund balance transfer is due to favorable budget variances.
The Citys budgeted transfers were $346,050 from the General Fund to the Budgeted Projects
Fund for capital improvements for streets, parks, public safety, public works, and general
government; $337,225 from the General Fund to the Street Reconstruction Fund; $80,185
from the General Fund to the Storm Sewer Renewal Replacement Fund and $548,000 from
the General Fund to the G.O. Capital Improvement Bond Funds of 2008 and 2009.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Citys basic
financial statements. The Citys basic financial statements comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the
financial statements. This report also contains other supplementary information in addition
to the basic financial statements themselves.
2
Managements Discussion and Analysis
Government-wide financial statements
. The government-wide financial statements are
designed to provide readers with a broad overview of the Citys finances, in a manner similar
to a private-sector business.
The statement of net position presents information on all of the Citys assets and liabilities,
with the difference between the two reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position of
the City is improving or deteriorating.
The statement of activities presents information showing how the Citys net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused
vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenues (governmental activities)
from other functions that are intended to recover all or a significant portion of their costs
through user fees and charges (business-type activities). The governmental activities of the
City include general government, public safety, public works and parks and recreation. The
business-type activities of the City include water, sanitary sewer and storm sewer.
The government-wide financial statements are statements 1 and 2 of this report.
Fund Financial statements
. A fund is a grouping of related accounts that is used to
maintain control over resources that have been segregated for specific activities or objectives.
The City, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City
can be divided into two categories: governmental funds and proprietary funds.
Governmental funds
. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resource, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may
be useful in evaluating a governments near-term financial requirements.
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the government-wide
financial statements. By doing so, readers may better understand the long-term impact of the
City's near term financial decisions. Both the governmental fund balance sheet and
governmental fund statement of revenues, expenditures and change in fund balance provide a
3
Managements Discussion and Analysis
reconciliation to facilitate this comparison between governmental funds and governmental
activities.
The City maintains five individual major governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of
revenues, expenditures and changes in fund balance for the following major funds:
General Fund
G.O. CIP Refunding Bonds of 2012A Debt Service Fund
Capital Revolving Fund Capital Project Fund
Street Reconstruction Fund Capital Project Fund
Renewal and Replacement Fund Capital Project Fund
Data from the other governmental funds are combined into a single, aggregated presentation.
Individual fund data for each of these nonmajor governmental funds is provided in the form
of subcombining statements elsewhere in this report.
The City adopts an annual appropriated budget for its General Fund. A budgetary
comparison schedule has been provided for this fund to demonstrate compliance with this
budget see Statement 10.
The basic governmental fund financial statements are statements 3 through 5 of this report.
Proprietary funds
. The City maintains three enterprise funds as a part of its proprietary
fund type. Enterprise funds are used to report the same functions presented as business-type
activities in the government-wide financial statements. The City uses enterprise funds to
account for its water, sanitary sewer and storm sewer operations.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for the following funds:
Enterprise funds:
Water
Sanitary Sewer
Storm Sewer
The basic proprietary fund financial statements are statements 6 through 8 of this report.
Fiduciary Funds
. Fiduciary funds are used to account for resources held for the benefit of
parties outside the City. Fiduciary funds are not reflected by the government-wide financial
statements because the resources of those funds are not available to support the Citys own
programs.
The basic fiduciary fund statements are Statements 9, 19 and 20.
4
Managements Discussion and Analysis
Notes to the financial statements
. The notes provide additional information that is essential
to a full understanding of the data provided in the governmentwide and fund financial
statements. The notes to the financial statements can be found following Statement 9.
Other information.
The combining statements referred to earlier in connection with non-
major governmental funds are presented immediately following the required supplementary
information on budgetary comparisons. Combining and individual fund statements and
schedules are presented as Statements 11 through 18.
Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's
financial position. In the case of the City, assets exceeded liabilities by $36,571,285 at the
close of the most recent fiscal year.
The largest portion of the Citys net position ($18,453,960 or 50%) reflects its investment in
capital assets (e.g. land, improvements, buildings and structures, machinery and equipment,
and furniture and fixtures) less any related debt used to acquire those assets that is still
outstanding. The City uses these capital assets to provide services to citizens; consequently,
these assets are not available for future spending. Although the Citys investment in its
capital assets is reported net of related debt, it should be noted that the resources needed to
repay this debt must be provided from other sources, since the capital assets themselves
cannot be used to liquidate these liabilities.
City of Oak Park Heights Net Position
Governmental ActivitiesBusiness-Type ActivitiesTotals
201320122013201220132012
Assets:
Current and other assets$23,059,529$22,160,497$1,587,489$1,368,075$24,647,018$23,528,572
Capital assets18,221,73917,752,2026,604,5156,746,34424,826,25424,498,546
Total assets$41,281,268$39,912,699$8,192,004$8,114,419$49,473,272$48,027,118
Liabilities:
Long-term liabilities outstanding$11,422,248$11,767,849$18,635$32,721$11,440,883$11,800,570
Other liabilities1,341,037723,283120,06755,4801,461,104778,763
Total liabilities$12,763,285$12,491,132$138,702$88,201$12,901,987$12,579,333
Net position:
Net investment in capital assets$11,849,446$11,172,202$6,604,514$6,746,344$18,453,960$17,918,546
Restricted842,2101,007,208 - - 842,2101,007,208
Unrestricted15,826,32715,242,1571,448,7881,279,87417,275,11516,522,031
Total net position$28,517,983$27,421,567$8,053,302$8,026,218$36,571,285$35,447,785
A portion of the Citys net position represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position
may be used to meet the Citys ongoing obligations to citizens and creditors.
5
Managements Discussion and Analysis
At the end of the current fiscal year, the City is able to report positive balances in all three
categories of net position, both for the government as a whole, as well as for its separate
governmental and business-type activities.
Governmental Activities
Governmental activities increased the Citys net position by $1,014,891 during 2013. Key
elements of this increase are as follows:
City of Oak Park Heights Changes in Net Position
Governmental ActivitiesBusiness-Type ActivitiesTotals
201320122013201220132012
Revenues:
Program revenues:
Charges for services$594,268$395,379$1,641,716$1,598,703$2,235,984$1,994,082
Operating grants and contributions99,171112,912 - - 99,171112,912
Capital grants and contributions341,99124,13123,234 - 365,22524,131
General revenues:
General property taxes4,434,1794,262,983 - - 4,434,1794,262,983
Tax increment106,92426,583 - - 106,92426,583
Grants and contributions not
restricted to specific programs2,0402,040 - - 2,0402,040
Gain on sale of capital assets1,9567,950(1,472) - 4847,950
Other revenue26,52629,172 - - 26,52629,172
Unrestricted investment earnings(85,474)204,422(7,026)14,046(92,500)218,468
Total revenues5,521,5815,065,5721,656,4521,612,7497,178,0336,678,321
Expenses:
General government1,601,4021,455,359 - - 1,601,4021,455,359
Public safety1,497,7651,431,594 - - 1,497,7651,431,594
Public works1,080,4371,128,249 - - 1,080,4371,128,249
Parks and recreation269,929248,243 - - 269,929248,243
Interest on long-term debt463,537377,713 - - 463,537377,713
Water - - 468,932470,266468,932470,266
Sanitary sewer - - 695,817668,588695,817668,588
Storm sewer - - 58,23943,90458,23943,904
Total expenses 4,913,0704,641,1581,222,9881,182,7586,136,0585,823,916
Increase in net position before transfers608,511424,414433,464429,9911,041,975854,405
Transfers406,380504,239(406,380)(504,239) - -
Change in net position1,014,891928,65327,084(74,248)1,041,975854,405
Net position - January 1, as previously reported27,421,56726,492,9148,026,2188,100,46635,447,78534,593,380
Prior period adjustment81,525 - - - 81,525 -
Net position - January 1, as restated27,503,09226,492,9148,026,2188,100,46635,529,31034,593,380
Net position - December 31$28,517,983$27,421,567$8,053,302$8,026,218$36,571,285$35,447,785
6
Managements Discussion and Analysis
Below are specific graphs which provide comparisons of the governmental activities
revenues and expenditures:
Governmental Activities -Revenues
Other revenue
1%
Tax increment
Unrestricted investment
Charges for services
2%
Operating grants and
earnings
11%
contributions
-2%
2%
Capital grants and
contributions
6%
General property taxes
80%
Governmental Activities -Expenses
Interest on long-term debt
9%
Parks and recreation
General government
6%
33%
Public works
22%
Public safety
30%
7
Managements Discussion and Analysis
Business-Type Activities
Business-type activities increased net position by $27,084 during 2013. Below are graphs
showing the business-type activities revenue and expense comparisons:
Business-Type Activities -RevenuesBusiness-Type Activities -RevenuesBusiness-Type Activities -Revenues
Unrestricted investment
earnings
Less than 1%
Charges for services
100%
Business-Type Activities -Expenses
Storm sewer
5%
Water
38%
Sanitary sewer
57%
8
Managements Discussion and Analysis
Financial Analysis of the Government's Funds
Governmental Funds
. The focus of the Citys governmental funds is to provide information
on near-term inflows, outflows, and balances of spendable resources. Such information is
useful in assessing the Citys financing requirements. In particular, unreserved fund balance
may serve as a useful measure of a governments net resources available for spending at the
end of the fiscal year.
At the end of the current fiscal year, the Citys governmental funds reported combined
ending fund balances of $21,680,702.
The General Fund decreased by $236,787 in 2013. The City had amended the budget to
reallocate the fund balance by $633,295 in accordance with the Citys fund balance policy.
The allocation consists of $97,295 for over budgeted or unfunded expenditures and the
transfer of $536,000 to the Capital Revolving Fund is the portion of the Citys expenditures
for infrastructure betterments due to the Highway 36 Bridge project being constructed by the
State of Minnesota and Minnesota Department of Transportation.
Expenditures were under budget by $199,582 due to most city departments actual
expenditures being under budget. The budget savings was primarily due to reduced costs in
personal services as a result of retirements with reduced replacement costs and the combining
of the Building Inspector position with the Planning/Code Enforcement position. Other
budget savings are from reduced costs incurred for the contractual services and materials and
supplies.
The G.O. CIP Refunding Bonds of 2012A decreased by $116,728, due to scheduled debt
payments made with escrowed funds.
The Capital Revolving Fund increased by $106,334, a net result of a $536,000 transfer from
the General Fund and the expenditures incurred relating to the Highway 36 Bridge Project
that is being constructed by the State of Minnesota and the Minnesota Department of
Transportation. The costs incurred are a result of negotiating funding and costs of the
infrastructure that the city is obligated to relocate for the project.
The Street Reconstruction Capital Project Fund increased by $19,079 during 2013 . This
increase is from a transfer of $337,225 from the General Fund net of the expenditures related
to the 2014-2015 Street Reconstruction Project.
The Renewal and Replacement Capital Project Fund decreased by $173,016 during 2013.
This fund receives an annual transfer from the proprietary funds in an amount equal to
depreciation expense on contributed capital assets. The reduction is due to expenditures for
infrastructure replacement.
The nonmajor special revenue funds increased by $14,831 during 2013.
9
Managements Discussion and Analysis
The nonmajor debt service funds decreased by $564 during 2013.
The nonmajor capital project funds increase by $447,543 during 2013 due to transfers in
from other funds for the accumulation of resources for future capital improvement
expenditures.
Proprietary funds
. The Citys proprietary funds provide the same type of information
found in the government-wide financial statements, but in more detail.
Budgetary Highlights
General Fund
The General Fund budget was amended once during 2013, increasing other contractual
services for the Mayor and Council, and public works snow removal for $2,495 and
$66,100, respectively. In addition, transfers out were amended to include an additional
$536,000 to the Revolving Capital Fund and $20,700 transfer to the Renewal and
Replacement Capital Project Fund. Lastly, contingencies were increased by $7,000.
Capital Asset and Debt Administration
Capital assets
. The Citys investment in capital assets for its governmental and business-
type activities as of December 31, 2013, amounts to $24,826,255 (net of accumulated
depreciation). This investment in capital assets includes land, construction in progress,
buildings and structures, other improvements, infrastructure, machinery and equipment and
furniture and fixtures.
10
Managements Discussion and Analysis
City of Oak Park Heights Capital Assets
(Net of Depreciation
)
BeginningEnding
BalanceIncreasesDecreasesBalance
Governmental activities:
Capital assets, not being depreciated:
Land$2,238,930$434$ - $2,239,364
Construction in progress2,6751,116,122 - 1,118,797
Total capital assets, not being depreciated2,241,6051,116,55603,358,161
Capital assets, being depreciated:
Buildings and structures7,540,25034,459(11,048)7,563,661
Other improvements1,529,55921,900(7,090)1,544,369
Machinery and equipment581,644 - (8,000)573,644
Furniture and fixtures419,86242,116(43,471)418,507
Infrastructure12,907,27120,856 - 12,928,127
Total capital assets, being depreciated22,978,586119,331(69,609)23,028,308
Less accumulated depreciation for:
Buildings and structures468,137180,786(11,048)637,875
Other improvements267,06645,929(7,090)305,905
Machinery and equipment261,83758,560(8,000)312,397
Furniture and fixtures181,98942,291(28,573)195,707
Infrastructure6,288,960423,885 - 6,712,845
Total accumulated depreciation7,467,989751,451(54,711)8,164,729
Total capital assets being depreciated - net15,510,597(632,120)(14,898)14,863,579
Governmental activities capital assets - net$17,752,202$484,436($14,898)$18,221,740
BeginningEnding
BalanceIncreasesDecreasesBalance
Business-type activities:
Capital assets, not being depreciated:
Land$937,919$ - $ - $937,919
Construction in progress - 72,476 - 72,476
Total capital assets, not being depreciated937,91972,47601,010,395
Capital assets, being depreciated:
Buildings and structures2,047,665 - - 2,047,665
Machinery and equipment428,15432,461(11,900)448,715
Infrastructure7,311,429 - - 7,311,429
Total capital assets, being depreciated9,787,24832,461(11,900)9,807,809
Less accumulated depreciation for:
Buildings and structures733,16076,856 - 810,016
Machinery and equipment207,12920,815(10,428)217,516
Infrastructure3,038,534147,623 - 3,186,157
Less accumulated depreciation3,978,823245,294(10,428)4,213,689
Total capital assets being depreciated - net5,808,425(212,833)(1,472)5,594,120
Business-type activities capital assets - net$6,746,344($140,357)($1,472)$6,604,515
Additional information on the Citys capital assets can be found in Note 4.
11
Managements Discussion and Analysis
Long-term debt
. At the end of the current fiscal year, the City had total bonded debt
outstanding of $11,425,000, a decrease of $295,000 from 2012.
Additional long-term debt in the amount of $242,685 for compensated absences was also
outstanding at the end of 2013.
City of Oak Park Heights Outstanding Debt
General obligation bonds, compensated absences and unamortized bond premium:
Governmental ActivitiesBusiness-Type ActivitiesTotals
201320122013201220132012
General obligation bonds$11,425,000$11,720,000$ - $ - $11,425,000$11,720,000
Compensated absences222,233212,17720,45235,169242,685247,346
Bond premium145,441155,137 - - 145,441155,137
Total$11,792,674$12,087,314$20,452$35,169$11,813,126$12,122,483
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of
total estimated market value. The current debt limitation for the City is $19,235,070. The
Citys 2008A and 2009A Capital Improvement Bonds are counted within the statutory
limitation.
Additional information on the Citys long-term debt can be found in Note 6.
Requests for information.
This financial report is designed to provide a general overview
of the Citys finances for all those with an interest in the governments finances. Questions
concerning any of the information provided in this report or requests for additional financial
information should be addressed to the Director of Finance, 14168 Oak Park Boulevard, Oak
Park Heights, Minnesota 55082-2007.
12
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13
BASIC FINANCIAL STATEMENTS
14
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15
CITY OF OAK PARK HEIGHTS, MINNESOTA
Statement 1
STATEMENT OF NET POSITION
December 31, 2013
Primary Government
GovernmentalBusiness-Type
Assets:ActivitiesActivitiesTotal
Cash and investments$17,122,693$1,122,310$18,245,003
Cash with escrow agent5,063,118 - 5,063,118
Accrued interest receivable99,9087,484107,392
Accounts receivable - net138,909423,458562,367
Internal balances(211)211 -
Due from other governmental units389,068 - 389,068
Escrow deposit10,000 - 10,000
Prepaid items5,20134,02639,227
Taxes receivable101,334 - 101,334
Special assessments receivable18,509 - 18,509
Land held for resale111,000 - 111,000
Capital assets (net of accumulated depreciation):
Land2,239,364937,9193,177,283
Building and structures6,925,7861,237,6498,163,435
Other improvements1,238,463 - 1,238,463
Machinery and equipment261,247231,199492,446
Furniture and fixtures222,800 - 222,800
Infrastructure6,215,2824,125,27210,340,554
Construction in progress1,118,79772,4761,191,273
Total assets41,281,2688,192,00449,473,272
Liabilities:
Accounts payable647,30194,471741,772
Salaries payable6,3351,9968,331
Due to other governmental units153,1462,030155,176
Accrued interest payable15,945 - 15,945
Unearned revenue2,932 - 2,932
Compensated absences payable:
Due within one year45,7301,81747,547
Due in more than one year176,50318,635195,138
Other post employment benefits144,95219,753164,705
Bonds payable:
Due within one year324,696 - 324,696
Due in more than one year11,245,745 - 11,245,745
Total liabilities12,763,285138,70212,901,987
Net position:
Net investment in capital assets11,849,4466,604,51418,453,960
Restricted for:
Park improvements815,549 - 815,549
Other purposes26,661 - 26,661
Unrestricted15,826,3271,448,78817,275,115
Total net position$28,517,983$8,053,302$36,571,285
The accompanying notes are an integral part of these financial statements.
16
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2013
Program Revenues
Charges For
Functions/ProgramsExpensesServices
Primary government:
Governmental activities:
General government$1,601,402$305,590
Public safety1,497,765255,169
Public works1,080,43733,509
Parks and recreation269,929 -
Interest on long-term debt463,537 -
Total governmental activities4,913,070594,268
Business-type activities:
Water468,932720,590
Sanitary sewer695,817833,063
Storm sewer58,23988,063
Total business-type activities1,222,9881,641,716
Total primary government$6,136,058$2,235,984
The accompanying notes are an integral part of these financial statements.
17
Statement 2
Net (Expense) Revenue and
Program RevenuesChanges in Net Position
Primary Government
OperatingCapital
Grants andGrants andGovernmentalBusiness-Type
ContributionsContributionsActivitiesActivitiesTotal
$ - $ - ($1,295,812)$ - ($1,295,812)
89,359 - (1,153,237) - (1,153,237)
9,812341,491(695,625) - (695,625)
- 500(269,429) - (269,429)
- - (463,537) - (463,537)
99,171341,991(3,877,640)0(3,877,640)
- - - 251,658251,658
- - - 137,246137,246
- 23,234 - 53,05853,058
023,2340441,962441,962
$99,171$365,225(3,877,640)441,962(3,435,678)
General revenues:
General property taxes4,434,179 - 4,434,179
Tax increment106,924 - 106,924
Grants and contributions not
restricted to specific programs2,040 - 2,040
Unrestricted investment earnings(85,474)(7,026)(92,500)
Gain (loss) on sale of capital assets1,956(1,472)484
Other revenue26,526 - 26,526
Transfers406,380(406,380) -
Total general revenues
and transfers4,892,531(414,878)4,477,653
Change in net position1,014,89127,0841,041,975
Net position - January 1,
as previously reported27,421,5678,026,21835,447,785
Prior period adjustment81,525 - 81,525
Net position - January 1, as restated27,503,0928,026,21835,529,310
Net position - December 31$28,517,983$8,053,302$36,571,285
The accompanying notes are an integral part of these financial statements.
18
CITY OF OAK PARK HEIGHTS, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2013
528 G.O. CIP
Refunding Bonds
General Fundof 2012A
Assets
Cash and investments$3,643,812$14,849
Cash with escrow agent - 5,063,118
Accrued interest receivable17,35795
Accounts receivable - net134,478 -
Due from other governmental units47,398 -
Escrow deposit - -
Prepaid items5,201 -
Taxes receivable:
Delinquent101,334 -
Due from county - -
Special assessments receivable - -
Land held for resale - -
Total assets$3,949,580$5,078,062
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable$156,925$ -
Salaries payable6,335 -
Due to other governmental units153,115 -
Deposits payable17,500 -
Unearned revenue - -
Total liabilities333,8750
Deferred inflows of resources:
Unavailable revenue101,334 -
Fund balance:
Nonspendable5,201 -
Restricted - 5,078,062
Assigned173,000 -
Unassigned3,336,170 -
Total fund balance3,514,3715,078,062
Total liabilities, deferred inflows of resources, and fund balance$3,949,580$5,078,062
Fund balance reported above
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.
Other long-term assets are not available to pay for current-period expenditures and, therefore, are reported as
unavailable revenues in the funds.
Long-term liabilities, are not due and payable in the current period and, therefore, are not reported in the funds:
Bonds payable
Compensated absences payable
Other post employment benefits
Accrued interest payable
Net position of governmental activities
The accompanying notes are an integral part of these financial statements.
19
Statement 3
710 Renewal and Other
500 Capital 565 Street Replacement Capital Governmental
Revolving FundReconstructionProject FundFundsTotal Governmental Funds
20132012
$451,901$2,775,511$4,482,641$5,753,979$17,122,693$16,334,800
- - - - 5,063,1185,179,790
2,40316,30829,21334,53299,908107,576
- - - 4,431138,90912,787
341,670 - - - 389,06857,951
- - - 10,00010,000 -
- - - - 5,2014,609
- - - - 101,334100,357
- - - - - 104,485
18,509 - - - 18,50937,019
- - - 111,000111,000111,000
$814,483$2,791,819$4,511,854$5,913,942$23,059,740$22,050,374
$141,828$280,214$ - $51,045$630,012$253,504
- - - - 6,3355,342
- - - 31153,1461,667
- - - - 17,5003,000
- - - 2,9322,932 -
141,828280,214054,008809,925263,513
356,779 - - 111,000569,113248,376
- - - - 5,2014,609
- - - 956,6876,034,7496,192,222
315,8762,511,6054,511,8544,792,24712,304,58211,841,630
- - - - 3,336,1703,500,024
315,8762,511,6054,511,8545,748,93421,680,70221,538,485
$814,483$2,791,819$4,511,854$5,913,942$23,059,740$22,050,374
$21,680,702$21,538,485
18,221,73917,752,202
569,113358,499
(11,570,441)(11,875,137)
(222,233)(212,177)
(144,952)(125,034)
(15,945)(15,271)
$28,517,983$27,421,567
The accompanying notes are an integral part of these financial statements.
20
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2013
528 G.O. CIP
Refunding Bonds of
General Fund2012A
Revenues:
General property taxes$4,433,202$ -
Tax increment - -
Special assessments - -
Licenses and permits90,910 -
Intergovernmental96,587 -
Charges for services304,403 -
Fines and forfeits51,360 -
Investment income(23,982)(7,897)
Refunds and reimbursements135,364 -
Donations and contributions500 -
Total revenues5,088,344 (7,897)
Expenditures:
Current:
General government1,279,394 -
Public safety1,437,141 -
Public works606,680 -
Parks and recreation135,756 -
Capital outlay - -
Debt service:
Principal - -
Interest - 108,831
Bond issuance costs - -
Total expenditures3,458,971 108,831
Revenues over (under) expenditures1,629,373 (116,728)
Other financing sources (uses):
Sale of capital assets2,000 -
Issuance of refunding bonds - -
Bond premium - -
Transfers in - -
Transfers out(1,868,160) -
Total other financing sources (uses)(1,866,160)0
Net change in fund balance(236,787)(116,728)
Fund balance - January 1, as previously reported3,669,6335,194,790
Prior period adjustment81,525 -
Fund balance - January 1, as restated3,751,1585,194,790
Fund balance - December 31$3,514,371$5,078,062
The accompanying notes are an integral part of these financial statements.
21
Statement 4
710 Renewal
and Replacement Other
500 Capital 565 Street Capital Project GovernmentalIntra-Activity
Revolving FundReconstructionFundFundsEliminationsTotal Governmental Funds
20132012
$ - $ - $ - $ - $ - $4,433,202$4,245,360
- - - 106,924 - 106,92426,583
20,731 - - - - 20,73121,906
- - - - - 90,910163,986
1,000 - - 4,624 - 102,211114,952
- - - 33,509 - 337,91249,441
- - - 5,248 - 56,60856,709
(2,540)(12,896)(12,982)(25,177) - (85,474)204,422
- - - - - 135,364154,415
- - - - - 500400
19,191 (12,896)(12,982)125,128 0 5,198,888 5,038,174
- - - 99,497 - 1,378,8911,195,121
- - - 11,962 - 1,449,1031,394,586
18,093159,374 - 21,629 - 805,776737,001
- - - 16,305 - 152,061132,497
430,764145,876422,192104,477 - 1,103,309160,856
- - - 295,000 - 295,000275,000
- - - 253,605 - 362,436260,680
- - - - - - 103,854
448,857 305,250 422,192 802,475 0 5,546,576 4,259,595
(429,666)(318,146)(435,174)(677,347)0 (347,688)778,579
- - - - - 2,00024,418
- - - - - - 5,140,000
- - - - - - 155,137
536,000337,225262,1581,139,157 - 2,274,540408,914
- - - - - (1,868,160) -
536,000 337,225 262,158 1,139,157 0 408,380 5,728,469
106,334 19,079 (173,016)461,810 0 60,692 6,507,048
209,5422,492,5264,684,8705,287,124 - 21,538,48515,031,437
- - - - - 81,525 -
209,5422,492,5264,684,8705,287,124 - 21,620,01015,031,437
$315,876$2,511,605$4,511,854$5,748,934$0$21,680,702$21,538,485
The accompanying notes are an integral part of these financial statements.
22
CITY OF OAK PARK HEIGHTS, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES,Statement 5
EXPENDITURES AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2013
20132012
Amounts reported for governmental activities in the
statement of activities are different because:
Net changes in fund balances - total governmental funds (Statement 4)$60,692$6,507,048
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense:
Depreciation(751,452)(744,282)
Capital outlay1,103,309160,856
Other various transactions relating to capital assets:
Transfer of asset from business-type activities - 95,325
Donation of capital assets - 20,000
Adjustment of land434 -
Book value of capital assets sold, less trade-in value received(44)(16,133)
Capitalization of prior year construction in progress117,290 -
Revenues in the statement of activities that do not provide current financial
resources are not reported as revenues in the funds:
Change in delinquent taxes receivable97717,623
Change in deferred special assessments receivable(18,510)(18,510)
Change in value of land held for resale - (57,518)
Change in unavailable grant receivable338,270 -
The issuance of long-term debt (e.g., bonds, leases) provides current
financial resources to governmental funds, while the repayment of the
principal of long-term debt consumes the current financial resources of
governmental funds. Neither transaction, however, has any effect on net
position. The amount of this difference is:
Principal payments on bonds payable295,000275,000
Issuance of refunding bonds - (5,140,000)
Bond premium9,696(155,137)
Elimination of bond issuance costs(110,123) -
Some expenses reported in the statement of activities do not require the use
of current financial resources and, therefore, are not reported as expenditures
in governmental funds. Expenses reported in the statement of activities
include the effects of the changes in these expense accruals as follows:
Amortization of issuance costs - (8,770)
Change in compensated absences payable(10,056)14,244
Change in other post employment benefits(19,918)(16,684)
Change in accrued interest payable(674)(4,409)
Change in net position of governmental activities (Statement 2)$1,014,891$928,653
The accompanying notes are an integral part of these financial statements.
23
CITY OF OAK PARK HEIGHTS, MINNESOTA
Statement 6
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2013
Business-Type Activities Enterprise Funds
707 Storm
705 Water 706 Sewer Sewer Utility
Utility FundUtility FundFund
Totals
20132012
Assets:
Current assets:
Cash and cash equivalents$660,585$379,053$82,672$1,122,310$919,948
Accrued interest receivable4,1902,7994957,4847,522
Accounts receivable:
Customers143,944197,23420,844362,022361,434
Certified to County21,70220,67319,27261,64744,298
Due from other governmental units - - - - 1,990
Prepaid items - 34,026 - 34,02632,883
Total current assets830,421 633,785 123,283 1,587,489 1,368,075
Noncurrent assets:
Capital assets:
Land937,919 - - 937,919937,919
Buildings and structures2,003,68243,983 - 2,047,6652,047,665
Machinery and equipment442,1166,599 - 448,715428,154
Distribution and collection system3,308,9444,002,485 - 7,311,4297,311,429
Construction in progress72,476 - - 72,476 -
Total capital assets6,765,137 4,053,067 0 10,818,204 10,725,167
Less: Allowance for depreciation(2,425,136)(1,788,553) - (4,213,689)(3,978,823)
Net capital assets4,340,0012,264,51406,604,5156,746,344
Total noncurrent assets4,340,0012,264,51406,604,5156,746,344
Total assets5,170,4222,898,299123,2838,192,0048,114,419
Liabilities:
Current liabilities:
Accounts payable83,0711,21518584,47126,171
Deposits payable10,000 - - 10,000 -
Salaries payable1,091905 - 1,9961,877
Due to other governmental units2,030 - - 2,0307,070
Compensated absences payable - current portion1,0656431091,8172,448
Total current liabilities97,257 2,763 294 100,314 37,566
Noncurrent liabilities:
Compensated absences payable - noncurrent portion10,9216,5921,12218,63532,721
Other post employment benefits11,1617,0861,50619,75317,914
Noncurrent liabilities22,08213,6782,62838,38850,635
Total liabilities119,33916,4412,922138,70288,201
Net position:
Net investment in capital assets4,340,0002,264,514 - 6,604,5146,746,344
Unrestricted711,083617,344120,3611,448,7881,279,874
Total net position$5,051,083$2,881,858$120,361$8,053,302$8,026,218
The accompanying notes are an integral part of these financial statements.
24
CITY OF OAK PARK HEIGHTS, MINNESOTA
Statement 7
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31, 2013
Business-Type Activities Enterprise Funds
707 Storm
705 Water 706 Sewer Sewer Utility
Utility FundUtility FundFund
Totals
20132012
Operating revenues:
Customer billings$705,595$823,129$82,744$1,611,468$1,569,924
Penalties7,2909,28681917,39516,935
Meter sales3,019 - - 3,0195,343
Charges for services420140 - 5603,653
Refunds and reimbursements4,2665084,5009,2742,848
Total operating revenues720,590 833,063 88,063 1,641,716 1,598,703
Operating expenses:
Personal services198,594125,80921,822346,225341,492
Contractual services89,31984,59131,509205,419199,325
MCES charges - 394,600 - 394,600361,271
Materials and supplies19,9236,61972827,27032,270
Administrative and personnel charges - - 4,1804,1803,830
Depreciation161,09684,198 - 245,294244,235
Total operating expenses468,932 695,817 58,239 1,222,988 1,182,423
Operating income251,658 137,246 29,824 418,728 416,280
Nonoperating revenues (expenses):
Earnings on investments(4,638)(2,013)(375)(7,026)14,046
Other - - 23,23423,234(95,325)
(Loss) on disposal of capital assets(1,472) - - (1,472)(335)
Total nonoperating revenues (expenses)(6,110)(2,013)22,85914,736(81,614)
Income before contributions and transfers245,548135,23352,683433,464334,666
Transfers:
Transfers to other funds(237,123)(165,840)(3,417)(406,380)(408,914)
Total transfers and contributions(237,123)(165,840)(3,417)(406,380)(408,914)
Change in net position8,425(30,607)49,26627,084(74,248)
Net position - January 15,042,6582,912,46571,0958,026,2188,100,466
Net position - December 31$5,051,083$2,881,858$120,361$8,053,302$8,026,218
The accompanying notes are an integral part of these financial statements.
25
CITY OF OAK PARK HEIGHTS, MINNESOTA
Statement 8
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2013
Business-Type Activities Enterprise Funds
707 Storm
705 Water 706 Sewer Sewer Utility
Utility FundUtility FundFundTotals
20132012
Cash flows from operating activities:
Receipts from customers and users$723,534$831,455$70,780$1,625,769$1,581,541
Payment to suppliers(34,076)(490,557)(44,719)(569,352)(692,841)
Payment to employees(205,826)(130,671)(22,487)(358,984)(338,402)
Net cash flows provided by (used in) operating activities483,632210,2273,574697,433550,298
Cash flows from noncapital financing activities:
Transfer to other funds(237,123)(165,840)(3,417)(406,380)(408,914)
Cash flows from capital and related
financing activities:
Acquisition of capital assets(104,937) - - (104,937)(121,452)
Cash flows from investing activities:
Investment income(5,187)(1,852)51(6,988)16,726
Net increase (decrease) in cash and cash equivalents136,38542,535208179,12836,658
Cash and cash equivalents - January 1524,200336,51859,230919,948883,290
Cash and cash equivalents - December 31$660,585 $379,053 $59,438 $1,099,076 $919,948
Reconciliation of operating income to net
cash provided by operating activities:
Operating income$251,658$137,246$29,824$418,728$416,280
Adjustments to reconcile operating income
(loss) to net cash flows from operating activities:
Depreciation161,09684,198 - 245,294244,235
Changes in assets and liabilities:
Decrease (increase) in receivables2,944(1,608)(17,283)(15,947)(17,162)
Decrease (increase) in prepaid expenses - (1,143) - (1,143)(2,777)
Increase (decrease) in payables67,934(8,466)(8,967)50,501(90,278)
Total adjustments231,974 72,981 (26,250)278,705 134,018
Net cash provided by (used in) operating activities$483,632$210,227$3,574$697,433$550,298
The accompanying notes are an integral part of these financial statements.
26
CITY OF OAK PARK HEIGHTS, MINNESOTA
STATEMENT OF FIDUCIARY NET POSITION Statement 9
AGENCY FUNDS
December 31, 2013
20132012
Assets:
Cash and investments$238,004$225,031
Due from developers25,1845,377
Total assets263,188230,408
Liabilities:
Escrow deposits payable136,000136,000
Accounts payable1,9632,872
Due to developers125,22591,536
Total liabilities263,188230,408
Net position:
Unrestricted$0$0
The accompanying notes are an integral part of these financial statements.
27
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Oak Park Heights, Minnesota operates under the State of Minnesota Statutory Plan A form of
government. The governing body consists of a five member City council elected by voters of the City.
The financial statements of the City of Oak Park Heights, Minnesota have been prepared in conformity with
generally accepted accounting principles as applied to governmental units by the Governmental Accounting
Standards Board (GASB). The following is a summary of the significant accounting policies.
A.FINANCIAL REPORTING ENTITY
As required by generally accepted accounting principles, the financial statements of the reporting entity
include those of the City (the primary government) and its component units, entities for which the City
is considered to be financially accountable. Blended component units, although legally separate
entities, are, in substance, part of the City's operations and so data from these units are combined with
data of the primary government.
BLENDED COMPONENT UNIT
The EDA of the City of Oak Park Heights, Minnesota is a separate legal entity. The EDA board
members are substantially the same as the City council in that four of the five board members are
council members and the fifth board member is the City finance director. Separate financial statements
are not prepared by the EDA.
B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The government-wide financial statements (i.e., the statement of net position and the statement of
changes in net position) report information on all of the nonfiduciary activities of the primary
government and its component units. For the most part, the effect of interfund activity has been
removed from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a
significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
business-type activity is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or business-type activity. 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 business-type activity and 2) grants and contributions that are restricted
to meeting the operational or capital requirements of a particular function or business-type activity.
Taxes and other items not included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary
funds, even though the latter are excluded from the government-wide financial statements. Major
individual governmental funds and major individual enterprise funds are reported as separate columns
in the fund financial statements.
28
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
C.MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues
are recorded when earned and expenses are recorded when a liability is incurred, regardless of the
timing of related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met. The Citys only fiduciary funds are agency funds. Agency
funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of
operations.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
City considers all revenues, except reimbursement grants, to be available if they are collected within 60
days of the end of the current fiscal period. Reimbursement grants are considered available if they are
collected within one year of the end of the current fiscal period. Expenditures generally are recorded
when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well
as expenditures related to compensated absences and claims and judgments, are recorded only when
payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest
associated with the current fiscal period are all considered to be susceptible to accrual and so have been
recognized as revenues of the current fiscal period. Only the portion of special assessments receivable
due within the current fiscal period is considered to be susceptible to accrual as revenue of the current
period. All other revenue items are considered to be measurable and available only when cash is
received by the City.
The City reports the following major governmental funds:
The General Fund is the Citys primary operating fund. It accounts for all financial resources of
the general government, except those required to be accounted for in another fund.
The G.O. CIP Refunding Bonds of 2012A Debt Service Fund is used to account for the
accumulation of resources for debt service payments on the 2012A bonds. The fund also holds
assets which will be used to refund the G.O. Capital Improvement Bonds of 2008 in the year 2016.
The Capital Revolving Capital Project Fund is used to account for monies set aside for various
capital improvements.
The Street Reconstruction Capital Project Fund accounts for the accumulation of funds to be used
for future street reconstruction projects.
The Renewal and Replacement Capital Project Fund is used to account for assets depreciated from
the utility fund and water and sanitary sewer departments. Funds are used to renew or replace
water and sanitary sewer system assets.
29
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
The City reports the following major proprietary funds:
The Water Utility Fund accounts for assets, liabilities, revenues and expenditures for water utility
operations.
The Sewer Utility Fund accounts for assets, liabilities, revenues and expenditures for sewer utility
operations.
The Storm Sewer Utility Fund accounts for assets, liabilities, revenues and expenditures for storm
sewer utility operations.
Additionally, the City reports the following fund type:
Agency Funds account for the assets of various developers held by the City as an agent.
As a general rule the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are transactions that would be treated as revenues,
expenditures or expenses if they involved external organizations, such as buying goods and services or
payments in lieu of taxes, are similarly treated when they involve other funds of the City. Elimination
of these charges would distort the direct costs and program revenues reported for the various functions
concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and
contributions, including special assessments. Internally dedicated resources are reported as general
revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary funds principal ongoing operations. The principal operating revenues of
the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise
funds include the cost of sales and services, administrative expenses, and depreciation on capital assets.
All revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses.
D.BUDGETS
Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual
appropriated budgets are adopted for the General Fund, but not for Special Revenue Funds. Budgeted
expenditure appropriations lapse at year end.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed
by the City because it is at present not considered necessary to assure effective budgetary control or to
facilitate effective cash management.
30
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
E.LEGAL COMPLIANCE - BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
1. The City Administrator submits to the City Council a proposed operating budget for the fiscal
year commencing the following January 1. The operating budget includes proposed
expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through passage of a resolution on a departmental basis and can
be expended by each department based upon detailed budget estimates for individual
expenditure accounts.
4. The department heads are authorized to transfer appropriations under $500 within any
department budget. Additional interdepartmental or interfund appropriations and deletions are
or may be authorized by the City Council with fund (contingency) reserves or additional
revenues.
5. Formal budgetary integration is employed as a management control device during the year for
the General Fund.
6. Legal debt obligation indentures determine the appropriation level and debt service tax levies
for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to
determine and calculate user charges. These debt service and budget amounts represent
general obligation bond indenture provisions and net income for operation and capital
maintenance and are not reflected in the financial statements.
7. A capital improvement program is reviewed annually by the City Council for the Capital
Project Funds. However, appropriations for major projects are not adopted until the actual bid
award of the improvement. The appropriations are not reflected in the financial statements.
8. Expenditures may not legally exceed budgeted appropriations at the total fund level.
Monitoring of budgets is maintained at the expenditure category level (i.e., personal services;
material and supplies; contractual services; capital outlay) within each department. All
amounts over budget have been approved by the City council through the disbursement
approval process.
9. The City Council may authorize transfer of budgeted amounts between City funds.
F.CASH AND INVESTMENTS
Cash and investment balances from all funds are pooled and invested to the extent available in
authorized investments. Earnings from investments are allocated to individual funds on the basis of the
fund's equity in the cash and investment pool.
31
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Investments are stated at fair value, based upon quoted market prices, except for investments in 2a7-like
external investment pools, which are stated at amortized cost and approximate fair value. Investment
income is accrued at the balance sheet date.
For purposes of the statement of cash flows the Enterprise Funds consider all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. All of the cash and
investments allocated to the Enterprise Funds have original maturities of 90 days or less. Therefore the
entire balance in the fund is considered cash equivalents.
G.RECEIVABLES AND PAYABLES
Property taxes and special assessments (see notes 1H and I) have been reported net of estimated
uncollectible accounts. Because utility bills are considered liens on property, no estimated uncollectible
amounts are established. Uncollectible amounts are not material for other receivables and have not
been reported.
H.PROPERTY TAX REVENUE RECOGNITION
The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment
date) of each year for collection in the following year. The County is responsible for billing and
collecting all property taxes for itself, the City, the local School District and other taxing authorities.
Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real
property taxes are payable (by property owners) on May 15 and October 15 of each calendar year.
Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes
are collected by the County and remitted to the City on or before July 7 and December 2 of the same
year. Delinquent collections for November and December are received the following January. The
City has no ability to enforce payment of property taxes by property owners. The County possesses this
authority.
Government-Wide Financial Statements
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible
property taxes are not material and have not been reported.
Governmental Fund Financial Statements
The City recognizes property tax revenue when it becomes both measurable and available to finance
expenditures of the current period. In practice, current and delinquent taxes and State credits received
by the City in July, December and January are recognized as revenue for the current year. Taxes
collected by the County by December 31 (remitted to the City the following January) and taxes and
credits not received at year end are classified as delinquent and due from County taxes receivable. The
portion of delinquent taxes not collected by the City in January is fully offset by deferred inflows of
resources because they are not available to finance current expenditures.
32
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
I.SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special
assessment improvement projects in accordance with State Statutes. These assessments are collectible
by the City over a term of years usually consistent with the term of the related bond issue. Collection of
annual installments (including interest) is handled by the County Auditor in the same manner as
property taxes. Property owners are allowed to (and often do) prepay future installments without
interest or prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that
property until full payment is made or the amount is determined to be excessive by the City Council or
court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit
sale. Proceeds of sales from tax forfeit properties are allocated first to the Countys costs of
administering all tax forfeit properties. Generally, the City will collect the full amount of its special
assessments not adjusted by City Council or court action. Pursuant to State Statutes, a property shall be
subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal
recreational land in which event the property is subject to such sale after five years.
Government-Wide Financial Statements
The City recognizes special assessment revenue in the period that the assessment roll was adopted by
the City Council. Uncollectible special assessments are not material and have not been reported.
Governmental Fund Financial Statements
Revenue from special assessments is recognized by the City when it becomes measurable and available
to finance expenditures of the current fiscal period. In practice, current and delinquent special
assessments received by the City are recognized as revenue for the current year. All remaining
delinquent and deferred assessments receivable in governmental funds are offset by deferred inflows of
resources.
J.INVENTORIES
The original cost of materials and supplies has been recorded as expenditures at the time of purchase.
The City does not maintain material amounts of inventories of goods and supplies.
K.PREPAID ITEMS
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government-wide and fund financial statements. Prepaid items are reported using
the consumption method and recorded as expenditure/expense at time of consumption.
33
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
L.CAPITAL ASSETS
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Capital assets are defined by the City as assets
with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in
excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased
or constructed. Donated capital assets are recorded at estimated fair market value at the date of
donation.
In the case of the initial capitalization of general infrastructure assets (i.e., those reported by
governmental activities) the City chose to include all such items regardless of their acquisition date.
These assets are reported at historical cost.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets of business-type activities is included as part of
the capitalized value of the assets constructed.For the year ended December 31, 2013, no interest was
capitalized in connection with construction in progress.
Property, plant and equipment of the primary government, as well as the component units, are
depreciated using the straight line method over the following estimated useful lives:
Buildings and structures 20 - 50 years
Machinery and equipment 3 20 years
Distribution and collection systems 50 years
Streets 25 years
Storm sewers 50 years
Pathways 20 years
M.COMPENSATED ABSENCES
It is the Citys policy to permit employees to accumulate earned but unused vacation and sick pay
benefits. All vacation pay and accumulated vested sick leave benefits is accrued when incurred in the
government-wide and proprietary fund financial statements.
A liability for these amounts is reported in governmental funds only if they have matured, for example,
as a result of employee resignations and retirements. In accordance with the provisions of Statement of
Government Accounting Standards No. 16, Accounting for Compensated Absences, no liability is
recorded for nonvesting accumulating rights to receive sick pay benefits.
34
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
N.LONG-TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund types in the fund financial statements,
long-term debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary fund type statement of net position. Bond premiums
and discounts are amortized over the life of the bond.
In the fund financial statements, governmental fund types recognize bond premiums and discounts
during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt
issuances are reported as other financing uses.
O.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.
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. These constraints are established by
Resolution of City Council.
Assigned- consistsof internally imposed constraints for the specific purpose of the Citys intended
use. Pursuant to the Citys Fund Balance Policy, the Finance Director and/or City Administrator
have been authorized to assign fund balance that reflects the Citys intended use of those funds.
Unassigned - is the residual classification for the general fund and also reflects negative residual
amounts in other funds.
When both restricted and unrestricted resources are available for use, it is the Citys 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 Citys policy to use
resources in the following order; 1) committed 2) assigned and 3) unassigned.
35
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
P.INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it
that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing
fund and as reductions of expenditures/expenses in the fund that is reimbursed. Interfund loans are
reported as an interfund loan receivable or payable which offsets the movement of cash between funds.
All other interfund transactions are reported as transfers.
Q.RECLASSIFICATIONS
Certain amounts presented in the prior year data have been reclassified in order to be consistent with the
current years presentation.
R.USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted accounting principles
(GAAP) requires management to make estimates that affect amounts reported in the financial
statements during the reporting period. Actual results could differ from such estimates.
S.COMPARATIVE TOTALS
The basic financial statements and combining and individual fund financial statements include certain
prior-year summarized comparative information in total but not at the level of detail required for a
presentation in conformity with generally accepted accounting principles. Accordingly, such
information should be read in conjunction with the Citys financial statements for the year ended
December 31, 2012, from which the summarized information was derived.
T.DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to a future period(s) and so will not be
recognized as an outflow of resources (expense/expenditure) until then. The City has no items that
qualify for reporting in this category.
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will not be recognized
as an inflow of resources (revenue) until that time. The City has one type of item, which arises only
under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly,
the item, unavailable revenue, is reported only in the governmental fund balance sheet. The
governmental funds report unavailable revenues from the following sources: property taxes, special
assessments, land held for resale, and unavailable grant revenue.
36
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 2 DEPOSITS AND INVESTMENTS
A. DEPOSITS
In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized
by the City Council, all of which are members of the Federal Reserve System.
Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral.
The market value of collateral pledged must equal 110% of the deposits not covered by insurance or
bonds.
Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City
Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral
includes the following:
a)United States government treasury bills, treasury notes, treasury bonds;
b)Issues of United States government agencies and instrumentalities as quoted by a recognized
industry quotation service available to the government entity;
c)General obligation securities of any state or local government with taxing powers which is rated
A or better by a national bond rating service, or revenue obligation securities of any state or local
government with taxing powers which is rated AA or better by a national bond rating service;
d)Unrated general obligation securities of a local government with taxing powers may be pledged as
collateral against funds deposited by that same local government entity;
e)Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality
accompanied by written evidence that the banks public debt is rated AA or better by Moodys
Investors Service, Inc. or Standard & Poors Corporation; and
f)Time deposits that are fully insured by any Federal agency.
At December 31, 2013 the carrying amount of the Citys deposits with financial institutions was
$6,847,251.
Custodial credit risk Deposits. Custodial credit risk is the risk that in the event of a bank failure, the
Citys deposits may not be returned to it. State statutes require that insurance, surety bonds or collateral
protect all City deposits. The market value of collateral pledged must equal 110% of deposits not
covered by insurance or bonds. As of December 31, 2013, the bank balance of the Citys deposits was
$7,078,421, all of which was either insured by the Federal Deposit Insurance Corporation (FDIC) or
covered by perfected pledged collateral held in the Citys name.
37
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
B. INVESTMENTS
Minnesota Statutes authorize the City to invest in the following:
a) Direct obligations or obligations guaranteed by the United States or its agencies, its
instrumentalities or organizations created by an act of congress, excluding mortgage-backed
securities defined as high risk.
b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and
whose only investments are in securities described in (a) above, general obligation tax-exempt
securities, or repurchase or reverse repurchase agreements.
c) Obligations of the State of Minnesota or any of its municipalities as follows:
1)any security which is a general obligation of any state or local government with taxing powers
which is rated A or better by a national bond rating service;
2)any security which is a revenue obligation of any state or local government with taxing powers
which is rated AA or better by a national bond rating service; and
3)a general obligation of the Minnesota housing finance agency which is a moral obligation of
the State of Minnesota and is rated A or better by a national bond rating agency.
d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the
highest quality, and maturing in 270 days or less.
f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve
System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government
securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers;
or, a bank qualified as a depositor.
g) General obligation temporary bonds of the same governmental entity issued under section 429.091,
subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6.
38
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
As of December 31, 2013 the City had the following investments and maturities:
Investment Maturities (in Years)
FairLess
Investment TypeRatingValueThan 11-56-10
Federal National Mortgage Assn. NotesAaa$5,063,118$ - $5,063,118$ -
Federal Home Loan Mortgage Corp. NotesAaa - - - -
Federal Home Loan Bank NotesAaa5,728,678 - 98,6765,630,002
Brokered certificates of depositNR3,887,2131,981,0351,716,638189,540
External investment pool - 4M FundNR2,019,7652,019,765 - -
Total$16,698,774$4,000,800$6,878,432$5,819,542
NR - Not RatedTotal investments$16,698,774
Deposits6,847,251
Petty cash100
Total cash and investments$23,546,125
The Minnesota Municipal Money Market Fund (4M Fund) is regulated by Minnesota Statutes and the Board
of Directors of the League of Minnesota Cities and is an external investment pool not registered with the
Securities Exchange Commission (SEC) that follows the same regulatory rules of the SEC under rule 2a7.
The fair value of the position in the pool is the same as the value of the pool shares.
Following is a reconciliation of the Citys cash and investment balances as of December 31, 2013:
Cash and investments:
Governmental and business-type (Statement 1)$18,245,003
Fiduciary (Statement 9)238,004
Cash with escrow agent5,063,118
Total cash and investments$23,546,125
C. INVESTMENT RISKS
Custodial credit risk investments For investments in securities, custodial credit risk is the risk that in
the event of failure of the counterparty to a transaction, the City will not be able to recover the value of
its investment securities that are in the possession of an outside party. Investments in investment pools
and money markets are not evidenced by securities that exist in physical or book entry form, and
therefore are not subject to custodial credit risk disclosures. The Citys investment policy does not
address custodial risk. However, investments in securities are held by the Citys broker-dealer of which
$2,000,000 is insured through SIPC. Each broker-dealer has provided additional protection by
providing additional insurance. This insurance is subject to aggregate limits applied to all of the
broker-dealers accounts.
39
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Interest rate risk Interest rate risk is the risk that changes in interest rates of debt investments could
adversely affect the fair value of an investment. The Citys investment policy requires the City to
diversify its investment portfolio to eliminate the risk of loss resulting from over concentration of assets
in a specific maturity. The policy also states the Citys investment portfolio will remain sufficiently
liquid to enable the City to meet all operating requirements which might be reasonably anticipated.
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will be unable
to fulfill its obligation to the holder of the investment. Minnesota Statutes limit the Citys investments
to direct obligations or obligations 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 thirteen months or less; shares of a Minnesota joint
powers investment trust whose investments are restricted to securities described in 118.04; general
obligations of any state or local government with taxing powers which is rated A or better; revenue
obligations of any state or local government with taxing powers which is 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 the 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 brokers-dealers. The Citys investment policy does not place further restrictions on
investment options.
Concentration of credit risk Concentration of credit risk is the risk of loss that may be attributed to the
magnitude of a governments investment in a single issuer. The City places no limit on the amount the
City may invest in any one issuer. As of December 31, 2013, more than 5% of the Citys cash and
investments are in the following governmental agencies: Federal National Mortgage Association (21%)
and Federal Home Loan Bank (24%).
40
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 3 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2013 are as
follows:
Storm Sewer
Utility
GeneralFundTotal
Delinquent property taxes$50,823$ - $50,823
Deferred special assessments - 15,24715,247
Total$50,823$15,247$66,070
Note 4 UNAVAILABLE REVENUE
Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. As of the end of the current fiscal year,
the various components of unavailable revenue reported in the governmental funds were as follows:
Unavailable
Property Special Land HeldGrant
TaxesAssesmentsfor ResaleRevenueTotal
Major funds:
General Fund$101,334$ - $ - $ - $101,334
Capital Revolving Fund - 18,509 - 338,270356,779
Nonmajor funds - - 111,000 - 111,000
Total unavailable revenue$101,334$18,509$111,000$338,270$569,113
41
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 5 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2013 was as follows:
BeginningEnding
BalanceIncreasesDecreasesBalance
Governmental activities:
Capital assets, not being depreciated:
Land$2,238,930$434$ - $2,239,364
Construction in progress2,6751,116,122 - 1,118,797
Total capital assets, not being depreciated2,241,6051,116,55603,358,161
Capital assets, being depreciated:
Buildings and structures7,540,25034,459(11,048)7,563,661
Other improvements1,529,55921,900(7,090)1,544,369
Machinery and equipment581,644 - (8,000)573,644
Furniture and fixtures419,86242,116(43,471)418,507
Infrastructure12,907,27120,856 - 12,928,127
Total capital assets, being depreciated22,978,586119,331(69,609)23,028,308
Less accumulated depreciation for:
Buildings and structures468,137180,786(11,048)637,875
Other improvements267,06645,929(7,090)305,905
Machinery and equipment261,83758,560(8,000)312,397
Furniture and fixtures181,98942,291(28,573)195,707
Infrastructure6,288,960423,885 - 6,712,845
Total accumulated depreciation7,467,989751,451(54,711)8,164,729
Total capital assets being depreciated - net15,510,597(632,120)(14,898)14,863,579
Governmental activities capital assets - net$17,752,202$484,436($14,898)$18,221,740
42
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
BeginningEnding
BalanceIncreasesDecreasesBalance
Business-type activities:
Capital assets, not being depreciated:
Land$937,919$ - $ - $937,919
Construction in progress - 72,476 - 72,476
Total capital assets, not being depreciated937,91972,47601,010,395
Capital assets, being depreciated:
Buildings and structures2,047,665 - - 2,047,665
Machinery and equipment428,15432,461(11,900)448,715
Infrastructure7,311,429 - - 7,311,429
Total capital assets, being depreciated9,787,24832,461(11,900)9,807,809
Less accumulated depreciation for:
Buildings and structures733,16076,856 - 810,016
Machinery and equipment207,12920,815(10,428)217,516
Infrastructure3,038,534147,623 - 3,186,157
Less accumulated depreciation3,978,823245,294(10,428)4,213,689
Total capital assets being depreciated - net5,808,425(212,833)(1,472)5,594,120
Business-type activities capital assets - net$6,746,344($140,357)($1,472)$6,604,515
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government$204,284
Public safety34,796
Public works393,552
Recreation118,820
Total depreciation expense - governmental activities$751,452
Business-type activities:
Water$161,096
Sewer84,198
Total depreciation expense - business-type activities$245,294
43
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 6 LONG-TERM DEBT
The City issues general obligation bonds to provide funds for the acquisition and construction of major capital
facilities. The reporting entitys long-term debt is segregated between the amounts to be repaid from
governmental activities and amounts to be repaid from business-type activities.
As of December 31, 2013, the long-term debt of the financial reporting entity consisted of the following:
FinalAuthorized
Issue Maturity Interest AndOutstanding
DateDateRateIssued12/31/13
Governmental activities:
Improvement bonds:
G.O. Capital Improvement Bonds, Series 2008A06/15/0812/15/282.5 - 4.4$6,300,000$5,505,000
G.O. Capital Improvement Bonds, Series 2009A09/15/0912/15/191.2 - 3.551,195,000780,000
G.O. CIP Refunding Bonds, Series 2012A12/01/1212/15/282.0 - 2.155,140,0005,140,000
Bond premium155,137145,441
Compensated absences payable222,233
Total governmental activities11,792,674
Business-type activities:
Compensated absences payable20,452
Total City indebtedness$11,813,126
Annual debt service requirements to maturity are as follows:
YearGovernmental Activities
Ending2008A G.O. Cap Imp Bonds2012A G.O. CIP Ref. Bonds2009A G.O. Cap Imp BondsTotal
December 31,PrincipalInterestPrincipalInterestPrincipalInterestPrincipalInterest
2014$200,000$222,018$ - $104,758$115,000$23,560$315,000$350,336
2015215,000215,418 - 104,758120,00020,858335,000341,034
20165,090,000208,000 - 104,758125,00017,6785,215,000330,436
2017 - - 305,000104,758130,00014,115435,000118,873
2018 - - 320,00098,658140,00010,084460,000108,742
2019 - - 340,00092,258150,0005,325490,00097,583
2020 - - 360,00085,458 - - 360,00085,458
2021 - - 380,00078,258 - - 380,00078,258
2022 - - 400,00070,658 - - 400,00070,658
2023 - - 430,00062,658 - - 430,00062,658
2024 - - 455,00054,058 - - 455,00054,058
2025 - - 495,00044,958 - - 495,00044,958
2026 - - 525,00035,058 - - 525,00035,058
2027 - - 545,00024,295 - - 545,00024,295
2028 - - 585,00012,578 - - 585,00012,578
Total$5,505,000$645,436$5,140,000$1,077,927$780,000$91,620$11,425,000$1,814,983
It is not practicable to determine the specific year for payment of accrued compensated absences.
44
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Change in Long-Term Liabilities
Long-term liability activity for the year ended December 31, 2013, was as follows:
BalanceBalanceDue Within
01/01/13AdditionsReductions12/31/13One Year
Governmental Activities:
Bonded debt:
Improvement bonds$6,580,000$ - ($295,000)$6,285,000$315,000
CIP refunding bonds5,140,000 - - 5,140,000 -
Bond premium155,137 - (9,696)145,4419,096
Compensated absences212,17784,772(74,716)222,23345,730
Total governmental activities$12,087,314$84,772($379,412)$11,792,674$369,826
Business-Type Activities:
Compensated absences$37,380$11,901($28,829)$20,452$1,818
Total business-type activities$37,380$11,901($28,829)$20,452$1,818
For governmental activities, compensated absences are generally liquidated by the General Fund. All long-
term bonded indebtedness outstanding at December 31, 2013 is backed by the full faith and credit of the
City, including improvement bond issues. Delinquent taxes receivable at December 31, 2013 were
$101,334.
Crossover Refunding 2012A Bonds
On December 1, 2012, the City issued $5,140,000 in General Obligation Capital Improvement Plan
Crossover Refunding Bonds, Series 2012A with interest rates between 2.00% and 2.15% to advance refund
$4,860,000 of outstanding 2008A General Obligation Capital Improvement Bonds with interest rates
between 3.70% and 4.40%. The net proceeds were used to purchase U.S. government securities in the
amount of $5,179,790. Those securities were deposited in an irrevocable trust with an escrow agent to
provide for the interest on the refunding bonds before the crossover date and called principal on the
refunded bonds on December 15, 2016.
The City advance refunded the 2008A General Obligation Capital Improvement Bonds to reduce its total
debt service payments during the years 2013 through 2028 by $481,745 and to obtain an economic gain
(difference between the present value of the debt service payments on the old and new debt) of $404,263.
The City is responsible for the debt service of the refunded bonds through the crossover date (December 15,
2016) and the debt service of the refunding bonds after the crossover date. The debt service of the
refunding bonds before the crossover date is payable from the escrow account. Assets held with the escrow
agent total $5,063,118 at December 31, 2013.
The financial statements present each bond issue and the escrow account assets pursuant to GASB No. 7.
The effect on the financial statements is to report greater debt than, in substance, the City will be responsible
for paying.
45
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
The Refunding Bonds of 2012A are crossover refunding bonds whereby the City and the escrow agent are
responsible for the debt service payments as follows:
Debt Service Commitment
Year EndingRefundedRefundingEscrow
December 31,Bonds TotalBonds TotalAccountCity
2014$422,018$104,758$104,758$422,018
2015430,418104,758104,758430,418
20165,298,000104,7584,964,758438,000
2017 - 409,758 - 409,758
2018 - 418,658 - 418,658
2019 - 432,258 - 432,258
2020 - 445,458 - 445,458
2021 - 458,258 - 458,258
2022 - 470,658 - 470,658
2023 - 492,658 - 492,658
2024 - 509,058 - 509,058
2025 - 539,958 - 539,958
2026 - 560,058 - 560,058
2027 - 569,295 - 569,295
2028 - 597,578 - 597,578
Total$6,150,436$6,217,927$5,174,274$7,194,089
Revenues Pledged
Revenue PledgedCurrent Year
Percent ofRemainingPrincipalPledged
Use ofTotalTerm ofPrincipaland InterestRevenue
Bond IssueProceedsTypeDebt ServicePledgeand InterestPaidReceived
2008ACity hall constructionProperty taxes100%2009 - 2028$6,150,439$412,845$410,000
2009ACity hall constructionProperty taxes100%2010 - 2019$871,620$135,760$138,000
The City will begin making payments on the 2012A Bonds in 2017. Beginning then, the property taxes
pledged for the 2008A Bonds will be applied to the 2012A Bonds, as the 2008A Bonds will have been
refunded.
46
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 7 PENSION PLANS
A. PERA DEFINED BENEFIT PLAN
PLAN DESCRIPTION
All full-time and certain part-time employees of the City are covered by defined benefit plans administered
by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General
Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF) which are
cost-sharing, multiple-employer retirement plans. These plans are established and administered in
accordance with Minnesota Statutes, Chapters 353 and 356.
GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are
covered by Social Security and Basic Plan members are not. All new members must participate in the
Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute
are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon
death of eligible members. Benefits are established by state statute, and vest after three years of credited
service. The defined retirement benefits are based on a members highest average salary for any five
successive years of allowable service, age, and years of credit at termination of service.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply
to active plan participants. Vested, terminated employees who are entitled to benefits but are not
receiving them yet are bound by the provisions in effect at the time they last terminated their public
service.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for GERF and PEPFF. That report may be obtained on the internet at
www.mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by
calling 651-296-7460 or 1-800-652-9026.
FUNDING POLICY
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes
are established and amended by the state legislature. The City makes annual contributions to the
pension plans equal to the amount required by state statutes. GERF Basic Plan members and
Coordinated Plan members were required to contribute 9.1% and 6.25%, respectively, of their annual
covered salary in 2013. PEPFF members were required to contribute 9.6% of their annual covered
salary in 2013. The City was required to contribute the following percentages of annual covered
payroll in 2013: 11.78% for Basic Plan members, 7.25% for Coordinated Plan members, and 14.4% for
PEPFF members. The Citys contributions to the General Employees Retirement Fund for the years
ending December 31, 2013, 2012 and 2011 were $53,186, $52,387, and $52,289, respectively. The
Citys contributions to the Public Employees Police and Fire Fund for the years ending December 31,
2013, 2012 and 2011 were $116,026, $108,683, and $106,220, respectively. The Citys contributions
were equal to the contractually required contributions for each year as set by state statute.
47
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
B. DEFINED CONTRIBUTION PLAN
The City administrator does not participate in PERA, but is covered by a defined contribution plan
administered by the ICMA Retirement Corporation. The Plan is a tax qualified plan under Section 457
of the Internal Revenue Code and all contributions by or on behalf of the employee are tax deferred
until time of withdrawal.
The City is required to contribute 10% of the annual base salary. Plan provisions and contribution
requirements are established and may be amended by the City council. Employer contributions were
$11,154 for the year ended December 31, 2013.
Note 8 OTHER POST-EMPLOYMENT BENEFITS
A.PLAN DESCRIPTION
In addition to providing the pension benefits described in Note 6, the City provides post-employment
health care benefits (as defined in paragraph B) for retired employees through a single-employer
defined benefit plan. The City of Oak Park Heights, Minnesota OPEB plan is administered by the City.
The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a,
and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are
governed by the City and can be amended by the City through its personnel manual and collective
bargaining agreements with employee groups. The Plan is not accounted for as a trust fund, an
irrevocable trust has not been established to account for the Plan. The Plan does not issue a separate
report.
B. BENEFITS PROVIDED
Retirees
The City is required by State Statute to allow retirees to continue participation in the Citys group health
insurance plan if the individual terminates service with the City through service retirement or disability
retirement. Eligibility for benefits is the earlier of age 55 and 3 years of service or age 65.
All health care coverage is provided through the Citys group health insurance plans. The retiree is
required to pay 100% of their premium cost for the City-sponsored group health insurance plan in
which they participate. The premium is a blended rate determined on the entire active and retiree
population. Since the projected claims costs for retirees exceed the blended premium paid by retirees,
the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those
afforded to active employees. Upon a retiree reaching age 65 years of age, Medicare becomes the
primary insurer and the Citys plan becomes secondary.
48
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
C. PARTICIPANTS
As of the January 1, 2012 actuarial valuation, participants consisted of:
Retirees and beneficiaries currently
purchasing health insurance through the City2
Active employees19
Total21
Participating employers1
D. FUNDING POLICY
The additional cost of using a blended rate for actives and retirees is currently funded on a pay-as-you-
go basis. The City Council may change the funding policy at any time.
E. ANNUAL OPEB COSTS AND NET OPEB OBLIGATION
The Citys annual other post employment benefit (OPEB) cost is calculated based on the annual
required contribution (ARC) of the employer, an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed 30 years. The net OPEB obligation as of
December 31, 2013, was calculated as follows:
Annual required contribution (ARC)$34,923
Interest on net OPEB obligation5,719
Adjustment to ARC(8,267)
Annual OPEB cost32,375
Contributions made during the year(10,618)
Increase in net OPEB obligation21,757
Net OPEB obligation - beginning of year142,948
Net OPEB obligation - end of year$164,705
The net OPEB obligation is allocated as follows:
Governmental activities$144,952
Business-type activities19,753
$164,705
For governmental activities, the net OPEB obligation is generally liquidated by the General Fund.
49
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
The Citys annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net
OPEB obligation for the previous three years was as follows:
Percentage of
Fiscal YearAnnual OPEBEmployer Annual OPEB CostNet OPEB
EndedCostContributionsContributedObligation
December 31, 2011$58,548$23,17739.6%$121,007
December 31, 201231,6839,74230.7%142,948
December 31, 201332,37410,61832.8%164,705
F. FUNDED STATUS AND FUNDING PROGRESS
The City currently has no assets that have been irrevocably deposited in a trust for future health
benefits; therefore, the actuarial value of assets is zero. The funded status of the plan as of the most
recent actuarial valuation date was as follows:
Unfunded
ActuarialActuarialUAAL as a
ActuarialActuarialAccruedAccruedFundedCoveredPercentage of
ValuationValue of AssetsLiability (AAL)*Liability (UAAL)RatioPayrollCovered Payroll
Date(a)(b)(b-a)(a/b)(c) ( (b-a) / c)
January 1, 2012$0$290,381$290,3810.0%$1,648,74817.6%
*Using the Projected Unit Credit Actuarial cost method.
G. ACTUARIAL METHODS AND ASSUMPTIONS
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality and the health care cost trend. Amounts determined
regarding the funded status of the plan and the annual required contributions (ARC) of the employer are
subject to continual revision as actual results are compared with past expectations and new estimates are
made about the future. The schedule of funding progress, presented as required supplementary
information following the notes to financial statements, presents multi-year trend information that
shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial accrued liabilities for benefits.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and plan members) and include the types of benefits provided at the time of
each valuation and the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The actuarial methods and assumptions used include techniques that are
designed to reduce the effect of short-term volatility in actuarial accrued liabilities and the actuarial
value of assets, consistent with the long-term perspective of the calculations.
50
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
In the January 1, 2012 actuarial valuation, the Projected Unit Credit Actuarial cost method was used.
The actuarial assumptions included a 4.0% investment rate of return (net of administrative expenses),
an inflation rate of 3.0% and an initial annual health care cost trend rate of 9% reduced by 0.4% each
year to arrive at an ultimate health care cost trend rate of 5.0%. The actuarial value of assets was $0.
The Plans unfunded actuarial accrued liability is amortized as a level dollar amount over a 30 year
open period. The remaining amortization period at December 31, 2013, was 26 years.
Note 9 INTERFUND TRANSFERS
Transfers In
Major Funds
CapitalStreet Renewal and Nonmajor
RevolvingReconstructionReplacement Governmental
Total
FundFundFund Funds
Transfers out:
Governmental activities:
General Fund$536,000$337,225$20,700$974,235$1,868,160
Business-type activities:
Water Utility Fund - - 114,556122,567237,123
Sewer Utility Fund - - 126,90238,938165,840
Storm Sewer Utility Fund - - - 3,4173,417
Total transfers$536,000$337,225$262,158$1,139,157$2,274,540
During 2013, the City made routine interfund transfers to accumulate resources to be used for capital
improvements and to fund debt service expenditures.
Note 10 CONTINGENCIES AND COMMITMENTS
A.ST. CROIX RIVER CROSSING PROJECT
During 2012 the State of Minnesota and Minnesota Department of Transportation (MNDOT) finalized plans
and received federal approval to construct an interstate bridge connecting Highway 36 in Oak Park Heights
and Houlton, Wisconsin. As a direct result of the MNDOT project, the City was obligated to commit to
relocate portions of its water, sewer and storm utility infrastructure along Highway 36 as well as participate
in other costs as a result of the Project. Accordingly, the City at the request of MNDOT and the State of
Minnesota has entered into agreements with MNDOT for the portions of the impacted relocations or
improvements and all related soft costs and expenses to the present utility systems and for any related costs
as a result of the Project in total. The estimated cost to the City for all costs is anticipated to be a total cost
of $600,000 and is dependent on the final timing to be determined by MNDOT and their contractors.
51
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
B.FEDERAL AND STATE FUNDS
The City receives financial assistance from federal and state governmental agencies in the form of
grants. The disbursement of funds received under these programs generally requires compliance with
the terms and conditions specified in the grant agreements and are subject to audit by the grantor
agencies. Any disallowed claims resulting from such audits could become a liability of the applicable
fund. However, in the opinion of management, any such disallowed claims will not have a material
effect on any of the financial statements of the individual fund types included herein or on the overall
financial position of the City at December 31, 2013.
Note 11 RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors
and omissions; injuries to employees; and natural disasters.
Workers compensation coverage is provided through a pooled self-insurance program through the League of
Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject
to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers
Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is not
subject to a deductible. The Citys workers compensation coverage is retrospectively rated. With this type of
coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if
any, is considered immaterial and not recorded until received or paid.
Property and casualty insurance coverage is provided through a pooled self-insurance program through the
LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if
deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess
various amounts. The City retains risk for deductible portions. These deductibles are considered immaterial to
the financial statements.
Employee health and disability insurance is provided through commercial insurance. The City does not have a
deductible or yearly maximum on this insurance.
There were no significant reductions in insurance from the previous year or settlements in excess of insurance
coverage for any of the past three fiscal years.
52
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 12 FUND BALANCE
A.CLASSIFICATIONS
Definitions of fund balance classifications are included in Note 1.O. At December 31, 2013, a
summary of the governmental fund balance classifications are as follows:
G.O. CIP
RefundingCapitalRenewal andOther
Bonds ofStreetRevolvingReplacementGovernmental
General Fund2012AReconstructionFundFundFundsTotal
Nonspendable:
Prepaid items$5,201$ - $ - $ - $ - $ - $5,201
Restricted for:
Law enforcement - - - - - 7,3307,330
Tax increment - - - - - 19,33119,331
Debt service - 5,078,062 - - - 114,4775,192,539
Park improvements - - - - - 256,187256,187
Moelter Park improvements - - - - - 559,362559,362
Total restricted05,078,062000559,3626,034,749
Assigned for:
Compensated absences173,000 - - - - - 173,000
Capital purposes - - - 315,8764,511,8544,760,9239,588,653
Street reconstruction - - 2,511,605 - - - 2,511,605
Economic development - - - - - 31,32431,324
Total assigned173,00002,511,605315,8764,511,8544,792,24712,304,582
Unassigned3,336,170 - - - - - 3,336,170
Total$3,514,371$5,078,062$2,511,605$315,876$4,511,854$5,351,609$21,680,702
B.MINIMUM UNASSIGNED FUND BALANCE POLICY
The City Council has formally adopted a policy regarding the minimum unassigned fund balance for the
General Fund. The most significant revenue source of the General Fund is property taxes. This
revenue source is received in two installments during the year June and December. As such, it is the
Citys goal to begin each fiscal year with sufficient working capital to fund operations between each
semi-annual receipt of property taxes.
The policy states the City will maintain an unassigned fund balance in the General Fund for the
following purposes and in the following amounts:
For cash flow needs an amount should be established equal to 45-55% of the subsequent
years budgeted operating expenditures.
For emergencies or contingencies (such as revenue shortfalls or unexpected budget over runs)
an amount should be established equal to 10 15% of the ensuing years General Fund
operating expenditures.
At December 31, 2013, the unassigned fund balance of the General Fund was $3,336,170, which
sufficiently meets the cash flow and emergency needs described above.
53
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 13 MAJOR TAXPAYER
The City has one major taxpayer, Xcel Energy. The total tax capacity value for this taxpayer represented
approximately 41% of the City's total tax capacity value for taxes payable in 2013.
Note 14 TAX INCREMENT DISTRICT
The City is the administrating authority for Tax Increment District 1-1 (Oakgreen Project). During 2010, the
City and the developer signed a $1,200,000 tax increment pay-as-you-go revenue note relating to this district.
The note is not a general obligation of the City and is payable solely from available tax increments.
Accordingly, the note is not reflected in the financial statements of the City. A summary of the note is as
follows:
Tax Increment Revenue Note, TIF 1-1 issued in 2010 in the principal sum of $1,200,000 with an interest rate
of 6.90% per annum. Principal and interest payments shall be payable on each February 1 and August 1
following the date of the note to and including February 1, 2026. Payments are payable solely from available tax
increment, which shall mean 80% of the tax increment derived from the development property and received by
the City. The City shall have no obligation to pay unpaid balance of principal or accrued interest that may
remain after the final payment on February 1, 2026. At December 31, 2013 the principal amount outstanding on
the note was $1,200,000.
Note 15 CONDUIT DEBT OBLIGATIONS
From time to time, the City has issued Rental Housing or Industrial Revenue Bonds to provide financial
assistance to private-sector entities for the acquisition and construction of rental housing, office space or a clinic
deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from
payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired
facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State, nor any
political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are
not reported as liabilities in the accompanying financial statements.
As of December 31, 2013, there were three series of Industrial Revenue Bonds outstanding. The principal
amount payable at December 31, 2013 was $95,130,000.
54
CITY OF OAK PARK HEIGHTS, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 16 OPERATING LEASES
The City leases space in and above its water tower. The space is used for antennas and other equipment necessary to
provide radio communications. Lease terms are as follows:
2013
LeaseAnnual LeaseExpirationRenewal
LocationLesseeAmountAdjustment Factor*DateOptions
58th and NorrellSprint PCS$33,509Greater of CPI or 5%9/20/20142 5-year terms
*Amounts for future lease receipts are unavailable because they are based on the Consumer Price Index.
Note 17 PRIOR PERIOD ADJUSTMENT
On January 1, 2013, the City recorded prior period adjustements in the General Fund. Revenues and fund
balance previously reported were understated due to unrecorded servicing fees. Beginning fund balance has
been restated as follows:
General
Fund
Fund balance - January 1, as previously reported$3,669,633
Prior period adjustment81,525
Fund balance - January 1, as restated$3,751,158
Note 18 CHANGE IN ACCOUNTING PRINCIPLE
For the year ended December 31, 2013, the City implemented GASB Statements No. 61 and 65. GASB
Statement No. 61, The Financial Reporting Entity: Omnibus – An Amendment of GASB No. 14 and No.34
modifies certain requirements for inclusion of component units in the financial reporting entity and also amends
the criteria for reporting component units as if they were part of the primary government (i.e. blending). GASB
Statement No. 65, Items Previously Reported as Assets and Liabilities resulted in accounts previously presented
as liabilities being reclassified as deferred inflows of resources.
55